A hybrid blockchain is a combination of both private and public blockchains, providing better transparency, data security, and privacy. Since it is open and accessible to the public, the blockchain validates transaction data by using a blockchain consensus mechanism. Then, the data is stored in a private blockchain that can be accessed by users with permission. Business organizations could have better control over what they need to achieve instead of changing their plans due to technological limitations.
Ideally, a hybrid blockchain means controlled access and autonomy at the same time. Hybrid blockchain architecture is entirely customizable so that the hybrid blockchain members can decide who can join the blockchain or which transactions should be made public.
Functions of hybrid blockchain technology -:
Increased security: Hybrid blockchain offers increased security as it combines the best features of both public and private blockchains. The private blockchain layer ensures that sensitive data is kept secure and accessible only to authorized parties, while the public blockchain layer provides transparency, immutability, and decentralized consensus.
Enhanced privacy: Hybrid blockchain provides enhanced privacy by allowing parties to share confidential information through the private blockchain layer while keeping the transaction details on the public blockchain layer.
Scalability: Hybrid blockchain offers improved scalability as it allows for the use of off-chain solutions to handle a large volume of transactions and reduce congestion on the public blockchain layer.
Interoperability: Hybrid blockchain enables interoperability between different blockchain networks, allowing for a seamless exchange of data and assets between them.
Flexibility: Hybrid blockchain provides greater flexibility by allowing organizations to customize their blockchain infrastructure to suit their specific needs.
Compliance: Hybrid blockchain provides organizations with the ability to comply with regulatory requirements by segregating sensitive data on a private blockchain layer while maintaining transparency and immutability on the public blockchain layer.
Use Cases -:
Hybrid Internet of Things (IoT) :
IoT can be complicated to manage with a public blockchain solution as it will provide free data to the hackers for mapping nodes or hacking into them. With the usage of the hybrid blockchain, the devices can be positioned in a private network providing access to the required users.
Trading and Finance :
The aim of the hybrid blockchain is to provide a global finance and trading platform by using Delegated Proof-of-Stake (DPOS).
Banking :
A hybrid blockchain can be an ideal solution for banking applications. As banks need to solve problems internally and secure user information. Even Ripple can transfer to a hybrid blockchain network if there is a change required.
Supply Chain :
As there are enormous benefits, many supply chain logistics companies have already started implementing the hybrid blockchain aimed to improve throughput. IBM food trust and Walmart are active players in this project.
Governments :
Governments have started the implementation of blockchain for voting, creating public identification databases, recording complex data, automation of acquisitions, providing social/charitable assistance, etc.
Hybrid blockchains provide the government with the control they need and enable the public to access it. Entirely private or public blockchains will not work as they hinder users’ access or disclosure of data.
Enterprise Services :
Hybrid blockchain can not only be used to build open-source technology but also enterprise-grade solutions. Business organizations can use hybrid blockchain to automate their service and improve their reliability and transparency for workforces and end-users.
Conclusion -:
In a couple of years, more business organizations will likely adopt the hybrid blockchain. Industries that require high levels of transparency, data security, privacy, and traceability could gain benefits from this revolutionary technology. Hybrid blockchain is a boon for organizations that want to secure and process their critical business data without exposing it to a third party.
