Not all blockchains are the same. Every week we hear about new blockchain applications that promise us a better and brighter future. Now the blockchain is used not only for cryptocurrencies - there are absolutely new and even unexpected ways of using it.
Given the wide variety of alleged use cases for blockchains, two fundamentally different models have emerged: controlled and censor-resistant. Let's find out what these two terms mean.
Many believe that the censorship-resistant model is closer to the original blockchain concept outlined by Satoshi Nakamoto.
A censored blockchain is quite simple, as its name suggests - no permission is required to become a member of such a network and contribute to its content. In theory, anyone can take part in its work. In this case, censorship closely borders on the publicity of such systems.
Since anyone can join censorship-resistant blockchains, they tend to be much more decentralized than controlled systems. One of the downsides to censorship-resistant blockchains is that they are slower than controlled blockchains.
Transaction information stored on censorship-resistant blockchains is usually verified by the community. What happens is not controlled or regulated by a third party, and the truth of transactions can only be confirmed by community consensus. What if you need more control and privacy?
Controlled blockchains are turning the very idea of blockchains upside down. Blockchain was originally invented as an open, free and open-source system, but controlled blockchains have become the complete opposite of that. Controlled blockchains are also often referred to as private.
It's also pretty simple here: controlled blockchains require permission to join them. And only the owner of such a network can decide who can participate in its work and who can not. Such governance also means that the owner of the blockchain chooses the structure of the network, releases software updates, and generally controls everything that happens on their blockchain.
Information in controlled blockchains can only be verified by authorized network participants. The owner can also decide to whom the information can be shared and control it. In some cases, the community will also be able to view certain information stored on a private-controlled blockchain.
Take US supermarket Walmart, for example, which plans to track vegetables across the blockchain to reduce the number of E. Coli bacteria in food. Such information may be verified/approved by Walmart and its suppliers, however, only information about the origin of the product is available to the wider blockchain community.
Controlled blockchains are more scalable and can run faster due to their centralization and less information processing.
Controlled blockchains are becoming quite popular: they are used by banks, supermarkets, shipping companies, and even telecommunications firms.
In censorship-resistant blockchains, transaction information is verified by the community. In controlled systems, transaction information is verified by a select group approved by the blockchain owner.
Controlled systems tend to be more scalable and faster, and they handle everything centrally. Censor-resistant systems are open to everyone and are more decentralized; however, their disadvantage is less speed and scalability.