In this article, you’ll learn what blockchain technology is, how many blockchains are there, types and use cases of blockchain, and how does it work.
What Is Blockchain Technology?
Blockchain is a distributed, unchangeable ledger that makes recording transactions and managing assets in a corporate network more accessible. A tangible item (such as a home, vehicle, money, or property) can also be an intangible asset (intellectual property, patents, copyrights, branding). In layman’s terms, a Blockchain is a form of digital ledger that can be hacked, cloned, and distributed across various computer systems.
How Many Blockchains Are There?
There are at least 1,000 blockchains today, with at least four different types of blockchain networks. While the concept of blockchain refers to a single sort of data transfer, the sector offers a variety of platforms. It is helpful in various applications, including supply chain management, cryptocurrencies, decentralized exchanges, smart contracts, central bank money, etc.
In the same way that there are so many computer networks around the globe today, there could be hundreds of thousands or millions of chains in the future.
How Does Blockchain Work?
First, a user or a node will sign a transaction with their private key. Essentially, the private key will generate a one-of-a-kind digital signature that will be impossible to change. In actuality, if someone tries to change the transaction data, then there is a change in the digital signature, and no one will be able to validate it. As a result, it will be thrown out.
The transaction will then be published to all of the verifying nodes. The blockchain platform can utilize a variety of approaches to determine whether or not a transaction is genuine. Consensus algorithms are the methods or algorithms used.
Once the nodes have verified that the transaction is valid, it will be recorded in the ledger. Also, it will have a timestamp and a unique ID to secure it further from any modification.
The block will then connect to the preceding block, another block will relate to this one, and so on. As a result, there is a creation of a chain of blocks; hence the name is blockchain.
Use Cases Of Blockchain
It is slowly growing and ensuring that it creates a standard when it comes to implementation, spread over many industries under the blockchain umbrella.
Here are a few examples of blockchain use cases in various industries:
1. Legal
Without legal involvement, smart contracts on the blockchain track contract participants, conditions, ownership transfers, and delivery of goods or services.
2. Supply chain
The blockchain is useful as a distributed ledger. Where there is no inherent trust, organizations within a supply chain gain transparency into shipment monitoring, deliveries, and progress among other providers.
3. Food
The use of blockchain to record food supply chain data improves product traceability and batching processing. Expiration dates, storage temperatures, and shipment are all factors to consider.
4. Hospitality and Travel
Passengers can utilize their authenticated “single travel ID” instead of travel documents, identification cards, loyalty program IDs, and payment data by storing it on the blockchain.
5. Education
Educational institutions could use blockchain to store credentialing data such as tests, degrees, and transcripts and verify knowledge transfer between parties.
6. Healthcare
Electronic medical records kept in a blockchain and accessible and updated using biometrics allow for the democratization of patient data and the elimination of the cost of moving records between providers.
7. Retail
P2P retail transactions help in tracking retail earnings using secure P2P marketplaces. includes product data, shipment and bill of lading records on the blockchain, and Bitcoin payments
8. Energy
Micro-transactions of data sent to the blockchain, confirmed, and re-dispersed to the grid while securing payment to the submitter enable decentralized energy transfer and distribution.
9. Government
As technology for storing personal identifying information, criminal records, and “e-citizenship authorised by biometrics,” blockchain holds potential.
Types of Blockchain Networks
1. Public Blockchain
The term “public blockchain” refers to a blockchain that is not restricted. Anybody with an internet connection can join the network and start validating blocks and sending transactions, and users who validate the blocks get the reward in these types of networks.
This network uses Proof of Stake or Proof of Work consensus to validate transactions. Satoshi Nakamoto, a person who goes by Satoshi, came up with this model in 2009. It’s also known as “mother technology.”
Example: Cryptocurrencies such as Ethereum and Solana.
2. Private Blockchain
A private blockchain is a permissioned or restricted blockchain that operates within a closed network, such as a corporation. Only a few members of an organization are given authorization in this case.
The organization retains control over the level of security, permissions, authorizations, and accessibility. As a result, private blockchains function similarly to public blockchains, albeit on a much smaller scale.
Example: For instance, blockchain technology is helpful for voting, digital identity, supply chain management, or asset ownership.
3. Consortium Blockchain
A consortium blockchain is a system governed by numerous organizations rather than a single one. It’s a permissioned platform, akin to a private platform, rather than a public one.
Even though it is permissioned, you must be a member of any organization with access to the ledger; it still provides decentralization.
More than one company that shares the information or mine the data acts as a node in this blockchain.Multiple companies can make decisions on the platform, like in the consortium blockchain example. So, no group can get away with illegal activity. As a result, banks, governments, and other government entities prefer to use consortium blockchain.
Example: Hyperledger, R3, Ripple, and Multichain, are some of the consortium blockchains.
4. Hybrid Blockchain
The hybrid blockchain is best defined as combining the most significant features of both private and public blockchain solutions. In a basic scenario, a hybrid blockchain would provide both freedom and controlled access.
Hybrid blockchain architecture is customizable.Users may regulate who has access to data kept in the blockchain with a mixed network.
Users can join a private blockchain with numerous public blockchains because of the hybrid blockchain system’s flexibility.
Example: Dragonchain, IBM Food Trust, and Onecoin are examples of hybrid blockchains.
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