The Different Types of Blockchain Structures

A Blockchain is a digital, decentralized, and distributed ledger that stores information open, accessible, and secure.

It stores information in blocks, adding new ones to existing chains.

Blockchain is the platform on which new-gen digital applications such as crypto, NFTs, DAOs, smart contracts, etc., are built.

It is efficient, safe, accessible, open, costly, and susceptible to illegal use.

It has four main types: public, private, consortium, and hybrid.

Public blockchains are public and give access to anyone to join.

Private blockchains are private, require access to join, and are governed by a single organization.

Consortium blockchains require access to join and are controlled by organizations.

Hybrid blockchains combine features of private and public blockchains.

In the digital space, information is recorded in an advanced manner.

Groups of information are collected in ‘blocks’ that possess specific storage capacities, which, when exhausted, are added to an already existing ‘chain’ of blocks.

When a block is filled with information, it is given a precise timestamp when added to the chain.

This forms what is called “blockchain.”

What is a Blockchain?

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A blockchain is a digitally distributed ledger that stores information open, accessible, and secure.

The most important feature of the blockchain is that it is decentralized, i.e., not regulated by a central authority. Instead, it is shared among the network of computer servers.

With blockchain, you cannot modify any information after it has been entered on the entry list. This security is obtained via cryptographic concepts.

It is private, decentralized, and detailed, safe from external tampering. Transactions get processed quicker and more efficiently with it.

However, a major drawback is the immense cost it takes to power the technology. As we have previously established, blockchain is a digital ledger, and this means it can be easily used for nefarious activities.

By and large, blockchain is a staple of next-gen tech, and it is the platform on which the likes of cryptocurrency, NFTs, DAOs, smart contracts, etc., are built. It is the future of technology.


All blockchain networks can either be permissionless, permissioned, or both.

Permissionless blockchains enable nodes (anyone) to join the network without restriction.

Permissioned blockchains restrict the access and rights of nodes on the network.


Blockchains can exist in any of the above forms, which leads to the types of blockchains there are.

Let's dive in.

Types of Blockchain Structures

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There are four main types of blockchain structures. Here, we'll examine each while highlighting its pros, cons, and uses.

Public Blockchain

This type of blockchain anyone with an internet connection can access. It is public; it doesn't require permission or restrict entry.

You can access recent and prior records and perform mining activities on it.

However, no valid transaction can be altered on the network, and you can validate the transactions, uncover bugs or recommend modifications because the source code is usually open-source. If a public blockchain lacks the needed peers contributing to deciphering transactions, it will become non-functional.

The verification of the transactions is accomplished through Proof-of-Work (PoW) or Proof-of-Stake (PoS).

The primary benefit of public blockchains is that they are entirely independent of organizations. Also, they operate transparently, and are secure and open.

Because it has no restrictions to entry, an infinite number of nodes can join the network. This makes it slow and unscalable because access to it can't be controlled.

Public blockchains are primarily used in mining cryptocurrencies such as Bitcoin, Litecoin, Ether, etc.

In addition, they find use in organizations steeped in responsibility and trust, like social support groups or NGOs.

Private Blockchain

A private blockchain operates in a restrictive environment like a closed network or under the management of a sole entity.

In a way, it is centralized, and although it functions in a peer-to-peer format, it works on a smaller level ( like a small group within an organization.)

The primary benefit of private blockchain is that the controlling organization can set authorization levels, safety, and accessibility levels. They wield a monopoly on which nodes can access or add a transaction.

Due to their limited size, transactions get carried out quickly.

A significant drawback with private blockchain is that it possesses centralized ownership, and this goes against the decentralized nature of blockchain technology.

Since a small group of people operates it, there is little or no anonymity. The source code is closed and can't be independently validated, which leads to less security.

They find use in supply chain management, trade secret management, internal voting, and asset ownership.

Hybrid Blockchain

This type of blockchain combines features of private and public blockchains.

It lets organizations establish a private, permission-based system alongside a public permissionless system, allowing them to regulate who can access certain data stored in the blockchain and what data will be opened up publicly.

Transactions on a hybrid blockchain are not published but are verified when needed.

If you join a hybrid blockchain, you possess maximum access to the network. Your identity is protected from other users unless they join in a transaction. Hence, both party's identities will be revealed.

Because a hybrid blockchain works within a closed ecosystem, external hackers can't attack the network. Therefore, it preserves secrecy and ensures cheap, quick, and scalable transactions.

A significant drawback is that it isn't wholly open because information can be hidden.

Hybrid blockchain finds use in the real estate sector. Corporations can use a hybrid blockchain to run systems privately but reveal specific information, such as listings, to the public.

Consortium Blockchain

A Consortium blockchain is synonymous with a hybrid blockchain in that it has private and public blockchain features.

What separates both is that numerous organizational members work together on a decentralized network with consortium blockchain.

An advantage of it is that it tends to be safe, scalable, and efficient.

A disadvantage of it is it isn't very open.

Consortium blockchain can be helpful in the banking industry for validating payments, research purposes, and food tracking.

Conclusion

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These four types of blockchain structures have different merits, demerits, and uses.

Most importantly, they all can record information in a safer, more open, and more efficient way than we are used to.

Therefore, the existence of these different blockchain structures is advantageous to technology progress.



Author: Valentine. A, Gate.io Researcher
This article represents only the researcher's views and does not constitute any investment suggestions.
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