Different blockchains have different features and functions. We can often see Public, Private, Consortium and Permissioned Blockchain in this field, but what do they mean respectively?
Public blockchain is universally accessible, that means anyone at any time can access the system, read data, send confirmable transactions and compete in recordkeeping. This kind of blockchain is generally referred to a fully decentralized one, since no single individual or entity could control or tamper the data. Public blockchain uses tokens as an incentive, which encourages participants to compete in recordkeeping, and thus ensures the security of data. Bitcoin and Ethereum are two typical examples.
Private Blockchain requires strict limitation on participating nodes, with its write permission controlled by a certain organization. Since the participating nodes are limited and controllable, private blockchain ensures higher efficiency, better privacy, lower cost and is less vulnerable to malicious attacks. Besides, It can also meet other requirements in financial industry, such as identification. Compared with centralized database, private blockchain can prevent deliberate hide or tamper of data by a single node inside the organization, and track the source if any error occurs. Thus , the private blockchain is more preferred by many major financial institutes.
Consortium Blockchain is managed by multiple organizations, each of which runs one or more nodes. Only these organizations in the system can read and write the data, as well as sending transactions and recording the data together.
The privacy and design permission can be different between Private and Consortium Blockchain, with Consortium Blockchain having more complex requirements in its permission.
Permissioned Blockchain means that every nodes participating in the blockchain system has the permission, those nodes without permission are not allowed to access the system. So, Private and Consortium Blockchain also belong to Permissioned Blockchain. Some Permissioned Blockchains don’t have token mechanism, because they don’t use tokens to encourage recordkeeping competition.
Since there are more and more requirements showed in the application scenarios, the blockchain technology is also becoming more and more complex. The bound of public blockchain and permissioned blockchain starts to blur, and this results in the appearance of Hybrid Blockchain, whose feature is that all nodes in the system have different permissions, like some can only view parts of the data, some can download all of the data, and some participate in the recordkeeping. The Hybrid Blockchain may also share the advantages of the public blockchain and permissioned blockchain, but it is relatively difficult to develop it and will be one of the development trends in the future.
There are no absolute advantages and disadvantages for public, permissioned or hybrid blockchain, we should choose the type according to different application scenarios. Got it?