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There’s no doubt that blockchain technology is a creation that could be bound to change the world in manners we can’t even imagine. The most important thing for a blockchain is to function itself appropriately, that’s where the consensus mechanism comes into the picture. It verifies the blockchain and guarantees it works proficiently. There are several consensus mechanisms being developed and one of these is called Proof-of-Burn (PoB). In this, users need to “burn” or make for all time inaccessible some mined PoW cryptocurrency. At the point when the PoW coins are burned, the user gets coins or tokens or other mining benefits on the system.

  • Working of Proof-of-Burn
    The way proof of burn works is that miners send coins to a location. This address is an unspendable address. When coins get burned, they can’t be used and spent again. Since transactions are recorded on the blockchain, there’s fundamental verification that the coins can never again be utilized, and the user can be remunerated accordingly. The thought behind proof of burn is that by consuming a cryptocurrency, a user is showing an ability to experience a momentary misfortune but not anymore for long term investment. Users get compensated after some time through the confirmation of mining, gaining a lifetime benefit to mine on the framework. The more coins a user burns, the chance of his getting selected for mining next time increases accordingly.

  • Proof of burn can be executed in various ways. For instance, the coin burned might be that of the local cryptocurrency or that of an alternative cryptocurrency. With the proof of burn, your stake decays after some time. Much like with Bitcoin and the need to put resources into progressively ground-breaking mining as time passes by, you’ll need to burn more coins after some time so as to keep up your chances of being chosen for mining the following block.

  • The Eater Address
    The eater address is basically a location that is utilized to store coins that can’t ever be reused. While most public addresses are produced from a private key, and the private key holder at that point approaches any coins sent to that address, an eater address is an arbitrarily created location that isn’t related with a private key. Since there’s no private key affiliation, and there’s no real way to create a private key by using the public address, there is no way to ever get to the coins sent to the eater address.

  • Features of Proof of Burn are as follows:
    Sustainable.
    Less energy required
    No hardware mining.
    Coin burns is a virtual process
    Burning coins reduce the circulating supply
    Encourages long-term commitment.

  • Conclusion
    Some well-known examples of implementations of proof of burn incorporate Counterparty and Slimcoin. On account of Slimcoin, proof of burn is utilized as its consensus mechanism and mining strategy. Interestingly, Counterparty utilizes proof of burn for seeding its tokens. Those taking an interest sent bitcoins to an unspendable Bitcoin address and got the Counterparty tokens in return. Be that as it may, it is more than likely that we will keep on observing the advancement of variousconsensus mechanisms. What’s your opinion about Proof of Burn? Tell us in the comments below!

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As we all know that blockchain is going to be a profound technology in the future. It’s a technology on which we can rely on without interruption of third parties. One question always comes to our mind that, “What is the difference between Blockchain and Database ?” or “Is Blockchain a database?” Well, yes Blockchain is a decentralized ledger (database) containing records of transactions. First of all, there is no central authority which controls the blockchain database. Everyone accessing the blockchain is accountable for the data in it. While storing data in the blockchain you should always remember that there is no ‘D’ in ‘CRUD’ operations. In short, whatever data you put into blockchain, it will stay in the blockchain forever. You cannot tamper that data once it is added.

Data stored in the blockchain is not controlled by any central entity, because of which we can get higher security and reliability. Data stored is not limited up to the transaction details only, we can see that a huge data will be stored on its nodes in future including texts, images, videos, infographics and so on. As we all know that with an increase in storage of data, smart contracts will also keep on increasing eventually and as a result, its deployment price will increase.All the transactions which we run on ethereum blockchain require gas. A suitable amount of gas has to be paid to the miners as compensation, for securing our transactions. This gas relies on the complexity and size of the contract, which means if data size increases so do gas. There are certainly other alternatives which we can opt to store data for our systems which we will discuss one by one.

