Types of

Blockchain
Athira Jayavarma

Dept. of EEE
Types of Blockchain
 Public
 Private
 Permissioned
Public Blockchain
Anybody can join and leave as they wish.

Transaction blocks are publicly observable even though

participants are anonymous.

It is open-source.

Fully decentralized which doesn’t allow changing and revoking

the transactions after they are stored in public blockchain

Eg:- Bitcoin
Every user can log on to the system and even develop new applications
building on the Bitcoin blockchain.

When registering via the Bitcoin website, users choose a so called “wallet”
and a Bitcoin address.

 Bitcoin addresses are similar to email accounts, via which users can send
bitcoins to other users.

Whenever a transaction is made, the corresponding information is

broadcast to the entire Bitcoin blockchain via the associated peer-to-peer
network.

The wallets calculate the account balances based on the tamper-proof

information stored on the blockchain.
• Payments made using Bitcoin can be clearly and unambiguously verified,
which makes system-related accounting errors impossible.

• Bitcoins can be used as a payment in online shops, restaurants, hotels etc.

• The Swiss municipality of Zug has even become the first public administration
to accept Bitcoin payments.
Private Blockchain

• A private blockchain is a type of blockchain network where access and participation

are restricted to a specific group of participants.

• It is typically used within organizations or closed ecosystems, and the participants

are known and trusted entities.

• Private blockchains employ identity management systems to verify and

authenticate participants. Only approved participants can become nodes in the
network and participate in block validation.

• Private blockchains often have a centralized governance model, where a central

authority or a group of authorities has control over the network's operations,
decision-making, and consensus mechanisms.
 Permissioned Blockchain
 A permissioned blockchain, also known as a consortium blockchain, is a type of blockchain network where

access and participation are restricted to a specific group of approved entities.

 It combines aspects of both public and private blockchains.

Permissioned blockchains often have a shared governance structure where multiple

organizations or entities collectively make decisions regarding the network's operations,
rules, and consensus mechanisms.

The main difference between private and permissioned blockchains lies in the level of
access control and governance. Private blockchains are typically used within a single
organization or closed ecosystem, with centralized control and restricted access.

Permissioned blockchains, on the other hand, involve a consortium of trusted entities,

shared governance, and controlled access to maintain privacy, confidentiality, and
scalability.
Blockchain Nodes

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• Nodes in a blockchain network refer to the individual computers or devices that
participate in the network and maintain a copy of the blockchain's distributed ledger.

• These nodes play a crucial role in the functioning of a blockchain by validating

transactions, securing the network, and maintaining consensus.

• Types of nodes:

 Full node

 Light node

 Master node
Functions of a nodes

• Nodes determine whether or not a block of transactions is legitimate and accept

or reject it.

• Nodes save and store transaction blocks (storing Blockchain transaction history).

• This transaction history is broadcast and disseminated by nodes to other nodes

that may need to synchronize with the Blockchain ( updates on transaction history
are important)
Full Nodes
Full nodes are the most fundamental type of nodes in a blockchain network.

They download and store a complete copy of the blockchain's ledger, including all
transactions and blocks.

Full nodes independently validate each transaction and block, ensuring they adhere
to the network's consensus rules.

They maintain a complete history of the blockchain, making them reliable sources of
information for other nodes.
Light Nodes or SPV Nodes
Light nodes, also known as Simplified Payment Verification (SPV) nodes, do not
store a complete copy of the blockchain.

Instead, they store a subset of the blockchain's data, focusing primarily on the
transactions relevant to them.

 Light nodes rely on full nodes to retrieve and verify transaction data, which
enables them to interact with the blockchain without the need for significant
storage or computational resources.

They are commonly used in mobile or resource-constrained environments.

Masternodes
Masternodes are specialized nodes found in certain blockchain networks that
offer additional functionalities and services.

These nodes typically require a substantial amount of cryptocurrency to be

staked as collateral.

 Masternodes perform tasks such as facilitating instant transactions,

participating in governance and voting, and providing enhanced privacy
features.
Subject Node Miner
To participate in the peer-to-peer network To validate transactions and create new
Purpose
and store a copy of the Blockchain blocks

Requires specialized hardware and high

Only needs to run software to connect to
Requirements computing power to solve complex
the network
mathematical problems
Earns rewards in the form of newly
No direct financial incentive for running a
Incentive minted cryptocurrency and transaction
node
fees
Can be a full node or a light node,
Network Must be a full node in order to
depending on the amount of data they
Status participate in mining
store
Determines the order of transactions
Role in Participates in the consensus process by
and creates new blocks by solving a
Consensus verifying transactions and blocks
cryptographic puzzle
Mining is often concentrated in the
Nodes can be run by anyone, leading to a
Centralization hands of a few large mining pools,
more decentralized network
leading to concerns about centralization
Uses much less energy than mining, since it Requires high energy consumption due
Power Comparison between a node andtoa the
miner
doesn’t require solving complex intensive computation required
Bitcoin

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Bitcoin is a completely decentralized, peer-to-peer,
permissionless cryptocurrency put forth in 2009.
• Completely decentralized- No central party for ordering or recording
anything.

• Peer-to-peer- Software that runs on machines of all stakeholders to form the

system.

• Permissionless- No identity; no need to sign up anywhere to use ; no access

control-anyone can participate in any role
Bitcoin Transaction Life Cycle-The
sender

Dave opens his Bitcoin Provides the address of

wallet Jain and the amount to
transfer and sends
 The Bitcoin Transaction-The Network

The network nodes

validate the
The wallet constructs
transactions based The miners include
the transactions, sign
on the existing the transaction to
using Dave’s private
blockchain, and the next block to be
key, and broadcasts it
propagate the mined.
to the network
transaction to
miners
 The Bitcoin Transaction-The Miners

Once the mining

Miners construct a is over and the
new block and tries hash is obtains,
The miners collect all to connect it with the the block is
the transactions for existing included in the
the time duration say blockchain,through a existing
for 10 min cryptographic hash blockchain. The
computation- updated
The Mining blockchain is
Procedure propagated In the
network
The Bitcoin Transaction-The Receiver

Jain opens his Bitcoin

The transaction reflects
Wallet and refreshes, the
at Jain’s Wallet
blockchain gets updated