difference understanding crypto

Understanding the different types of blockchain technology

Ever since Satoshi Nakamoto implemented the first blockchain in Bitcoin as a public ledger in 2009, blockchain technology has continued evolving for the past decades. 

Its future in financial and inter-agency transactions was further explored by central banks and business organizations, signalling the start of various blockchain projects such as the Blockchain 2.0 that gave birth to the different types of blockchain technology. 

Each blockchain has its own share of advantages and uses, as well as its weaknesses. Here are the various types of blockchain technology you should know and the purpose they serve:

Public blockchain

A public blockchain is considered to be the first type of blockchain. Since it is a permissionless and non-restrictive ledger system, any person with an internet connection can gain access to the network, become a user and start validating blocks. Moreover, this type of blockchain launched the Bitcoin protocol and spread the use of distributed ledger technology (DLT).

The most common use of public blockchain is the exchanging and mining of cryptocurrencies such as Bitcoin, Ethereum and Litecoin. It can also be used in elections to implement transparency for the voters and the candidates alike. 

Public blockchains are ideal for organizations as well which aim to build trust among their members like NGOs and other agencies of the public sector. 


One of the most significant advantages of using public blockchain is its immutability. Meaning to say, no user has the right or power to tamper with the network under any circumstances. If someone attempts to meddle with the blocks such as double-spending, the system will recognize it as an attack and reject the transaction.

In addition, since public blockchain is independent, it will still run even if an organization closes down for as long as there are computers connected to it.


Even though public blockchain has several benefits to organizations, it also has its shortcomings. One example is that its transaction speed can be slow with a processing time that ranges from a few minutes to hours. 

When it comes to Bitcoin, it can only handle seven transactions in 10 minutes compared to VISA’s average of 24,000 transactions per second. This is because of the complexity of solving the mathematical equations required in mining cryptocurrency. 

Moreover, public blockchain also suffers from a lack of scalability. This means that the more users join, the slower the network will become. 

Private blockchain

Also known as an enterprise blockchain, a private blockchain is a permissioned blockchain that works within a restrictive system and is governed by a single entity. Although it uses a decentralized network and peer-to-peer connections like public blockchains, it is only operated on a small network. So, if you are not an authorized participant, you won’t have the access to join and validate blocks. 

When using this platform, a huge amount of trust between the users must be implemented for the private blockchain to work well. Moreover, this type of blockchain offers proper regulations and rules that other platforms cannot offer. 

As a result, it makes a private blockchain highly favourable for private companies. It can be used for supply chain management where organizations can manage the flow of goods and services confidentially. Aside from that, its most common use is to track and verify asset ownership as well as internal voting.


Private blockchains are known for their speed and efficiency. This is because only a few nodes have access to the network and have the authority to validate transactions, leading to a faster processing time. 

Secondly, users can take advantage of the full privacy that you can’t find in public blockchain platforms. It is especially important for private enterprises that handle sensitive information that should not be leaked or revealed to the public. The company has the power to set accessibility, authorizations and permission levels, improving the overall confidentiality.


One of the disadvantages that private blockchains face is the controversy that it is not a true blockchain. It goes against the philosophy of what a blockchain is, which focuses on decentralization. 

This platform also offers less security because there is only a small number of nodes in the system. Once a few nodes behave erratically, it can compromise the consensus method which can put the entire network at risk. 

Consortium blockchain

A consortium blockchain is also known as a Federated blockchain used by organizations that want to use the features of both public and private blockchains. It is considered to be semi-decentralized and has a controlled number of users, yet it works across multiple organizations. 

In a nutshell, it is a permissioned platform just like a private blockchain. However, the difference is that in private blockchains, there is a centralized entity governing the entire network. On the other hand, consortium blockchains have different organizations with the right to make calls on the platform.

So, it ensures that no organization is involved in illicit transactions or activities. This is why this platform is mostly used by banks, research institutions and supply chains. The most popular companies that utilize this platform are Energy Web Foundation and IBM Food Trust.


In a consortium blockchain, there is a lack of scalability issues since there is only a controlled user group, allowing for speedy network outputs. It also offers lower transaction costs because everything is regulated, making it an ideal choice for businesses aiming for affordable pricing.


Although consortium blockchains are secure, the entire system can still be in danger once a node is breached. Moreover, it is less transparent and less anonymous when compared to other kinds of blockchain technology.

Hybrid blockchain

Just like a consortium blockchain, a hybrid blockchain is best defined as the combination of public and private blockchains. 

It is favoured by organizations or businesses that want to establish a permission-centred network together with a public blockchain. They can grant permission to anyone who wishes to access the system, and what information will be available to the public. In short, hybrid blockchains are highly customizable.

Once a user joins a hybrid network, they are granted complete access to the blockchain. Your identity will also remain confidential unless you start a transaction with another user. 

Hybrid blockchains are mostly used by real estate companies, retail enterprises and financial services. This platform allows them to maintain confidentiality while showing important information to the public such as listings.


Since a hybrid blockchain works within a closed ecosystem, cybercriminals can’t execute an attack against the network, protecting an organization’s sensitive information from being breached or leaked. 

Also, hybrid blockchains offer privacy while still communicating with the public. Companies can customize their blockchain in a way that protects their privacy while getting in touch with their associates.


One of the disadvantages of this type of blockchain is that it doesn’t offer incentives to users participating in the network. Moreover, a hybrid blockchain falls short on transparency since certain information is shielded and cannot be disclosed.

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