If you Thought Blockchain was Amazing, Wait till You Read about Hybrid Blockchain
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The world has witnessed an overwhelming interest in Blockchain across various industries across nations, from tens of hundred new startups, to dedicated blockchain labs showing up in both commercial and federal institutions, or to multiple consortia established for solving major challenges of their industry.
Blockchain technology retains a great level of detail in its records for all financial and non-financial transactions made. Blockchain technology minimizes the chances of misinformation or manipulated information being distributed across the network. One of the best parts up for discussion about public blockchain is that it’s generally not governed by one particular entity. Each participant or entity gets the opportunity to share or generate copies. While some see it as strength, it is also viewed as a big disadvantage as few might claim it’s not secure enough.
Fortunately, Blockchain technology can be utilized in three different ways—public, private and hybrid. While much has been said and discussed about public and private blockchain, hybrid blockchain technology still remains untouched and is comparatively a ‘fresh’ term.
A Glimpse at Hybrid Blockchain
As the name suggests, Hybrid Blockchain lies between the two extremes of public and private and enjoys characteristics of both private and public blockchain. Hybrid Blockchain network members or particular dominant entity can determine as to which transactions can remain public and which must be confined to a smaller group of members.
Hybrid Blockchain consisting of Public and Private State of network ensures that every transaction is private but still verifiable by an immutable record on the public state of blockchain. In its public state, each transaction gets approved by a massive network and is essentially secure and trustworthy. Hence, there is no need for a central governing body or an exhaustive chain of intermediaries to supervise things. So, any change done to a transaction will undergo an agnate approval process, making it next to impossible for a single actor to meddle with the transaction or entries.
While the public state of Hybrid Blockchain gives everyone (who has joined the network) equal rights to view, modify and append their consent to a transaction, the identity of transacting parties is never disclosed to all the visible network participants. However, this anonymity is something not acceptable to financial institutions and regulated industries that have strict Know Your Customer (KYC) standards. Moreover, the unrestricted visibility of public state of network exposes all the data to a colossal network—a factor that discords with data confidentiality obligations as well as their business concerns.
This anonymity of public state is successfully combated by the private state of Hybrid Blockchain—the state that is most suitable for financial institutions. Although it’s decentralized, secure, transparent and immutable like its public analogue in most cases, it restricts the rights to view, modify and append/approve transactions to selective members. In simple words, if a network member(s) do not want its transaction data to be visible or accessible without their permission, they can earmark particular rights to view, modify or get into consensus with different members. For example, consider a transaction where Member 1 is allowed to view the payment entries, Member 2 can only edit the specific entries and Member 3 is the one who assents the transaction.
Hybrid Blockchain: The Possibilities
The game-changing Hybrid Blockchain Technology can be used to build enterprise-grade implementations of the open-source technology across different trades leading to real-world use cases. What’s more, the robust security and high transaction throughout of Hybrid Blockchain ensures trusted cross-border payments for trade and financing. Industrial Applications is another domain where Hybrid Blockchain can be successfully implemented across various sectors like Travel, Energy, Aviation etc. and can be used to support business process re-engineering, financing, supply-chain, procurement etc.