#5 – Types of Blockchain

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To properly describe a blockchain solution, additional terms must be entered into the conversation. A blockchain solution can be measured and described against the following three metrics:

Public vs. Private

Who can write data to the blockchain? Public blockchains allow for large audiences or any member of the public to add data to the ledger. Bitcoin is a great example of a public blockchain network.

There are no rules or permissions around who can trade Bitcoin. Anyone can buy, sell, or send Bitcoin to anyone else. A blockchain solution used to track how charitable donations are used by a non-profit would be a great example of a private solution. In such a solution, only designated officers of the non-profit organization should be allowed to share metrics detailing how donations are allocated and spent.

Open vs. Closed

Who can read data from the blockchain? Open blockchains allow large audiences or the public to consume all the ledger data. Closed blockchains attempt to restrict read access. Once again, Bitcoin is a great example of an Open platform; anyone in the world can use a blockchain explorer to view the details of any Bitcoin transaction, whether they were a participant or not. An example of a closed blockchain solution might be a platform for managing elections. In such a solution it would be important that only election officials have access to election results and the individual votes cast by each voter – such information may not be well-suited for public consumption.

Permissioned vs. Permissionless

Blockchain network which allows access to everyone is called permissionless. It doesn’t manage or track identity. We can however build permissioned access to the network by adding identity checking and tracking, therefore, called permissioned.

While developing a blockchain network, we can find out if all participants in a network would need similar permissions or different ones. Based on such requirements permissioned access logic could be implemented.

It can sometimes be helpful to have a visual model when planning your blockchain solution. Feel free to use a quadrant such as the one below when mapping out a solution. For any envisioned use case, where does it fit on the model below? In other words, which combination best describes your desired solution?

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