These days, it seems like everybody is talking about blockchain. From your friends on social media to major internet news outlets, everyone has an opinion on this important 21st-century technology.
But what’s so special about blockchain technology? How does the blockchain network influence different types of cryptocurrency? What are the different types of blockchain?
If you’ve found yourself asking these questions, you’ve come to the right place. This article will walk you through everything you need to know about the different types of blockchain technology that are currently in place.
What is Blockchain
The first thing to understand is that blockchain is less of individual technology and more of a new way of viewing things. It was first put forth by Satoshi Nakamoto, the founder of Bitcoin, as a way to make sure all interactions stayed peer to peer.
In a blockchain, all steps of a process are assigned a highly complex serial number hidden behind a cryptogram. There’s no one at the top who knows this serial number. In order to verify each transaction, people are paid to solve this cryptogram themselves, keeping it peer to peer.
Blockchain was first used to make sure that Bitcoin can be traded safely without federal regulations. A series of checks and balances based on many meant that no one was imposing value judgments for the “common good.”
While the Bitcoin blockchain is public, there are tons of private blockchains out there that people use for their businesses. However, people may use the term The Blockchain to refer to the Bitcoin blockchain or cryptocurrency blockchains at large.
Blocks can take a while to mine, popular cryptocurrencies, like Bitcoin, try to limit the number of blocks that are produced and limit bitcoin production so that individual blocks are worth more.
If you’d like to use a system that makes use of smaller blockchains that you can trade more of, consider using bitcoin cash.
What is a Private Blockchain
There are many businesses out there that offer the service of setting up a “private blockchain” for a company. What does this mean?
A private blockchain is, in essence, a blockchains system of checks and balances applied to one company’s supply chain.
Say that you run a company that produces pasta sauce. A system of verification would be set up so that every batch of tomatoes, every shipment, every packaging process would be entered as “blocks” into the chain.
This means, that if one customer gets a batch of bad sauce and winds up sick, you don’t have to pull your entire line of products off the shelf. Instead, you can go back in your chain and find where the bad batch of tomatoes came from.
Understand the Types of Blockchain
As you can see, what few people who talk about blockchain understand is that it isn’t one technology, it’s a way of doing things. Understand the different types of blockchains and you’re closer to understanding how our world works.
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