Understanding the Difference Between an ‘Open-Community’ and ‘Closed-Network’ Blockchain
R3 is a consortium of about 200 firms coming together to research and develop distributed database models, somewhere along the lines of Bitcoin. Usually, they receive a lot of heat as they say they are researching a corporate or private model of “Blockchain”, but are in-fact developing a version of Distributed Ledger Technology (DLT). The debate between a Public Blockchain and a Private Blockchain (yes, its an oxymoron) is the center of great distress.
Source: Fiber Optical Networking
Another such debate that hasn’t reached mainstream discussion yet, as it falls under the Public Blockchain category, is the difference between an Open-community Blockchain and a Closed-Environment Blockchain. You can think of Bitcoin being an Open-community ecosystem, and Ethereum being a member of the other side of the spectrum.
Open Community Blockchains
Source: Embracing Open
A blockchain application that is open for all participants to read, audit, edit and argue, about the internal functioning of the blockchain network, is a public blockchain. Public blockchains are relevant mostly because they function as autonomous entities that are not dependent on established organizations to proctor the day to day functioning of the network. A public blockchain is actively used, illustrated and developed by network participants that back the idea of an open-source, delegate-free, secure network that can be readily used. Customization is an embedded feature of such a network, as all code is open for anyone to use, copy, or replace.
Bitcoin, Monero, Litecoin, Dogecoin are just a few of the examples.
Closed Environment Blockchains
Source: StartUp Management
A closed-environment blockchain is a network that is established on the trust and merit of legitimate organizations or participants, capable of handling the responsibility and authenticity that needs to be provided on the network. They are the sole-authorities taking care of the growth of the network, by actively looking after the execution and relay, and at the same time, checking for internal threats that may arise to be wary of malicious actors working against the network.
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Public ‘open-community’ Blockchains |
Public ‘closed-network’ Blockchains |
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Consensus |
An open-networked blockchain majorly depends on the users or delegated participants appointed by the users to reach consensus about various decisions within the network |
A closed-networked blockchain readily reaches a consensus as all participants know each other through distributed delegation rights. |
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Source Code |
Read, audited, and altered by the entire network |
Can be read by the network, but audited and altered by delegated maintainers |
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Development |
Developed for open-source, free use for participants |
Can be developed for commercial use as well as limited open-source use |
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Community participation |
An active community of participants are readily volunteering for the betterment of the network |
The delegated responsible participants are given the right to make changes to the source code in the best interest on the community |
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Information processing |
Relaying information or transaction on the network is relatively open and any network participant can do so without much interference. Although the open nature makes it inefficient and time-consuming |
The transactional capabilities can reside in the hands of the delegate responsible for maintaining the network. Information can even be censored and restricted, depending on the governance of the network. |
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Common Vision |
The Vision can change through time, mostly due to the relatively high turnover of people working for the open source community – Bitcoin started off as an experiment by the cyberphunk group and didn’t take long to become a prospect for the future of money. |
A common vision is set beforehand to ensure all developers and managers can reach a common goal – The founding vision of Ethereum was to develop a global distributed computer and it is well on its way to do so. |
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Remuneration and Incentivization |
The only incentives that the users of an open network could receive are the benefits of using such a network, and the remuneration that the network has agreed upon for such participation. |
As it could be deployed for commercial use, the institutions and participants are incentivized to actively engage in making the user experience better and profitable |
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End-user experience |
A user on the open-community network has to be constantly updated with the functionings of the network, so as to be a part of the ongoing changes and suggestions that are being discussed |
A user on the network does not necessarily need to be aware of the constant dialogues that are going on between the maintainers. The maintainers are responsible to make a network that requires minimum user participation and maximum user utility. |
- SB
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@reverseacid, great post! Easy to read and follow. I'm also interested in blockchain and will be following your posts. Thank you for reaching out.
Thank you @guysellars. It's been our aim to provide toned down pieces about concepts that people are not usually exposed to. Would love to hear your suggestions on future articles you'd like us to cover.
Cheers.
Memo well received. This is a nicely written comprehensive article on understanding the difference between ‘Open-Community’ and ‘Closed-Network’ Blockchain.
A nice continuance to this article might be "Understanding the pros and cons" between the two.
