The most well-known application of blockchain, a sort of public ledger technology, is Bitcoin. There are now 9 significant public ledgers, 5 of which are primarily used as currencies. The introduction of private blockchains designed exclusively for the business sector is the outcome of the continued development of technology. In this article, we will make the case that its development has aided in the success of blockchain technology.
What is the Current Status of Public Blockchains?
New users are welcome to join and participate in the networks of public blockchains like Ethereum, Bitcoin, and Litecoin. When users have access to the distributed ledger, they can conduct transactions anywhere in the world. In addition to the high decentralization, the public blockchain development network’s nodes have equal transmission power, ensuring full distribution. More instances include:
The performance of the cryptocurrencies linked to the aforementioned public blockchains is directly correlated with the success of those blockchains. The lower performance of the associated cryptocurrencies, especially ether, bitcoin, and litecoin, has caused problems for the three most significant public ledgers previously mentioned. The public blockchains are in a weaker position as a result of this tendency.
Despite there being over 2000 projects listed on CoinMarketCap, the majority of them had only recently forked the Bitcoin (or seven other well-known protocols) source code or been launched on the Ethereum network to generate money. Additionally, Ethereum and three other decentralised app (or Dapp) platforms have experienced their own difficulties:
- Ethereum’s Proof-of-Stake upgrade has been delayed.
- IOTA, which focuses on machine-to-machine connectivity for the Internet of Things, is not a blockchain at all;
- EOS amended their constitution;
- NXT developers shifted their focus to a new project named Ardor.
In general, communities expanded and fragmented, reliance on the exchange rate rose, and the future use of the several public ledgers got hazy.
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Private Blockchains Are the Most Popular
Contrarily, private blockchains offer a wide range of configurable features and help a firm achieve a specific business goal. The two blockchain frameworks that are most frequently mentioned are R3 Corda and Hyperledger. Large-scale corporations like Microsoft and JP Morgan have put millions of dollars into developing their own private blockchains. For Forbes, Michael del Castillo has developed a list of the 50 biggest publicly traded companies engaged in blockchain research.
Notably, the necessity of a private blockchain for corporations is still up for debate. It is frequently believed to be nothing more than a “distributed database with timestamps,” but this is incorrect. In actuality, it is an immutable database, meaning that data changes or interference require the cooperation of all users. Second, in this context, the term “blockchain” must be used to refer to a collection of technologies that includes a consensus mechanism that enables network participants to agree on the right transactions or additions to the ledger.
Numerous consortia were formed in order to succeed, including
- R3 (based on the Corda framework)
- the Enterprise Ethereum Alliance (EEA),
- the Blockchain Insurance Industry Initiative (B3i),
- the Post-Trade Distributed Ledger (PTDL) Group,
- the Blockchain Collaborative Consortium (BCCC)
- ISITC Europe
In addition, Outlier Ventures has been monitoring 293 businesses that use or have experience with blockchain in their respective industry sectors. National blockchain organizations have been founded in many nations as well. Most significantly, businesses unite behind technology and the advantages of distributed ledger solutions for business.
Blockchain Consortium Gain Popularity
The main advantage of consortium blockchains, which are sometimes referred to as federated blockchains, is the synergy effect attained by collaboration between various commercial groups. Sharing resources improves both the performance of the main business processes and costs. The enterprises gain from the pooling of the expenses, time, and human resources required for the development of blockchain. Importantly, privacy settings are presented to each participant fairly.
One example of a blockchain consortium is Hyperledger Fabric, which was developed as a result of collaboration between numerous businesses from various sectors and industries, including IBM, Daimler, SAP, Fujitsu, and Intel. Additionally, its founders created the blockchain known as Digital Trade Chain exclusively for the financial industry. Digital Trade Chain was created by a number of financial institutions, including UniCredit, Deutsche Bank, and Rabobank. In addition, Hashed Health is a blockchain development consulting that its members created specifically for the health services sector.
Future of Consortium, Private, and Public Blockchains
Blockchain is a cutting-edge and practical tech stack for various businesses and open-source communities. It may have several qualities that distinguish it as a public, private, or federated blockchain. In conclusion, blockchain is more than just a distributed database; it can also assist network users achieve transparency, get rid of intermediaries, and work more efficiently. Private blockchains tend to rule the market in terms of available solutions and range of industries due to the business sector’s increasing interest.