What Are the Different Types of Blockchains? How Does It Work?

What Are the Different Types of Blockchains? How Does It Work?

Blockchain technology is the decentralized and distributed ledger that records the transactions across all the computers involved. It brings transparency as no one can alter a block without altering all subsequent blocks and hence can be noticed by the others easily. In order to understand it in layman language, one can compare it with Google Doc. As any entry made by one in the network, it appears in real-time to others. It means the information gets distributed and not copied. The distribution takes place in real-time. The same real-time update is with Blockchain technology.

The Blockchain network has no central authority, but a distributed ledger that records every single transaction and hence is a democratized system. The data inside it is cryptographically stored. Although cryptocurrency is one of the potential applications of blockchain technology, it can be used in different fields such as supply chain, accounting, identity management, and many more in order to realize more from Blockchain technology.

There are generally three types of Blockchains- Public Blockchains, Private Blockchains and Hybrid Blockchains.

Public Blockchains are decentralized with no single authority to control the recording of transactions. All the transactions are fully transparent, and anyone can access to verify the transactions. As the name itself suggests that they are public, and is an element of the internet, so the nationality, religion, race or sex doesn’t matter. Public Blockchains are almost impossible to get shut down. In it, there is a token associated, which is designed to incentivize and reward the participants in it. The example of Public Blockchain is Bitcoin.

Private Blockchains are also called as Permissioned Blockchains and differ largely from Public Blockchains. In it, every participant needs permission to join the network. Transactions here are private and are available to participants who have been given permission to join the network. Hence, they are more centralized in nature than Public Blockchains. Having control over the network means a hierarchal governance structure. The Private Blockchains are more or less meant for the enterprises that do not want their sensitive data visible outside their network. These Private Blockchains may or may not have a token associated in the chain. The example of Permissioned Blockchain is Hyperledger.

Similar to the Private Blockchains are Consortium Blockchains, where the major difference is that the Consortium Blockchains are governed by a group rather than a single entity. It is a collaborative kind of model where the business can be brought together, who works together and also competes with one another. Having all the benefits of the Private Blockchains hence can be considered as the category within the Private Blockchains.

Hybrid Blockchains are the blockchains that merge the good parts of both the blockchains, i.e., Public Blockchains and the Private Blockchains. It combines the privacy part of Private Blockchains and transparency benefits of the Public Blockchains. It imparts flexibility to the enterprise, that is, they can now choose the data they want to make public and the data they want to keep private. It means the enterprises can operate with transparency, security, and privacy. The example is Dragonchain Blockchains.

Blockchain Policy

Blockchain is a distributed and decentralized ledger for recording the tamper-proof and transparent transactions. The policy is a set of plans that are used for making decisions. So, the Blockchain policy provides direction through a set of plans and actions regarding Blockchain technology implementation or regulation of it.

Maharashtra Blockchain Policy

Maharashtra is working on the implementation of Blockchain technology and has decided to come out with ‘State Blockchain Policy.’ Blockchain technology can be used in different fields, such as vehicle management, supply chain management, health, and agriculture. Bl Recently, it has launched Blockchain Sandbox for e-governance. The Government of India has recently started a blockchain sandbox for startups to experiment and test the blockchain technology in a live environment.

In the agricultural sector, the Government is working along with the Agricultural and Processed Food Products Export Development Authority (APEDA) for the pomegranate exports. The primary objective is to give money in the hands of farmers and hence removing the middleman from the chain. It will provide loans to the farmers against the receipts of additional produce deposited in the godowns of Warehouse Corporation of India. Earlier, these loans were provided through the middleman, who is infamous for exploiting the farmers.

Blockchain technology would also be tested for organ transplantation in the health sector. It would be used for the mapping process, and the IT and the Health ministry are holding discussions to make a suitable plan for successful implementation. As per CryptoMoonPress, Gokuldas Tejpal Hospital of Mumbai has been chosen by the government to form the nodes of hospitals, health departments, and agencies. The main aim of using the Blockchain here is to match the demand, supply gap, and also keeps the anonymity of the donor intact and helps in record fudging.

Policymaking and its implementation are two different sides of the same coin. Blockchain Sandbox would help the startups to test and experiment with the product in a risk-free manner. The only challenge is to build the platform and tools which will prepare the base of the implementation of Blockchain technology. The need of the hour is to run and test the product with the help of technology in a live environment. The access to the Sandbox has already been given to the startups. The more things will surely come up with the time when the Government of Maharashtra will release a Blockchain policy in the coming weeks.

Leave a Reply

Your email address will not be published. Required fields are marked *