Today, blockchain has a more exciting and vast potential to influence, revolutionize, and even disrupt more industries than ever before. As such, more and more businesses and their leaders are choosing to invest in blockchain technology and blockchain education, including registering for a blockchain online course such as the Blockchain Technologies online short course from the MIT Sloan School of Management.
In order to make the most out of blockchain technology, businesses and individuals need to understand the different types of blockchain technologies that are available, as well as their use cases. We will cover those essential topics in this article, including an overview of the different types of blockchain technology and how blockchain is used in different industries.
Before we discuss their use cases, let’s first go over various types of blockchain technology.
Types of Blockchain Technology
Blockchain technology can be broken into four categories:
- Public blockchain
- Private blockchain
- Consortium blockchain
- Hybrid blockchain
1. Public Blockchain
A public blockchain is a type of blockchain technology that anyone can access and use. Bitcoin, the first and most well-known cryptocurrency, is an example of a public blockchain. With public blockchain technology, permission is not needed to join the network or participate in transactions. All you need is an internet connection. Users can also remain anonymous if they choose to do so.
The main characteristics of a public blockchain are:
- Decentralized: There is no central authority governing the network. Instead, it is run by a distributed network of nodes, or computers, around the world.
- Distributed: The blockchain is stored on each node in the network.
- Open source: The codebase of a public blockchain is available to anyone who wants to view it or contribute to it.
2. Private Blockchain
This is a type of blockchain technology that is permissioned, meaning only certain users can access the network. Unlike with a public blockchain, businesses or individuals must obtain permission from network administrators before joining the network or participating in transactions.
The main characteristics of a private blockchain are:
- Centralized: There is a central authority governing the network. This central authority has the power to add or remove users from the network.
- Permissioned: Only certain users have access to the network. These users must obtain permission from the network administrators before joining or participating in transactions.
- High-efficiency and fast: Because private blockchain networks are smaller and more centralized than public blockchain networks, they can be more efficient and faster.
3. Consortium Blockchain
As this article from Analytic Steps explains: “A consortium blockchain is a type of semi-decentralized network in which members are not granted to a single entity. Instead, it is granted to a group of individuals or ‘nodes’. It offers network security that public chains don’t. It also provides significant degrees of control, and faster processing and makes it more efficient and secure in many ways. “
The main characteristics of a consortium blockchain are:
- Because consortium blockchain networks have less transparency than public blockchain networks, they can be more secure.
- Consortium blockchain networks can be more efficient than public blockchain networks due to their size and centralization.
- Consortium blockchain networks are smaller than public blockchain networks, they can be more scalable. Not to mention, this type of blockchain technology allows for more innovation.
4. Hybrid Blockchain
Finally, we get to the hybrid blockchain, which is a type of blockchain technology that combines features of both public and private blockchain networks. A hybrid blockchain network can be either permissioned or unpermissioned.
The main characteristics of a hybrid blockchain are:
- Flexibility: Hybrid blockchain networks offer flexibility because they can be customized to meet the needs of businesses or individuals.
- Interoperability: Hybrid blockchain networks can interoperate with others, including public and private blockchain networks.
Now that we’ve covered some blockchain technology types, let’s discuss their use cases.
Use Cases for Blockchain Technology
There are numerous potential use cases for different types of blockchain technology, and we will discuss four of them next: logistics, finance, insurance, and healthcare.
One such way blockchain technology is being used is in the logistics industry. Blockchain technology can help to streamline the process of tracking shipments and managing supply chains. This is thanks to blockchain technology providing a secure and tamper-proof record of all shipments and their corresponding blockchain technology.
In addition, blockchain technology can help reduce the costs associated with logistics. Blockchain technology can automate many of the manual processes currently used to track shipments and manage supply chains, easing the burden on logistics companies.
Next, blockchain technology is being used in the finance industry. Blockchain technology can be used to streamline financial transactions and reduce costs. For example, blockchain technology can be used to settle payments between banks quickly and securely. In addition, blockchain technology can be used to issue and manage digital currencies.
Blockchain technology can also help to reduce fraud in the finance industry. This is because it provides a secure and tamper-proof record of all transactions. As a result, it’s very difficult for someone to commit fraud by altering transaction records.
Another potential use case for blockchain technology is in the insurance industry. For example, blockchain tech can help streamline the process of filing and processing insurance claims. This technology can provide a secure and tamper-proof record of all insurance claims, just as it provides secure records in other industries. In addition, blockchain technology can automate many of the manual processes that are currently used to file and process insurance claims.
Blockchain technology can also help to reduce fraud in the insurance industry. Because, as we mentioned, blockchain technology can provide a secure and tamper-proof record of all insurance claims, it’s helping reduce fraud in the insurance industry.
Finally, blockchain technology is being used in the healthcare industry in numerous ways, including to help to secure and share patient health records. In addition, blockchain technology can automate many of the manual processes currently used to secure and share patient health records, making data sharing more efficient.
Blockchain technology can also help to reduce fraud in the healthcare industry. For example, blockchain tech can be used to verify the authenticity of prescriptions. Therefore, when blockchain technology is utilized in the healthcare industry, it helps to reduce the risk of fraud and counterfeit drugs.
Logistics, finance, insurance, and healthcare are just a few industries already beginning to utilize blockchain technology. As blockchain technology continues to evolve and develop, we can expect to see even more innovative uses for this revolutionary technology.
Studying blockchain online course can help you to stay up-to-date on the latest blockchain developments and understand how blockchain technology can be used in different industries.