Blockchain Networks

3-minutes Read

Blockchain Networks

Blockchain: Peer-to-peer computer network that records data on a distributed, immutable ledger.

How has blockchain technology evolved?

Blockchain 1.0: Currency

The first application of blockchain was to facilitate a decentralized online payments system which came about with the invention of Bitcoin. The distributed ledger technology on the public peer-to-peer Bitcoin network was used to allow people to enter into financial transactions with one another. Payments were made possible with the Bitcoin payment token, the first cryptocurrency coin or digital cash. Many other blockchains have since been created for this purely monetary use case.

Blockchain 2.0: Smart Contracts

The next development in blockchain technology was the creation of ‘smart contracts’ which were first introduced with the Ethereum Blockchain network. They are essentially small pieces of self-executing code or programs that are saved within the blocks on the blockchain. The code is used to store and make transparent the terms of the transaction, making the contract verifiable and enforceable. This reduces the cost of verification and execution and it makes the blockchain more secure.

Blockchain 3.0: DApps

Decentralized applications (DApps) utilize blockchains to run their code, meaning that it is running on a decentralised peer-to-peer network. In comparison, traditional applications run their code on centralized servers.

Blockchain 4.0: Usable in Industry

This stage is characterised by the real-life implementation of blockchain solutions within business, especially the industrial sector. The next evolution in industry, or Industry 4.0, is underway because of the digitisation of processes. There are many areas that blockchain can play a part such as in supply chain management, financial transactions, data management and many more. There are digitization, and specifically blockchain, opportunities across the whole value chain. The great power of the technology and the potential use cases within business and industry are being realized in this stage.

What are the different kinds of Blockchain Networks?

Public: Anyone can join this network, there are no limits to network access. Also known as permissionless network.

Private: The access to these networks is restricted to only those that have been allowed entry. Also known as permissioned network.

Consortium: This is a hybrid of a Public and Private network, the difference from either network depends on the consensus procedures of that consortium.

What are the major Blockchain Networks?
There are hundreds of blockchain networks but these are some of the main ones:

Bitcoin Blockchain Network

Classification: Public/permissionless, decentralized and open source blockchain

Unique Features: This is the original blockchain which was introduced in 2009 as the first real-life application of a decentralized peer-to-peer electronic cash system.  

Technical: Coded in Script and Miniscript.

 

Hyperledger Fabric

Classification: Consortium/permissioned, open source enterprise blockchain.
Unique Features: Developed by Hyperledger and hosted by The Linux Foundation. It allows for transaction data to be stored on the ledger as ‘Chain code’ similar to Ethereum’s ‘Smart Contracts’. Privacy within transactions is made possible via “channels” which allows data to be shared only amongst permissioned channel members. Hyperledger Fabric is coded using Javascript, Go, Java, etc. IBM has contributed to the code for the blockchain.

Corda

Classification: Consortium/ permissioned, open source enterprise blockchain.
Unique Features: Corda was originally developed by R3 but is independently managed by the Corda Network Foundation. The Corda network has privacy and identity verification features restrict ledger and transaction data access to only those parties that are involved in the particular transaction. It allows for the creation of nested private groups within the blockchain while still keeping interoperability with the whole network and amongst all nodes. This way network participants can enter into legally binding private transactions with legally identifiable counterparties. [Corda can support multiple different consensus pools using different algorithms]. Corda uses a relational database, supports SQL queries and the smart contracts are coded in Kotlin and Java.

Quorum

Classification: Consortium/permissioned, open source enterprise blockchain.
Unique Features: Quorum was developed by JP Morgan and by slight variations to the Ethereum codebase (a soft fork to the Ethereum blockchain). Many Ethereum features therefore remain such as the smart contracts which are coded in Solidity. However, unlike Ethereum Quorum is a private network and this has enabled them to introduce zero transaction fees or “free gas”. 

EOS

Classification: Public/permissionless, open source blockchain network

Unique Features: Powered by the native cryptocurrency EOS. Like Ethereum, it is capable of hosting dApps which are supported by smart contracts, however the major difference is that consensus is achieved through delegated Proof of Stake (dPOS). The goal of dPOS is that it makes the EOS network quicker at processing transactions compared with blockchains using other consensus methods.

Ethereum Blockchain Network

Classification: Public/permissionless, open source blockchain network

Unique Features: Ethereum introduced the concept of ‘smart contracts’. This allowed for the creation of a diverse set of dApps to be built on top of the Ethereum network. For a more detailed description: What is Ethereum?

Related Topic

Blockchain Service Network

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