Types Of Blockchains
Blockchains & Distributed Ledger Technologies The Bitcoin White Paper was published by Satoshi Nakamoto in 2008; the first Bitcoin block got mined in 2009. Since the Bitcoin protocol is open source, anyone could take the protocol, fork it (modify the code), and start their own version of P2P money. Many so-called altcoins emerged and tried to be a better, faster or more anonymous than Bitcoin. Soon the code was not only altered to create better cryptocurrencies, but some projects also tried to alter the idea ofblockchain beyond the use case of P2P money. The idea emerged that the Bitcoin blockchain could be in fact used for any kind of value transaction or any kind of agreement such as P2P insurance, P2P energy trading, P2P ride sharing, etc. Colored Coins and Mastercoin tried to solvethat problem based on the Bitcoin Blockchain Protocol. TheEthereum project decided to create their own blockchain, with very different properties than Bitcoin, decoupling the smart contract layer from the core blockchain protocol, offering a radical new way to create online markets and programmable transactions known as Smart Contracts . Private institutions like banks realized that they could use the core idea of blockchain as a distributed ledger technology (DLT), and create a permissionedblockchain (privateor federated), where the validator is a member of aconsortium or separate legal entities of the same organization. The term blockchain in the context of permissioned privateledger is highly controversial and disputed. This is why the term distributed ledger technologies emerged as a more general term. Private blockchains are valuable for solving efficiency, security and fraud problems within traditional financial institutions, but only incrementally. Its not very likely that private Continue reading >>
The Risks Of Private Blockchain: Too Many Chains
The Risks of Private Blockchain: Too Many Chains Part two in a series about blockchain early adoption risks. Read the first article here . In our previous article , we discussed the differences between public and private blockchain-enabled applications. Many financial institutions are wary of enabling their customers to engage with public blockchain and crypto currency, for fear of the affiliation with possible money laundering or other illicit activities. But the implementation of a private blockchain has implications that can greatly benefit existing bank processes. The accurate, tamper-proof record-keeping means that processes, such as interbank payments, trade finance transactions, and correspondent banking services, could be enacted quickly and seamlessly. But private blockchain doesnt come without risks. The first prevalent blockchain-affiliated risk pertains to the use of private blockchain environments. The private blockchain space is fragmented. Currently there are many blockchain projects in development simultaneously, and companies are forming islands of consortia, each revolving around one specific blockchain implementation. Most of the progress in private blockchain is seen in the banking sector. Right now, there are four consortia of banks using one of the four private existing blockchain technologies, namely R3, Hyperledger, Ripple, and Quorum. Having multiple blockchains is undesirable for a couple of reasons. Any single blockchain will not have the full picture of everything. Each blockchains protocol and implementation are different and that results in different models of data storage, confidentiality, and permissions control. Currently, there are hundreds of financial institutions scattered across 4 main private blockchain consortia. The problem with Continue reading >>
Private Blockchain Vs Public Blockchain
You cannot be a crypto investor or entrepreneur without having a real understanding of the differences between these types of blockchains as well as their implications. Even if they are based on similar principles, their operation is, in fact, different to all levels. So the tokens issued by these blockchains will not be assessed in the same manner. A blockchain is so-called public (or open) when anyone can become a member of the network without conditions of admission. In other words, anyone wishing to use the service proposed by the network can download the protocol locally without having to reveal his or her identity or meet predetermined criteria. A protocol is a computer program that could be compared to a Charter in that it defines the rules of operation of a network based on a blockchain. For example, the members of the bitcoin network download the Bitcoin protocol (through the intermediary of their wallet) to be able to join the