  • IPFS
    IPFS stands for Interplanetary File System. It was invented by Juan Benet. IPFS is a peer-to-peer distributed file system. It relies on a Distributed Hash Table and the BitTorrent protocol. To understand IPFS in a simple manner lets consider an example, suppose there are 100 people sitting in a hall and they are given a task for finding the meaning of a particular word from Google. Now everybody in the hall is accessing google server. Each person is sending a request to Google’s server individually. This is what the existing system does, but if we consider IPFS, then only one person will access the google server, others will simply access google server from that particular person. In short, we can access the server from a nearby node instead of sending a request to a remote server. But there are certain flaws in this system like, if people want to access your system as a server then its necessary for you to be online till the process gets completed.

  • Decentralized cloud-based storage
    You must have heard about Dropbox, it’s simply cloud-based storage. As it is a distributed storage, your data will be stored on the user’s system who gave out their hard drive space for usage unlike centralized servers for cloud services. This does overcome the flaw of IPFS of being online if someone is accessing your data. We can completely rely on this type of storage whereas there are certain flaws associated with this type of storage also like, only static files can be used for storage and as the space for storage is rented, it’s not free of cost.

  • Distributed Database
    Structured data is stored in a Distributed database. This kind of database is quick and fault tolerant. But a flaw is associated with this system also. Distributes database faces the Byzantine problem. In this, all the nodes in the database should run the genuine code, if anyone node runs malicious code then there is no central server present here to discard the node or to modify it. Hence the entire database existence will come at stake.

  • Bigchain DB
    Bigchain DB uses RethinkDB. It is a NoSQL database so it can store huge amount of data and its transaction speed is also very fast. The bigchain team promises to solve the Byzantine problem but it is not achieved because for that we have to modify the basic architecture of the blockchain. In the case of private Blockchain, this is the best-suited option to opt for, but for public blockchain, it is a good option.

  • Ties DB
    Ties DB is the best database system to avail today. It is based on NoSQL, but it gives us some more feature including incentives and responsibility of blocks. In Ties DB, the database will recall the inventor and modifier that block and make them the new owner. So that the owner will be accountable for further processing. Now everyone on the network can read all the records because it is public. This will completely eliminate the Byzantine problem.

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Consensus mechanisms also known as consensus algorithms are nothing but a decision-making process which is performed by a group of people. They support a common decision which is best suited for everyone in the group. In this, the group members have to follow the decisions which are in the majority. The rest who is not in favor of the decision also have to go with the majority. To make it more clear let’s consider a simple example. Suppose there is a group of people who want to take some decision which will benefit their company’s sales. Each one of them has the right to suggest some good ideas and techniques, but the majority of people from the group will be in favor of the one idea that will help them the most.Other individuals in the group have to deal with this decision whether they liked it or not.

Now let’s consider a broader scenario where thousands of people are involved in that group.Wouldn’t that make it way more difficult? Consensus algorithms not always are in favor of majority votes, but it also favors to one that benefits all of them. Blockchain consensus algorithms were invented to maintain equality in the online world.

Different types of Consensus Algorithms/Mechanisms:

PoW (Proof-of-Work)
It is the very first blockchain consensus mechanism. It was first used by bitcoin. The process in consensus is known as mining and the node is called as miners. Miners have to solve complex puzzles in order to verify a transaction, in return they receive some reward. To solve the complex puzzle, miners has to use a lot of computation and resources. This is a major drawback associated with PoW, hence some blockchains are moving to different consensus mechanisms.

PoS (Proof-of-Stake)
Contrary to the proof-of-Work, where the miners are rewarded for solving mathematical problems in order to validate transactions and creating new blocks, with the proof of stake, the creator of a new block is chosen in a deterministic way, which depends on its wealth or assets,also known as stake.

DPoS (Delegated Proof-of-Stake)
DPoS is also known as digital democracy. It is the most powerful consensus mechanism. A DPoS-based blockchain counts with a voting system where stakeholders are able to vote for a few delegates that will secure the network on their behalf. The delegates are responsible for achieving consensus during the generation and validation of new blocks. Each delegate presents an individual proposal when demanding for votes.

