A Compact Guide To Crypto Networks

A Compact Guide To Crypto Networks


A crypto network is a dedicated group of cryptocurrencies that are built on blockchain technology and maintain a certain level of interdependence. These networks can be broken down into categories based on several factors, including their consensus systems, the specific features they support, and core functions. 

Crypto networks operate just like any other platform, but the difference is that instead of being centralized, they are decentralized, and cryptocurrencies coordinate all activities. So, before diving into blockchain or cryptocurrency investment, understanding how the crypto network works is the first thing to do. 

This guide will give you the basic crypto concepts you need to know:

Crypto Networks: How They Work

Crypto networks are a fairly new concept, but they're quickly gaining traction in the mainstream as people continue to buy into the idea of a cashless society. A crypto network is a network of computers that create and store cryptocurrency transactions. You may be familiar with cryptocurrencies like Bitcoin, and you might know what they can do—but how do they work?

Crypto networks are made up of blocks linked together in a chain-like structure. Each block contains data about transactions that have taken place recently, and each time a new transaction occurs, it's added to the next block in the chain. Using cryptography (hence 'crypto'), every computer on the network has access to this chain, which helps them verify that each transaction being added is legitimate.

Cryptocurrencies aren't controlled by anyone or entity; instead, they rely on people worldwide to keep the network running smoothly by giving computing power to fuel and validate the network. In return, those who donate their computing power are rewarded with cryptocurrency for their efforts. This helps ensure that there's always enough power for the network. It also mitigates issues associated with centralization because all of those computers work together. Check over here and other similar resources for more information on how the blockchain network works, including funding and withdrawals. 

Types of Crypto Networks

Just as different types of businesses may have varying goals, there are different types of crypto networks. 

Most crypto networks can be categorized into four main types: private, public, consortium, and hybrid networks.

  • Private Network

A private network is one where the nodes (computers) that run the blockchain software are within the control of a single entity, such as a company or an organization. 

This means that this entity controls access to the network, including transactions allowed on the network and when. Those who would want to join the private network would require the consent of the network administrator. 

Moreover, a private network is usually set-up for a specific purpose. 

  • Public Network

A public network is just like it sounds: anyone can join and participate in the operation of the blockchain. 

Generally speaking, a public blockchain does not require permission to read from or write to the blockchain. Therefore, anyone using a public blockchain can see any transactions on a public blockchain and are considered highly transparent. The best example of this kind of network is the bitcoin network.

  • Consortium Network

A consortium network is a blockchain network that allows a pre-selected set of nodes to participate in the consensus process. These networks are typically used when the network members are known and can be trusted. For instance, a consortium network could be used by a group of banks that need to verify transactions between themselves without requiring verification by multiple unknown nodes on the public Internet.

  • Hybrid Network

A hybrid network is a type of blockchain network that uses both public and private networks for its operation. For instance, it could use a public blockchain for storing some information and a private blockchain for storing more sensitive information. This allows the best features from both blockchains to be combined into one network.

The Future of Crypto Networks

Crypto networks still have a long way to go and have a lot of work to do. For example, Ethereum has yet to implement a network-wide scaling solution that can handle all the applications developers build on top of it. However, once these problems are solved and become more user-friendly, they will explode in popularity. 

The networks will be able to provide all sorts of services such as e-commerce, social media, online gaming and gambling, virtual reality, and plenty more. This means that many entrepreneurs could build an app that competes with established companies as they will have equal access to the network's users.


Cryptocurrency is a rapidly-progressing industry, with exciting new developments occurring daily, from ICOs and network upgrades to new innovative coins and cryptocurrency apps. As a result, consumers and investors alike have plenty of options to choose from. 

However, a smart investor should be equipped with the proper foundation to avoid mistakes. This guide can give you a good basis to understand how the network works.

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