Choosing a Blockchain Solution
There are three core types of blockchains: public networks like Bitcoin, permissioned networks such as Ripple, and private ones like Hijro. Blockchains do a few straightforward things:
- They move value and trade value quickly and at a very low cost.
- They create nearly permanent data histories.
Blockchain technology also allows for a few less-straightforward solutions such as the ability to prove that you have a “thing” without revealing it to the other party. It is also possible to “prove the negative,” or prove what is missing within a dataset or system. This feature is particularly useful for auditing and proving compliance.
The table lists common uses cases that are suited for each type of blockchain.
|Primary Purpose||Type of Blockchain|
|Move value between untrusted parties||Public|
|Move value between trusted parties||Private|
|Trade value between unlike things||Permissioned|
|Trade value of the same thing||Public|
|Create decentralized organization||Public or permissioned|
|Create decentralized contract||Public or permissioned|
|Trade securitized assets||Public or permissioned|
|Build identity for people or things||Public|
|Publish for public recordkeeping||Public|
|Publish for private recordkeeping||Public or permissioned|
|Preform auditing of records or systems||Public or permissioned|
|Publish land title data||Public|
|Trade digital money or assets||Public or permissioned|
|Create systems for Internet of Things (IoT) security||Public|
|Build systems security||Public|
There may be exceptions depending on your project, and it is possible to use a different type of blockchain to reach your goal. But in general, here is how to break down different types of networks and understand their strengths and weaknesses:
- Public networks are large and decentralized, anyone can participate within them at any level — this includes things like running a full node, mining cryptocurrency, trading tokens, or publishing entries. They tend to be more secure and immutable then private or permissioned networks. They’re often slower and more expensive to use. They’re are secured with a cryptocurrency and have limited storage capacity.
- Permissioned networks are viewable to the public, but participation is controlled. Many of them utilize a cryptocurrency, but they can have a lower cost for applications that are built on top of them. This feature makes it easier to scale project and increase transaction volume. Permissioned networks can be very fast with low latency and have higher storage capacity over public networks.
- Private networks are shared between trusted parties and may not be viewable to the public. They’re very fast and may have no latency. They also have a low cost to run and can be built in an industrious weekend. Most private networks do not utilize a cryptocurrency and do not have the same immutability and security of decentralized networks. Storage capacity may be unlimited.
There are also hybrids between these three core types of blockchains that seek to find the right balance of security, auditability, scalability, and data storage for applications built on top of them.