Blockchains are often known as “digital ledgers” that keep track of all transactions that take place on a network. Anyone with access to the chain may view transactions chronologically.
Blockchains are secure, transparent, and decentralized, which makes them ideal for managing data or assets that need to be shared among a group of people.
There are various types of blockchains, and understanding their differences is key to grasping the technology.
In this guide, we’ll explore the unique features of different blockchains and help you understand which might be best for your needs.
What Are Blockchains, And What Do They Do?
A blockchain is a decentralized, digital ledger that records transactions in a public or private network. A network of computers verifies transactions, and each block in the chain contains a timestamp and digital signatures that secure it against tampering. Blockchains can be used to track anything of value, from financial transactions to supply chain data.
Because they are secure and transparent, blockchains are being adopted by a growing number of businesses and organizations. For example, Microsoft and IBM use blockchains to create more efficient supply chains.
In the future, blockchains may also be used to create digital identities and streamline the process of voting.
Different Types of Blockchain
A Blockchain is a decentralized database that enables secure, transparent, and tamper-proof transactions.
There are four main types of blockchain:
- Public blockchain,
- Private blockchain,
- Consortium blockchain
- Hybrid blockchain
A public blockchain is a distributed ledger that anyone can view and add data to. Bitcoin and Ethereum are examples of public blockchains. Miners validate transactions on the network and are rewarded with cryptocurrency for their efforts.
Public blockchains are often used for conducting ICOs, or Initial Coin Offerings. In an ICO, a blockchain project sells tokens to early investors in exchange for cryptocurrency.
The funds raised from crypto are then used to finance the project’s development. Some public blockchain networks, such as Ethereum, also allow developers to build decentralized applications (DAPPs) on top of the platform.
These Dapps can have a wide range of use cases, such as allowing users to send payments or store data in a secure, decentralized way.
A private blockchain is a Permissioned chain where only pre-selected nodes are allowed to validate and add transactions to the chain.
However, public blockchains like Bitcoin and Ethereum are permissionless, meaning that anyone can download the software, become a node, and start validating and adding transactions to the chain.
Private blockchains are often used by businesses who wish to use blockchain technology without sacrificing speed or cost. For instance, banks may use private blockchains to track financial transactions without making those transactions publicly visible.
Similarly, supply chain companies may use private blockchains to track shipments without revealing their entire inventory to competitors.
A consortium blockchain is a hybrid of public and private blockchains. In a consortium chain, a group of pre-selected nodes (usually large organizations) validate and add transactions to the chain.
This allows for improved speed and scalability compared to public blockchains while still maintaining some degree of decentralization. Consortium chains are often used in industries where multiple parties need to track and share data, such as in finance or supply chain management.
A hybrid blockchain is a combination of public and private blockchains. In a hybrid chain, some transactions are visible to everyone on the network, while others are only visible to pre-selected nodes.
This allows for increased security and privacy compared to public blockchains while still maintaining some degree of transparency.
Hybrid chains are often used by businesses who wish to keep some data private while sharing other data publicly.
What Are The Main Differences Between Blockchains?
The key difference between blockchains is who is able to access and view the data on the chain. Public blockchains, like Bitcoin or Ethereum, allow anyone to view the data and transactions on the blockchain.
Private blockchains, instead, restrict access to only certain users. Consortium blockchains are a hybrid of the two, with control shared among a group of select users.
Another key difference is who is able to validate transactions on the chain. On a public blockchain, anyone can validate transactions, while on a private blockchain, only certain users (usually chosen by the consortium or organization running the chain) can validate transactions.
Level of Privacy and Confidentiality
The level of privacy and confidentiality also differs between blockchains. All data is publicly visible on a public blockchain, while on a private blockchain, data can be restricted to only certain users.
Consortium blockchains lie somewhere in between, offering some degree of privacy and confidentiality.