Thank you kindly for this nice article, upvote support given :)
Intersting suggestion @futuremind. We will definitely look into the subject. Maybe you can provide a summary of your thoughts and we can collaborate on a piece together in the future.
Thanks for the kind words. That's the motivation that keeps us going.
Cheers.
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I haven't put a ton of thought into this honestly, in regards to the differences of open and closed networks, but I have given thought to the account creation process that exists on the Steem blockchain. Would this make it a closed network? Even though it's publicly viewable ? I would say it is a closed network, because only those with accounts can interact, however, this is a good protection against mass account creation for the purpose of vote farming.
So I suppose there are quite a bit of dynamics to consider here, and I will need to delve a bit deeper into my conceptual understanding of the pros and cons to different architectures in blockchain networks. I don't think with my current skill-set that I would be the best candidate for a collaboration, but I am more than happy to present my thoughts on the topic, even with my limited knowledge and understanding. It's probably not as limited as some, but I'm no pro, that's for sure man.
Thank you for the response :)
Hi there. I received a memo from you a few moments ago.
Please note that if you wish to send me memos to my wallet the fee is 0.5 Steem.
If you do no wish to send this amount then please remove me from your list.
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I love how you impose your own minimums. This isn't the first time I've seen you saying this 😂
Dang! Do you get any takers on the higher amount, @mazzle? I take free money of any amount from anyone, but if I can increase the send, I am all for it.
Lol. Of course not. I just get tired of people sending spam messages to my wallet. The dollar amount isn’t worth the time taken to read it. So if they want my attention, they need to send more money. The alternative is that I flag their post for 0.5 Steem value if they keep up with the spam.
I welcome floods of them. Just think how much all the memos will be worth if Steem ever reaches proportions of value similar to BTC.. It's all relative I suppose.. I just look at it as: It all adds up.
Steem won’t reach those levels. And I’m happy to grow my account without the help of spam.
Posted using Partiko iOS
haha, agreed and agreed 😎
Noted @mazzle. Didn't mean to be a nuisance. We will comply to your requests immediately.
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Thanks for the clear explanation outlining the various differences. Even a non-techie such as myself could understand it.
Looking forward to more such informative posts. Keep up the good work!
Much appreciated @majes.tytyty. One of our long standing aim is to make sure all our pieces are easily understandabke for a non-technical audience. Thanks for the support.
Would love to hear your opinion or suggestions on future posts you'd like us to cover.
Cheers.
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Dear @reverseacid I received your note and I am very happy to be able to read this article very detailed.
Wooo, I really had no idea that something like this existed, I mean that whenever I think of chain blocks I think of a totally decentralized technology in the public domain. Is it to say that there are possibilities that entrepreneurs create chains of blocks that benefit or give participation to a specific group of people?
A nice and understanding breakdown of the subject matter. i read and immediately understand what the post was talking about and i must say i have never really know the difference between this two not until the review of this post and its clear explanation.
Good job buddy!!
Thank you for your kind words @adewararilwan. We feels the community should know what it's getting into before deciding for themselves. It's been our aim all along.
Would love to hear your suggestions for future pieces that you'd like us to cover.
Cheers.
Great post makes it all clear. I assume both will be there and have their positive and negative sides, just like it is on the internet now.
P.s. I wonder if there are really open blockchains, there is always someone in charge. A person who started it and can end it. Communication is always needed. Users will leave if you keep changing without explaining.
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Just like everything, there are positives and negatives to each of the above mentioned concepts. It's depends on what you're looking for in a project.
Taking about open blockchain, in our opinion, it doesn't really matter who is the founder of a particular protocol as long as it is distributed enough to function on its own. Take the case of bitcoin; setting aside the constant search for Satoshi, it's clear that even if he IS found, it won't necessarily affect the protocol, as bitcoin has gained enough traction to function on its own.
It's only applicable to some projects ofcourse. Not all are susceptible to being independent from their founder.
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hi @reverseacid its really amazing Post with Huge Information :)
And what specifically did you like about this post?
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Hey @reverseacid thank you for your memo. I like that you pointed out the difference between open and closed blockchain systems. I believe that the closed approach will be quite important for companies in the near future :)
Very interesting field of topic.
Do you guys work within blockchain systems for companies?
Cheers,
M