network and exchange bitcoins, but the only condition is to have an Internet connection. It is different with a private blockchain (or closed) since the members of the network are selected before being able to download the protocol and therefore use the proposed service by the network. The mining capabilities and the system of consensus as a whole are centralized within the hands of the same entity. A network based on a private blockchain is therefore not decentralized in itself. Finally, consortium blockchains provide many of the benefits of private blockchains without focus the mechanism of the consensus between the hands of the same entity. In this article, we will mostly focus on the diffrence between public and private blockchain. The differences between these types of blockchains are based on the levels of trust existing among the Continue reading >>
5 Answers - What Is The Difference Between Private Blockchains And Public Blockchains Like Bitcoin? - Quora
What is the difference between private blockchains and public blockchains like bitcoin? A private blockchain is just like a public one when it comes to the distribute aspect of the data,multiple computers (nodes) are comneceted through a protocol and they exchange transactions and help mentain a common ledger. Unlike a public one the private blockchain is behind a firewall and can only be mined by computers that are on that network. It is also generally used just within a company, behind their firewall and is only available to the emplyees and systems on that company. You can say a public blockchain is a democracy where all the computers and organizations decide together where they are going and what changes to implement. In a private one, there is generally a dictatorship because everything is owned by one company. Have a look at . The private blockchain that NASDAQ is using. If you want to find out more about how the blockchain works have a look at I think that there's misunderstanding of what "private blockchain" means. If the blockchain would be totally private - like belongs to a few parties that totally trust each other - then it will defeat the whole added value of blockchain as a "trust machine". Such organization would be better of with adopting some existing database to serve as a ledger - like Oracle SQL where only trusted parties get read/write access. Private blockchain - is one where there are some parties - that somewhat trust each other, but not entirely. Like companies that compete with each other in some things, but want collaborate in other. Such companies can decide to expose the blockchain to everybody, but restrict those who can be miners. Or they just can decide that block considered to be "confirmed" whenever n out of m participants sign the blo Continue reading >>
The Difference Between Public And Private Blockchain
Blockchain Unleashed: IBM Blockchain Blog The difference between public and private blockchain May 31, 2017 | Written by: Praveen Jayachandran Categorized: Blockchain Developers | Blockchain Explained | Blockchain Identity There are a number of explanations on what blockchain is and what exactly is the difference between Bitcoin and blockchain , but another area where I get many questions, is the difference between public and private blockchain. The similarities of public and private blockchain Many flavors of blockchain have evolved over the years and the terminology is often misconstrued. This is easy to do because public and private blockchain have many similarities: Both are decentralized peer-to-peer networks, where each participant maintains a replica of a shared append-only ledger of digitally signed transactions. Both maintain the replicas in sync through a protocol referred to as consensus. Both provide certain guarantees on the immutability of the ledger, even when some participants are faulty or malicious. The sole distinction between public and private blockchain is related to who is allowed to participate in the network, execute the consensus protocol and maintain the shared ledger. A public blockchain network is completely open and anyone can join and participate in the network. The network typically has an incentivizing mechanism to encourage more participants to join the network. Bitcoin is one of the largest public blockchain networks in production today. One of the drawbacks of a public blockchain is the substantial amount of computational power that is necessary to maintain a distributed ledger at a large scale. More specifically, to achieve consensus, each node in a network must solve a complex, resource-intensive cryptographic problem called a proo Continue reading >>
Private Blockchain Or Database?
