With news of one or another blockchain coming out every day, cryptocurrencies definitely having a picnic in the financial world, and centralized exchanges falling like dominoes, the public’s interest in this splendiferous new tech is growing exponentially. Bitcoin really did prove its worth by doing, rising from a coin that was considered to be worth less than a hundredth of a penny into something that the market has testified is 9 249 times better than the dollar.
Why wouldn’t it be? It doesn’t transmit diseases, doesn’t get cheaper and cheaper every year (in fact, the USD 15 times lesser in buying capacity than in the 1960s), and knows how to weed out corruption and help make the world a truly far place where everyone has access to opportunities. What else do you need to believe you’re in the future everyone has been dreaming of already? Androids, hoverboards, and cancer treatment already exist.
Although Bitcoin is not anonymous with its huge database of potential dirt on everyone ever, other blockchain protocols make it impossiblу for someone to track you, like Mimblewimble.
But how did Bitcoin’s blockchain outperform the USD? What mechanisms make it work the way it does? What type of blockchain is Bitcoin? What other types of blockchain tokens and frameworks are there? Is it true that other blockchains are so much better than Bitcoin in every respect and Bitcoin is only the king because of the hype*? What type of blockchain is Hyperledger?
You, at the cutting edge of innovation, are absolutely right to be asking these questions. Get some promising new currency at Nominex plus find out something only the intellectual elite know now to be light years ahead of everyone when everyone learns about the wonders different types of blockchain technology can do!
You’ll also be able to find more information about types of blockchain algorithms as part of our podcasts if you’re more of an audial learner (get in touch with our support for a private session of kinesthetic learning in a separate booth – but take a few hundred dollar bills with you).
So what types of blockchains are out there?
You obviously want to learn what about blockchains makes them differ from one another, but before that there is one important distinction to be made. What makes a blockchain a blockchain?
In fact, there are 6 characteristics, according to a legendary Bitcoin expert Andreas Antonopoulos, that actually make a blockchain a blockchain. And centralized governance is not one of them.
Beware! If you’re examining a blockchain that is not decentralized, it’s not a blockchain. Like EOS. If it’s not entirely open, it’s also not a blockchain. And if it has a headquarters where the staff gets regular visits from men in black suit with very suave manners and in suits that pucker a little under the arms (the way they usually do when you use gun holsters ) – definitely not a blockchain.
Blockchains are a technology that isn’t controlled by anyone (including mafia or the government or any third party). If it’s missing any of the following features, steer clear:
“Do you think that a central bank digital currency issued by the United States or China or the European Union, whoever else, is going to help or hurt Bitcoin? It’s going to be entirely irrelevant to Bitcoin. It’s it’s a bit like, you know, introducing a new model of cars and saying, is this going to help or hurt the airline industry? We’re flying above all that shit. Behind trails Libra Central Bank, alternative digital currencies. All of those systems lack the fundamental components that make Bitcoin interesting and different. They’re not different at all. I use that acronym to remind my viewers what the fundamentals are and that the acronym is RIP CORD because we’re having to parachute out of a crashing plane, which represents classical banking, here and if you’re really into the banking system you better find that ripcord fast. RIPCORD stands for Revolutionary, Immutable, Public, Collaborative, Open, Resistant to tampering, and Decentralized”.
More on that here:
Types of blockchain that emerged after Bitcoin
There are terabytes of information out there about blockchains. Like people, they all have their characteristics and different types they are classified by. One way to classify blockchains is by their accessibility options.
By the way, when describing different types of blockchain here we will mention Sidechains only in passing because they don’t really require an in-depth explanation. These are just blockchains that run alongside the main blockchain and allow exchanges of data. If you’re interested, there’s more info here.
As far as types of blockchain protocols go, Public Blockchains have no access restrictions whatsoever. Liberté, égalité, fraternité! Opportunities are equal for anyone out there living in Nigeria with a $50 smartphone or a swanky San Francisco downtown apartment. Bitcoin and Ethereum blockchains are public, and they are trying to preserve the original Satoshi Legacy. Power to the people. Anyone can partake, and everyone gets an equal chance.
A Private Blockchain breaks the first rule of Satoshi’s, which is “accessibility for everyone”, and it is not only not public and not collaborative, not open, but it’s also not decentralized. Owned and run by a group of men who, as a rule, have a Bentley for every day of the week, private blockchains are a laugh in the face of everything crypto stands for.
The chances are that there will be complete autocracy in this kind of system. Who are private blockchains for? Obviously for those who have something to hide. A common example is Ripple who, although it has been around longer than Bitcoin, cannot be, strictly speaking, considered a blockchain for all the above reasons – plus private blockchains disable the anonymity option. Goodbye, privacy, hello, totalitarianism.
Although these are faster and more scalable, Trust is also a bigger issue when it comes to private blockchains. The credibility of a private blockchain network relies on the credibility of the authorized nodes. They need to be trustworthy as they are verifying and validating transactions. The validity of records also can’t be independently verified. – Selfkey
These combine (hopefully) the best of both worlds and the most promising applications so far. The public blockchain part of a hybrid blockchain allows everyone in the world access. The private blockchain part controls who can make adjustments to the ledger. The advantages here are speed, accessibility, and privacy while still maintaining communications with the world and keeping up to date with what’s up. Will these work out? Time will tell. Here’s a detailed example of hybrid architecture from 101blockchain.com:
|Public Blockchain||Publicly available blockchains, they have no restrictions on participatory and validator||Ensures data securityAvailability of the network to anyone||Slow||BitcoinEtheriumLitecoin|
|Private Blockchain||Requires the participants to be invited before they can become of the blockchain, transactions are only visible to those who a part of the ecosystem||Better controlledCan be regulated||May be manipulated||Those are typically used in private organisations|
|Hybrid Blockchain||Some nodes are private, others are public. Some of the nodes are will be allowed to participate in transactions||All the nodes can access the information||The users who do not have full access may be reluctant use it||Used in companies to ensure additional levels of security|
Types of blockchain
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The long goodbye
So now you know what types of blockchain platforms are out there, you’re probably less interested in private blockchains, excited about the public ones (that is where democracy lies), and intrigued by the hybrid ones (although whether they will succeed is a good question).
Where to go about implementation of your freshly acquired knowledge and play around with different types of blockchain tokens? Nomex offers the most protected environment so far from the security point of view with world-class protection from the world’s cybersecurity capital, Estonia, an opportunity to create passive income with an awesome referral system to gain profits from, many wildly exciting functions like earning money with 0 starting capital, and so much more.
You’ll also find more information about types of blockchain consensus in our kickass education section and types of blockchain after bitcoin in the blog section. Join us and find out why blue oceans of crypto exchanges are way better than Lake Placids of classical financial institutions.
See you soon!