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What is blockchain?

Banxe Team
3 min read 28.06.2022
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A blockchain is a database that stores encrypted blocks of data (typical transactions that are completed on the blockchain: sell or buy) then puts them together into blocks to form a chronological single-source-of-truth chain of data. If we were to visually represent the blockchain it would look like a list of transactions that anyone can view and verify. A blockchain can record information about cryptocurrency transactions, NFT ownership, or DeFi smart contracts. The Bitcoin blockchain, for example, contains a record of every time someone sent or received bitcoin. 

 

Blockchain technology first appeared in 2008 as the distributed ledger behind Bitcoin transactions. The technology has since taken on a life of its own, and now there are hundreds of blockchain that exist. Cryptocurrencies and the blockchain technology that powers them make it possible to transfer value online without the need for a middleman like a bank or credit card company.

 

There are four types of blockchain

 

  1. Public Blockchain

A public blockchain is a non-restrictive, permission-less distributed ledger system. Anyone who has access to the internet can sign in on a blockchain platform to become an authorized node and be a part of the blockchain network. 

Examples: Bitcoin BTC, Ethereum ETH, Litecoin LTC

  1. Private Blockchain

A private blockchain is a restrictive or permission blockchain operative only in a closed network. Private blockchains are usually used within an organization or enterprises where only selected members are participants of a blockchain network. The level of security, authorizations, permissions, accessibility is in the hands of the controlling organization. 

Examples of private blockchains are; Multichain and Hyperledger projects (Fabric, Sawtooth), Corda, etc.

  1. Consortium Blockchain

A consortium blockchain is a semi-decentralized type where more than one organization manages a blockchain network. This is contrary to what we saw in a private blockchain, which is managed by only a single organization. More than one organization can act as a node in this type of blockchain and exchange information or do mining. Consortium blockchains are typically used by banks, government organizations, etc.

Examples of consortium blockchain are; Energy Web Foundation, R3, etc.

  1. Hybrid Blockchain 

A hybrid blockchain is a combination of the private and public blockchain. It uses the features of both types of blockchains that is one can have a private permission-based system as well as a public permission-less system. With such a hybrid network, users can control who gets access to which data stored in the blockchain. Only a selected section of data or records from the blockchain can be allowed to go public keeping the rest as confidential in the private network. 

Example of a hybrid blockchain is Dragonchain.

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