By allowing digital information to be distributed but not copied, blockchain technology has created the backbone of a new type of internet. While blockchain was originally devised for digital currency such as Bitcoin, there are now many other potential uses for the technology.
In this blog post, we’ll discuss what blockchain is, the different types, and the innovation being made using blockchain technology.
What is a blockchain?
Blockchain is a shared distributed ledger technology (DLT) that makes the history of any digital asset unalterable, and transparent by using decentralization and cryptographic hashing. Virtually anything of value can be tracked and traded on a blockchain network. Each block in the chain contains a number of transactions. Each time a new transaction occurs on the blockchain network, a record of that transaction is added to the participants ledgers. This reduces risks and cuts costs for everyone involved. Businesses run on information, and blockchain is ideal for delivering information as it provides immediate, shared, and transparent information stored on legers that can't be changed, and can only be accessed by allowed network members. Blockchain networks track orders, payments, accounts, production, and much more!
Types of blockchains
There are several different ways to build a blockchain network. They can be public, private, permissioned, or built by a consortium.
A public blockchain is one that anyone can join and participate in, such as Bitcoin. Drawbacks to a public blockchain might include substantial computational power required, little or no privacy for transactions, and weak security. These are particularly important considerations for enterprise uses of blockchain. A private blockchain network, similar to a public blockchain network, is a decentralized peer-to-peer network. The significant difference is that only one organization or trusted group or agency governs the network. That organization controls who is allowed to participate in the network, execute a consensus protocol and maintain the shared ledger. This can significantly boost trust and confidence between participants. A private blockchain can be run behind a corporate firewall and even be hosted on-premises. Private blockchains are the most effective because transaction fees, often called "gas", can be better controlled. Businesses who set up a private blockchain will generally set up a permissioned blockchain network. Public blockchain networks can also be a permissioned. This places restrictions on who is allowed to participate in the network, and only in certain transactions. Participants must obtain an invitation and have permission to join. Multiple organizations can share the responsibilities of maintaining a blockchain. These organizations determine who may submit transactions or access data. A consortium blockchain is most ideal for businesses when all participants need to be permissioned and have a shared responsibility for the blockchain. A good consortium ensures impartial management and stability of the chain.
Out of all the types of blockchain, private blockchains are often the most effective. The concept of a stable coin makes atomic transaction and value consistent, which can be hard in public chains where any entity can accumulate enough coin and voting nodes to influence the transnational cost and voting to control block stability vs having several stable government or organizations add consistency to the chain. For example, high fluctuating values and transnational cost in bitcoin make more an investment platform and too risky to back a commodity or global currency. When a blockchain is managed properly, transactions are simplified, corruption is reduced, and it has great traceability when combined with identify tokens to eliminate theft.
Vigilant's Experience with blockchain
Carl Ingram, founder of Vigilant Technologies, leads teams that developed Geological Survey systems, Cost Basis solutions, Bitcoin exchanges and currency exchange trading platforms. Carl continues to work on a blockchain project called NXA. NXA is a blockchain infrastructure for emerging giants, empowering blockchain network platform for an inclusive global economy. NXA is a platform that supports technology solutions to improve financial inclusion, transparency and Sustainable Development Goals (SDGs). Working alongside industry participants, stakeholders, community members and authorities, NXA has both an appreciation of the challenge and an understanding of the art of the possible. NXA endeavors to create a set of bedrock tenets for the foundation of the internet of value: currency, property (physical and digital) and identity.
Learn more about NXA! https://nxa.org/About