PoC (Proof-of-Capacity)
Proof of Capacity uses a process called plotting. In this, solutions to a problem are pre-stored in digital storages like hard disks. This process is known as plotting. Whenever storage has been plotted as in when storage gets filled with solutions then that miner can take part in the block creation process. Whoever completes the storage part for puzzle first, gets to create the new block. The more storage capacity you have, the more solutions you can store, the higher your chances of creating a block are.

PoB (Proof-of-Burn)
When coins are destroyed in a blockchain, it is not actually destroyed, we send those coins to some address from where coins cannot be reused or spent. This address is known as eater address. This eater address has no private keys so that it is publicly visible but not accessible for spending. These transactions get added on the blockchain, so that there’s a necessary proof that the coins cannot be spent again, and the user who burned the coins gets rewarded.

PoWeight (Proof-of-Weight)
PoWeight is based on Algorand consensus model. By making use of Algorand consensus model, transactions get confirmed very quickly. Each user on a network of PoWeight has a“weight” associated with it. This weight depends upon the asset the user has in his account. Till the over all weighted fraction of the users are honest – usually, two-thirds or greater – the network will remain secure. This method also secures the network from double-spending.

Conclusion
We have gone through some of the most common consensus algorithms, however this isn’t it,there are more such algorithms which we will go through in the next article. At the end of the day, all these consensus mechanisms have the same vision of reaching consensus in a decentralized network. They actually vary wildly in their approach to gain consensus. No ideal consensus mechanism exists till now, but it’s fascinating to see that how so many consensus mechanisms were grown eventually in the long run by their necessities.

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Memorable Bitcoin Transactions

There are three hundred thousand transactions on BTC and BCH daily. In some cases, some transactions may become memorable. We can find these transactions in any blockchain browser and are available to everyone in public ledger.

According to miners, all Bitcoin exchanges are equivalent, as long as adequate charges are paid to them, regardless of who the sender or recipient is, or the amount of Bitcoin has been exchanged, it has no effect to them. Up until now, the Bitcoin has created in excess of 360 million transactions, of which just few which catched the limelight are depicted in detail in this article.

  • The first ever Bitcoin transactionThe very first bitcoin transaction occurred between two individuals on 12 January 2009. This was the only known transaction performed by Satoshi Nakamoto. Satoshi Nakamoto sent some bitcoins to a person named Hal Finney. The cost of this transaction was zero bitcoins.

  • French currency and Bitcoin transaction
    A citizen of Finland, Martti Malmi was also known as Sirius who was a software developer, sold 5050 BTC for $5.02 to New Liberty Standard. The only way to receive bitcoins at that time was through the mining process. During those times, block reward was 50 bitcoins per block.

  • The first ever real-world bitcoin transaction
    Software architect from Florida, Laszlo Hanecz is welkown for his historic bitcoin transaction. People who do not own Bitcoins are also familiar with this legendary transaction. On 22 May 2010, Laszlo Hanecz spent 10000.99 BTC to buy two large Papa John’s pizza. Out of this bitcoin amount of 0.99 BTC was spent on miners. From that day onward, May 22 is observed as ”Bitcoin Pizza Day”.

  • Value Overflow IncidentOn 15 August 2010, an obscure programmer created 184.467 billion Bitcoin out of nowhere in what has turned out to be known as the Value Overflow Incident. Satoshi Nakamoto rapidly hard-forked the blockchain to expel the 184.467 billion Bitcoins, which is the main thing that spared Bitcoin from biting the dust an early demise that day.

  • Assassination by using BitcoinAn individual in the past has blackmailed the dark network market. As a result, on 31 March 2013, 1607 bitcoins were transaferred to user “red and white” to assassinate that particular individual. The assassination thankfully did not succeed, but the $ 150,000 got green signal from both sides succeeded. The deal received 3,22,639 confirmations and did not roll back.

  • Bitstamp Hacking
    Bitstamp experienced a noteworthy hack in 2015. Around 19000 bitcoins
    were stolen. Obviously, the reputation was at stake and the business nearly stopped. Be that as it may, they stayed nearby and developed it back. They recognize how huge of an error that was and said they did what they could to recoup from that and reinforce their security setup.

