During the past few years, blockchain technology has become increasingly popular. It has the potential to revolutionize how we transfer, store, and manage information. There are multiple types of blockchains or distributed ledger technologies.
You may have heard of distributed ledger technology (DLT), another name for what people often call a blockchain. There are many different types of DLTs or blockchains. DLT is a type of database that is not stored in one place but on a network of computers. Visit here to learn more about the regularisation of blockchains or DLT technology.
In this post, we will tell you about the different types of blockchain. Many beginners do not know which blockchain they should choose during investing. That is why we explain here the types of blockchain in detail.
Private or permissioned blockchains
Private or permissioned blockchains are run by a single organization. This organization controls all the nodes in a private blockchain, and they have the power to decide who can read, write and audit transactions on the blockchain. You can revoke the access to nodes as per their discretion.
A private blockchain is much more similar to traditional databases than public blockchains: it’s faster, easier to set up, and provides more flexibility for developers. However, because there is no anonymity in private blockchains and only a few selected people are allowed to use them, these blockchains don’t offer all of the benefits that public ones do.
While permissioned blockchains have their use cases, other DLTs can be used for different purposes. Hyperledger Fabric is a membership ledger that allows multiple participants to see the same agreement, but only authorized participants can make changes.
This is a good choice when you want to ensure the privacy of the data while still making sure that everyone is on the same page and aware of any changes.
Suppose you’re interested in learning more about how Hyperledger Fabric works, or you’re interested in getting started with it yourself. In that case, we recommend taking the Developing Blockchain Solutions course before diving deeper by exploring an enterprise-ready blockchain platform like Quorum or Corda.
The three types of blockchain platforms
There are three types of blockchain platforms you should be aware of, and they each have their uses.
- Open source blockchain platforms allow anyone to read the code, modify it, and improve it.
- Private blockchain platforms are closed off to the public; only invited participants can join the forum or platform.
- Hybrid blockchain platforms are open-source on one side and private on the other; users can choose which side to use based on whether they want privacy or transparency.
Here’s an open-source blockchain platform example: Bitcoin is the original distributed ledger technology (DLT) that uses blockchain architecture. It was created in 2008 as an open-source project by Satoshi Nakamoto with one purpose, to enable people to exchange value without using any intermediaries like banks, PayPal, Western Union, etc., all while being fully transparent and anonymous.
R3 Corda is used for financial transactions among banks or insurance companies where privacy is key. You can select from many different types of blockchain only what you should know, which is the right type of blockchain for you.
It’s important to know that there are several different types of blockchains from which you can choose, depending on your needs.
Whether you’re building a decentralized financial application or a government database for storing identity documents or even collecting data about air pollution in Asia, there is likely already an existing blockchain solution, or one could be customized to suit your requirements.
Today’s most common types of blockchains include public blockchains, private blockchains, and hybrid ones (which combine elements of both public and private varieties).
Above, we have told you about types of blockchain so you can know before investing which type of blockchain you need. You can learn about the types of blockchain by reading the above guide carefully.
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