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3 Types of Blockchain

The document categorizes blockchains into four main types: public, private, hybrid, and consortium, each with distinct characteristics regarding user access, control, and use cases. It also discusses the importance of selecting the appropriate blockchain type based on organizational priorities, regulatory considerations, and scalability needs. Additionally, it introduces Blockchain-as-a-Service (BaaS) as a cost-effective solution for businesses to develop blockchain applications without managing infrastructure.

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21A0536 Shivani
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3 views

3 Types of Blockchain

The document categorizes blockchains into four main types: public, private, hybrid, and consortium, each with distinct characteristics regarding user access, control, and use cases. It also discusses the importance of selecting the appropriate blockchain type based on organizational priorities, regulatory considerations, and scalability needs. Additionally, it introduces Blockchain-as-a-Service (BaaS) as a cost-effective solution for businesses to develop blockchain applications without managing infrastructure.

Uploaded by

21A0536 Shivani
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Types of Blockchain

Prof. J. Ujwala Rekha


Categorization of Blockchains
• Blockchains are categorized based on user
identity/authentication and user
rights/authorization.
• Permissionless and Permissioned Blockchain
– Permissionless blockchain is characterized by open
and unrestricted participation.
– In a Permissioned blockchain, access to participate in
the network is restricted. Network administrators have
control over who can join, view data and engage in the
consensus process
Four Prominent Types of Blockchains

• Public blockchains
• Private blockchains
• Hybrid blockchains
• Consortium blockchains
Public Blockchain
Key traits
• Decentralized, democratized and transparent
• Support a wide range of applications
• Promote interoperability
• Useful for crypto, trading tokenized assets, crowdsourcing and
open-source work.
• Examples and platforms: Ethereum, Bitcoin, Solana
• Public blockchains thrive on robust participation – the more, the
merrier and the more secure.
• Public blockchain struggle with relatively slow transaction speed
and limited scalability.
• Due to their highly transparent nature, they may not be appropriate
for sensitive transactions.
• Use cases: Trading digital assets, crowdfunding, collecting
donations or working on open-source projects.
Private Blockchain
Key traits
• Restricted participation to select members by a single entity in
contrast to decentralization
• Enhanced privacy and greater control
• Centralized and at potentially higher risk for manipulation
• Useful for precise functions within an organization
• Examples and platforms: Hyperledger Fabric, MultiChain
• Private blockchains offer enhanced privacy, greater control and
faster transaction-processing speeds.
• Having one central entity to restrict participation can make less
resistant to internal risks like fraud or manipulatioon.
• Use cases: Internal applications such as logistics, accounting,
payroll and sensitive record-keeping.
Hybrid Blockchain
Key traits
• Combine elements of both public and private options and offer a
balance between the decentralized ethos of public blockchains and
the control of private ones.
• Selective transparency and customizable levels of access
• Balance between decentralization and control
• Can be complex from a management and governance perspective
• Useful for selective data-sharing within regulated industries
• Examples and platforms: XinFin, IBM’s Blockchain Platform
• Establishing protocols and governance strategies that can handle the
hybrid nature of these blockchains is a related challenge.
• Use cases: Enterprises involved in selective data-sharing. For
example, a financial or healthcare organization might use a
hybrid blockchain if they need to make certain information publicly
auditable while protecting customer or patient confidentiality.
Consortium Blockchains
Key traits
• The consortium blockchain also known as the federated blockchain is a
permissioned blockchain and considered to be a hybrid between public and private
blockchain.
• A group of organizations share control and governance of the network.
• Each consortium member typically has equal rights regarding decisions.
• Compared to a single-entity, private blockchain, these models foster increased trust
and security.
• Balanced between centralized and decentralized models
• Shared cost and risk
• Cross-organizational coordination can introduce complexities
• Useful for collaborative processes
• Example and platform: R3’s Corda.
• Managing consensus and governance across multiple organizations requires
significant coordination and often compromise.
• Differences in goals and strategies among members can lead to conflicts or
inefficiencies.
• Use cases: Secure data sharing, logistics and supply chain management
What to Consider when Selecting a Blockchain?
• When determining what type of blockchain technology to introduce
into your enterprise, it’s important to first identify key priorities and
objectives:
– Is public exposure or private confidentiality more critical?
– How will the blockchain integrate with existing infrastructure?
– Looking ahead, what are the business’s expectations and needs for
scalability?
– What future does leadership envision when it comes to tokenized
and digital assets?
• The regulatory environment is another core consideration when
weighing which type of blockchain technology to explore.
– Certain industries may require compliance with regulatory
standards and data protection laws.
– A regulated blockchain infrastructure provider with a nuanced
approach to multijurisdictional compliance can guide enterprises in
choosing solutions tailored to these specific needs.
Public vs. Private vs. Consortium vs. Hybrid
Blockchains
Public Private Consortium Hybrid

