The blockchain is like a data storing medium main purpose of the blockchain is storing a list of records, called blocks, which are linked using cryptography.
The first work on cryptographically secured blocks was in in 1991 by Stuart Haber and W. Scott Stornetta, their intention is to implement a system where documents’ timestamps could not be tampered with or backdated.
Then the first blockchain was conceptualized by Satoshi Nakamoto in 2008. it was implemented on cryptocurrency called Bitcoin, bitcoin has become one of the popular cryptocurrency and its network was copied, forked and updated to make better cryptocurrencies such as Litecoin, DASH etc which are now popularly called altcoins.
Bitcoin and other altcoins become popular and hype started that “Blockchain is the real invention and not the Bitcoin“
This hype has become so much hyped up that it has blurred the whole difference between the blockchain of P2P currencies (Bitcoin, DASH, Litecoin etc) and the blockchain developed by the companies, governments, and consortiums.
So today’s let us brush off some of this blurriness by looking closely at different types of blockchains.
Types Of Blockchain.
Bitcoin supports an optional and special feature called scripts for the conditional transfer of values. Ethereum Blockchain extended the scripting feature into a full-blown code execution framework called smart contract. A smart contract provides the very powerful capability of code execution for embedding business logic on the blockchain.
Based on such capabilities, three major types of blockchains emerge from the Bitcoin Foundation.
- Public Blockchain
- Private Blockchain
- Permissioned or Consortium Blockchain
The name suggests that this is Public blockchain system, that means anybody can join and leave the blockchain, it is open to people, that means this is blockchain for the people and by the people. Another thing is that these types of blockchain are open and transparent hence anyone can review anything at a given point of time on a public blockchain.
Anyone can run full node and start mining, anyone can make transactions on the blockchain, anyone can review/audit the blockchain in a Blockchain explorer.
Here name suggests that this is a private blockchain system that means this type of blockchain is controlled by the private property of an individual or an organization.
I this type access to the blockchain is a limited only to the person or a selected group of members can access blockchain. Here there is an in charge who looks after of important things such as read/write or whom to selectively give access to read or write.
This restriction helps in simplifying the normal operations such as block creation and contingency model.
Indications of a private blockchain make blockchain as private property but yet it is cryptographical secured from the company’s point of view and more cost-effective for them, but the whole purpose of blockchain is decentralization.
Permissioned or Consortium Blockchain
In this type of blockchain is mainly focused on removing a single ownership of the technology which gets vested in just one entity by using private blockchains.
Instead of single ownership here you have more than one in charge. Here consortium of collaborating parties to transact on a blockchain for ease of governance, provenance, and accountability.
Basically, you have a group of companies or representative individuals coming together and making decisions for the best benefit of the whole network, for example, a consortium of all automobile companies or healthcare organizations.
Permissioned blockchain has the benefits of a public blockchain with allowing only users with permission to collaborate and transact.
In summary, significant innovations such as smart contracts have opened up broader applications for blockchain technology. Private and permissioned blockchain allow for controlled access to the blockchain enabling many diverse business models.