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 July 20  | 0 Comments

Bitcoin has swept the financial sector by storm in recent years. The rise of Bitcoin has also introduced a new and more secure connected network – Blockchain, that is being touted as Internet 3.0.

To begin, what is Blockchain? Simply put, Blockchain is an encrypted repository of digital information. A Blockchain is maintained on a decentralized and distributed network of computers. Hosting a Blockchain on a distributed network of systems allows secure transactions to occur across a Blockchain with minimal or no possibility of fraudulent activities.

In layman’s terms, a Blockchain is a network of computers that cannot be hacked or breached because the network is distributed across several computers and not controlled on any single device.

The popularity of Bitcoin has fueled interest in the Blockchain technology from several companies, government organizations and financial institutions.

Types Of Block-chain Platforms




Security Of Block Chain

The highly secure nature of Blockchain technology is understood by this informative image.


The use of a Blockchain allows users to track assets across accounts or between individuals.

Transactions on a Blockchain are tamper-proof after they are recorded in the ledger. Any erroneous transaction, therefore, cannot be reversed. Hence, transactions are secure and records cannot be falsified.

The functioning requires a consensus between all its users on the network because users need to validate all transactions.

We are going to introduce you to the different types of Blockchain and tell you about the Blockchain data structure. There are primarily three types of Blockchains are: –



Here we will elaborate on Public and Private Block Chain.

The Consortium or Federated Blockchain is a hybrid of the Public and Private Blockchain. It is partly decentralized. The consensus process is controlled by a pre-selected set of nodes, for instance, financial institutions.


Public Block Chain

There are three things you need to remember that define a Public Blockchain.

  • The code to operate a Public Blockchain is openly This gives anyone the right to participate in the process that decides which blocks get added to the chain as well as the current shape and size of the Blockchain.
  • Anyone can perform transactions on the network. The transactions, as long as they are valid, will go through.
  • With a block explorer, anyone can gain access to and read transactions. Transactions are anonymous and transparent.

Anyone can participate on a public Blockchain, without permission. Examples include Bitcoin, Ethereum, Monero, Dash, Litecoin, among others.

This nature of the Public Blockchain presents two major implications.

Everyone can potentially disrupt prevalent business models through the reduction in the use of intermediaries.

With a Blockchain, there is no need to maintain servers or system administrators. This leads to a significant reduction in cost of creating and running decentralized applications or DApps.


Private Block Chain

In a Private Blockchain, edit permissions are kept centralized to one organization. Read permissions may be public or restricted to varying degrees.

Private Blockchains are mostly used in database management, auditing among other fields. There uses are internal to a single company, and so the companies will not want the data to be accessible to the public. They use Blockchain technology by setting up groups and participants who can verify transactions internally.

However, Private Blockchains may scale better and comply better with governmental data security and privacy regulations. Thus, they have certain security advantages, and other security disadvantages, as we have highlighted above.

However, as Blockchain is still in the nascent stages, it is unclear how this groundbreaking technology will evolve and be adopted. Some examples of Private Blockchains include MONAX and Multichain.

The important benefits of Private Blockchains are a reduction in transaction costs and data redundancies as well as easier data-handling and more automated compliance functionalities.

In a Consortium Blockchain, 10 out of 15 institutions are required to sign the block in order to validate it.


The Block Chain Data Structure

A Merkle Tree structure allows the transmission of blocks of data between individuals on a peer-to-peer network. This information needs to be transmitted in an unaltered or uncorrupted state. When data needs to be stored efficiently and securely, Merkle Trees play an important role.

A Merkle Tree is also called a hash tree and is meant for verifying data that is stored and transmitted between different computers linked to a network. This technology has become an important part of peer-to-peer networks in recent times, as well as in cryptocurrency.


Understanding Merkle Tree Structures

A Merkle Tree can be understood as a data structure which is used by many Blockchains. Each block in Blockchains stores all the transaction data in the form of a Merkle tree.

In this data structure, hashes of child nodes are combined with the parent node’s header. This method of combining the child nodes’ headers and adding it to the header of the parent node continues iteratively till the final node is reached, right at top. This is the root node and it will contain information relating to all other nodes present in the tree.

Simply put, a Merkle Tree structure for the data in a Blockchain makes the layout easier to understand.

The most common and simple form of Merkle tree is the Binary Merkle Tree.

Let us discuss how this tree is generated.

Let’s consider that there are four transactions: L1, L2, L3 and L4 in a block.

To begin, all transactions in the block are individually hashed. For example, L1 is hashed to hash 0-0.

Then the combination of hash 0-0 and hash 0-1 is hashed and stored within a parent node. This process is again repeated for the other nodes.

A combination of hash 0 and hash 1 is stored in its parent node. This is the last node of this Merkle tree and is called the root node or the Merkle root.

The block header is generated by using the Merkle root with the header hash of the previous block, a nonce and a time-stamp.

To summarize, the hash of all the transactions in a block is stored in the Merkle Tree. When a node has to verify if any transaction is changed, the node will only need to build the Merkle tree by using all the transactions of the block. This makes it very simple to validate or invalidate transaction sets. Thus, Merkle Tree data structures help to maintain the security in a Blockchain.

That was an introduction to the types of Blockchains with an overview of how a Merkle Tree data structure operates. Visit our page to know more about Blockchain development.