What Are The Different Type Of Blockchains?
















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What Are The Di...


What Are The Different Type Of Blockchains?

6 mins read / updated on Fri Nov 24 2023


Defining Blockchain

At its essence, a blockchain operates as a decentralized, immutable ledger that simplifies the recording of transactions and asset management (encompassing both tangible and intangible assets) within a business network. In the realm of blockchains, an extensive array of value forms can be documented and exchanged, resulting in reduced risks and operational costs for all stakeholders. But, what exactly comprises a blockchain network?

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Essentially, a blockchain network offers a foundational structure that supports applications in interfacing with ledger and smart contract functionalities. It is smart contracts that are chiefly employed for generating transactions. These transactions are then disseminated to every node in the network, ensuring an immutable recording on their individual ledger versions. Among those using the system are end-users via client applications or those overseeing the blockchain network.

On such a network, various processes such as orders, account management, payments, manufacturing, and more can be monitored. Since participants access a unified transactional view, it allows for enhanced trust, offering heightened efficiencies and prospects. So, how varied are these blockchain networks?

Often, a collective of entities forms a consortium to develop the network. Their actions and rights within this ecosystem are directed by an established policy set, which was agreed upon during the network's inception. Other iterations of blockchain networks encompass public, private, and permissioned categories.

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In this article, we'll delve deep into the four primary blockchain network types, elucidating their advantages and disadvantages.

Key Features of Blockchain Technology

Fundamentally decentralized, blockchain harnesses a global network of users to authenticate and document transactions. Owing to its structure, blockchain transactions are characterized by their consistency, speed, reliability, cost-effectiveness, and resistance to tampering.

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Here’s a brief on these features or attributes:

Speed: Direct transactions without intermediaries.

Reliability: Operates globally, uninterrupted.

Cost-Efficiency: Eliminates expenses associated with centralized bodies.

Robustness: A collective node system fortifies it against breaches.

Integrity: With its timestamped data, tampering becomes near impossible. For public blockchains, every transaction is open for scrutiny.

Also Read: Blockchain Network Congestion

Types of Blockchain Technology

Permissionless vs. Permissioned Blockchains

All blockchain versions can be slotted as permissionless, permissioned, or a blend of both. Permissionless blockchains welcome any user to enter the ecosystem and function as a network node without identity-based restrictions. In stark contrast, permissioned blockchains offer selective access, often revealing the identities of its users to other network participants.

The expansive node network of permissionless blockchains renders them more secure due to the challenging task of collusion. Yet, their extensive transaction processing time is a drawback. Permissioned blockchains, on the other hand, offer heightened efficiency due to fewer nodes, resulting in quicker transaction processing. However, central authority in permissioned blockchains poses a vulnerability, making them susceptible to conventional hacking methods. A lower node count also implies an increased potential for collusion, hence, administrators of such blockchains must be selective, opting for highly trustworthy nodes.

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Public Blockchain

Emerging in four primary categories - public, private, consortium, and hybrid - each blockchain platform boasts its unique set of advantages, limitations, and optimal applications.

The public blockchain model is the cradle of cryptocurrencies like Bitcoin and serves as a testament to the efficacy of Distributed Ledger Technology (DLT). By circumventing centralization issues like security lapses and opaqueness, DLT disperses information across a P2P network. Its decentralized structure mandates an authentication method, facilitated by consensus algorithms, such as Proof of Work (PoW) and Proof of Stake (PoS). Public blockchains offer open access, allowing any internet user to engage with the platform as a validated node. Once a record is approved, altering it is not feasible. The open-source nature of most public blockchains fosters collective scrutiny, bug detection, and suggested modifications.

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Public Blockchain Merits:

The autonomy of public blockchains ensures their continuity, irrespective of the founding organization's fate. Some of these networks reward user contributions, amplifying security. Coupled with diligent adherence to safety protocols, public blockchains remain largely invulnerable.

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Public Blockchain Limitations:

Public blockchains can be sluggish and don’t offer control over user access. A potential vulnerability emerges if malevolent actors control over 51% of the network’s computing power. With more nodes joining, the network can also become slower.

Private Blockchain

Private blockchains operate in a controlled or enclosed environment. While they maintain the fundamental P2P connections and decentralization similar to public blockchains, they function on a more compact scale. Typically, private blockchains are exclusive to specific organizations or corporate structures.

Private Blockchain Benefits:

The organization in charge can define permissions, secure the data, and determine node access levels. It offers a layer of control over who views, edits, or inputs data, and can shield certain information from third-party access.

Private Blockchain Drawbacks:

Detractors argue that they deviate from blockchain's core decentralized principle. Trust establishment can be tricky due to centralized nodes. A limited node count might also reduce the security threshold. Additionally, proprietary code restricts independent audits, and user anonymity is often compromised.

