Directory

• Public Blockchain
• Private Blockchain
• Consortium Blockchain
• Which type of blockchain has more advantages?
• Summary

When Bitcoin came out, it also became its underlying The foundation was laid for the development of the underlying technology of the protocol, and that technology is blockchain. Those eager to innovate have now discovered the potential of this technology and are exploring possible applications of blockchain technology in every industry.

Bitcoin is a so-called cryptocurrency, a type of digital cash that is not controlled by anyone. What is different from other technologies is that it combines distributed database technology, economic incentives and encryption technology to form a broad ecosystem collaboration without a leader or administrator.

In the more than a decade since the Bitcoin network was created, the data structures it uses have gained widespread appeal across industries. Now, the application fields of blockchain technology have covered various departments from finance and supply chain to legal system and government, and many industries are conducting experiments.

If you missed the beginner's guide to blockchain technology we published: Blockchain is a simple data structure. The data on it cannot be modified, but it can be continuously updated. expansion. It might be helpful to think of its data structure as a spreadsheet, where each cell points to the previous cell, so any modifications to the previous cell are immediately apparent. Typically, blockchain stores information about financial transactions, but it can be used with any type of electronic data.

To draw an analogy with our spreadsheet, let's assume that a document can be modified by multiple parties. Everyone can run dedicated software on their device and connect to other devices, giving all participants access to the latest database.

The central agency cannot obtain information from it (the network is distributed). This means information travels slower, but makes the network very powerful in terms of security and redundancy.

In the following, we will study three types of blockchain: private chain, public chain and consortium chain. Before that, let us reiterate what these three types of blockchains have in common and some key characteristics:

• Attach ledger only –Follow Characteristics of blockchain, the system needs to follow the chain structure of blocks, where each block is linked to the previous block. If our blockchain is a collection of cells in a spreadsheet, a block is a single cell.
• Peer-to-Peer Network –Every participant on the network has a copy of the blockchain's data. These actors are called nodes and they interact in a peer-to-peer manner.
• Consensus Mechanism –There must be a mechanism for nodes to agree on the correctness of transactions propagated across the network to ensure that false data is not written in the blockchain.

The table below summarizes some of the main differences.

Public blockchain

If you have used cryptocurrencies recently, you have probably interacted with a public chain. This type of blockchain covers the vast majority of distributed ledgers that exist today. We call them "public" because anyone can view the transactions that occur and simply download the necessary software to join.

We also often use the term "access restrictions" in public places. There is no regulatory party to prevent participation, and anyone can participate in the consensus mechanism (for example, through mining or staking). Since anyone can join freely and be rewarded according to the role they play in reaching consensus, we expect to see a highly distributed topology on the public chain network.

Similarly, we expect public blockchains to be more audit-proof than private (or semi-private) blockchains. Since anyone can join the network, the protocol must contain certain mechanisms to prevent malicious actors from gaining advantages through anonymity.

However, public chains also have trade-offs in terms of security and performance. Many servers on the public chain have encountered expansion bottlenecks and have relatively weak throughput. Additionally, pushing changes to the network while maintaining a non-split network can be a challenge, as it is less likely that all participants will agree to a proposal at the same time.

Private blockchain

No access restrictions with public blockchains In stark contrast, private blockchains establish access rules for who can see and write to the blockchain (they are permissioned environments). Private blockchains are also not decentralized systems because there is a clear hierarchy in terms of control. However, they are distributed and many nodes still maintain copies of the blockchain on their computers.

Private chains are more suitable for enterprise maintenance, because enterprises hope to enjoy the advantages of blockchain without allowing external network access.

In some private chains, proof of work is redundant in the context of a security model. However, it turns out that proof of work is necessary for an open environment. In a private blockchain, not using PoW does not pose a serious threat because the identity of each participant is known and managed manually.  

In this case, a more efficient algorithm is to use designated validators, which are nodes selected to assume certain functions in order to perform transaction verification. Generally speaking, this includes nodes that must sign every block. If a node behaves maliciously, it can be quickly discovered and removed from the network. With the top-down control of blockchain, the coordination of the entire system will be much easier.

Consortium blockchain

Consortium blockchain is between the public chain and Between private chains, it combines the characteristic elements of both. In terms of consensus, we can observe the most significant differences between consortium chains and private and public chains. The consortium chain regards a small number of participants with equal power as validators. It is not an open system like the public chain, allowing anyone to verify the block, nor is it like the private chain, which is a closed system that only allows a certain person to verify the block. Entity to appoint block producers.

From here, the rules of the system are very flexible: the visibility of the chain can be restricted to validators, authorized personnel, or visible to everyone. As long as a consensus is reached with the validator, modifications can be easily made. As for the function of the blockchain, if these participants can act honestly according to the preset thresholds, no problems will occur in the system.

In an environment where multiple organizations operate in the same industry and require a common infrastructure for transactions or relaying information, consortium chains will be the best choice. Joining such a consortium chain is also highly beneficial for organizations as it will enable them to share industry insights with other players.

Which type of blockchain has more advantages?

In essence, public, private and consortium chains are not contradictory, they just use different technologies:

• Well-designed public chains tend to be more advantageous in terms of audit resistance, but at the expense of lower speed and throughput. These are the best options for providing security guarantees for transaction settlement (or smart contracts).
• A private chain can prioritize the speed of the system because it does not need to worry about core failures like public blockchains. Ideally, private blockchains are deployed where individuals or organizations have control and information remains confidential.
• Consortium chains mitigate counterparty risk in private chains (by eliminating centralized control), and smaller node counts often allow them to run more efficiently than public chains. The alliance chain is suitable for unit organizations that need to communicate with each other.

Summary

For individuals and companies engaged in various activities There are a lot of blockchain options out there. Even among public, private and consortium chains, there are many different user experiences depending on the complexity. Based on actual usage, users can choose the product that best suits their goals.