A private blockchain is a blockchain that has an access control layer built into the protocol [ 1 ]. This means the network participants have control over who can join the network, and who can participate in the consensus process of the blockchain. This is in contrast to a public blockchain, which is open for all to participate in as a user, as an entity that determines the validity of transactions, and the consensus process. Private blockchains, therefore have a very different level of security than public blockchains like Bitcoin [ 2 ]. Private blockchains are a class of distributed ledgers that use transactions and blocks, first described in Bitcoin. Distributed ledgers are shared databases with access protection rights, with defined rules on what types of changes can be performed by what entities. The value of distributed ledgers at the enterprise level arises from the ability to do away with reconciliation of data among participating entities [ 3 ]. This is especially the case with financial institutions that trade with one another. A lot of effort on the back-office today is spent in reconciliation of records among different institutions [ 4 ]. Instead, distributed ledgers allow financial institutions to maintain a structurally consistent shared database of transactions. This allows each participating institution to read data from the distributed ledger and be guaranteed that it is valid and reconciled against the data held by the other participating institutes. Difference between a Public and Private Blockchain Distributed ledgers are inspired from Bitcoin and other public blockchains. However, they differ in their fundamental characteristics of access and security promises. The security of a public blockchain like Bitcoin comes from its proof of work, which mak Continue reading >>
Heres How I Built A Private Blockchain Network, And You Cantoo
Heres how I built a private blockchain network, and you cantoo Nothing helps understand blockchains better than building oneyourself This is PART-4 of The Product Managers guide to the Blockchain series! If you somehow landed on my publication for the first time, Welcome! I recommend you start from part 1 , and then read part 2 and part3 before reading this post. However If you are the explorer type, read on! (Update: Heres the latest part 5 of the blockchain series ) In Part 3 of this series, we looked at the mechanics of Ethereum and also talked about the concept of Ethereum Accounts, Smart Contracts and Gas the fuel that helps all these pieces to work together. Its been a lot of reading so far, but while you can read all the blockchain content available on the internet, nothing helps understand blockchains better than building one yourself. So thats what I did. You can simply follow this post and build a little prototype to see how everything weve talked about so far comes together. Here is what we will accomplish in this post, Weve seen this before , but basically the Ethereum blockchain network is simply lots of EVM (Ethereum Virtual Machines) or nodes connected to every other node to create a mesh. Each node runs a copy of the entire blockchain and competes to mine the next block or validate a transaction. Whenever a new block is added, the blockchain updates and is propagated to the entire network, such that each node is in sync. To become a node in the Ethereum network, your computer will have to download and update a copy of the entire Ethereum blockchain. To achieve this Ethereum provides tools that you can download, connect to the Ethereum network with and then interact with it. These are: Geth if you have experience with web development and are interested i Continue reading >>
Public And Private Blockchain Concepts And Examples
Public and Private Blockchain Concepts and Examples There has been tremendous interest in blockchain, the technology on which Bitcoin functions. Nakamoto developed the blockchain as an acceptable solution to the game theory puzzle Byzantine Generals Problem. This lead to a number of firms adopting the technology in different ways to solve real world issues, wherever there was an element of trust involved. Majority of them could be relating to the ability to provide proof of ownership for documents, software modules/licenses, voting etc. As you know, we at LTP have been doing a lot of research to understand other use cases of blockchain apart from Bitcoin-based payments. Recently we had released a comprehensive analysis of 50+ startups and 20 use-cases of blockchain. Though there have been news of large companies accepting bitcoin (Ex.: Amazon, Microsoft, Dell) and the overall acceptance reaching a 100,000+ merchants figure, upon deeper examination we realize that large corporations do not store the Bitcoin payments. They generally partner with a Bitcoin payment processor who converts the Bitcoins to cash as and when they receive a payment and this converted amount is what the corporates take into their account. What a bummer! By definition, blockchain is a ledger of all transactions that have been executed and could be seen as a write-only platform, wherein transactions once executed cannot be modified later. This platform has been further divided into Public and Private blockchain. Is there a third one? a hybrid mode such as a Consortium blockchain as represented by Vitalik Buterin, founder of Ethereum, a decentralized web 3.0 publishing platform. A public blockchain is a platform where anyone on the platform would be able to read or write to the platform, provided th Continue reading >>
Public Vs Private Blockchain In A Wide World Of Unique Applications
Public vs Private Blockchain In A Wide World Of Unique Applications Recently we explored the fundamental concept of blockchain and how its revolutionizing record keeping in a wide swath of industries. We focused on the public blockchain, an incorruptible record keeping system; transparent by being public and un-hackable due to its distributed nature. However, there is more to this globally distributed ledger system than being public and transparent. The advantages of blockchain technology transcend these characteristics, which have been made famous by applications like bitcoin. There are also private and permissioned blockchains that prioritize different elements of the technology in order to serve a variety of other applications. Public, permissioned and private blockchains are defined by who can use the system and who hosts the blockchain in order to validate transactions. Anyone can be a user or a node (host) on a public blockchain, while permissioned blockchains are operated by a wide but defined group, such as the primary stakeholders of a specific industry. A private blockchain, as the name suggests, is run and used by one organization. Each form of blockchain places a different level of importance on anonymity, immutability, efficiency, and transparency. The public blockchain, that has been made famous by bitcoin for example, prioritizes anonymity, immutability, and transparency over efficiency. Whereas permissioned blockchains value immutability and efficiency over anonymity and transparency. The private blockchain can be confusing for those just getting to grips with complex systems like bitcoin. By prioritizing efficiency over the anonymity, immutability and transparency it foregoes the characteristics normally associated with the technology. The range of app Continue reading >>
What Usecases Do Private Blockchains Have?
