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Type of Blockchain

It is difficult to categorize the blockchain since there are so many types of them around the world. However, blockchain, in general, can be classified in several types such as validator (signing) node participation type or endpoint publication forms.

Sorted by participation form of Validator node (sign node)

  • Open node method (permission-less node method)
  • Consortium node method
  • Owned node method

Endpoint Management Method Type

  • Public endpoint method
  • Permission endpoint method
  • Private endpoint method

*Validator Node is a node to sign the blockchain, and an operator node supporting the blockchain.

*Endpoint refers to the URL or IP address of an end node or server to access blockchain.

Ethereum Mainnet Method Ethereum mainnet method is an open node system (anyone is free to join as a Validator). Open node system is naturally a public endpoint system. This chain system is a permissioned consortium method in the demonstration experiment stage, which is expected to transfer to the public endpoint method in the future, if there is no problem. In other words, this is a blockchain network intended to become a public consortium method.

Sometimes only the open node method is called the public chain, many of what is called the public chain around the world,however , is not actually open node, so in this site we call the public chain for the public endpoint blockchain that anyone is able to use.

Validator Node Method

Open Node Method

Open node method, in general, is the system where anyone can participate in blockchain operation by connecting the blockchain network through their own node server. The advantage of this type of network is that the existence of the blockchain network is not easily threatened by the power of specific individuals or groups and governments, while at the same time the network offers the most flexible use. This is especially suitable for the corroboration across the borders. Sometimes it is called permission-less chain.

Since many people can flexibly participate in the network, this method can easily create a large community, if the network becomes truly safe and convenient. In addition, it is also easy to obtain the feedback on the blockchain network from the community, so that it facilitates completely new ideas or innovations, increases the number of finding problems thus could further obtain the knowledge on software defects, and plus could have more information.

On the other hand, the disadvantage is that it is difficult to increase the transaction speed of blockchain since many of the node servers have to cooperate by using consensus algorithms such as PoW or PoS. Larger the community, the more time is needed in making decisions such as spec change, etc.

PoW, which Bitcoins and current Ethereum main network is using, is the system that the people who calculate faster are able to create the next block (process the transaction and obtain the reward on it), therefore, the system works greatly in favor of people with large computing power. This is why Bitcoin is said to consume more energy than one small country to support the network. The system has a huge impact on the environment and it has a risk of being hacked when a particular group gains more than 51% of huge computing power, because of its nature.

Though PoS (Proof of Stake), which is designed to reduce the power consumption, solves the power consumption problem, similarly it has the risk of being hacked, if more than 51% of the tokens are concentrated in a specific group, because probability of gaining the block reward is determined by the amount of staking (deposit the cryptocurrency) instead of computing power. The Ethereum mainnet plans to introduce PoS in the near future. If the network is large enough as the Ethereum mainnet, such a problem may be little or none at this point, but still adopting PoS in the smaller blockchain network could have significant risk.

Consortium Node Method

Consortium node method blockchain is a blockchain network that needs the approval from the existing Validator to become a Validator. Japan Open Chain uses this method and approval of majority by the existing Validator is required. It’s been occasionally called permissioned chain together with the owned node. It is often used in the world of blockchain gaming chains.

The advantage of this method is that it can easily build good governance because of the small number of Validators, easy to rapidly make decisions on the future perspective of the blockchain network, and can swiftly tackle the issues occurring on the blockchain. It also provides a transparent, trustworthy and reliant relationship with the operator so that it is easy to get support. Since the number of Validator nodes are small and the structure of the algorithm is simple, it can easily increase the transaction speed. It can be used as a public chain by making the endpoint public endpoint, can be changed to the private endpoint, or changed to the permissioned to anonymize, all of these features of this method works very convenient when aiming to establish the blockchain specialized in certain usage.

On the other hand, the disadvantage of this method is that the authority is biased to specific Validator so that consortium node method is prone to gather strong governance compared to open node method, in other words, this may limit the degree of user’s freedom. While the governance is more effective, it also means the loss of democratic freedom to a certain degree in terms of the future direction of the blockchain network. If a majority of Validators are hacked, then the network may be hacked in PoA method, thus should not be used without understanding who are the operators.

Owned Node Method

Owned node method is a blockchain in which one single company or one single individual is owning the all Validator nodes. Binance Smartchain and others are using this method in the world.

The advantage of this method is that a single company can completely decide the policy of blockchain network. You may think this is not at all different from relational database, but this method is suitable for the cases where you want to share the data among the group companies or you want to establish your own payment network or traceability program since making the endpoint public makes it more auditability from the outside and allows for bandwidth monopoly. Even when you just genuinely think from the database software point of view, Ethereum compatibility allows the use of software created by the Ethereum community, therefore may be able to build the system faster and more reasonably than creating relational database applications depending on the purpose.

Private endpoint provides more anonymity, which is suitable for the cases where you want to benefit from the Ethereum community but the system needs anonymity, or you want to build the staging environment for a public chain program that is developed secretly within the company.

On the other hand, the disadvantage of this method is that the authority concentrates on a single individual or a company. If you decide to withdraw from the chain, you may loose all of the data unless you hand over the chain. There is also more risk of being hacked since it relies on one company for security.

Endpoint Method

Public Endpoint Method

This refers to the blockchain network whose endpoint is open to the public online around the world.

Permissioned Endpoint Method

This refers to the blockchain network that needs the approval by the members of the blockchain network to access the network.

Private Endpoint Method

This refers to the blockchain network whose endpoint is not open to the public.