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How does a cryptocurrency gain value?


“How does a cryptocurrency gain value?” – this is a very important question to know, specially before investing your money into any cryptocurrency out there. What are the factors that are going to give your cryptocurrency value and whether it will be successful in the future? How do you know that any cryptocurrency you are investing in has any future potential? Is it a short term investment cryptocurrency or long term investment cryptocurrency? How do you know that your coin is not a pump and dump type of cryptocurrency? Investing in a cryptocurrency just because it has a spike in value doesn’t mean that it is promising in the future as well. There are many cryptocurrencies in the market which are manipulated, their prices are pumped and then it reduces drastically. After they are dumped their price never go up again.


Some important factors which give value to cryptocurrency are as follows.

  • Demand

Cryptocurrencies do not originally have any value. So what gives them value? We, the people give them value. People willing to pay price for the cryptocurrency at the price set gives value to cryptocurrency. If there is no one ready to buy the cryptocurrency then it simply will have no value. Basically, cryptocurrency should have a high demand among people willing to buy them.

  • Concept

The concept of introducing your cryptocurrency in the market should be unique and appealing. There are a lot of cryptocurrencies in the market who serves the same purpose. Your cryptocurrency should have a unique purpose and it should interest people to buy it.

  • Usage

After purchasing cryptocurrency user should trade it in the market. If people are not willing to trade with those cryptocurrencies then how on earth they will ever gain value?

  • Big Community

There should be a strong active community of people supporting cryptocurrency. They should also actively promote that cryptocurrency. If no one ever supports the cryptocurrency then it will go nowhere.

  • Power Consumption

Cryptocurrency mining is not a piece of cake. It requires profound registering skill just as a lot of power source. This makes it expensive and subsequently increases value post-mining.

  • Investors

Investors play a major role in the launch as well as the sustainability of cryptocurrencies. If investors buy a large amount then automatically the value for cryptocurrency goes up. They additionally assume a key job in the promotion and driving fame.


Conclusion
Last yet not least is that cryptocurrency must help in solving transactional issues and fabricate trust. Likewise, it is vital that one go through the white paper just as to cross-check the realities referenced in it. In this manner, one can really assess the present and future prospect of a cryptocurrency.

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Why we need KYC for ICO Process?

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Lawful issues are one of the top 3 dangers that can sink your ICO. The explanation for this is simple: the legitimate scene is changing rapidly and you need to modify your business to these changes. There's one solitary point which has kept a similar shape for quite a while as of now. And it originates from the antiquated pre-blockchain time. It's the Know Your Customer process.


What precisely is KYC?

KYC means 'Know Your Customer'. It is a procedure to verify the identity of your investors. It requires the data sharing of investors, for example, record scans, to ensure they are a genuine individual. Every investor should pass the KYC procedure and give their accreditations so as to participate in the ICO. This is a fundamental measure to guarantee that the ICO ventures are working with authentic individuals.


For what reason do you require KYC in your ICO?

In the event that, among your financial specialists, there are residents of the United States - a KYC is compulsory under US law. Else, you may need to return their cryptocurrency to them. Laws in different parts of the world are progressively liberal, yet at the same time, on the off chance that you consider participating with different characters, you have to remain consistent with KYC rules. For instance, when you apply for trade posting it is typically one of their essential criteria. KYC exists to provide your project from scamming. Regardless of whether your project is great and promising, once it has been labeled as a pit for money laundering, you will face serious problems. We Blockchainerz as experts, unequivocally prescribe fusing KYC in your ICO procedure. Otherwise, some opportunities for your project’s growth might get closed for you. It guarantees that the sources of cryptocurrencies offered by the investor are lawful. Not all the investors will get to participate in the funding round. This implies there is an area of KYC reports that have been rejected. What occurs with these rejected? Most organizations will either stash the rejected archives away for later coordinating to keep the rejected investors from seeking to endeavor once more. This is an insightful strategy particularly if the ICO is being overseen by a firm that has different ICOs running in the market.


