The popularity of blockchain technology grew as the need for digital currencies increased. Although blockchain is not necessarily related to cryptocurrencies, the biggest cryptocurrencies – such as Bitcoin and Ethereum – use blockchain technology. Blockchain can be seen simply as a way to record and store information in a wide and distributed way. blockchain is a type of database. But what is a database? A database is a collection of information stored electronically in a computer system, But blockchain stores data and information in a new way. In fact, the way information is stored in a blockchain differs significantly from other databases. A blockchain gathers data in units called Blocks, each of which has a specific collection of data. These blocks can only hold a certain amount of data and have a restricted storage capacity.
In the following, we will explain that blockchain is generally divided into several categories. Permissionless and permissioned blockchains are the two types into which blockchains are often split. Private Blockchains and Consortium Blockchains go under the category of licensed blockchains, whereas Public Blockchain falls under the category of blockchains that do not need permission. Hybrid blockchains are a kind of blockchains that combine elements of permissioned and permissionless architectures.
A public blockchain network is a blockchain whose network is open to the public, completely decentralized, and anyone can become a member. Public blockchains allow all nodes to have equal rights to access, create new blocks, and validate in the blockchain.
Public blockchains such as Bitcoin blockchain, Ethereum blockchain, and other digital currencies are mostly used in cryptocurrency projects and are used for mining and exchanging digital currencies.
Private blockchains, sometimes called managed blockchains, are controlled by specific organizations and institutions. In this type of blockchains, the upstream power or group decides who is the node or the network operator. Private blockchains are somewhat decentralized; Because public access to these blockchains is limited.
Some examples of private blockchains include the business-to-business or B2B virtual currency exchange network Ripple, and Hyperledger.
Consortium blockchain is one of the permissioned blockchains. Unlike private blockchains, these blockchains are managed by a group of organizations and institutions; Therefore, consortium blockchains are more decentralized than private blockchains and thus provide higher levels of security.
Setting up a blockchain consortium can be a difficult process, as it requires cooperation between a large number of organizations. Logistical challenges are among the advantages of this blockchain. Some members of supply chains may not have the necessary technology or infrastructure to implement blockchain. A group may also decide that the upfront costs of digitizing their data and connecting to other members of the supply chain are too high.
Hybrid blockchains are controlled by an organization, but have a level of oversight (like a public blockchain) that is required to validate certain transactions. An example of a hybrid blockchain is the IBM Food Trust, which was created to improve efficiency across the entire food supply chain.