The type of blockchain technology implemented must also hold up to industry demands to properly support global relationships. Platforms have fantastic features like a user-friendly interface, suitability for all traders, and unique tools for bitcoin traders. Of course, if you manage these types of relationships, you should feel free to implement any blockchain regardless of size or scale, but there are three primary types. If you are interested in trading Bitcoin, you may Sign up on a reliable trading platform.
Three primary types
1) Public blockchain is a blockchain that anyone can access via a search engine or internet browser. These blockchains are less likely to contain sensitive information as they encourage transparency and quick peer-to-peer interactions between individuals at near real-time speeds.
2) Private Blockchain is a blockchain for use with limited access points for vendors, customers, and regulators. In this type of blockchain, the controlled database cannot be publicly accessed by users but can be accessed if a user is permitted to access the database.
3) Hybrid blockchain is a combination of public and private blockchains that can contain sensitive data and must be secured with a public blockchain for security. Still, it can also have sensitive data in a private database. So, for example, you could have a single database belonging to the government, industry, or both.
Systems that employ hybrid blockchains are already being implemented today. For example, utility companies might utilize a hybrid blockchain to track electric consumption while maintaining openness via their public blockchain. However, this hybrid blockchain might also contain business records that would be considered sensitive and confidential information (i.e., pricing, volumes, sales, etc.) that would not be openly accessible – but only to those privileged to view this information.
Utility companies might also want to maintain a public blockchain for peer-to-peer transactions and financial transfers between consumers and producers. Various institutions, such as banks or customer service groups, could validate transactions and convert fiat currency into cryptocurrency used on the public blockchain.
Another example of the potential uses of hybrid blockchains is the management of businesses where several parties are involved with each transaction in a value chain (i.e., manufacturer, shipper, customs officials, and customer). In this case, each transaction between one party and another might use a different type of blockchain to maintain security. Therefore, please expect that the next few years will increase the implementation of hybrid blockchains, as they are uniquely suited for use within the globally interconnected relationships that are rapidly growing today.
Permissioned vs. Permissionless for government authorities
Another factor to consider about hybrid blockchains is the importance of permission vs. permissionless chains. For example, public blockchains are better suited for sharing information or conducting financial transactions outside of traditional channels but not necessarily best suited for collaborating to share sensitive company or government data, which requires a higher level of control and security accountability.
For example, one can imagine a scenario where a government is testing out some new blockchain technology to support a new telemedicine project or another project. In this scenario, the government would want to control and manage the data transmitted between telecom companies, hospitals, and clinics. Therefore, all of these parties would need to be on the same page regarding regulations and data management procedures in addition to sharing sensitive encryption keys that could compromise their security if not maintained securely and securely.
In these types of cases, permissionless blockchains would be best suited for support of these types of projects as it allows any party to gain access to all data at once without requiring consent from each individual with specific roles or permissions. With permissionless blockchains, these permissions are managed by the blockchain itself and can be altered or revoked as needed via built-in encryption systems. On the other hand, permissioned blockchains require a more complex system of authentication per missioning facilitated outside the blockchain.
Permissioned vs. permission blockchain examples
Permissionless Financial Transactions are best in cases where no regulations or laws need to be followed or adhered to when dealing with financial transactions. In this case, it allows for a seamless cashless transaction between users without relying on traditional banking institutions to verify funds before approving transactions.
How will blockchain impact central banking?
With the rise of blockchain technology, there has been a growing discussion regarding the future of central banking. Essentially, cryptocurrencies such as Bitcoin and Ethereum are secure digital currencies like gold that use open-source, peer-to-peer consensus protocols rather than a centralized authority to validate their transactions and other important information (i.e., ownership rights). Another trait that Bitcoin and other cryptocurrencies have are market cap controls, allowing users to trade digital assets on an exchange and with other investors in the cryptocurrency community, thereby increasing liquidity and creating demand for the digital asset.
Industry analysts predict that blockchain technology will help central banks and other government institutions to store and share information, secure transactions, and create a digital currency. These predictions come from the technological improvements in cryptography, computing power, and other advancements that make secure information storage more practical for governments.
The recent rise of cryptocurrencies like Ethereum also presents some significant differences from traditional fiat currencies. These differences have made governments more aware of the potential impact that blockchain could have on their current modes of storing and managing records.
For every task, government authorities will use different types of blockchain models. For example, for identity management, the government can use a hybrid model, and for storing confidential information, the government authorities can use a private blockchain model.