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How Many Blockchains Does the World Have? Uncovering Decentralization

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How Many Blockchains Does the World Have?
Uncovering Decentralization

January 2023


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How many blockchains are there? The truth is that no one knows the number. There are hundreds upon hundreds of active blockchains and the number continues to climb as the years go on. The fact that blockchains are decentralized with no central authority makes it impossible to quantify and difficult to monitor their growth. In addition, some blockchains are categorized as private blockchains. Access to them or even the knowledge of their identity is governed by the controlling entity.

Major exchange marketplaces offer some sense of size with regards to cryptocurrency-based blockchains. One such marketplace is CoinMarketCap whose current listing stands close to 9K "currencies." However, not all of these cryptocurrencies run on their own blockchain. Moreover, cryptocurrencies are only one application of the blockchain. There are various use cases for blockchain technology that may or may not involve the exchange of cryptocurrency including smart contracts.

To get a better understanding of the blockchain ecosystem and the complexity of the question "How many blockchains are there?", this article will discuss the four different types of blockchains: public, private, consortium, and hybrid.

Public Blockchains

Public blockchains are decentralized networks in which all are allowed to participate. Participants can read data, write data, validate data, and store data that is contained in the blockchain network. Examples of public blockchains are:

  • Bitcoin
  • Ethereum
  • Litecoin

Private Blockchains

A private blockchain is a permissioned network. Only those granted access to the network can read data, write data, validate data , store data, or perform any operation within the network. The permission feature makes private blockchains less decentralized as there is a point of control (a single entity) over the network. Examples of private blockchains are:

  • Hyperledger Fabric
  • Corda
  • Quorum

Consortium Blockchains

Consortium blockchains are similar to private blockchains but they involve oversight by multiple entities instead of a single entity. Examples of consortium blockchains are:

  • The Hyperledger (originators of Hyperledger Fabric)
  • The Enterprise Ethereum Alliance (EEA) (a permissioned version of Ethereum called Ethereum Enterprise)

Hybrid Blockchains

Hybrid blockchains are a combination of public and private blockchains. They seek to offer benefits of each type while avoiding the limitations of each. Examples of hybrid blockchains are:

  • Aion
  • Wanchain
  • Cosmos

Pros and Cons by Blockchain Type

Each of the four types of blockchains has its own list of advantages and disadvantages. Below are the pros and cons for each blockchain type.

Public Blockchain: Pros and Cons

Pros

  • Fully decentralized networks: Not controlled by a single entity and therefore no single point of failure.
  • Open to anyone.
  • Security cryptographic techniques: Proof of work or proof of stake.
  • Transparency: All transactions are recorded on a publicly-available ledger.
  • Immutability

Cons

  • Scalability: All nodes on the network need to validate every transaction making them slower and more expensive in terms of resource use
  • Privacy: None privacy. The ledger is publicly-available.
  • Complexity: Complex to set up and maintain because they require a large number of nodes.

Private Blockchain: Pros and Cons

Pros

  • Scalability: Can be faster and more scalable than public blockchains because they have fewer nodes participating in the transaction validation process.
  • Customizability: They can be customized to the specific needs of the application. In contrast, public blockchains tend to have fixed algorithms.
  • Control: Access is restricted. The network's central authority can decide who can join the network and what types of transactions are allowed to pass through the network.
  • Privacy: Either none of the transactions are visible to the public or only some of the transactions are available to the public.

Cons

  • Greater Centralization: They are controlled by a central authority and access to the network is restricted.
  • Lack of transparency: Either only some or none of the transactions are visible to the public.
  • Complexity: Require a central authority to manage access and make decisions about the network.

Consortium Blockchain: Pros and Cons

Pros

  • Decentralization: Largely decentralized. They are operated by a group of organizations rather than a single entity.
  • Customizability: They can be customized to meet the specific needs of the consortium.
  • Control: Access is restricted and decisions about the network are made by the consortium.
  • Privacy: Offer greater privacy than public blockchains. Access is restricted and not all transactions are visible to the public.

Cons

  • Centralization: Although largely decentralized, consortium blockchains are more centralized than public blockchains. Access to the network is restricted and decisions about the network are made by a group of organizations
  • Lack of transparency: Not all transactions are visible to the public.
  • Complexity: Can be complex to set up and maintain because they require the coordination and consensus of multiple organizations (the members of the consortium).

Hybrid Blockchain: Pros

Pros

Hybrids combine the benefits of both public and private blockchains- they offer the best of both worlds. For instance, they can allow for a greater degree of control over the network while still maintaining the transparency and decentralization of a public blockchain. They can be structured to achieve the scalability and efficiency of a private blockchain and the security and transparency of a public blockchain.

Cons

  • Complex: Because they combine features of both public and private blockchains, they may require the specialised technical expertise to build and maintain.
  • Less Security and Decentralization: Allowing for the creation of both public and private blockchain mechanisms may lead to more censorship or tampering than found in fully public blockchains.

Points to Consider When Digesting the Complexity of the Question "How Many Blockchains are There?"

  • A cryptocurrency project can either run on its own blockchain or run on a pre-existing blockchain platform. For instance, if a project wants to utilize smart contracts, its developers may run it on the Ethereum Blockchain platform.
  • A private blockchain may not have a need for cryptocurrency but utilize the network for business operations. An organization's private blockchain would want to limit access to their chain and implement the use of network permissions.
  • The terms "Blockchain" and "Distributed Ledger" are not one in the same. A Distributed Ledger is a type of database. Distributed Ledger Technology (DLT) is peer-to-peer, requires consensus and is both shared and synchronized. A ledger is geographically spread (distributed) across many sites, countries, or institutions. This makes it a decentralized database. With DLT, there is no single point-of-failure. Sounds like a public blockchain? That is correct. However, blockchains are a special type of distributed ledger. A blockchain uses a series 'blocks' as its data structure. Each block contains a list of immutable transactions. These blocks are chained together hence the term "blockchain."

List of Smart contracts:

Smart contracts have become increasingly important in the blockchain ecosystem. They are computer programs that automatically execute upon the meeting of certain conditions in accorandance with the terms of the underlying agreement. Though not currently legally binding, organizations have begun turn to smart contracts as a way to eliminate the costs associated with third-party trustees, avoid time delays caused by the use of intermediaries, and reduce fraud. Some of the blockchains supporting smart contracts are as follows:

  • Ethereum
  • Bitcoin (now smart contract enabled)
  • Binance Smart Chain
  • Cardano
  • Solana
  • Avalanche
  • Tron
  • EOS.IO

Conclusion

While everyone wants to know the number of blockchains currently in existence, there is simply no way to tell. There is no authority over all public blockchains. There is no authority over all private blockchains. There is no authority over all consortium blockchains. There is no authority over all hybrid blockchains. Therefore, it is impossible to accurately assess the total number of blockchains in existence today. One thing that is known is that blockchain technology is here to stay with applications extending far beyond cryptocurrency.


For more articles related to blockchain technology, see the following articles:



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