Principle issues with KYC in the Cryptosphere

For some, individuals out there, a KYC is an inconsistency of blockchains obscurity. In addition, usually saw as unsafe - you are sending your personal information to unregulated and unlicensed organizations. In the event that they happen to be a scam - you end up with loss of your money, as well as get your ID duplicates sold in the Darknet. To avoid those dangers, you can basically use outsourced KYC vendor of recognized notoriety so as to abstain from setting up your very own custom answer for verifying identity. Whichever you pick, if you are going for ICO, do utilize the KYC procedure to keep away from extortion.

The thought behind KYC may appear to be illogical at first. In any case, we shouldn't form a hasty opinion. From one viewpoint, KYC undermines one of the key standards of the crypto world — anonymity. Then again, it guarantees the straightforwardness of exchanges, and this is the most vital thing. It ensures that the token deal is authentic.


ICO Regulations in different countries

United Kingdom, Europe, South Korea, and the United States have made KYC rules a vital piece of all cryptocurrency regulatory frameworks. The European Parliament related to the European Central Bank passed a decision in 2017 that would present robust KYC rules in the market. The decision is right now being approved by the different part nations. Nations like the United States, Japan and even South Korea have shown efforts towards improvement of KYC rules for their respective crypto markets.


Conclusion

The goal of the KYC is to avoid fraud and counteract terrorist financing. KYC is extremely beneficial for both cryptocurrency exchanges and their clients. It is a security check for exchanges that want to conduct due diligence and for clients to do business with fully compliant exchanges. KYC enables us to comprehend the client better and oversee chances wisely. It limits the number of criminal acts and guarantees the wellbeing of token deals. Metaphorically, it's a defensive measure for ICО ventures and their supporters enabling them to run business in a transparent way. A lot is on the line, and what we truly require is trust.

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Blockchain & AI: Do they go hand-in-hand?

Blockchain with AI

John McCarthy, father of Artificial Intelligence defined Artificial Intelligence as, “The science and engineering of making intelligent machines, especially intelligent computer programs”. We all have probably heard about world chess champions losing to a computer system or AI-powered washing machine or self-driving cars. These are some examples which are powered by artificial intelligence. Artificial intelligence is nothing but creating systems capable of executing tasks that seem to require acumen. Blending blockchain and artificial intelligence together can actually do wonders.

For a machine to master, it needs a large amount of data to analyze. This process is similar to humans. We analyze data passively by using our five senses. According to Trent McConaghy, he stated in his article three characteristics introduced by blockchain which are as follows:

  • Decentralized/shared control
  • Immutable/audit trails</span
  • Native assets/exchanges

As we all are familiar with machines, we know that the machine does not have senses as humans. When an AI gets trained, it becomes far easier to track the path it took to find a solution, provided that path is stored on an immutable block. At the end of the day, the primary reason behind developing AI is to make human life easier, one such obvious avenue is being explored by using AI and the blockchain to create both active and passive income streams.

Blending AI with Blockchain

Blockchain technology helps users with the ability to create a >transparent system on which they can run smart contracts, track a ledger, and more. Artificial intelligence powers the system by allowing for hands-off programs that are designed to become smarter and more efficient over time.  Some ways in which AI can collaborate with blockchain and do miracles:

  • Extensibility : AI can perform collaborative learning with no centralized dataset.
  • Safety: AI can recognize blockchain application layer issues.
  • Efficiency: AI can predict the likelihood of a node to fulfill certain mining tasks.

There is no doubt that AI is going to help blockchain technology. Companies that are getting a headstart in the industry will almost certainly benefit greatly from such foresight. Due to increased extensibility, more efficiency, AI is going to prove safer, cheaper, and easier to run blockchains in general. There are a lot of applications where we can see AI and blockchain merging together, some are as follows:

1) Crypto Trading

The stock market can be tricky sometimes, so does trading cryptocurrencies. If the market starts falling, you can get confused and take the decision of selling it as soon as possible. But sometimes, the market gets back into the race after falling and you can end up with no profit at all. You can avoid this emotional mistake by using an AI-based crypto bot to trade for you. There are certain AI based crypto bots available in the market for eg., Autino, and Cryptohopper. Refer to our article “Best Bots for automated crypto trading strategies” for more detail.

