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Blockchain Technology and its Types-A Short Review

Article in International Journal of Applied Science and Engineering · December 2021

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International Journal of Applied Science and Engineering
Citation: IJASE: 9(02): 189-200, December 2021
DOI:

Case Study Information Systems

Blockchain Technology and its Types—A Short Review

P.K. Paul1*, P.S. Aithal2, Ricardo Saavedra3 and Surajit Ghosh4

1
Executive Director (MCIS) and Asst. Professor (IST), Department of CIS, & Information Scientist (Offg.), Raiganj
University, West Bengal, India
2
Vice Chancellor, Srinivas University, Karnataka, India
3
Director & Chair, International Program, Azteca University, Mexico
4
Director & Chairman, Kotibarsha Institute of Technology and Management (KITM), West Bengal, India
*Corresponding author: [email protected]

Received: 14 Oct., 2021 Revised: 13 Nov., 2021 Accepted: 05 Dec., 2021

Abstract
Blockchain Technology is the emerging component of IT and Computing and is a kind of encrypted record
of data works on distributed database. This is furthermore dealt with the data related to the transaction,
contract, independent record, etc. Digital ledger is important and also applicable in various platforms,
not bounded in a particular place; and required in financial activities and services and hence it is worthy
in healthy digital currency and transactions. Financial transaction is not associated with the third party
and it keeps the data encryption and here participants no need to share personal data and thus Blockchain
Technology is associated with the data breach. Insignificantly Blockchain not only reduces the data breach
but also supports the multiple numbers of shared copies and it works on the same database. It helps in wage
a data breach attack. Earlier it was known as Blockchain but gradually it is treated as a Technology and
considered as important in Information Technology and impacting the financial sector rapidly. Blockchain
Technology is required in various tangible and intangible asset management and required in tracking
including recorded effectively within a network and ledger. Blockchain is therefore is a tool, a technique,
as well as a procedure for sophisticated financial management. This paper is based on existing literature
emphasizing Blockchain Technology with features, characteristics with a focus on its types.
Keywords: Blockchain Technology, Financial Technologies, Business Sector, Financial Engineering, IT
Applications

The Blockchain is only allowed to works for the registered members having permission and this offers
immediate, shared and completely transparent information. It is worthy to note that the applications
of Blockchain in tracking orders, payments, accounts, and production. Here furthermore transaction
details are visible to the end users from time to time. Blockchain Technology is applicable in different

How to cite this article: Paul, P.K., Aithal, P.S., Saavedra, R. and Ghosh, S. (2021). Blockchain Technology and its Types—A Short
Review. IJASE., 9(02): 189-200.
Source of Support: None; Conflict of Interest: None
 Paul et al.

areas and sectors such as business and commerce, education and training, health and medical systems,
government and administration, entertainment, banking and trade, etc., and such applications are increasing
gradually[1],[9],[18]. Therefore, Blockchain Technology is a kind of fraud resistant system and holds the
potential to revolutionize the financial sector transparently and advanced. Blockchain Technology is
offered many benefits (such as Fig. 1) more efficiently than that of traditional business processes and its
applications also growing in various sectors and places. However, it would be worthy to note that there are
shortages in manpower development requirements and as a result,various educational institutions started
offering training, academic,and research program in Blockchain Technologies including allied areas[2],[3].

Efficiency Transparency Trust Resilience

Using the “if-this-then Get real-time insights into The majority of The larger number of
that” logic of smart trades and transactions participants in a blockchain participants
contracts can reduce rather than just receiving blockchain systems need the more robust the data
error reduction and reports in different formats to approve the transactions is, as it can be seen as
increase speed. at different formats and agree upon which a massively replicated
at different time from data is written, altered or database.
different institutions. removed.

Fig. 1: Basic benefits of Blockchain Technology at a glance

Objective of the Work

This Paper entitled ‘Blockchain Technology and its Types—A Short Review’ is conceptual nature, and
theoretical and concern about the following objectives—

ˆˆ To learn about the basics of Blockchain Technology with fundamental aspects including its nature.
ˆˆ To know about the features and functions of Blockchain Technology including basic applications
of Blockchain Technology.
ˆˆ To learn the main types of blockchain with their features and functions in a concise manner.
ˆˆ To know about the advantages and disadvantages of public, private, and hybrid blockchain
technology.
ˆˆ To learn about the basic features of the consortium blockchain in a brief and concise manner.

