Types of Blockchain

Core Components of Blockchain Architecture

1.Node: Nodes are network participants and their devices permit them to keep track of the
distributed ledger and serve as communication hubs in various network tasks. A block broadcasts all
the network nodes when a miner looks to add a new block in transactions to the blockchain.
2.Transactions: A transaction refers to a contract or agreement and transfers of assets between
parties. The asset is typically cash or property. The network of computers in blockchain stores the
transactional data as copy with the storage typically referred to as a digital ledger.
3.Block: A block in a blockchain network is similar to a link in a chain. In the field of cryptocurrency,
blocks are like records that store transactions like a record book, and those are encrypted
into a hash tree. There are a huge number of transactions occurring every day in the world. It is
important for the users to keep track of those transactions, and they do it with the help of a block
structure. The block structure of the blockchain is mentioned in the very first diagram in this article.
4.Chain: Chain is the concept where all the blocks are connected with the help of a chain in the
whole blockchain structure in the world. And those blocks are connected with the help of the previous
block hash and it indicates a chaining structure.
5. Miners: Blockchain mining is a process that validates every step in the transactions while
operating all cryptocurrencies. People involved in this mining they called miners. Blockchain mining is a
process to validate each step in the transactions while operating cryptocurrencies.
6. Consensus: A consensus is a fault-tolerant mechanism that is used in computer and
blockchain systems to achieve the necessary agreement on a single state of the network
among distributed processes or multi-agent systems, such as with cryptocurrencies. It is useful in
record keeping and other things.
There are different kinds of consensus mechanism algorithms, each of which works on different
principles:
• Proof of Work (PoW): Proof of Work required a stakeholder node to prove that the work is
done and submitted by them certifying them to receive the right to add new transactions in the
blockchain.
• Proof of Stake (PoS): The proof of Stake is also a common consensus algorithm that evolved as a
low-cost low-energy-consuming, low-energy-consuming alternative for the PoW algorithm.
• For providing the responsibilities the public ledger provides by the virtual currency token like
Bitcoin and Ethereum.
• Proof of Capacity (PoC): Proof of Capacity (PoC) allow sharing of memory space of the nodes
Clasiffication of Blockchain
1. Permissionless Blockchain
• It is also known as trustless or public blockchains, are available to everyone to participate
in the blockchains process that use to validate transactions and data. These are used in
the network where high transparency is required.
Advantages:
• Everyone can participate only requirement is good hardware and internet.
• Bring trust among users or entities.
• It has a high level of transparency as it’s a larger network.
• Broader decentralization of access to more participants.
Disadvantages:
• Poor energy efficiency due to large network.
• Lower performance scalability.
• Less privacy as many of the things is visible.
2. Permissioned Blockchain
• These are the closed network only a set of groups are allowed to validate
transactions or data in a given blockchain network. These are used in the network where
high privacy and security are required.
Advantages:
• This blockchain tends to be faster as it has some nodes for validations.
• They can offer customizability.
• Strong Privacy as permission is needed for accessing transaction information.
• As few nodes are involved performance and scalability are increased.
Disadvantages:
• Not truly decentralized as it requires permission
• Risk of corruption as only a few participants are involved.
• Anytime owner and operator can change the rules as per their need.
Type sof Blockchain

I. Private Blockchain Networks

• These blockchains are not as decentralized as the public blockchain only selected nodes can

participate in the process, making it more secure than the others.

• Private blockchains operate on closed networks, and tend to work well for private businesses and

organizations. Companies can use private blockchains to customize their accessibility and

authorization preferences, parameters to the network, and other important security

options. Only one authority manages a private blockchain network.

Advantages:
• Speed: The rate of the transaction is high, due to its small size. Verification of each node is less

time-consuming.
• Scalability: We can modify the scalability. The size of the network can be decided manually.

• Privacy: It has increased the level of privacy for confidentiality reasons as the businesses required.