2) Music Streaming

Musiclife is a blockchain music ecosystem. Here artists are automatically paid through smart contracts every time their music is streamed. This alone helps to ensure that the artists make more money for their work compared to traditional streaming platforms. But the real kicker here is Musiclife’s pricing model. Using an AI pricing method, the music price through the platform automatically adjusts based on current market playback data, so the more popular a song is the more money the artist will make.

3) TradeConnect

TradeConnect allows users to trade cryptocurrencies without any complex procedures required. It combines both Blockchain technology and Artificial intelligence together and provides quick transactions without lengthy registration work. It also provides transparency to its users. TradeConnect is multi-asset trading system/network which works on behalf of us. It does the processing of all the task starting from developing whitepaper till the implementation of a project. Tradeconnect will allow traders to trade any financial assets instantly and without intermediaries.

Conclusion:

AI and Blockchain together create most reliable technology enabled decision-making systems which are immutable. The emergence of blockchain and confluence of AI resulted in the creation of a whole new set of opportunities for different companies and businesses.

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STO: A secured form of ICO

When we plan to invest in crypto-tokens, surely you will come across terms like STO and ICO marketing. Although you may think this is confusing at first. So lets us start with step by step introduction to it. As we begin with ICO stands for Initial Coin Offering, and STO refers to Security Token Offering. These crypto assets have their own different issues and come up with their own pros and cons.

Initial Coin Offerings:

Initial Coin Offering (ICO) is basically a method of raising funds in an unregulated environment. So for instance, a start-up sells a fraction of the cryptocurrency tokens to the people. To whom who have supported the project in the first phases. Basically, they gather the funds in fiat currency forms such as US dollar or Euros and also could be cryptocurrencies such as Bitcoin. When it comes to project itself, the start-up team firstly prepares and presents a whitepaper where all the details of the project are explained and also the purpose of the project will be mentioned there. Furthermore, the whitepaper will clarify why a crypto token is needed. Roadmap plays a very important role to fully complete the project.

Here are some other points the whitepaper clarifies:

  • Project management details.
  • The timeline for the ICO
  • The currencies which are acceptable in the ICO
  • The percentage of a crypto token to be sold in the ICO
  • Allocation of the remaining tokens

So, during ICO when the project has received at least the minimum desired amount it is taken to its next level, which is “completion”. If in any kind of situations, the project team was unable to gather the minimum amount, they return it back to investors. Let’s outline the advantages and disadvantages of ICO’s.

Advantages of an ICO:

  • Positive network effect
  • Since there is no entry barrier to the project can potentially raise funds in a much easier manner.
  • Basically, the team members use their own blockchains to manage the funds raised. And they will distribute the token accordingly in an automated and simple way.
  • The marketing done for the ICO is solely digital by using the company website, social media, various messaging apps, and other online forums.
  • It also becomes beneficiary for the investors when the crypto becomes popular, creating more liquidity to them.
  • Effortless medium to raise funds for projects
  • No middleman involved thus it eliminates any unwanted costs
  • It is Simple to promote and market

Disadvantages of an ICO

  • It may create uncertainty about the possibility of the product to be finished and ready as stated in the whitepaper.
  • The Crypto market is highly volatile due to its nature.
  • The ICO’s are not officially regulated by the officials so the potential investors do not have a legal alternative if funds are lost.
  • Regulations can potentially cause problems.

So What is STO- Security Token Offerings?

STO can be said as similar to ICO in a way that it allows consumers to buy digital coins or tokens as a part of a public offering. Yet, unlike many ICO’s; STO’s are the sale of tangible securities such as assets, profits or revenue of the start-up.

