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How hybrid BlockChain technology helps adoption of Blockchain for fast and cost-effective operations

The blockchain is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. What makes them truly decentralized and usable for financial transactions or for contracts between two or more parties is that they can be combined with the difficult to achieve "Proof-of-work".

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-By Nitin Gupta, Co-founder, CEO & CTO, NeuroTags

With proof-of-work, the system can be open, shared and yet secure against tampering. Cryptocurrencies are successfully using this system, where their blocks are backed by proof-of-work and resides on open sharable ledgers in public computers.

However the proof-of-work adds the constraint of spending significant resources in mining, secondly you need a critical mass of miners for your system, otherwise, it remains vulnerable to be taken over or played by someone with a powerful set of computing resources.

“Proof-of-work” cannot be very simple its difficulty level has to be adjusted depending on the number of mining nodes, which constrains the speed at which the number of blocks that can be added to the blockchain, which make blockchain difficult to use for most of the practical purposes.

However, if you make the blockchain private between a limited number of trusted parties then you may let go the “proof-of-work” and instead may use the “Majority-vote” or other algorithms to solve the agreement problem in case of any disagreement. This blockchain can be made as fast as needed. But again you risk the system to be taken over by a hacker who has gained control over the majority of the nodes.

Hybrid Blockchain Technology

With the help of Hybrid Blockchain Technology (HBT), a private blockchain can utilize the tamper-proofing property of a public chain which is backed by proof-of-work and yet have the speed of private blockchain.

A HBT such as one provided by NeuroTags can be used by private parties to have immutable records and contract management system which would be extremely fast and yet hack-proof and secure.

HBT usually internally manages the private blocks using a set of “weighted-voting” algorithms and utilizes the public cryptocurrencies (open ledgers blockchains) occasionally to mark blocks immutable with “Proof-of-work” of miners (such as that of Bitcoins or Ethereum).

Usually, HBT is made cost-effective and simple to use for the security of financial, healthcare or other data by providing the validator-modules which would autorun and make sure records in a system are intact.

The system can be used among the participating parties or groups to make sure the contracts among them are private and available only among them yet secured and sealed using the public blockchain proof of work.

The same technology can be added on top of the legacy DB to complement it by providing the additional security layer of the blockchain so that chosen records can be made tamper-proof and without any extra overhead of development effort.

A node in an HBT can be publisher or subscriber or both. Nodes can be configured to be randomly distributed on AWS, Google or Azure or any Datacenter, with individual private algorithms and keys to uniquely protect the blocks data. In this system, hackers will have to hack all the nodes to be able to mutate any block which is not yet hashed to the public blockchain. The ones whose hash is covered in public blockchain would anyway be immutable. Consensus algorithm (such as weighted-voting right) can be configured to resolve the clash.

For most practical purposes, where speed cannot be compromised and cost-effectivity is important, technologies such as HBT can be deployed to take complete advantage of blockchain’s decentralization and immutability.

If you have an interesting article / experience / case study to share, please get in touch with us at [email protected]


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