Tuesday, January 31, 2023

What Are The Different Types Of Blockchain?


Everyone knows that blockchain is one of the best technology, people have ever used. There are different types of blockchain technology at present. Blockchain provides us with decentralization, immutability, high security, privacy, and much more.

When any institution or organization is adopting blockchain, to fulfill its needs, they have to decide which type of blockchain is suitable for them. To prevent unauthorized access to the data, these institutions adopt blockchain technology.

This data needs to be kept away from the public, and only accessible to authorized individuals. Therefore, these institutions can’t use a public blockchain network. So they go for different types of blockchains according to their requirements.

We have discussed below different types of blockchains along with their pros and cons.

Why Do We Need Different Blockchains?

  • We use blockchain technology to perform transactions or exchange data through a decentralized network which ensures safety.
  • At present majority of people use blockchain technology in the form of Bitcoin as a digital currency
  • Bitcoin is an example of a public blockchain. Anyone with an internet connection can join the network as a node, verify others, and can perform transactions
  • But a problem arises when organizations adopt blockchain technology into their businesses
  • They can’t use a public blockchain network because it would disclose their critical data to the public
  • In that case, these organizations will use a different type of blockchain network which will only be accessible to authorized individuals

Similarly, there are different ways blockchain network is set up depending upon the needs of an individual or an organization

Permissionless Blockchain

Also known as a public blockchain is used to provide high transparency. It allows anyone to join the network as a node, verify other nodes, and conduct or validate transactions. Each node on a blockchain network has a replica of the chain.


  • Are decentralized and have no central authority
  • Open-source
  • More secure
  • Provides full transparency


  • Anyone with an internet connection can join the network
  • Anyone can access or create data
  • Anyone can publish smart contracts
  • Relatively high level of anonymity


  • Performance is slow
  • Scaling is a challenge
  • Monetary incentives to nodes
  • Energy inefficient

Permissioned Blockchain

Also known as a private blockchain tends to be comparatively more efficient. It allows only authorized individuals to join the network, and validate transactions or information in the network.


  • Lack of anonymity
  • Setup by a private entity
  • A closed ecosystem where all individuals are well known
  • Every action is tracked


  • Comparatively faster
  • Strong privacy
  • More secure
  • Scaling is drastically increased


  • Not fully decentralized
  • Risks of corruption of data
  • Lack of transparency
  • More prone to censorship or regulation

Types Of Blockchain

Types Of Blockchain

Public Blockchain

A public blockchain is a permissionless blockchain network where anyone with internet access and a computer can join the network and can conduct or validate transactions. It is a decentralized network that eliminates the problems like less security and transparency.

Proof of Work(PoW) and Proof of Stake(PoS) are the consensus methods used for the verification of transactions happening on a public blockchain. It would become non-functional if there aren’t enough peers for the verification.

Each node in the network has a replica of the chain therefore no one can alter or tamper with the records stored in a public blockchain network. Bitcoin is the first implementation of blockchain that was released to the public. 


  • Brings trust among all the nodes in the network due to the presence of the proof-of-work algorithm
  • More secure and greater distribution of data as it is open to the public
  • Provides anonymity as users aren’t required to reveal their identity for participation
  • It is decentralized and every node has a copy of the blockchain


  • The number of transactions that can be performed in a second is very low due to its size
  • Proof-of-Work(PoW) algorithm consumes a lot of energy
  • Scalability is a challenge as transactions are processed slowly. The bigger the size of the network, the slower it will be

Use Cases:

  • Governments can use it for voting purposes to ensure trust
  • Can be used by organizations that are built on transparency or trust

Private Blockchain

A private blockchain is a permissioned blockchain network where only authorized individuals can join the network which makes it comparatively more secure. It is set up and controlled by a single entity and works in a restrictive environment.

Therefore, it is kind of centralized to some extent. The central authority or operator can change the data accordingly.

A private blockchain network uses a peer-to-peer connection to operate. It also offers security, trust, and transparency to the respective individuals. It is also known as enterprise blockchain.


  • Due to its smaller size, the rate of transactions is faster
  • Comparatively more scalable as only a few nodes are approved to verify transactions
  • Increased level of privacy
  • Highly efficient and consumes comparatively less energy


  • Not fully decentralized
  • Risk of manipulation increases as there are a limited number of nodes
  • Trust issues arise as the centralized entity makes the final call

Use Cases: 

  • To manage the supply chain of an organization
  • Used to manage assets

Hybrid Blockchain

As the name implies, a hybrid blockchain is a combination of private as well as public blockchain networks. This type of blockchain is used by organizations that want to enjoy the features of both networks.

It enables organizations to set up a private, permission-based system along with a public, permissionless system.

Transactions happening in a hybrid blockchain are kept private but can be verified by granting access using smart contracts.


  • Highly secure as it prevents hackers from executing a 51 percent attack on the network
  • Better scalability
  • Offers better privacy along with communication with a third party
  • Transactions are inexpensive and fast.


  • Lack of transparency as data can be hidden
  • Upgrading is a challenge
  • Lack of incentive for participation in the network

Use Cases:

  • Good for the healthcare industry, real estate, etc.
  • Ideal for the financial sector

Consortium Blockchain

A consortium blockchain is also called a federated blockchain. It is a permissioned blockchain managed by a group of organizations rather than a single entity or organization. In this type of blockchain, some operations are made public and some are kept private.

The consensus protocol is managed by nodes that are predetermined. It consists of a validator node to validate, initiate and receive transactions.

In brief, they provide all the features of a permissioned blockchain network, without one entity having the power.


  • More efficient
  • Are more secure and provide better scalability
  • Provides high transaction speed due to a limited number of nodes
  • Offers access control


  • Lack of transparency in some cases
  • Risk of vulnerability
  • Risk of regulation and censorship
  • Comparatively less anonymous

Use Cases:

  • Can be used to share research data
  • Can be used by banks to manage transactions
  • To track food

Public Blockchain vs Private Blockchain

What Are The Different Types Of Blockchain?

So now you are familiar with various types of blockchain networks along with their pros and cons. It is up to you to choose anyone that will serve your purpose better.

If you are an organization then it is a good idea to go for a private blockchain network or hybrid blockchain network. But if you want more transparency and decentralization then you can try a public blockchain network.

Mark Davis
Mark Davis
Mark Davis, blockchain and crypto content writer, experienced in creating informative and engaging content. Background in finance, economics, and tech. Aim to be accurate, objective, and thorough. Capable of writing in various styles, and simplifying complex topics for different audiences.

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