Security Token Offerings (STO) also can be called as one of tech perception as initial coin offerings. It comes with countless of tokens required by an asset. ERC 20 is the popular one, whenever we talk about STO. Yet, it is not able to fill the gaps like securities, protocols, and congestion in the network.

Let’s outline the advantages and disadvantages of STO:

Advantages of an STO:

  • Actually, STO’s are registered with the (SEC) Securities and Exchange Commission.
  • More secure compared to an ICO as the SEC only allows projects that are reasonable and serious about the aim.
  • The market experts are highly confident as the predicted market cap is $10 trillion by 2020.
  • It emphasizes the ongoing trend

Conclusion:

Funding is generally the critical obstacle for blockchain projects so, in conclusion, it can be said that both the ICO and STO’s are raising the potential of more blockchain projects to succeed. We can see that Security Token Offerings will be more and more present in the crypto industry. I believe that the STO concept is a powerful idea. It has a very crucial role in the alignment of the blockchain project with government regulations. It even has the potential to end the ‘’conflict’’ between the regulators and the blockchain community.

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We are now very much familiar with blockchain and its working. In this blog, we are concentrating on the basic types of Blockchain. So we all know that Blockchain is a public ledger which is distributed and decentralized. Well coming to the types of Blockchain, there are basically three types of Blockchain:

1) Public Blockchain
2) Private Blockchain
3) Consortium or Federated Blockchain

This blog will help you to understand the difference between types of Blockchain which are mentioned above. We will have a look at each in detail and also focus on how they are different from each other.

1) Public Blockchain

Public Blockchain is simply, a public which means its basically for the public, by the public, and of the public. Anyone on earth, who is willing to read, write or join a public blockchain, can do so. No access restriction is observed here. A transaction is completely transparent, but at the same time, they are anonymous. An obvious question which comes to our mind is that if no one is in charge here then how decisions are being taken? That’s where decentralized consensus mechanism such as proof of work and proof of stake etc comes into the picture.
Examples of Public blockchain include Bitcoin, Ethereum, Monero, Dash, Litecoin, etc.

2) Private Blockchain

A private blockchain as the name suggests is private to an individual or to an organization. A private blockchain is completely permissioned. To join the network, one has to take permission from the network administrators. Access rights are different for everyone. Some have restricted access and some have full access, it depends on the designation of the user. Private blockchain is similar to centralized system, the only difference is, we inherit blockchain advantages. All the transactions and their verifications are carried out internally, because of which there is a good chance of security violation in the system, which was avoided in public blockchain.
Examples of Private Blockchain include database management, auditing, Bank chain, Monax, and Multichain. etc.

3) Consortium or Federated Blockchain

Consortium or Federated Blockchain is an amalgamation of the public and private blockchain. In this type, the power does not reside with a single entity. It runs under the leadership of a group of entities. In public blockchain, any person having internet connection can participate in the process of transaction verification, which is not possible in the Consortium network. Consortium Blockchains are quick and provides higher scalability and transaction security. We can see that Consortium Blockchains are often used in the banking sector. The consensus mechanism is managed by a pre-selected set of nodes. These nodes can be from all the entities forming the consortium.
Examples of Consortium or Federated Blockchain include R3 (Banking), EWF (Energy), B3i (Insurance), Corda.


The table shown below will help you to understand how Public Blockchain, a Private Blockchain and Consortium Blockchain are different from each other.

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Why we need them?

Whenever we require privacy and control for our system than private and consortium blockchain can be a decent option to go with. On the other hand when we require an open system with censorship resistance then we must go for public blockchain in that case. Hence different organizations are using several use cases of blockchain technology according to their purpose.

Conclusion

Coming to the conclusion, we saw Blockchain types & how they are different from each other. Along with this, we also saw how they have their significant usage according to their needs. Each blockchain type has its own set of pros and cons. And deciding on which type of blockchain is best suited to your business company/business rely on your business/company requirement. The future will only tell how far these blockchains go and who will be the vanquisher.

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