Finally, the scalability of a blockchain also varies depending on its type. Public blockchains are often limited in terms of scalability due to their decentralized nature, while private blockchains can be more scalable as they can be centrally managed.
Consortium blockchains offer a good balance between decentralization and centralization and can offer better scalability than both public and private blockchains.
So, which type of blockchain is right for you? It depends on your specific use case.
A public blockchain may be the best choice if trustless transparency is critical.A private blockchain may be a better option if confidentiality is a concern.
And if you need a good balance between decentralization and centralization, then a consortium blockchain may be the way to go.
Differences Between Ethereum, Bitcoin, BSC, and TRON Blockchains
Bitcoin, Ethereum, BSC, and TRON are all popular cryptocurrency platforms with their own unique features and benefits. Here’s a quick rundown of the key differences between each one:
Bitcoin is the original cryptocurrency, and it remains the most popular and valuable platform in existence today. Bitcoin is powered by a Proof-of-Work consensus mechanism, which means that new coins are generated through mining.
Transactions on the Bitcoin network are fast and secure, and fees are relatively low.
Ethereum is the second-largest cryptocurrency platform, and it has become well-known for its smart contract functionality. Ethereum uses a Proof-of-Work consensus mechanism, like Bitcoin, but it is also planning to transition to a Proof-of-Stake system in the near future. Ethereum transaction fees are based on gas prices, which can fluctuate depending on network conditions.
BSC is a relatively new platform that was created as a fork of Ethereum. BSC uses a Delegated Proof-of-Stake consensus mechanism, which is more energy-efficient than Proof-of-Work. BSC also offers some unique features, such as staking rewards and low transaction fees.
TRON is a blockchain platform that enables developers to build decentralized applications. TRON uses a Delegated Proof-of-Stake consensus mechanism and offers high scalability and fast transactions. TRON also has its own native cryptocurrency, TRX by founder Justin Sun.
Each of these blockchains has its own strengths and weaknesses.
Ethereum is popular for its ability to create dapps, Bitcoin is used for its cryptocurrency, BSC is efficient for creating smart contracts, and TRON is good for managing digital assets.
Ethereum is often criticized for its scalability issues, Bitcoin’s blockchain can be slow and expensive to use, BSC is still a relatively new platform, and TRON has been accused of plagiarism and wash trading.
Is There Any Difference In Sending Token Mechanism For Ethereum, Bitcoin, BSC, and TRON?
For Ethereum, all tokens are stored in a single contract. To send tokens, the sender needs to know the recipient’s address and the number of tokens to be sent.
The sender then needs to call the send() function on the contract with the recipient’s address and the number of tokens to be sent.
Bitcoin does not use contracts, so there is no standard way to send tokens. However, a popular method is to use single-signature or multi-signature addresses. With this method, the sender creates a transaction that sends tokens to a multi-signature address.
The address requires multiple signatures from different people in order to spend the funds. So, in order to send tokens using Bitcoin, you need to get hold of someone who has access to the required signatures.
For BSC and TRON, it is possible to send tokens without knowing the recipient’s address. That is done by using what is called a “token burn” transaction. In a token burn transaction, the sender sends tokens to a special address that automatically destroys them.
This means the recipient does not need to have an account on the blockchain to receive tokens. Probably the only downside of this method is that it is impossible to send a specific number of tokens, as the entire balance of the sender’s account will be destroyed.
So, in summary, there are some key differences between the way that Ethereum, Bitcoin, BSC, and TRON handle the sending of tokens.
Ethereum requires the sender to know the address and number of tokens to be sent, while Bitcoin requires the sender to access the required signatures.
BSC and TRON allow the sender to send tokens without knowing the address, but this comes at the cost of not being able to specify a specific number of tokens.
Similarities Between Ethereum, Bitcoin, BSC, and TRON
There are several major cryptocurrencies that have gained popularity in recent years, including Ethereum, Bitcoin, BSC, and TRON. While each of these currencies has unique features, they also share some important similarities.
