What types of blockchain are there?
There are 4 types of blockchainA blockchain is a type of distributed ledger technology. It is a huge database formed by blocks,cryptographically linked to each other, containing information such as transactions. These blocks are addedfollowing network: public, private, hybrid and consortium. We explain their similarities and differences in detail.
public blockchain
The public blockchain is accessible to all, requiring no permission or distinction of rights to participate, consult, modify or validate a transaction. Anyone with an Internet connection can access the complete transaction history, while still being able to carry out miningProcess allowing to solve a mathematical or computing challenge imposed by a blockchain’s Proof of Workconsensus. Mining activity requires a variable calculation power depending on the blockchain’s algorithm alongwith difficulty activities. A key aspect of the public blockchain is its “open-source” nature, enabling anyone with adequate computer skills to modify the protocol code. What’s more, it operates on a decentralized principle, secured by consensusTruth admitted by all system participants. This doesn’t imply that it is the absolute truth or that it’sindisputable, it is the truth participants agree on. In crypto, algorithms beginning with within a peer-to-peer network. This consensus implies that all participants must agree to add data to the blockchain. The most commonly used methods for this consensus are Proof of WorkOldest consensus algorithm, on which Bitcoin is based. On public blockchains, the consensus algorithm choses the block that is added to the blockchain at a given time and the “truth” and Proof of StakeBlockchain consensus mechanism attributing the consensus determination by adding blocks to the blockchain to master nodes, having a certain number of coins of this blockchain. This amount is always indicated.
Public blockchain, exemplified by pioneers such as Bitcoin and other crypto-currencies (crypto-assets or digital assets) such as EthereumSecond most important crypto asset by market capitalization. Ethereum blockchain has been launched
in 2015 by Vitalik Buterin, it is also used for other applications such as DeFi and NFTs. and Litecoin, remains the most popular. Blockchain’s principles of openness, transparency and decentralization have redefined the landscape of distributed ledger technologies. They are revolutionizing the way we approach financial transactions, but also other sectors such as supply chain management, electronic voting systems, product traceability and intellectual property.
Private blockchain
Private blockchain is a distributed ledger technology (DLT) designed for restricted use within a specific
organization or group of players. It is characterized by restricted access, requiring prior authorization to participate, consult, modify or validate a transaction within the network. This form of blockchain is limited to a specific set of individuals or entities, with centralized control over access and management. Decisions and rules come from a single entity, making the system coherent. In terms of security, private blockchain relies on consensus mechanisms specific to authorized participants, guaranteeing validation by a predefined number of trusted nodes within the entity deploying the blockchain. These features make private blockchain a suitable solution for corporate contexts, where confidentiality, strict access control and centralized governance are essential to meet the organization’s specific needs.
Hybrid blockchain
As the name suggests, hybrid blockchain is a combination of the characteristics of both public and private blockchain. Some parts of the blockchain are public, while others are private and restricted to specific players. This model combines the accessibility and transparency of public blockchain with the control and confidentiality intrinsic to private blockchain. It offers flexibility to meet the varied needs of businesses, combining the advantages of both models for use more suited to specific contexts. For example, in healthcare, hybrid blockchain could be useful for sharing research data with a scientific community while preserving the confidentiality of patients’ personal data. In the financial industry, a hybrid blockchain could also prove very useful. A financial company can manage day-to-day transactions transparently on a public blockchain. At the same time, sensitive information such as complex financial contracts or customer data is stored on a private blockchain, restricting access to authorized business partners and regulators.
Consortium blockchain
Consortium blockchain is a technology shared between several organizations to record and validate transactions. Unlike an open blockchain, access is limited to a select group of companies who collaborate to manage the network. Each company retains a copy of the information, promoting transparency and shared control.
The main advantage lies in this collaboration. Companies work together to validate transactions and ensure collective governance, reinforcing confidence in data integrity.
This approach is useful in sectors where several players have common interests, such as healthcare or logistics, contexts in which cooperation and trust are essential.
Cryptocurrencies or digital currencies are terms commonly used in the crypto ecosystem. However, the terminology favored by regulators (ACPR and AMF) is crypto-assets or digital assets. This distinction arises because, although often referred to as cryptocurrencies, these assets do not qualify as currencies in the legal sense. They are virtual resources based on blockchain technology, whose value is determined solely by supply and demand.
None of the information contained in this FAQ constitutes investment advice, tax advice, legal advice, or any other type of advice, nor does it serve as an invitation to engage in any form of financial transaction.
Investing in digital assets carries risks and may not be suitable for all investors. It is the responsibility of investors to educate themselves about the risks associated with different digital assets. In particular, it is noted that digital assets can exhibit significant volatilityPrice variation of an asset on a given period., and investments in digital assets involve a risk of capital loss. Accordingly, it is important to remember that the past performance of digital assets, as might be indicated on Banque Delubac & Cie’s website or in documents provided to investors, is not indicative of future performance. Investors should familiarize themselves with the technologies underlying each digital asset and their associated risks, including vulnerabilities, defects, hacks, errors, protocol failures, or attacks on the protocol. Banque Delubac & Cie cannot be held liable for any misunderstanding of the risks associated with digital assets or for any losses investors may incur due to errors in walletPrice variation of an asset on a given period. addresses attributable to the investor.
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