Is your company prepared for blockchain? Here we’ll identify the 4 types of blockchain technology you need to know.
According to Gartner, enterprise production of blockchain project use cases is expected to grow by double-digit percentages in 2021. However, different use cases require different types of blockchain. Is your company prepared for blockchain? Blockchain technologies offer capabilities that range from incremental improvements to radical alterations to business models. Here we’ll identify the 4 types of blockchain technology you need to know.
Blockchain technology varies by different types, they are Public blockchain (i.e. Bitcoin, Ethereum), Private blockchain, Hybrid blockchain, and Consortium blockchain.
Public Blockchain is a blockchain network where anyone can join whenever they want. Basically, there are no restrictions when it comes to participation. The most common examples of public blockchain are Bitcoin (BTC) and Ethereum (ETH). Both of these cryptocurrencies are created with open-source computing codes, which can be viewed and used by anyone. Public blockchains target the general public as end-users, while private blockchains are geared toward invitation-only users and their networks.
Public blockchain allows anyone with internet access to sign on to a blockchain platform to become an authorized node. This user can access current and past records and conduct mining activities.
In Private Blockchain, only the entities participating in a transaction will have knowledge about it, whereas others will not be able to access it. Hyperledger Fabric of Linux Foundation is an example of a private blockchain.
Companies may choose to take advantage of blockchain technology while not giving up their competitive advantage to third parties. They can use private blockchains for trade secret management, for auditing. Other use cases for private blockchain include supply chain management, asset ownership, and internal voting.
Hybrid Blockchain is a combination of public and private entities. The best way to describe it is using a public blockchain where a private network is hosted. One example that uses hybrid blockchain in the supply chain is the IBM food trust. They aim to improve efficiency throughout and the whole food supply chain. It is a network where everyone, including farmers, wholesalers, distributors, and others takes part. Walmart is also an active player in this project.
A Consortium Blockchain is managed by a group. The group decides on how the blockchain will function. With the consortium model, there is limited access, and the group decides who gets the access in the first place. A consortium blockchain tends to be more secure, scalable, and efficient than a public blockchain network. Like private and hybrid blockchain, it also offers access controls. The benefits of having strict access are obvious. For example, limited access also means faster transactions. Energy Web Foundation is an example of consortium blockchain. They describe their foundation as ‘the world’s largest energy blockchain ecosystem’ and a leading blockchain partner for utilities, grid operators, renewable energy developers, corporate energy buyers, and others.’
“By 2023, blockchain will support the global movement and tracking of $2 Trillion of goods and services annually.” -Gartner
Which Blockchain Technology is Best?
Determining which blockchain type is best for you, your project, or your company should be based on your specific needs. Each blockchain has its own uses, features, advantages, and requirements.
Being a part of a public blockchain is easy to get involved with, but requires knowledge of how it all works. If you are more interested in implementing your own enterprise blockchain, a private blockchain may be more suitable. A consortium blockchain is best for enterprises and organizations who want to efficiently streamline communication among one another.
Before choosing the right blockchain, consider your business requirements and the features each blockchain offers. Consulting with a blockchain professional is essential if you aren’t already well-versed in the technology.
Blockchain is a revolutionary technology that has the potential to change how we do business. This brief overview of each blockchain type is here to help you get familiar with which one might be best for your company's needs. Contact us today if this sounds like something you’d like to explore further or with any questions about what it would take to integrate blockchain into your business.
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