These
days, propelled by the increase of cryptocurrencies, decentralized computing
now is soaring as the next big thing in Information Technology. In addition, we
now have a couple of various blockchain types, and within this post we will go
through 3 main “types” — federated or consortium, private, and public
blockchains — each of which will have its use case. Therefore, let us begin:
Public Blockchain
As
the name states, a public blockchain is completely open to the public, permits
anyone to audit/review, write, and read the ledger.
With
no certain person in charge, you might wonder how choices are made within the
public ledger. For that, public blockchains depend on a variety of decentralized
consensus mechanisms, like Proof of Stake (PoS) and Proof of Work (PoW) that ensure
that all transactions are cleared in a timely manner.
Ethereum,
Litecoin, and Bitcoin and virtually any additional cryptocurrency operates on a
public blockchain. Due to that, anyone may operate a full node and begin to mine
for cryptocurrency. Plus, anyone may make transactions and audit/review them inside
a Blockchain explorer.
Private Blockchain
On
the flip side of the spectrum, there’s private blockchains which are privately
operated and owned by an organization or individual, which, as a result may set
the rules however they wish.
It’s
a more centralized system in which consensus is accomplished on the whims of a
central in-charge who is able to give mining and additional rights to anyone or
they might choose to not give, whatsoever.
Nevertheless,
the system still depends on several nodes and utilizes blockchain-style
cryptography in order to benefit from more security.
Federated or Consortium
Blockchain
The
in-between blockchain type, will sit somewhere between a private and public
blockchain, and places more than a single party in charge.
In
a federated or consortium blockchain we have a group of representative
individuals or companies coming together and making choices for the benefit of
the entire network. Such a system only allows consortium members to make
transactions, audit/review blockchain, as well as run a full node.
However,
making decisions might require most members to vote one way or another; it’s up
to the consortium behind this type of blockchain to derive its own set of rules
then place them into action, usually with the use of a smart contract.
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