Blockchain is an advanced database system that enables a transparent way of sharing information within a network. It is a collection of blocks containing the records of digital assets or transactions. The blocks are linked together which makes a chainlike form. Each block in the blockchain has a unique hash value and the data in blocks are immutable. So you can use this technology to create an unchangeable ledger for tracking payments, orders, and other transaction information. As the network is decentralized no one governs it. The group of nodes maintains the network making it decentralized.
There are a number of ways in which blockchain networks can be built. The Blockchain network types are,
Public blockchains are permissionless blockchains. Anyone with an internet connection can participate in the data transaction by becoming a node in the network of this public blockchain. They can read, write and audit the data. But it’s difficult for them to alter the transaction data. Each peer network has a copy of the ledger. The user has access to all records that can be historical or current records and can perform mining operations. The source code is open. No one controls these blockchain nodes. Most cryptocurrencies run on this blockchain which is governed by rules and algorithms. It uses consensus algorithms to verify information authenticity.
Examples of this blockchain are bitcoin and cryptocurrency.
A single organization controls the private blockchain. It is also called managed blockchains. The authority determines who can participate and what rights they have in the network. Despite the fact that private blockchains have access restrictions, they are only partially decentralized. An example of a private blockchain is Ripple, a digital currency exchange network for businesses.
It is the combination of both private and public networks. Companies can set up permission-based systems alongside a public blockchain. In this way, they control access to specific data stored in the blockchain while keeping other data public. It uses smart contracts to allow public members to check if private transactions have been completed. Hybrid blockchains, for example, can allow the public to access digital currency but keep bank-owned currency private.
A group of organizations governs this blockchain network. Data access rights for selected organizations are determined by selected organizations that maintain the blockchain. Industries, in which many organizations have common goals and benefit from a shared responsibility, prefer consortium blockchain networks often.
The Global Shipping Business Network Consortium, for example, uses blockchain technology to digitize the shipping industry and improve collaboration among maritime operators. It is ideal for business when all participants need to be permissioned as well as have a shared responsibility for the blockchain.