Blockchain and Industry 4.0 - PerfectionGeeks

A Comparison of Various Blockchain Protocols

consensus protocols

With the expansion of blockchain technology, several new decentralized platforms have emerged now with distinctive qualities. Therefore, it is difficult to analyze and determine which is the most appropriate as per the requirement of the company. Shortlisting and then choosing one appropriate blockchain protocol needs a lot of investigation, analysis, and comparison. A parallel comparison of the blockchain platforms is essential for the evaluation of the type of components that they present. The execution of blockchain technology originally started with Bitcoin. Blockchain utilized for the functioning of Bitcoin was a basic spread ledger mechanism that would record the Bitcoin transactions. Bitcoin was a public chain; however, with a period, Blockchain protocols developed, and currently, there are four fundamental types of blockchain protocols:

  • • Public blockchains
  • • Hybrid blockchains
  • Private blockchains
  • • Consortium blockchains

Blockchain technology, with its numerous types, serves as an encrypted repository of digital information. It operates and is sustained established on the consensus mechanisms, distributed, decentralized, and autonomous network of computers. With the help of a blockchain network, transactions are protected with the help of consensus mechanisms. For example, the horizontal Proof-of-History keeps a track of the transaction procedure completely, thus, eliminating any sort of fraudulent activities on the network.

What’s a blockchain protocol?

A blockchain protocol creates the foundation of the blockchain. This is, intrinsically, a foundational layer of code that forms the framework for blockchain activity.

This can use for cryptocurrency but is not restrained to it. For instance, Bitcoin is a cryptocurrency. Bitcoins are exchanged using the Bitcoin Protocol. Protocols can determine how digital purchases are shared.

The Bitcoin Protocol, as well as the Ethereum one, uses a proof-of-work scheme that affects mining. This implies that data is distributed (but secure) and numerous computers must come to an agreement to prevent any malicious attacks.

Some protocols work differently. Hyperledger Fabric, for one, does not use proof-of- stake or proof-of-work. It is not a protocol developed for cryptocurrency. It is, however, fully permissioned. This indicates that companies can have power over the blockchain network. A full permission approach is not feasible in Bitcoin or Ethereum.

Why Does Blockchain Require a Protocol?

The main idea behind blockchain is its decentralized nature. This suggests that centralized control is missing. To make it work as intended, protocols are used. As there is no centralized commodity, peers or nodes require to be connected and keep a ledger copy. There is a consensus method that also functions in the network to validate transactions into blocks.

These blocks, once completed, cannot be changed. All of this is done using protocols. It acts as a guideline. This also suggests that we have other types of blockchains that try to do something differently, relying on what they like to earn from their actions.

Bitcoin, for instance, is a cryptocurrency that aims to enhance decentralized buy exchange. However, right now, it has become more of an asset utilized for preserving value, just like gold.

Blockchain is also flourishing rapidly in the past few years. It has come along a long way from what bitcoin has created. There are dedicated people, teams, and organizations trying to revolutionize blockchain with a more suitable solution that can be implemented in various scenarios.

What are the different kinds of blockchains?

With companies and start-ups increasingly integrating blockchain into their organization’s strategies, the decentralized technology has been categorized into four major classes based on its use points:

Public blockchain

Public blockchains are open-source blockchain networks. They authorize everybody to be a part of the network as users, designers, network members, and miners. Public blockchains are available for equal participation from all the members without any hindrance. Transactions being processed on the public blockchain are completely fine and available to all the parties of the network for examining the elements of it.

A public blockchain is completely decentralized, with no major authority in control. It is extremely censorship-resistant as anybody can enter the network as per their wish, irrespective of the place and nationality. Therefore, public blockchains can never be shut down.

Private blockchain

Private blockchains are permissioned blockchains. People require approval to join these blockchains. Transaction on the private blockchains is private and is only available to the network players who have permission to function on the private blockchain.

These blockchains are essential for the companies that collaborate and share their data, but they do not like to submit their confidential business information in the procedures on a public blockchain. A private blockchain is way better centralized as the different entities of the network are driving the chain, thus keeping similar control over various participants and the systems of governance.

Hybrid blockchain

A hybrid blockchain has an ecosystem with the integrated components of both a public and a private blockchain network. This elaborated that the hybrid blockchain has the privacy and security of the private blockchain along with the transparency of the public blockchain. Thus, a hybrid blockchain powers the flexibility of a firm process by delivering the privacy and preference to put up any information publicly as per their comfort.

The hybrid ecosystem is feasible because of the patented interchain attribute. This component lets the chain link with other blockchain protocols. With the use of a hybrid mechanism, the formation of a multi-chain network is easily possible. As they can run different public blockchains in a single go to improve the privacy of the transactions, they leverage the integrated hash power being utilized for the public chains.

Consortium blockchain

Consortium blockchains are also known as federated blockchains. They authorize any further participant on the block to join the established structure and share data instead of starting from the very beginning. With the use of consortium blockchains, organizations conveniently get answers to ensure their time and the cost of development.

There are different benefits of the consortium blockchain like the assurance, security, economically feasible, control, flexibility, and energy needed for the process of mining. Industries like logistics, banking & finance, healthcare & insurance implement the consortium blockchain.

Parallel comparison of different blockchain networks

consensus protocols

With years of development, blockchain technology is now divided into different generations. Each era of blockchain has a level-up consensus mechanism handling the problems that the last generation of blockchains could not crack. For example, the scalability factor is better solved in the third generation blockchains as compared to the second and first-generation blockchains.

The initial age of blockchains also lacked the quality of smart contracts. Similarly, other elements like interoperability and TPS is more useful in the third blockchain era. This is why we must do a tabular and thorough comparison of other blockchain platforms to comprehend their characteristics and the development of P2P networks for successfully implementing them in our interactions.

Check out the table given below for an in-depth comparison of the blockchain protocols.

In Conclusion

The above comparison table is based on some essential parameters that will help you research and choose one platform as per your organization’s necessities. The most significant fact of the blockchain protocol comparison is that it is never endless and grows from time to time with new upgrades and consensus mechanisms. For example, the second generation of blockchains evolved with a more suitable consensus mechanism in the third generation of protocols. They used horizontal proof-of-work and park chains in the case of Polkadot, to address the scalability problems. Thus, a parallel comparison of protocols can never end and will continue to transform with time for better analysis of the immutable blockchain technology.

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