Types of Blockchain: Which one is better?

#blockchain #typesofblockchain

Ridhi Khurana Feb 09 2021 · 4 min read
Share this


Blockchain, invented in 2008 by Satoshi Nakamoto is an open, immutable, distributed ledger that sequentially records transactions between two parties efficiently and in a verifiable and permanent way in real-time. Blockchain is an ongoing digital process consisting of individual blocks that store information, linked together in a particular order, from a series of related transactions. Without having a centralized authority or intermediaries, all of the parties involved can share a digital ledger through a computer network. By nature, a blockchain is immune to its data being changed. This is because the data in any given block cannot be retroactively altered once registered, without altering all subsequent blocks.


There are primarily four types of blockchain:


Public Blockchain

A non-restrictive, permission-less distributed ledger framework.  It is a genuinely decentralized network, and to authenticate transactions, it does not need a trusted central authority. As users, miners, developers, or community members, they allow everyone to participate. All transactions that take place on public blockchains are completely transparent, meaning that with read and write access permission, everyone can participate in this open-source blockchain. The most basic use of public blockchains is seen in mining and exchanging cryptocurrencies. Public blockchains are largely safe if the users strictly obey the rules and methods of security. Public blockchains all have a token linked to them that is usually designed to promote and reward network participants.

Advantages of public blockchain:

  • Open Read and Write
  • Immutability
  • Security and Transparency
  • Trustable
  • Decentralized platform
  • Anonymity
  • Quick and easy transactions
  • Disadvantages of Public Blockchain:

  • Lower rate of transaction per second (TPS)
  • Scalability Issues
  • High Energy Consumption
  • Traceability
  • Limited block size.

    Private Blockchain

    A private blockchain or permission blockchain is restrictive and operative only in a closed network. Private blockchains are commonly used by a company or organization where only selected participants are members of a blockchain network. In the hands of the controlling organization is the degree of protection, authorizations, permissions, accessibility. In order for the owner to decide what data can be accessed or prohibited, it is necessary to understand the users. The purpose why private blockchains are used by companies is to prevent anonymity. For companies who want to collaborate and exchange data, yet don't want their confidential business data accessible on a public blockchain, private blockchains are important.

    Organizations can restrict the users from accessing private data by identifying their identity. This prevents misuse of information. Private blockchains may have a token involved with the chain. For voting, supply chain management, digital identity, asset ownership, database management, auditing, etc., private blockchain networks are deployed.

    Advantages of Private blockchain:

  • Permissioned blockchain
  • Better Scalability
  • Better Consensus
  • Faster Speed
  • Scalability
  • Disadvantages of Private Blockchain:

  • Needs trust building
  • Lower Security
  • Centralization - they need a central Identity and Access Management (IAM) system for functioning properly as they are restricted.

    Consortium/ Federated Blockchain

    The consortium blockchain is a semi-decentralized type of blockchain in which a blockchain network is operated by more than one entity. In this kind of blockchain, more than one entity may function as a node and share information or do mining. Consortium blockchains, therefore, provide protection that is inherited from public blockchains. This collaborative model presents some of the best use cases for blockchain benefits.  Banks, government agencies, the supply chain, etc. usually use consortium blockchains.

    Advantages of Consortium blockchain:

  • Open-source development models
  • Shared resources
  • Security and privacy
  • Low transaction costs
  • Low energy consumption
  • Scalability
  • No criminal activity

    Hybrid Blockchain

    A hybrid blockchain is a mixture of the public and private blockchain, which ensures that it incorporates the privacy advantages of the public blockchain, which allows companies considerable flexibility to choose what information they want to make public and open and what information they want to keep private. A private network transaction of a hybrid blockchain is usually validated within that network.  But users can also publish it to be checked in the public blockchain. The public blockchains increase the hashing and provide more verification nodes. This strengthens the blockchain network's security and transparency.

    Advantages of Hybrid blockchain:

  • Works in a closed ecosystem
  • Private while still being able to communicate with the outer world
  • Low transaction cost
  • Flexible
  • Difference between types of blockchain


    "Which is the best blockchain platform? 'is largely subjective and relies entirely on an individual or a company's unique needs. It is important to base the selection of the correct blockchain technology for implementation on the respective business case and the possible benefits that one expects to achieve from implementing a blockchain.

    Read next