What Is a Network?

A network refers to all nodes in the operation of a blockchain at any given moment in time. A blockchain is a distributed ledger that allows one to record and manage assets in a centralized or decentralized way. The recording of new transactions on a blockchain is validated by nodes, which update the ledger with new transactions. The entirety of nodes makes up the blockchain network as a whole.

How Does a Network Work?

A blockchain network can record transactions, which can be used to construct smart contracts. These are used to connect transactions to execute more complex systems and run decentralized applications (DApps). Smart contracts serve as the foundation for DApps in different sectors, such as GameFi or DeFi. 

A public blockchain network allows anyone to track payments, orders, accounts and transactions from its ledger. The blockchain network is governed by a set of policies that are decided upon before the network's inception. These policies configure important network elements, such as the consensus mechanism (proof-of-stake or proof-of-work) and tokenomics. 

What Are the Features of a Blockchain Network?

Blockchain networks have several key features:

• Speed: Blockchain networks have confirmation times ranging between several seconds and several minutes.

• Consistency: Networks are online 24/7. 

• Cost: Networks can operate with low transaction fees of under one cent per transaction. 

• Security: The nodes in a blockchain network help it secure against hacking. 

• Immutability: A network keeps a tamper-proof record of payments that is visible to anyone that wants to audit transactions.

Types of Blockchain Networks

There are two main types of blockchain networks: public and private.

Public Blockchain Network

A public network is censorship-resistant and can be used by anyone in the world. Anyone can check its record of transactions by looking at the distributed ledger. Public networks work with different consensus mechanisms, usually either proof-of-work or proof-of-stake. The most popular public networks are Bitcoin and Ethereum.

Private Blockchain Network

A private blockchain network is operated by a single entity or a set of entities that grant access to its distributed ledger. It is thus a permissioned network. Moreover, private networks can have different levels of permissions for different nodes. Therefore, they are often less decentralized or completely centralized. They are mostly used by enterprises to record transactions or keep a record of data that is only for internal use.