( 24th July 2019 )
Today, I am describingthe type of block chain, such as Public, private and federated blockchains illustration
1) blockchainhub.net
Private blockchains are valuable for solving efficiency, security and fraud problems within traditional financial institutions, but only incrementally. It’s not very likely that private blockchains will revolutionize the financial system. Public blockchains, however, hold the potential to replace most functions of traditional financial institutions with software, fundamentally reshaping the way the financial system works.
2) Public Blockchain protocols
State of the art public Blockchain protocols based on Proof of Work (PoW) consensus algorithms are open source and not permissioned. Anyone can participate, without permission. Anyone can download the code and start running a public node on their local device, validating transactions in the network, thus participating in the consensus process the process for determining what blocks get added to the chain and what the current state is. Anyone in the world can send transactions through the network and expect to see them included in the blockchain if they are valid. Anyone can read transaction on the public block explorer. Transactions are transparent, but anonymous/pseudonumous.
Examples: Bitcoin, Ethereum, Monero, Dash, Litecoin, Dodgecoin, etc.
Effects: Potential to disrupt current business models through disintermediation. No infrastructure costs: No need to maintain servers or system admins radically reduces the costs of creating and running decentralized applications (dApps).
Regaring Compare Federated Blockchains or Consortium Blockchains.
Federated Blockchains operate under the leadership of a group. As opposed to public Blockchains, they don’t allow any person with access to the Internet to participate in the process of verifying transactions. Federated Blockchains are faster (higher scalability) and provide more transaction privacy. Consortium blockchains are mostly used in the banking sector. The consensus process is controlled by a pre-selected set of nodes; for example, one might imagine a consortium of 15 financial institutions, each of which operates a node and of which 10 must sign every block in order for the block to be valid. The right to read the blockchain may be public, or restricted to the participants.
For Example: R3 (Banks), EWF (Energy), B3i (Insurance), Corda
Effects:
1) Reduces transaction costs and data redundancies and replaces legacy systems, simplifying document handling and getting rid of semi manual compliance mechanisms.
2) in that sense it can be seen as equivalent to SAP in the 1990’s: reduces costs, but not disruptive!
Some would argue that such a system cannot be defined as a blockchain. Also, Blockchain is still in it’s early stages. It is unclear how the technology will pan out and will be adopted. Many argue that private or federated Blockchains might suffer the fate of Intranets in the 1990’s, when private companies built their own private LANs or WANs instead of using the public Internet and all the services, but has more or less become obsolete especially with the advent of SAAS in the Web2.
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