Are private blockchains intended to serve as testnets only or are there other applications? What use cases can private blockchains be applied to? In order to differentiate this question from this one , I'm going to assume this is looking specifically at use cases for private networks, not for a comparison between private and public ones. Jeff Coleman Jan 25 '16 at 1:59 There are numerous use cases for private blockchains. Some of the many ones that are being currently considered in industry include: As an access-restricted inter-bank settlement layer for currencies and securities As an inter-departmental "balance sheet" within a large enterprise tracking private data such as security authorisations, finances, etc. without any one department being in authoritative control of the records As an access-restricted platform for the issuance of loyalty points, gift cards, etc. by a major commercial entity As a private tracking tool for private equity, debt, and other liquid agreements. For a discussion of the contrasting features and other reasons that motivate these types of use cases to consider private blockchains over public blockchains, see this question . There is an Ethereum blog post that addresses this question. In a nutshell: Private blockchains are not necessarily just testnets There are two aspects of "privacy": (i) read permissions, (ii) block generation permissions. You may want to restrict (i) because your use-case may require privacy. You may want to restrict (ii) because your use-case does not require globally distributed trust, but rather trust spread across a pre-determined set of participants. that isn't an answer... eth Jan 22 '16 at 11:55 Indeed. Its a question rather. And for a reason: the article above covers your question and you did not state what ef Continue reading >>
What Are Private Blockchains & How Are They Different From Public Blockchains?
What Are Private Blockchains & How Are They Different From Public Blockchains? By: Sudhir Khatwani In: Blockchain Last Updated: Was it Bitcoin that introduced Blockchain to the world or was it the other way round? Well, this fact is as debatable as the chicken vs egg. But nonetheless,both Bitcoin and Blockchain have done remarkably well this year. Bitcoin reached an all-time high of well above $7000. Blockchain attractedmore than $2 billion investment. A handful of IT and banking pundits say that Blockchain is the real invention of Satoshi Nakamoto and not Bitcoin. It is so because the blockchain technology can be leveraged to solve many fundamental problems that our world faces in many areas. Since its invention, the blockchain that Bitcoin introduced to us has mutated into several other types of the blockchain. I have discussed some of the types of blockchain here on CoinSutra . But out of these aforementioned mentioned types of blockchain, I am interested in two types i.e. Public Blockchain and Private Blockchain, because I feel they have a lot of potential. Anyone can participate in a public blockchain because it is open-source and public to all where no one is in charge. There is no access or rights managementdone for a public blockchain and anyone can be the part of the consensus. ( Know more about consensus here ) Because of this, anyone at any given point of time can join or leave/read/write/audit the public blockchain ecosystem and the network will still be trustless. Trustless here means you need not set-up a trusted party or entity to overlook the operations on this type of blockchain and yet it will be censorship resistance. The catch is that this type of self-governed, decentralized yet trustless autonomy is ensured on the system by its method of decision Continue reading >>
Private Blockchains And How To Make Them Work
Private Blockchains And How to Make Them Work Posted by Gjermund Bjaanes on July 11, 2017 Many people are getting excited about blockchain technology, and for good reasons. Immutability, trustless sharing of data, secure transactions and much more can truly change the way we do business. However, not everybody wants to put their data on a publicly accessible data store.How can you have a private blockchain that is still secure and has all the great functionality of a public blockchain? If you are not too familiar with blockchain and want to learn more about the basics you can check out several articles about blockchain that I have written: Why would anyone not want all their data open to the public and have no ability to change the data once its out there? That might be a slightly leading question to get my point across Anyway, the point is that many people want the benefits of blockchain, but need to keep their data