Blockchain technology is a ledger mechanism that distributes asset transaction information into digital blocks connected with chains in terms of providing security. It is being utilized in various sectors, including retail, travel and transportation, oil and gas, media and advertising, telecommunications, travel and transportation, etcetera. In this content piece, we shall chiefly discuss the major types of blockchain networks and their progression.
What is a blockchain network?
Blockchain technology is mainly leveraged to track asset transactions within networks. It works as a digital ledger that allows businesses to maintain a shared and immutable record of their transaction between networks. Companies generally utilize blockchain for reliable data sources, enhanced data security, and faster transaction processes.
Once the information is shared in a network, the blockchain mechanism creates blocks of information in chronological order that cannot be modified or deleted without the consensus of all the network participants.
Additionally, there is no chance of unauthorized entry of information. In a way, the blockchain network acknowledges transparency and security in order to distribute data among the concerned individuals or organizations.
Types of blockchain networks-
- Private blockchain
A private blockchain is leveraged by a company and within the company. Here, the decision-maker is the organization that decides on whom to be considered a participant in the network and with whom to distribute the asset transaction records. Such networks are also called managed blockchains, as the parent company solely manages them.
Employing it enhances trust and credibility among the network participants. It ultimately boosts transparency when organizations use blockchain for their internal people, availing of person-to-person decentralization.
- Public blockchain
A public blockchain network allows anyone to participate without any permission. Here, any network participant has the authority to access, modify, and authenticate the blocks or transaction data. There is limited privacy and security in this network type. An example of public blockchain technology is Bitcoin, the decentralized cryptocurrency.
However, users believe that public blockchains provide a superior level of transparency among the network participants.
- Consortium blockchain
This particular blockchain mechanism allows multiple organizations to manage and authenticate a blockchain. But no one other than pre-determined organizations gets permission to access any information. Rather, the participant organizational bodies decide on who can read and modify the data.
Here, the pre-determined organizations commonly have similar objectives and hence take up the responsibility to manage their asset transaction data together.
- Hybrid blockchain
It is an amalgamated network of private and public blockchains. Hence, the network can be publicly available but not totally. Participants may access limited asset transaction details but not entirely; however, certain transaction information requires permission to access.
Growth of Blockchain Networks-
Due to its advanced security resolutions, blockchain technology has been adopted by global giants, especially those who operate in finance. In the initial period, it was employed to address internal transaction issues in the organizations, such as record keeping and transactions within the organizations.
Nevertheless, the ledger mechanism has observed growth lately as enterprises started adopting it for transaction tracking outside organizations across national and international territories. It is highly utilized for cryptocurrency transactions.
As per data, blockchain technology has recorded a market valuation of $6.6 billion in 2021. The market size is estimated to rise to $19 billion by 2024. Organizations are likely to restrict their expenditure and save around $12 million a year while using blockchain networks.
Blockchain mechanisms were primarily utilized in managing cryptocurrency; however, its promising progression has allowed organizations to adopt it in other decentralized technologies. Different networks of blockchain are utilized as per the requirements of individuals and organizations. The above-mentioned blockchain network list includes four segments of it. The asset management ledger technology is an evolving one that provides secured transaction tracking as well as transparency. To gain knowledge on other technological aspects, read our other blogs.