There are three types of blockchain
Public blockchain
Private blockchain
Consortium blockchain
One of the various types of blockchain technology is the public blockchain. A public blockchain is a distributed ledger technology that allows anyone to join and conduct transactions. It is an open version in which each peer has a copy of the ledger. This also means that anyone with an internet connection can access the public blockchain. The bitcoin public blockchain was one of the first to be made available to the public. It enabled anyone connected to the internet to do transactions in a decentralized manner' The verification of the transactions is done through consensus methods such as Proof-of-Work (POW), Proof-of-Stake (POS), and so on. At the cores, the participating nodes are required to do the heavy lifting, including validating transactions to make the public blockchain work. If a public blockchain does not have the necessary peers participating in transaction resolution, it will become non-functional. There are also different types of blockchain platforms that use these various types of blockchains as the base of their project. The most basic application of public blockchains is for cryptocurrency mining and exchange. As a result, Bitcoin and Litecoin blockchains are the most commonly used public blockchains.
The advantages of public blockchain include the following:
Anyone can take an active part in the public blockchain.
It instills trust in the entire user community.
Everyone is motivated to contribute to the improvement of the public network.
To function, public blockchain does not require any intermediaries.
Depending on the number of participating nodes, public blockchains are also secure.
It brings transparency to the whole network as the available data is available for verification purposes.
Disadvantages of public blockchain include the following:
A slow transaction speed hampers them. A transaction can take a few minutes to several hours to complete. For example, bitcoin can only handle seven transactions per second, whereas VISA can handle 24,000 transactions per second. This is due to the time required to solve the mathematical problems and complete the transaction.
Another problem with public blockchain is scalability. They simply cannot scale due to how they work. The network becomes clumsier and slower as more nodes join.
The final disadvantage of a public blockchain is the choice of consensus method. Bitcoin, for example, uses Proof-of-Work (POW) , which consumes a lot of energy. However, this has been partially solved by using more efficient algorithms such as Proof-of-Stake (POS).
One of the various types of blockchain technology is a private blockchain. A private blockchain is a blockchain that operates in a restricted environment, such as a closed network. It is also a permissioned blockchain that is under the control of an entity.
Private blockchains are ideal for use within a privately held company or organization for internal use cases. This allows you to use the blockchain effectively while restricting access to the blockchain network to only a few participants. The organization can also set different parameters to the network, including accessibility, authorization, and so on! So, what distinguishes it from a public blockchain? It is different in the way it is accessed. Otherwise, it provides the same set of features as the public blockchain, including transparency, trust, and security to the chosen participants. Another major difference is that it's kind of centralized as only one authority looks over the network. As a result, it lacks a decentralized theoretical nature. There are also different types of blockchain platforms that use private blockchain as their foundation. Furthermore, each of them is distinct and offers distinct benefits. In many cases, a private blockchain is considered a permissioned blockchain. Voting, supply chain management, digital identity, asset ownership, and other applications use private blockchain networks.
The following are some of the Advantages of private blockchain.
Private blockchains are extremely fast. This is due to the fact that there are fewer participants than on the public blockchain. In short, the network takes less time to reach consensus, resulting in faster transactions.
Private blockchains scale better. Scalability is possible because only a few nodes in a private blockchain are authorized to validate transactions.
This means it doesn't matter if the network grows; the private blockchain will work at its previous speed and efficiency. The key point here is the centralization of decision-making.
The following are some of the Disadvantages of private blockchain.
Private blockchains lack true decentralization. This is one of the most significant disadvantages of a private blockchain, and it contradicts the core philosophy of distributed ledger technology and blockchain in general.
Developing trust within the private blockchain is difficult because the centralised nodes make the final decision.
A consortium blockchain (also known as Federated blockchain) is a novel approach to meeting the needs of organizations that require both public and private blockchain features. Some aspects of the organizations are made public in a consortium blockchain, while others remain private.
The present nodes in a consortium blockchain control the consensus procedures. Furthermore, despite the fact that it is not open to the general public, it retains a decentralized nature. How? A consortium blockchain, on the other hand, is managed by multiple organizations. As a result, there is no single force of centralized outcome here.
The following are some of the Advantages of private blockchain
It provides greater customizability and resource control.
The term "electronic commerce" refers to the sale of electronic goods.
In addition, it is more efficient than public blockchain networks.
Works with well-defined governance structures.
It offers access controls.
The following are some of the Disadvantages of private blockchain
Even if it is secure, the integrity of the members can compromise the entire network.
It is less visible.
Regulations and censorship can have a significant impact on network performance.
The term "electronic commerce" refers to the sale of electronic goods.