Organization Public Single entity Multiple Highly


Type or organizations regulated
organization enterprise

Users Anonymous Known and Known and Anonymity


trusted trusted for public
participants participants n/w
members;
Private n/w
members are
known within
the private
n/w
Public Private Consortium Hybrid

Access Open and Access fully Selectively Centralized


transparent to restricted open; relevant control of
all transparency providing
provided access

Network type Decentralized Centralized Partially Partially


decentralized decentralized

Operation Anyone can Pre-approved Pre-approved Operations are


read, initiate and participants participants customizable;
receive can read, can read, central
transactions initiate initiate authority
transactions transactions decides
Public Private Consortium Hybrid

Verification Anyone can Central Only The public


participate in authority privileged n/w verifies
consensus creates a members can the block
process block validate and
create block
Immutability Secured by Secured by Secured by Secured by
hashing distributed distributed hashing at
consensus consensus the private
n/w and
secured by
distributed
consensus by
public
blockchain
Public Private Consortium Hybrid

Consensus PoW, PoS, Voting or Voting or DPoS in


mechanism etc. variations of variations of public and
PoW/PoS PoW/PoS variations in
private

Incentivization Incentivizes Users limited Limited Can


miners to to within a incentivization incentivize
grow the company users in the
network hence public
incentives are network
not relevant
Security Security Dependent Dependent Very high as
based on on the on unknown
consensus blockchain blockchain parties
protocols and architecture architecture cannot access
hash adopted adopted
functions
Public Private Consortium Hybrid

Trust Trust is Trusted Need to trust Consensus by


enforced via central the majority public
cryptographi control blockchain
c proof

Transaction Slow; takes High; takes Very high; Highest


speed more than 10 seconds to takes seconds
minutes for create a to create a
creating a block block
block
Energy Very high Low Low Low
consumption
Public Private Consortium Hybrid

Scalability Limited; as the Better Better Highly


n/w grows, the scalability as scalability as scalable
node high storage high storage
requirements and and
of bandwidth, computational computational
storage and power not power not
computational required. required
power
increases
Blockchain-as-a-Service
• Blockchain-as-a-Service (BaaS) is a concept similar to Software-as-
aService (SaaS) model.
• By adopting the BaaS model, businesses can leverage the cloud-based
solution to build their blockchain apps, smart contracts, and other
blockchain functions.
• For a fee, the service provider takes care of setting up and keeping the
blockchain infrastructure up and running on behalf of the company
enabling the company to focus on its core business areas without worrying
about infrastructure and performance-related issues.
• It is a lot cheaper to host and run the blockchain on a BaaS solution rather
than developing a blockchain in-house.
• However, security must be assessed thoroughly as mistakes in set-up or
configuration/code errors can severely disrupt the blockchain.
• All the major technology companies like Amazon (on AWS-Amazon Web
Services), Microsoft (by MS Azure), IBM, and Oracle have launched
blockchain-as-a-service (BaaS) offerings.

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