Methodology Adopted
This paper is theoretical in nature and various types of secondary sources and primary sources are being
used. Furthermore, various secondary sources are accessed regarding Blockchain Technology including

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 Blockchain Technology and its Types—A Short Review

the features, functions, and types. Various websites of different Blockchain Technology companies have
been analyzed to learn about the latest things going on in blockchain categories. In addition to previous,
in regard to knowing the blockchain, various Governmental policies also studied and analyzed to prepare
this work.

Blockchain Technology: Basic Applications and Emergence

Blockchain Technology is an important technology these days rather ‘Blockchain’ is deemed as a
technology. It is not only considered as database and but also a technology with digital trust. In the
year 1982 David Cham coined and proposed the term ‘blockchain’, and later Stuart Haber and W. Scott
Stornetta also in the year 1992 do more on this technology and reported in their book[4],[16],[27]. Gradually
ideas became introduced on Blockchain with the implementation of Satoshi Nakamoto after deploying the
first digital currency, i.e., Bitcoin. The tools, technologies, concept, and protocols regarding Blockchain
is gradually increasing. Blockchain has been gained with cryptocurrencies like bitcoin. In Blockchain,
change is difficult because it is immutable, and transactions are stored in various places on the computer
network. Blockchain Technology is applicable and important in different areas due to its holding of
features and services such as—

ˆˆ Using Blockchain Medical and health data can be shared effectively.

ˆˆ NFT market and sectors are applicable using proper blockchain technology.
ˆˆ It is applicable in the Music royalties tracking
ˆˆ It is being used in Cross-border payments with the real-time IoT operating systems
ˆˆ It is required in the personal identity security management and up-gradation.
ˆˆ In the Anti-money laundering tracking system too Blockchain Technology is being used.
ˆˆ Regarding sophisticated Supply chain and logistics monitoring and management Blockchain
Technology is effectively used.
ˆˆ Regarding proper, and healthy logistics monitoring Blockchain Technology are effective.
ˆˆ As far as the latest Voting mechanism is concerned this technology is fruitful.
ˆˆ In contemporary Advertising, marketing including Cryptocurrency exchange also blockchain is
effectively used.
ˆˆ Regarding real estate processing and other areas applications Blockchain Technology is worthy
and demanding[6],[7].

Therefore, Blockchain technology utilizations are gradually increasing in diverse sectors like Financial
Services, Education and Training, Healthcare, Government and Administration, Travel and Hospitality,
Retail, etc.[10],[12]. Here Fig. 2 illustrated about the potential advantages.

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 Paul et al.

Reduce costs of overall Reduction in systemic risks

transactions

Irrevocable tamper-resistant Fraud minimisation

transactions

Enabling effective monitoring

Improved security and
and auditing by participants,
efficiency of transactions
supervisors, and regulators

Fig. 2: Healthy and Potential advantages of blockchains

Blockchain & Types

Blockchain technology is being used to carry and transfer the transactions or exchange of information
through a secure network. Blockchain technology and distributed ledger technology is used parallel to
the digital cryptocurrency to the people. Blockchain is being used for the purpose of private networking
and uses too where only the restricted network users can get the authorization and access. Here network
administrators are authorized to administrate the activities and any new nodes or users who wish to get
permission, need to contact with the system or network administrators. Primarily there are two types
of Blockchain technology viz. private Blockchain and public Blockchain. Though based on some other
criteria and analysis Blockchain technology can also be noted and called as consortium blockchain
technology, and hybrid blockchain technology. It is important to note that every kind of Blockchain
basically consists of a cluster of nodes, and this is working on the peer-to-peer (P2P) network system.
Every node in the network has a copy of the shared ledger and further that is timely updated and also
being verified the transactions, initiate and receive transactions. Keeping in mind the broad nature, experts
classified Blockchain Technology into following three[5],[21],[26].

ˆˆ Public Blockchain,
ˆˆ Private Blockchain, and
ˆˆ Hybrid Blockchain.

