Blockchain networks are best known for the popularization of crypto assets. However, other types of blockchain networks developed for different purposes are frequently used today. One of these is the private blockchain network called "private blockchain."

What Are the Types of Blockchain Networks?

Blockchain technology is most commonly used in cryptocurrencies, the NFT sector, and Web 3.0. There are four main types of blockchain technology. These types are as follows:

• Public blockchain
• Hybrid blockchain
• Consortium blockchain
• Private blockchain

What Is Public Blockchain?

Public blockchain networks are blockchain networks without requirements such as authorization. This means that it is not connected to any center. In other words, anyone who wants to access the blockchain network can easily join public blockchain networks. All users with an internet connection can join the blockchain network and perform transactions.

What Is Hybrid Blockchain?

Hybrid blockchain networks include features of both public and private blockchain networks. Hybrid blockchain networks are controlled by a single person or organization.

What Is Consortium Blockchain?

Another name for consortium blockchain networks is unified blockchain. Consortium blockchains are much more decentralized than private blockchain networks. Unlike hybrid blockchain networks, which have a single control mechanism, consortium blockchain networks are developed by a diverse group of entities. The purpose of consortium blockchain networks is that such entities want to use a decentralized network for their joint work. People outside of consortium blockchain networks cannot log in to this blockchain network.

What Is a Private Blockchain?

Private blockchain networks are blockchain network that requires authorization. Only people who have the necessary permissions can participate in this blockchain network. Private blockchain networks are run by companies, institutions, or organizations. Details such as which user has which access permissions are determined by the company or organization that manages the private blockchain network.

Private blockchain networks do not make an organization's data public and enable the use of distributed ledger technology.

But this means that private blockchains lack one of the most important features of blockchain networks. This feature is decentralization, which means complete decentralization. Today, some critics argue that private blockchain networks are not blockchain networks at all, but centralized databases using distributed ledger technology.

Private blockchain networks are faster, more efficient, and more cost-effective than public blockchains, which require more time and energy to verify transactions.

A blockchain network is a ledger of recorded and verified transactions on a network that is distributed among all users. However, in many different situations, instead of a public blockchain network that everyone can access, it may be necessary to use private blockchain networks that can be accessed by a designated and limited number of users. The participants of private blockchain networks are predetermined and selected. Their access rights to the private blockchain network are controlled. This implies that participants need to authenticate themselves and obtain permission to join the network.

Some of the use cases of private blockchain networks are:

• Financial services
• Business-to-business transactions (B2B)
• Resource monitoring and tracking
• Health sector

Private Blockchain in Financial Services

Banks and other financial institutions may choose to use private blockchain networks for safer and faster payment processing.

Private Blockchain for Business-to-Business (B2B) Transactions

A private blockchain network may be preferred for efficient and secure transactions between multiple firms or institutions.

Private Blockchain for Resource Monitoring and Tracking

In any supply chain or logistics process, a private blockchain network can be used to track the sources of products and prevent situations such as counterfeiting.

Private Blockchain in the Health Sector

A private blockchain network structure can be used between hospitals, clinics, and other medical intervention centers to share important medical data securely and in conditions that respect patient confidentiality.

Private blockchain networks typically provide customized solutions for businesses and institutions. Companies design and develop private blockchain networks to solve their problems. These private blockchain networks can be relatively fast and scalable because they are generally not public. In addition, the biggest disadvantage of private blockchain networks is that they are based on a structure that requires trust.

What Are the Examples of Private Blockchain Network?

There are important examples of private blockchain networks. Some of these networks include:

• Corda
• Hyperledger Fabric
• Quorum
• MultiChain
• R3 Corda Enterprise

What Is R3 Corda?

Corda was developed by a company called R3. Corda is a platform for developing private blockchain networks for transactions between financial institutions. Corda's custom-designed configuration offers privacy, trust, and scalability to the businesses that use it.

What Is Hyperledger Fabric?

Hyperledger Fabric was developed by the Hyperledger Project. Hyperledger Fabric is an open source blockchain platform designed for businesses and organizations in general. Hyperledger Fabric provides a flexible structure for building private blockchain networks. It also has a fully customizable layout. Permissioned networks can be created to enable transactions between multiple companies.

What Is Quorum?

Quorum was developed by JPMorgan Chase. Quorum is a private blockchain platform that can be used between financial institutions. An Ethereum-based blockchain network, Quorum is optimized to address all the privacy, speed, and security needs of businesses.

What Is MultiChain?

MultiChain is an open-source platform that organizations can use to create their private blockchain networks. Thanks to its open-source structure, it is fully customizable. MultiChain can be used to share information between organizations by creating permissioned networks.

What Is R3 Corda Enterprise?

Corda Enterprise is a commercial version of Corda developed by R3. This version is designed for use by larger enterprises. It allows for the creation of relatively more complex private blockchain networks.

Each organization can develop and maintain different private blockchain networks for its own needs. This technology, which is becoming increasingly widespread today, facilitates the business processes of large companies.