Bitcoin Blockchain

Blockchain: Its benefits and Types

What is Blockchain technology? 

Blockchain is a shared, immutable ledger for recording transactions, tracking assets, and building trust. An asset can be tangible or intangible. Virtually anything of value can be tracked and traded on a blockchain network, reducing risk and cutting costs for all involved.

A blockchain network can track orders, payments, accounts, production, and much more. As each transaction occurs, it is recorded as a “block” of data, each block is connected to the ones before and after it. These blocks form a chain of data as an asset moves from place to place or ownership changes hands. Transactions are blocked together in an irreversible chain: called a blockchain.

Benefits of Blockchain:

Traditional Operations often waste time on duplicate record keeping and third-party validations. Record-keeping systems can be vulnerable to fraud and cyber-attacks. Limited transparency can slow data verification. Your confidential blockchain records will be shared only with network members to whom you have specifically granted access. No one, not even a system administrator, can delete a transaction. And to speed transactions, a set of rules — called a smart contract — can be stored on the blockchain and executed automatically. The solution to all the above-stated problems is Blockchain.

Types of Blockchain networks:

  1. Public Blockchain networks

A public blockchain is one that anyone can join and participate in, such as Bitcoin. Drawbacks might include substantial computational power required, little or no privacy for transactions, and weak security.

2. Private Blockchain networks

A private blockchain network, similar to a public blockchain network, is a decentralized peer-to-peer network. However, one organization governs the network, controlling who is allowed to participate, executing a consensus protocol, and maintaining the shared ledger. Depending on the use case, this can significantly boost trust and confidence between participants.

3. Permissioned Blockchain networks

Businesses that set up a private blockchain will generally set up a permissioned blockchain network. It is important to note that public blockchain networks can also be permissioned. This places restrictions on who is allowed to participate in the network and what transactions. Participants need to obtain an invitation or permission to join.

4. Consortium Blockchains

Multiple organizations can share the responsibilities of maintaining a blockchain. These pre-selected organizations determine who may submit transactions or access the data. A consortium blockchain is ideal for business when all participants need to be permissioned and have a shared responsibility for the blockchain.

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