Guide to Understanding the Types of Blockchain

Introduction

When it comes to understanding blockchain technology, they all seem similar from an outside perspective. Probably that’s why the world is divided among factions on their opinion of blockchain technology. With one side believing the blockchain to be nothing but a buzz world, while the other side claiming the blockchain technology to be a revolutionary technology of our times.

To settle this debate, one must understand the concept of blockchain technology, its various types, their working, and all the nuances that come in between. It’s just been over a decade since the first blockchain network i.e., Bitcoin came to the emergence and kick-started a new financial industry with a series of innovations.

Today, there are thousands of different cryptocurrencies leveraging hundreds of different mechanisms of blockchain technology to offer a new-age financial system. here is a complete guide to understand blockchain and we will look at the various types of blockchain networks and parameters to differentiate these blockchain networks. Let’s get started, shall we?

Parameters to differentiate various types of blockchains

Public & Private Blockchain

• What are public blockchain networks?
• Applications of public blockchain networks
• What are private blockchain networks
• Applications of private blockchain networks

Consensus Mechanism

• What is a consensus mechanism?
• Proof of Work (PoW)
• Ex — Bitcoin, Ethereum (pre-merge), Nervos Network
• Proof of Stake (PoS)
• Ex — Ethereum (post-merge), Cosmos, Cardano

Smart Contract Capability

• What is smart contract capability?
• Blockchains that support smart contracts
• Ethereum
• Binance Smart Chain
• Cosmos

Blockchain Layers

• What are different blockchain layers?
• Layer-1 vs. Layer-2
• Different types of Layer-2 blockchains

- Rollups — Optimism, zkEVM, Arbitrum

- Sidechains — Polygon

Oracle Networks

• What are oracle networks?
• Types of oracle networks — Chainlink, Supra, Band Protocol