Hybrid Blockchain

Marrying elements from both public and private blockchains, the hybrid variant allows organizations to operate a dual system: a private permissioned network alongside a public permissionless structure. Confidential data remains within the network, but can still be authenticated, typically through smart contracts. While a private entity may oversee the hybrid blockchain, transaction alterations remain impossible.

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Joining a hybrid blockchain offers unrestricted network access. However, a user's identity remains shielded unless they engage in a transaction with another entity.

Hybrid Blockchain Pros:

Its operation within a closed ecosystem shields it from external 51% attacks. While safeguarding privacy, it still enables third-party communication. Transactions are swift and economical, and scalability is superior to public blockchains.

Hybrid Blockchain Cons:

It isn’t fully transparent due to selective information shielding. System upgrades can pose challenges, and user contributions to the network often lack incentives.

Consortium Blockchain

Operating as a fusion of both private and public elements, consortium blockchains allow multi-entity collaborations on a decentralized platform. This network is a selective, group-based blockchain, ensuring risks linked with single-entity control in private blockchains are eliminated. In this setup, consensus procedures are managed by designated nodes, with validator nodes facilitating transaction processes.

Consortium Blockchain Strengths:

Compared to public blockchains, consortium versions offer better security, efficiency, and scalability. Like their private and hybrid counterparts, they also facilitate access controls.

Consortium Blockchain Weaknesses:

They are not as transparent as public blockchains. A breached member node can compromise the network, and stringent blockchain regulations can hinder optimal network functionality.

Final Words

Blockchain's versatility is reflected in its multiple variants, each reshaping how transactions are managed, authenticated, and safeguarded. By delving into the nuances of each category, users can effectively harness its vast potential. The ideal blockchain choice should sync with specific requirements, ensuring an optimal balance between transparency, oversight, and security.

Also Read: Proof Of Stake


Q: What are the different types of Blockchains?

A: The different types of blockchains are public, private, consortium, and hybrid.

Q: What are the two main Blockchains?

A: The two main blockchains are permissionless (public) and permissioned (private).

Q: What is the most common type of blockchain?

A: The most common type of blockchain is the public blockchain, especially due to its association with cryptocurrencies.

Q: Which are popular blockchains?

A: Popular blockchains include Bitcoin and Ethereum, both of which are public blockchains.

Q: What are the advantages and disadvantages of each type of blockchain?


- Public Blockchain:

- Advantages: Decentralized, transparent, resistant to tampering, and continuity regardless of the founding organization.

- Disadvantages: Slower transaction processing, potential for 51% attack, and lack of control over user access.

- Private Blockchain:

- Advantages: Control over permissions, increased privacy, and faster transactions due to fewer nodes.

- Disadvantages: Reduced decentralization, possible trust issues, and potentially lower security threshold.

- Hybrid Blockchain:

- Advantages: Protected from 51% attacks, safeguarded privacy, fast and economical transactions, and better scalability than public blockchains.

- Disadvantages: Not fully transparent and potential lack of user incentives.

- Consortium Blockchain:

- Advantages: Enhanced security, efficiency, scalability, and controlled access.

- Disadvantages: Less transparent than public blockchains and potential for compromised network if a member node is breached.

Q: What are the use cases for each type of blockchain?


- Public Blockchain: Cryptocurrencies, crowdfunding, and open-source projects.

- Private Blockchain: Business processes, internal auditing, and proprietary systems within organizations.

- Hybrid Blockchain: Situations requiring both transparency and privacy, such as supply chain management.

- Consortium Blockchain: Collaborative projects among multiple organizations, banking consortiums, and inter-business transactions.

Q: Which type of blockchain is right for my application?

A: The right blockchain for your application depends on your specific requirements. If you prioritize decentralization and transparency, a public blockchain might be suitable. For more control and privacy, consider private or consortium blockchains. Hybrid blockchains can be used when a combination of attributes is desired.

Q: How do I choose a blockchain platform?

A: Choosing a blockchain platform depends on your goals, desired features, scalability needs, and security requirements. You should also consider the platform's community support, development activity, and ease of integration.

Q: What are the security risks of blockchain?

A: Security risks include the potential 51% attack on public blockchains, vulnerability due to centralization in private blockchains, compromised member nodes in consortium blockchains, and potential collusion among participants.

Q: How can I mitigate the security risks of blockchain?

A: Ensure robust consensus mechanisms, engage in regular security audits, limit permissions where necessary, and encourage a diversified and active node community.

Q: What is the future of blockchain?

A: The future of blockchain promises increased adoption in various industries, more integrated solutions, enhanced security protocols, scalability improvements, and broader acceptance as a transformative technology.


Zainab Saberi

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