Blockchain 101: Types of Blockchain
Blockchain is a big and daunting term to many, being heard thrown around everywhere. It is often seen as a solution to many, but what exactly is a blockchain? Let us break down the three most popular types of blockchain and explain it to you.
1) Permissioned Blockchain
Permissioned blockchains maintain an access control layer to allow certain actions to be performed only by certain identifiable participants.
Permissioned blockchain maintains an access control layer to allow certain actions to be performed only by certain identifiable participants. These blockchains differ from permission-less. An example is Ripple (XRP), which determines roles for a select number of participants who can act as transaction validators on their network.
Such blockchains are also popular among industry-level enterprises and businesses, for which security, identity and role definition are important. For instance, a manufacturer producing a product may use a permissioned blockchain that also takes care of logistics.
2) Permissionless Blockchain
Permissionless blockchain networks power up most of the market’s digital currencies. They allow every user to create a personal address and begin interacting with the network, by submitting transactions, and hence adding entries to the ledger. Additionally, all parties have the choice of running a node on the system or employing the mining protocols to help verify transactions.
An example is Bitcoin, mining is done by solving complex mathematical equations which in return validate the transactions saved on the network — anyone is free to download the bitcoin blockchain and mine, in exchange for mining fees and block rewards.
3) Federated Blockchain In Consortium Blockchain
Some nodes control the consensus process, and some other nodes may be allowed to participate in the transactions. Consortium Blockchain is like a hybrid of Public and Private Blockchain. It is public because the Blockchain is being shared by different nodes, and it is private because the nodes that can access the Blockchain is restricted. Hence, it is partly public and partly private. Examples are Quorum (based on Ethereum), R3 Corda and Hyperledger.
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