Types of Blockchains and How Enterprises can Capitalize on it with the Assistance of TheBlockBox
Blockchain has been around for quite some time now. Though widely recognized as the technology that provides the infrastructure for Bitcoin, it is playing a bigger role in business, including small and midsize businesses (SMBs).
This revolutionary technology is going strong and is disrupting a wide range of industrial sectors. Blockchain was first created and implemented to establish a digital currency ecosystem that functioned in a trustless environment. It was aimed to take over the centralized financial system that seemingly has quite a few flaws in it. But today, it is envisioned as the technology that could negate the adversities caused by centralization across various industries.
However, the general distributed ledger system can be a curse to companies that deal with sensitive information.
There had to be a way in which the enterprises could use this technology. This would not only help them reap the benefits of it but also make the technology more widespread.
So, the question popped as to how these enterprise-level organizations could leverage blockchain technology?
The answer was a private or hybrid blockchain.
Let’s see what these are in contrast to the public blockchains.
Public, Private and Hybrid Blockchains
Prior to delving into details concerning different types of blockchain, we need to address the topics of blockchain network participants’ permission, access, and consensus mechanism.
In a permissionless/public blockchain, the consensus allows all nodes to have equal rights for viewing and validating transactions. Any blockchain member is free to set up a node and participate in the consensus mechanism.
Contrary to that, permissioned/private blockchains enable its primary members to exclusively select other members who can view or take part in the consensus process, and can validate transactions. In private blockchains, only registered and verified members are given access and full authority.
Public blockchains allow any individual, group, or organization to take part in the network — and that’s why they are called permissionless blockchains. They are secure, immutable, and decentralized databases. No one entity controls or manages the transactions and block creation on a public blockchain. It’s a truly democratic ecosystem controlled by the people on the network themselves.
There are various mainstream public blockchains such as Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Monero, etc.
Private blockchains, on the other hand, are permissioned, centralized or closed network which are managed by a single entity or a group of initially chosen entities. They dictate which participants can access the network and participate in the consensus process. Participation rules can either be set up by existing participants, a regulatory authority or an enterprise.
Linux Foundation’s Hyperledger Fabric and JP Morgan Chase’s Quorum are both to meet corporate privacy and centralized access requirements. Only entities participating in a particular transaction have knowledge about it — other entities will have no access to it. Due to the lesser number of nodes in a private blockchain, its transactional throughput is higher as compared to that of a private blockchain.
Hybrid blockchain falls in the sweet spot between the private and public blockchain. It is a mixture of both public and private blockchains. At present, a public blockchain has a very low transaction speed. The Ethereum mainnet for example averages about 15 tx/s, whereas Bitcoin stands at 7 tx/s. On the other hand, a private blockchain provides higher transaction speeds because the consensus finality completes faster.
The outcome is clear. The blockchain trilemma says that a Blockchain can only scale at the expense of decentralization or security. Since decentralization is key to providing a trustless system, how can we have a truly decentralized blockchain that is also fast and secure?
In a Hybrid blockchain, every transaction can happen quickly in its own private chain and commit only to the public chain as and when necessary, as in the case when public verification is required.
A list of enterprises which can reap the benefits of public, private and hybrid blockchains is extensive. Knowing how to apply blockchain to different business models, processes, and ecosystems can be a game-changing aspect:
1. Enterprises dealing with cross-country fiat payment transfers can utilize feeless, transparent and direct cryptocurrency transactional funnels and offer it to their users.
Payment solution providers such as Skrill, Neteller, EcoPayz, MuchBetter have already started utilizing this funnel consistently both for transactions and deposits. Tightly linking their business partners, payment solution providers deliver a one-stop go-to platform for cryptocurrency gamblers, players, traders, e-commerce users to get their crypto in play.
2. A supply chain is a network that is established between a business and its suppliers, and blockchain technology promises to solve the existing problems with today’s supply chains.
Products can be tagged and assigned with unique, cryptographically secured identities that are verified and stored onto a transparent and immutable blockchain. Blockchain can then be used to verify the state of the product, shipping status, time, location, and other specifics.
3. A digital identity can be thought of as the body of information that represents individuals, organizations, etc. that exists online. Blockchain could potentially solve digital identity issues by giving control back to the user, creating a so-called self-sovereign identity. Instead of granting broad consent to a variety of applications and service providers, individuals could own an encrypted digital hub in which their digital identity data is stored and use it to sign up or log in on all digital places.
Blockchain development, advisory, and consultancy — TheBlockBox
Blockchain was first used as an experiment in the bid to revolutionize the world of monetary transactions. But today it is spreading like a wildfire to an ever growing number of industries and markets around the world.
TheBlockBox is a blockchain development and consulting company that helps small to large size businesses leverage the blockchain potential. Our experts build end-to-end blockchain applications for a wide range of industries including finance, banking, supply chain, healthcare, transportation, digital identity, and advertising among many others.
Together we identify how blockchain can serve your idea or project in the right manner, and then help you understand how your business would benefit from it.
With TheBlockBox as your partner, you can rest assured to stay ahead of the emerging technological trends of the future.
We have the workforce to transfigure your idea into a fully operational end product.