1. Public Blockchain is a major type of Blockchain, and that is not only open but also decentralized in
nature. And in this type of Blockchain technology computer networks are basically accessible to anyone
interested in transactions. Here based on validation the validated person basically receives the transaction
rewards and furthermore, two kinds of Proof-of-work and Proof-of-stake models are being used.
The Public Blockchain is furthermore a non-restrictive and distributed ledger system which is doesn’t
seek any kind of permission, and anyone having access can be authorized one to get the data or part pf
the Blockchain. This kind of Blockchain also gives authorization regarding the current and past records

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 Blockchain Technology and its Types—A Short Review

verification. Additionally, this is being used for mining and exchanging cryptocurrencies[11],[13],[25]. In this
segment most common is Bitcoin and Litecoin blockchains. It is mostly secure upon following strict
security rules as well as methods. However, upon non-following the security protocols it may be risky.
Some of the examples of this type of Blockchain are—
ˆˆ Bitcoin,
ˆˆ Ethereum,
ˆˆ Litecoin.
Here Fig. 3 depicted some of the features and advantages regarding Public Blockchain Systems and
Technology.

Anyone can
participate

Requires a crypto
currency

High
decentralization

Low throughput

High energy
consumption
Fig. 3: Salient features and functions of the public blockchains

There are two common examples of public blockchains and these are Bitcoin and Ethereum as per the
experts[8],[14]. This type of Blockchain is concerned with the following type of features viz.

ˆˆ High Security and Privacy,

ˆˆ Open and Flexible Environment,
ˆˆ Anonymous Nature,
ˆˆ No regulations and strict Policies,
ˆˆ Full Transparency and Systems.
ˆˆ Distributed, etc.

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 Paul et al.

However, according to the experts, the following are being considered as important advantages and
benefits of the Public Blockchain.

Trustable and Faith

Public Blockchainis trusted and here unlike private blockchains, the participants are don’t need to think
of authenticity. In this type of Public Blockchain, they no need of knowing other nodes, and therefore
there is no fraud in the transactions. In this category nodes can contact blindly without feeling the needing
to trust individual nodes[15],[17].

Secure and Safe

In the Public Blockchain,there are opportunities in connecting with the other participants and nodes in
the same public network, and this results in secure, largest, and greater communication and participation.
Owing to this feature, it is difficult for the attackers to enter the systems and here every node will do the
verifications and transactions as per norms. Here thoughtful cryptogenic encrypting methods are being
used and therefore it is much safer than the private blockchain according to some experts.

Open and Transparent

Public Blockchain is also having the features of openness and here data is basically transparent to all the
nodes and in this mechanism, one blockchain record is normally available to all the authorized nodes.
Therefore, here all the nodes become open and transparent and there is an absence of fake transactions
or hiding any information[15],[22].
Though there are plenty of advantages and benefits but it is also having a different kind of disadvantages
and weaknesses, and some of them are as under.

Lower Transaction per Second

In Public Blockchain System the rate of transaction per second is also very low, and this is due to having
a large number of nodes and huge network. Here each node has to verify the transaction and also do
proof-of-work is time consuming. Here in public systems seven (07) transactions happen per second and
additionally, here Ethereum network has about a 15 TPS rate.

Scalability Matters
Similar to the previously mentioned issue on a lower transaction per second in public blockchain another
issue is scalability according to the experts. The huge size basically creates the scalability in this regard
and here bitcoins lightning networks are considered as important to overcome the problem according
to the experts.

High Energy Consumption

The public blockchain also suffers from higher energy consumption due to the proof-of-work energy
consumption. As it needs special algorithms therefore high energy consumption is considered as important
in energy, environment, and financial context.

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 Blockchain Technology and its Types—A Short Review

2. Private blockchains are restricted and not open, such kind of blockchain also has features of access.
This blockchain allows permission for the transaction from the support of the system administrator[8],[20].
Private blockchain solutions develop these platforms having the features of the following—

ˆˆ Full of privacy,
ˆˆ High efficiency,
ˆˆ Faster transaction,
ˆˆ Better scalability,
ˆˆ Faster and speediness.