- First, all four currencies are based on blockchain technology, which provides a secure and decentralized way of tracking transactions.
- Second, all four currencies can be used to purchase goods and services online.
- Finally, all four currencies are volatile, meaning their value can fluctuate dramatically over time.
Ethereum, Bitcoin, BSC, and TRON share similarities despite their differences. All of these platforms use a blockchain to store data, and they all use a Proof-of-Work or Delegated Proof-of-Stake consensus mechanism.
Additionally, all of these platforms have their own native cryptocurrencies.
As a result, investors must carefully consider all of these factors before choosing to invest in any one currency.
How Blockchain Technology Is Being Used In Different Industries
A growing number is adopting blockchain technology in a variety of industries. Here are some examples:
Banking and finance:
Banks are using blockchain to streamline the process of international money transfers and tackle the downsides of FIAT payment systems like SWIFT.
Supply chain management:
Blockchain is being used to track goods as they move through the supply chain, from manufacturers to retailers, and has a transparent way of tracking.
Blockchain can securely store and move patient data and medical records.
Some governments are using blockchain to create more efficient systems for things like land registration and identity verification and even go that far as to implement E-Citizenships or Citizenship by Investment if you invest in their Tokens (Example: Sango project, from Central African republic).
Blockchain is a versatile technology with a wide range of potential applications. As more businesses and organizations begin to adopt it, we will likely see even more innovative uses for blockchain in the future.
The Advantages And Disadvantages Of Blockchain Technology
Blockchain is a secure way to store data since it is tamper-proof and decentralized.
Blockchain can help to streamline processes by reducing the need for intermediaries.
Blockchain is a transparent platform that allows all users to see data.
Once data is stored on a blockchain, it usually cannot be changed.
Blockchain technology can struggle to scale to meet the needs of large businesses or organizations.
2. Difficulty changing data:
Since data on a blockchain cannot be changed, fixing errors or making updates can be difficult.
3. Energy consumption:
The process of mining cryptocurrency can be energy-intensive.
Overall, blockchain technology has a lot of potential. However, it is important to weigh the advantages and disadvantages carefully before deciding whether or not it is the right solution for your business or organization.
The Future Of Blockchain Technology
It’s safe to say that blockchain technology is here to stay. Recently, we’ve seen a surge in interest and investment in blockchain, with major corporations and financial institutions taking notice of its potential.
So what does the future hold for blockchain?
Experts predict that we’ll see even more widespread adoption of blockchain in the coming years. Increasingly businesses are exploring ways to use blockchain to streamline their operations and create new efficiencies.
At the same time, we’re seeing the development of new applications for blockchain beyond cryptocurrency, including supply chain management, identity verification, and data security.
As well as new blockchains lately, we see more and more new Blockchains or Layer 2 solutions coming up having their own ups and downsides as well as ecosystems.
As blockchain technology continues to evolve, we can expect to see even more expansive uses for it in the years ahead. With its ability to provide secure, tamper-proof transactions, there’s no limit to the potential impact that blockchain could have on our world.
Conclusion: Which Blockchain Is Right For You?
There is no one-size-fits-all answer to this question. The best blockchain for your business or organization will depend on your specific needs and requirements.
Blockchain could be a good fit for you if you’re looking for a secure, efficient way to store data. However, if you need the ability to make data changes, you may want to consider another solution.
Whatever blockchain you choose, it’s important to weigh the advantages and disadvantages before deciding carefully. With its vast potential, blockchain will surely have a big impact in the years ahead.
*This content does contain an external writer’s work and is written in a style from beginner to expert to profit from it and understand it.
Moritz Pindorek (Moritzpindorek.com)
Social Media, Marketing & Blockchain
Crypto/Web 3 Advisor, Top 10 Crypto Influencer 2022(Forbes Monaco) & Top 10 Entrepreneur 2022 (Forbes Monaco)
Owner and writer for Cryptouserguide.com