private or more tightly controlled for some reason. Lets study a couple of use cases to understand the reasoning behind these needs better. Property ownership is a great example.It would be less than ideal if the government or legal system was not able to enforce changes of ownership in for instance a legal dispute. If the ONLY person able to change ownership is the current owner himself, even if that ownership was acquired fraudulently, then you have big problem. Forcing changes that override some of the current restrictions of a public blockchain are needed for use cases like this.Perhaps we will figure out a good way to solve these issues at some point, and that is great, but for right now, a controlled blockchain is the best solution. Another (slightly generic) use case that you might imagine is that you might want to have data that are heavily regulat Continue reading >>
Public And Private Blockchain
Practical Examples Of How Blockchains Are Used In Banking And The Financial Services Sector
Practical Examples Of How Blockchains Are Used In Banking And The Financial Services Sector Opinions expressed by Forbes Contributors are their own. While there are still several hurdles to overcome before blockchain transforms finance and banking as we know it, the potential cost and labor savings it could create for the global financial market are so appealing that many major financial institutions are investing millions in resources to research how best to implement it. I believe blockchain is a technological advance that will have wide-reaching implications that will not just transform financial services but many other businesses and industries. Billions of individuals and businesses are served and trillions of dollars are moved around the antiquated global financial system each day. Still heavily reliant on paper, albeit dressed up with a digital faade, there are many issues with this system that cause added expense and delays as well as make it easier for crime and fraud to cripple it. Despite the financial industrys resistance to change, blockchain and its expected benefits make it worthwhile. Many of you may be familiar with Bitcoin, a type of digital currency that operates independently from a central bank, but the tech behind that system most people are not familiar with is blockchain. There are many different blockchainspublic and privateand they allow anyone to send value anywhere in the world where the blockchain file can be accessed. Think of each chain as an online database stored in a distributed, peer-to-peer fashion. The storage devices for the database are not all connected to a common processor and each blockordered recordshas a timestamp and a link to a previous block. Cryptography ensures that users can only edit the parts of the blockchain that t Continue reading >>
Where Have All The Private Blockchains Gone?
Where Have All the Private Blockchains Gone? Dec 18, 2017 at 05:00 UTC|UpdatedDec 19, 2017 at 02:03 UTC Dr. Gideon Greenspan is the founder and CEO of Coin Sciences, the company behind the MultiChain platform for private blockchains. The following article is an exclusive contribution to CoinDesk's 2017 in Review . The past six months have seen a great deal of excitement in the crypto space - bitcoin passed $10,000, billions were raised in ICOs and mainstream financial institutions like CME Group and CBOE launched cryptocurrency-based derivatives. This is all a far cry from this time last year when bitcoin was still below $1,000 and the total market cap of the entire space was $15 billion, less than 5% of today's figure. So, whatwere we talking about in December 2016 then? The answer, for those who don't remember, is private or permissioned blockchains , also known as "distributed ledgers." These systems share many technical similarities with the open blockchains underlying cryptocurrencies, but are designed to be used by a closed group of known parties. As you may have noticed, these days we hear a lot less about them. So, has this notion, which claimed to embrace the blockchain revolution, while emptying it of its true meaning, been consigned to the dustbin of history? With no promise of censorship-free money and no native token for speculation, were permissioned blockchains nothing more than a fleeting sideshow? It seems that more than a few people have reached that conclusion. Indeed, when CoinDesk Editor-in-Chief Pete Rizzo approached me to write a piece for the series, his prompt was the suggestion that "we're probably about due for a private blockchain return in 2018." However well-intentioned, this came across as a generous conciliatory expression of optimism fo Continue reading >>