This type of blockchain is works on closed systems and networks only and these are usually useful in
the organizations, enterprises from which only selected members can be joined. This type of blockchain
contains proper security, authorizations, permissions as well as accessibility. According to the experts,
private blockchains are deployed forvoting, regarding supply chain management, for finding and managing
digital identity, regarding asset ownership,and so on. There are certain popular private blockchains like
Multichain, Hyperledger projects, Corda, etc.

Participants are
pre-selected

No crypto currency
is required

Low decentralization

High throughput

Low energy con-

sumption

Fig. 4: Salient features and functions of the private blockchains

Private blockchains as running with the authorized nodes; therefore no one from the outside of the private
network is able in accessing information and transaction related data exchanged between two nodes.
Private blockchains are also held various types of advantages and disadvantages over public blockchains
and among these few important are mentioned as follows.

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 Paul et al.

According to the experts, the following are being considered as important advantages and benefits of
the Private Blockchain.

Speed and Velocity

Private blockchains works with greater speed than a public blockchain and therefore here higher rate of
the TPC (i.e., transaction per second) can be noted. Moreover, here only a limited number of nodes can
be seen therefore it comes with higher speed. Here all the nodes are having verification processability
and thus here the rate of adding new transactions in a block is fast. Here about thousands or hundred
thousand TPS is possible at a time[23],[24].
Scalability
Then that of a public blockchain, a Private blockchain is faster and thus gives higher scalability. Here
adding nodes to existing ones becomes easy and faster. Thus, it makes private blockchains very scalable
and flexible. And here adding or removing nodes not affect as such in the existing systems.
Though there are plenty of advantages and benefits but it is also having a different kind of disadvantages
and weaknesses, and some of them are as under.

Requires Trust-building
Public blockchain is a kind of open ledger and therefore it concerned with the security and legitimacy of
each individual users however in Private blockchain as only limited accessed users therefore it requires
trust building.

Lower Security
Private blockchain is weak when a third-party gains access to the central management system; therefore,
here it is easier for a node to hack the entire private blockchain system.
3. Hybrid Blockchains is a merger of public blockchain as well as private blockchain and it is required
in better control for achieving higher goals. Hybrid Blockchain deals with centralized and decentralized
systems and it is not open; however, it has the features of integrity, transparency, as well as security. It
has several advantages over traditional blockchains as depicted in Fig. 5.
In Hybrid Blockchains maximum customization is being considered as main benefits with private
permission-based system as well as a public permission-less system. In this type of blockchain systems
users are able in getting access and selected sections and rest can be recorded or keeps safe due to the
benefits of the records from the ledger. Hybrid Blockchains is flexible enough so that users can join easily
as private blockchain. This type of blockchain is able in enhancing the security and transparency of the
blockchain network[16],[26].
4. Consortium Blockchain is another type of semi-decentralized type of blockchain, and this type of
blockchain is able in the organization of managing the blockchain network. This type of blockchain is
able in doing activities even from a single organization. Here blockchain is able in exchange information
or do the mining and are being used in the areas such as banks, government organizations, etc. Some of
the examples of this type of consortium are Energy Web Foundation, R3, etc.

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 Blockchain Technology and its Types—A Short Review

Fig. 5: Types of Blockchains and roadmaps

Therefore, in a nutshell, all the Blockchains are having their own benefits and advantages and as a
whole public and private is considered as major or worthy in terms of operations (as depicted in Fig.
6) According to the experts security, scalability, and transparency are considered as worthy and main
points in the Blockchains of public and private types. It is important to note that private blockchains are
not trustworthy; while the public network is important in proof-of-work based.

Fig. 6: Architecture wise differences in public and private blockchains

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 Paul et al.

Therefore, in a summary, it is better to know that public blockchains are worthy and useful in a different
context.

Conclusion
Blockchain Technology is an important Information Technology component and is popular internationally
and considered as worthy in peer-to-peer decentralized distributed ledger based systems. It is valuable in
digital asset transparencies as in this technology third-party or intermediary or brokers are less. Here more
public attention is needed to the financial market as well as organizations in a scalable manner. Many
developing nations are in process of popularization of Blockchain Technology towards its worthy benefits
in organizations, different organizations, institutions, businesses, and commercial ventures are engaged
in blockchain related aspects. Incubation centers are dedicated in Blockchain Technology development
and getting its benefits considering various challenges and issues.

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