Blockchain#3.pdf

Blockchain Technology
Types of Blockchain
Dr. Ramchandra Mangrulkar

Blockchain Types
Public Blockchain
Private Blockchain
Consortium / Federated Blockchain
Hybrid Blockchain
2/21 30.07.2022 Dr. Ramchandra Mangrulkar DJSCE, Mumbai

Blockchain Types 1
1. https://blog.blockchainfirm.io/how-blockchain-technology-works/

Public Blockchain / Permissionless Blockchain

Public Blockchain
A public blockchain is the permission-less distributed ledger technology
where anyone can join and do transactions
Non-restrictive version where each peer has a copy of the ledger
The verification of the transactions is done through consensus methods
such as Proof-of-Work(PoW), Proof-of-Stake(PoS), and so on.
If a public blockchain doesn’t have the required peers participating in
solving transactions, then it will become non-functional.
Public Blockchain networks reward their participants for taking part in
the mining process and regulating the flow of the transactions while
simultaneously maintaining the immutability of the ledger.
Examples : Bitcoin, Ethereum, Litecoin, NEO

Advantages of Public Blockchain
Anyone can join the public blockchain.
It brings trust among the whole community of users Everyone feels
incentivized to work towards the betterment of the public network
Public blockchain requires no intermediaries to work.
Public blockchains are also secure depending on the number of
participating nodes
It brings transparency to the whole network as the available data is
available for verification purposes.

Dis-advantages of Public Blockchain
They suffer from a lack of transaction speed. It can take a few minutes to
hours before a transaction is completed. For instance, bitcoin can only
manage seven transactions per second compared to 24,000 transactions
per second done by VISA.
Another problem with public blockchain is scalability. They simply cannot
scale due to how they work. The more nodes join, the clumsier, and slow
the network becomes. There are steps taken to solve the problem. For
example, Bitcoin is working on lighting the network, which takes
transactions off-chain to make the main bitcoin network faster and more
scalable.
The last disadvantage of a public blockchain is the consensus method
choice. Bitcoin, for example, uses Proof-of-Work (PoW), which consumes
a lot of energy. However, this has been partially solved by using more
efficient algorithms such as Proof-of-Stake (PoS).

Use Cases of Public Blockchain
Voting : Governments can do voting through public blockchain employing
transparency and trust.
Fundraising : Companies or initiatives can make use of the public
blockchain for improving transparency and trust.

Private Blockchain / Permissioned Blockchain

Private Blockchain
Private blockchain networks are shared only among the trusted
participants.
The control of a private network lies with the owner.
The rules that a private blockchain abides by can be customized
depending on levels of permissions, exposure, number of participants,
authorization requirements, and a lot more.
Examples : Multichain, Hyperledger Fabric, Hyperledger Sawtooth, Corda

Advantages of Private Blockchain
Private blockchains are fast. This is because there are few participants
compared to the public blockchain.
Private blockchains are more scalable. The scalability is possible because,
in a private blockchain, only a few nodes are authorized to validate
transactions.

Dis-advantages of Private Blockchain
Private blockchains are not truly decentralized. This is one of the biggest
disadvantages of private blockchain and goes against the core philosophy
of distributed ledger technology or blockchain in general.
Achieving trust within the private blockchain is tough because the
centralized nodes make the last call.
As there are only a few nodes here, the security isn’t all that good.

Use Cases of Private Blockchain
Supply chain management : Organizations can deploy a private
blockchain to manage their supply chain.
Asset ownership : Assets can be tracked and verified using a private
blockchain.
Internal Voting : Private blockchain is also effective at internal voting.

Federated Blockchain / Consortium Blockchain

Federated Blockchain / Consortium Blockchain
A creative approach to solving organizations’ needs where there is a need
for both public and private blockchain features.
Consortium blockchains are partially decentralized blockchain networks. a
consortium blockchain is managed by more than one organization. So,
there is no one single force of centralized outcome here.
In a consortium blockchain, some aspects of the organizations are made
public, while others remain private.
To ensure proper functionality, the consortium has a validator node that
can do two functions, validate transactions, and also initiate or receive
transactions. In comparison, the member node can receive or initiate
transactions.
The federated blockchain helps in reducing the transaction costs and
redundancy of data while being faster and offering higher scalability.
Examples of Consortium Blockchain : Marco Polo, Energy Web
Foundation, IBM Food Trust.

Advantages of Federated Blockchain
It offers better customizability and control over resources.
Consortium blockchains are more secure and have better scalability.
It is also more efficient compared to public blockchain networks.
Works with well-defined governance structures.
It offers access controls.

Dis-advantages of Federated Blockchain
Even though it is secure, the whole network can be compromised due to
the member’s integrity.
It is less transparent. Regulations and censorship can have a huge impact
on network functionality.
It is also less anonymous compared to other types of blockchain.

Use Cases of Federated Blockchain
Banking and payments : A group of banks can work together and create
a consortium. They can decide the nodes that will validate transactions.
Research : A consortium blockchain can be used to share research data
and results.
Food tracking : It is also great for food tracking.

Hybrid Blockchain : A Duo Of Public And Private Blockchain

Hybrid Blockchain
Hybrid blockchain is best defined as a combination of a private and
public blockchain. It has use-cases in an organization that neither wants
to deploy a private blockchain nor public blockchain and simply wants to
deploy both worlds’ best.
To be precise, a hybrid blockchain offers controlled access and complete
freedom, both at the same time.
A hybrid blockchain network is not open to all. However, it includes
features such as transparency, integrity, and security.
Hybrid blockchains are totally customizable. The existing members of this
blockchain decide who can participate in the network and who cannot
and also which transactions are made public and which are kept private.
This type of blockchain opens up the door to the best possible way that
an organization can work with its shareholders.
Example of Hybrid Blockchain : Dragonchain, XinFin’s Hybrid blockchain

Difference between Types of Blockchain

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