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As we all know a blockchain is a continuous series of records linked and protected by cryptography. There are two types of blockchains:
Public blockchains are peer-to-peer, decentralised, open-sourced platform where anyone can suggest changes and improvements. There is no third trusted party involved. Anyone can read, write, edit, leave or join, but once interacting with a public blockchain data recorded will always be there. Examples include Bitcoin and Litecoin.
Private blockchains hold an element of exclusivity in that one can only participate by invitation or by verifying a set of rules created by the network inventor. For example, Chain Inc. partnered with NASDAQ OMX Group Inc. to allow trading on their blockchain. Access to the platform can vary in the following ways:
- Existing participants have the power to decide the fate of future entrants
- Regulatory authorities could issue licenses for participation
- Consortiums could make the decisions instead
Although public and private blockchains are distinctly different, they have a few basic similarities:
- Decentralised and peer-to-peer, where each participant maintains a replica of a shared ledger of digitally signed transactions
- Maintain replicas in sync through a protocol referred to as consensus
- Provide certain guarantees on the immutability of the ledger, even when some participants are faulty or malicious