Given how technical the world is becoming these days, I'm sure you might have come across the word "blockchain", or at the very least heard about it from a friend of a friend. This article is basically just to help you understand a little bit about blockchain without going into all the inner workings.
Blockchain can be described as a collection of records linked with each other strongly resistant to alterations and protected using cryptography or whatever Google said. Simply put, a blockchain is a system of recording information in a way that makes it difficult or dare I say impossible to change or hack the system, or you can say it is a digital ledger of transactions that is duplicated and distributed across the whole network of systems on the blockchain. In case you didn't know, a ledger is a book that is used to keep records about important stuff such as records of sales or transactions.
Assuming that you understand what a ledger is in real life, then I'm sure you're getting the idea about what a blockchain is. Blockchain technology is decentralized which means no one person can just make changes or new rules to the system which explains why the system can't be easily altered or tampered with.
Just because I want to be more thorough in my explanation I'd also add one more thing Google said, “a blockchain is a database that stores encrypted blocks of data and then chains them together to form a chronological single-source-of-truth”. I'm sure after reading this sentence what comes to your head is a bunch of cubes or blocks attached with a chain all arranged in a straight line and if you thought about that then congratulations!! all the things that were written above are not a waste, cause you're right! The blocks or cubes are the encrypted data and the chains are the hashing algorithms (which will not be explained in this article).
Types of Blockchain
There are four types of blockchain namely:
- Public blockchain
- Private blockchain
- Consortium blockchain
- Hybrid blockchain
Source: Types of Blockchain
The first two types of blockchain are the primary types, while the last two are variations. Now let's have a look at the four types of blockchains.
1. Public Blockchain
A public blockchain is a non-restrictive,permission-less distributed ledger system. Anyone who has access to the internet can sign in on a blockchain platform to become an authorized user(node) and be a part of the blockchain network. A user that is a part of the public blockchain is authorized to access current and past records, verify transactions, and so on. Basically, the user has a say in the happenings of said blockchain. The major application of public blockchains is for mining and exchanging cryptocurrencies. Public blockchains are mostly secure if the users strictly follow the security rules but risky when the users don't follow the security rules. The most common public blockchains are theBitcoin blockchain and Ethereum blockchain. Learn more about public blockchains here.
2. Private(or Managed) Blockchain
A private blockchain is more or less the opposite of a public blockchain. It is a restricted or permission-based blockchain, operative only in a closed network. Private blockchains are usually used within an organization where only selected members are participants of a blockchain network. The level of security, authorizations, permissions, and accessibility is in the hands of the controlling organization. Private blockchains are similar in use to a public blockchain but have a small and restrictive network. Private blockchain networks are used in cases like voting, asset ownership, digital identity, and so much more. An example of a private blockchain is Corda. Both private and public blockchains have drawbacks – public blockchains tend to have longer validation times for new data than private blockchains, and private blockchains are more vulnerable to fraud. To fix these problems, Consortium and Hybrid blockchains were developed. You can learn more about private blockchain here.
3. Consortium Blockchain
This type of blockchain is a semi-decentralized type of blockchain where more than one organization manages a blockchain network. This is unlike what we read above about a private blockchain, which is managed by only a single organization. More than one organization can act as a node in this type of blockchain. Consortium blockchains are typically used by banks, government organizations, etc. Examples of consortium blockchain are; Energy Web Foundation, R3, etc. You can read more about the consortium blockchain in this article.
4. Hybrid Blockchain
Hybrid blockchains are more or less like the combination of a private and public blockchain. They are controlled by a single organization, but it has a level of oversight performed by the public blockchain, which is required to perform certain transaction validations. An example of a hybrid blockchain is IBM Food Trust. Read more about the hybrid blockchain in this article.
I said I wouldn't go into the nitty-gritty and I'd like to believe that I actually didn't confuse you further than you were before reading this article, but basically, all these are basic things you need to know about blockchain.
I hope this article made more sense to you reading than it did to me ......