• Balanced: It is more balanced as only some user has the access to the transaction which improves
Disadvantages:
• Security- The number of nodes in this type is limited so chances of manipulation are there.
These blockchains are more vulnerable.
• Centralized- Trust building is one of the main disadvantages due to its central nature.
Organizations can use this for malpractices.
• Count- Since there are few nodes if nodes go offline the entire system of blockchain can be
endangered.
Use Cases:
• With proper security and maintenance, this blockchain is a great asset to secure information
without exposing it to the public eye. Therefore companies use them for internal auditing,
voting, and asset management. An example of private blockchains is Hyperledger, Corda.
II. Public Blockchain Networks
• These blockchains are completely open to following the idea of decentralization. They don’t
have any restrictions, anyone having a computer and internet can participate in the network.
• Bitcoin and other cryptocurrencies originated from public blockchains, which also played a role in
popularizing distributed ledger technology (DLT). Public blockchains also help to eliminate
• With DLT, data is distributed across a peer-to-peer network, rather than being stored in a
single location.
• A consensus algorithm is used for verifying information authenticity; proof of
stake (PoS) and proof of work (PoW) are two frequently used consensus methods.
Advantages:
• Trustable: There are algorithms to detect no fraud.
• Secure: This blockchain is large in size as it is open to the public. In a large size, there is
greater distribution of records
• Anonymous Nature: It is a secure platform to make your transaction properly at the same
time, you are not required to reveal your name and identity in order to participate.
• Decentralized: There is no single platform that maintains the network, instead every user
has a copy of the ledger.
Disadvantages:
• Processing: The rate of the transaction process is very slow, due to its large size.
Verification of each node is a very time-consuming process.
• Energy Consumption: Proof of work is high energy-consuming. It requires good
computer hardware to participate in the network
• Acceptance: No central authority is there so governments are facing the issue to
implement the technology faster.
Use Cases:
• Public Blockchain is secured with proof of work or proof of stake they can be used to
displace traditional financial systems. The more advanced side of this blockchain is the
smart contract that enabled this blockchain to support decentralization. Examples of
public blockchain are Bitcoin, Ethereum.
III. Hybrid Blockchains
• In a hybrid blockchain, some parts of the blockchain are public and transparent,
while others are private and accessible only to authorized and specific participants.
• It is a combination of both public and private blockchain.
• Permission-based and permissionless systems are used.
• User access information via smart contracts
• Even a primary entity owns a hybrid blockchain it cannot alter the transaction
Advantages:
• Ecosystem: Most advantageous thing about this blockchain is its hybrid nature. It cannot be hacked
as 51% of users don’t have access to the network
• Cost: Transactions are cheap as only a few nodes verify the transaction. All the nodes don’t carry the
verification hence less computational cost.
• Architecture: It is highly customizable and still maintains integrity, security, and transparency.
• Operations: It can choose the participants in the blockchain and decide which transaction can be
made public.
Disadvantages:
• Efficiency: Not everyone is in the position to implement a hybrid Blockchain. The organization also
faces some difficulty in terms of efficiency in maintenance.
• Transparency: There is a possibility that someone can hide information from the user. If someone
wants to get access through a hybrid blockchain it depends on the organization whether they will give
or not.
• Ecosystem: Due to its closed ecosystem this blockchain lacks the incentives for network participation.
Use Case:
• It provides a greater solution to the health care industry, government, real estate, and financial
IV. Consortium Blockchains
• It is a creative approach that solves the needs of the organization. This blockchain validates the
transaction and also initiates or receives transactions.
• consortium blockchains have both public and private components, except multiple
organizations will manage a single consortium blockchain network.
• Also known as Federated Blockchain.
• This is an innovative method to solve the organization’s needs.
• Some part is public and some part is private.
• In this type, more than one organization manages the blockchain.
Advantages:
• Speed: A limited number of users make verification fast. The high speed makes this more usable
for organizations.
• Authority: Multiple organizations can take part and make it decentralized at every level.
Decentralized authority, makes it more secure.
• Privacy: The information of the checked blocks is unknown to the public view. but any member
belonging to the blockchain can access it.
• Flexible: There is much divergence in the flexibility of the blockchain. Since it is not a very
large decision can be taken faster.

Disadvantages:
• Approval: All the members approve the protocol making it less flexible. Since one or more

organizations are involved there can be differences in the vision of interest.

• Transparency: It can be hacked if the organization becomes corrupt. Organizations may hide

information from the users.

• Vulnerability: If few nodes are getting compromised there is a greater chance of vulnerability

in this blockchain

Use Cases:
• It has high potential in businesses, banks, and other payment processors. Food tracking of the

organizations frequently collaborates with their sectors making it a federated solution ideal for

their use. Examples of consortium Blockchain are Tendermint and Multichain.

Categories of Block chain
• Public Block Chain
• Example: Bitcoin, Ethereum, Litecoin

• Private
• Example: voting, supply chain management, digital identity, asset ownership, etc

• Consortium
• Example: banks, government organizations

• Hybrid Block Chain

• Example: dragonchain