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We have discussed the blockchain basics, various properties and features of the blockchain. Let’s discuss the blockchain type (Public, Private and Consortium) in this article.
Public Blockchain Type
Public blockchain ledgers are visible in the public domain on the internet. Anyone can verify and add transactions to the block, and can also add a block to the blockchain. In public blockchain networks, the participants get incentives to join and are free to use it.
Anyone at any time can join and leave; read and write, and audit a public blockchain. It is censorship resistant. Public blockchain may also be said to be self-governed, decentralized and trustless. But due to the inherent properties of the blockchain, it is impossible to be tampered with.
Best known examples of this type of blockchain are that of Bitcoin and Litecoin.
Private Blockchain Type
As the name suggests, private blockchain is not in the public domain to be edited. Private Blockchain is within a single organization. Access to it and information regarding it is restricted. These are based on the access rights given to the users.
Hence, only specific persons in the organization with access rights can view, verify or add/delete the transactions in the blocks of the blockchain. It allows only specific people of the organization to verify and add a transaction to the blocks. However, information may be viewed on the internet in the public domain.
The private blockchain is not decentralized in the true sense. But the advantage of private blockchain is that it is much faster and cheaper. Also, reaching consensus on the private blockchain is much easier. On the flip side, it is less secure as it can be written and edited any time by those who have the requisite access rights.
Consortium Blockchain Type
In the consortium type of blockchain variant, a group of organizations have the rights to verify and add transactions. The ledger remains open or restricted to a select group. Consortium blockchain is used in cross-organizational activities. It is only controlled by pre-authorized nodes.
Consortium blockchain also known as federated blockchain is generally used in the e-banking and the financial sector. The process of consensus is controlled by pre-selected nodes. Inter-bank transactions are the best examples of the consortium blockchain. It is the prerogative of the participating organizations to keep the right to read the blockchain in the public domain or restricted it to certain participants.
Examples of Consortium or Federated Blockchain are R3, Corda, EWF and B3i.
For more learnings on the blockchain, please check my other posts as below: