What Are the Different Types of Blockchain Technologies?

The record-keeping technology brought to us in the blockchain era is relatively new. However, the strides made have been significant in recent years. Since Bitcoin’s introduction in the early 2000s, the types of blockchain technologies and their uses have not only expanded worldwide but have become more easily implemented as well.

Blockchain technology uses today are numerous. They range from uses like food tracing to streamlining financial paperwork. Even to securing patient healthcare data.

With such a wide variety of uses, blockchain truly is the future. But not all blockchain networks operate exactly the same. In this article, we’ll go over the main types of blockchain technologies that exist today.

Types of Blockchain Technologies

There are four major types of blockchains existing today. They are classified as public, private, hybrid, and federated. The discrepancies between each become nuanced, however, there are a few major commonalities.

Regardless of the functioning of the blockchain, each blockchain type has clusters of nodes that hold shared ledgers. These ledgers get updated on a peer-to-peer system. Each node verifies transactions and can also initiate or receive transactions.

Each blockchain type has its advantages, as well as drawbacks. For example, private blockchains typically have fewer nodes. Fewer nodes make them more susceptible to a hack. Yet, transactions made on a private network are lightning-fast. Let’s explore further.

Public Blockchain

To begin, public blockchains are the most well-known type of blockchain network. Think of Bitcoin, Litecoin, or Ethereum. Public blockchains are a decentralized distributed ledger technology. This particular type of technology stores information across a peer-to-peer network.

This allows for non-restrictive access. This means anyone with access to the internet can sign on and become an authorized node. Records or transactions made on a public blockchain network cannot be changed. Yet anyone can verify said transactions on the network.

The main use for a public blockchain is for the mining of cryptocurrencies. It can also be used for public recordkeeping for property ownership.

Private Blockchain

Private blockchains are also decentralized. Though they work on a much smaller scale than public blockchains. Unlike public blockchains that allow anyone to verify transactions, private blockchains are operated by small networks within an organization. This allows a company to control who can view or change the data within a blockchain.

Private blockchain uses can range anywhere from internal company audits to supply chain management. One of the major upsides to a private blockchain is the speed of transactions. Transactions become validated by a few nodes. This allows for speed and efficiency.

Federated Blockchain

A federated blockchain is a type that holds both private and public features. It is also referred to as a consortium blockchain. Consortium blockchains are managed by more than one organization.

Essentially, this blockchain operates as a private blockchain with limited access. Federated blockchains are highly secure and controlled by preset nodes. These preset nodes can start and confirm transactions. This type of blockchain is typically utilized by banks or government organizations.

Hybrid Blockchain

A hybrid blockchain is a combination of the best parts of a public and private blockchain. Hybrid blockchains are not open to the public. Though they still provide transparency and security.

Members of a hybrid blockchain can decide who can take part. They can also decide which transactions made on the blockchain itself can be made public. A user in a hybrid blockchain obtains access to perform transactions or modify them. The remaining users are kept private, keeping any confidential information secure.

Real estate and retail markets can benefit from hybrid blockchain technology. In addition, private citizen data like medical records can be stored on a hybrid network.

Uses

As mentioned above, each blockchain serves its own purpose. By using hybrid tech, a large company can keep its information securely stored. They can do so without the threat of a breach. Or, banks can secure sensitive user information.

Private blockchains are able to provide companies a way to complete transactions with incredible speed and can increase scalability as needed. Public blockchains provide a worldwide public ledger system. With an added bonus of an impossible network to hack.

Among other things, governments can work faster and smarter. Financial institutions can increase the efficacy of their operations. Healthcare records can become more secure, and insurance claims settled faster.

Cryptocurrency

It would be remiss not to mention cryptocurrencies when talking about blockchain technology. After all, blockchain is what allowed cryptocurrency to exist. The cryptocurrency community has exploded since the inception of Bitcoin. Blockchain is what helped digital currency along on its meteoric rise.

Cryptocurrency transactions are conducted via blockchain technology. Transactions occur between wallets, or simply, a digital place to store currency. The best cryptocurrency wallet may differ for each person. In today’s age, having a digital wallet also means you can withdraw your digital “cash” from an ATM.

Even without a digital wallet, you can click here to browse through locations convenient to you for a local Bitcoin ATM.

The Age of Blockchain

Governments, small businesses, large corporations, even individuals can all benefit from these types of blockchain technologies. Among these benefits are security, transparency, and scalability.

From food services to insurance companies, the uses are nuanced and endless. The various models will serve their purposes in various industries. Widespread adoption of these technologies will transform the way we do business today.

If you found the information presented here interesting, be sure to check out the whole host of articles in our Technology section.