When we think of blockchain technology, we usually picture a global network, open to everyone, just like Bitcoin. But the truth is, this “distributed ledger” concept isn’t a one-size-fits-all solution.
Not all blockchains are created the same way or for the same purpose. This guide will simply explain the four main types of blockchain networks, the difference between public and private blockchains, and what each type is used for.
Why Are There Different Types of Blockchain?
The simple answer lies in the level of control and permission. The fundamental question when designing any blockchain is: Who is allowed to participate? And who is allowed to see the data?
Think of the difference between a “public Google Doc” that anyone on the internet can see and comment on, versus a “private Google Doc” that no one can see or edit unless you invite them.
Both are documents on the internet, but the level of control and permission is completely different. Based on this principle, blockchains are divided into four main types.
What Are the Types of Blockchain Networks?
Blockchain networks are divided into four main types. Each type is designed for a specific purpose. They are: Public Blockchain, Private Blockchain, Consortium Blockchain, and Hybrid Blockchain. Let’s start by explaining them one by one.
What is a Public Blockchain?
The public blockchain is the most well-known type. It’s a blockchain network that is completely open and doesn’t require any permission to join.
Anyone with a computer and an internet connection can join the network and participate in validating transactions.
The best analogy for it is the internet or a public square: no single person owns or controls it, and everyone can see what’s happening.
This type is the one that achieves the concept of decentralization in its purest form, as there is no single authority controlling the network.
To secure it, these networks rely on complex consensus mechanisms like Proof-of-Work (PoW), which Bitcoin uses, or Proof-of-Stake (PoS), used by Ethereum.
What is a Private Blockchain?
A private blockchain is the complete opposite of a public one. It’s a closed network that requires an invitation and permission to join.
It is fully controlled by a single entity, like a company or an organization, which decides who can join, who can see the records, and who has the right to validate transactions. Think of it as a company’s internal network (intranet).
Because all participants are known and trusted, these networks feature very high speed and complete privacy, as they don’t need complex or costly consensus mechanisms to secure them.
What is a Consortium Blockchain?
This type is a middle ground, often called a “semi-private” or “federated” blockchain. Instead of being controlled by one entity (like a private chain) or no one (like a public chain), this type is governed by a pre-selected group of organizations.
Imagine a group of 5 major banks deciding to create a shared blockchain network to process transfers between them.
The network isn’t open to the public, but it’s also not owned by a single bank; it’s managed by all five banks together.
This design combines a degree of decentralization (distributed among several members) with high efficiency (because the participants are trusted).
What is a Hybrid Blockchain?
As the name suggests, this is a smart mix that combines elements of both public and private blockchains.
These networks are not fully open or fully closed. Instead, they allow companies to decide which data remains private and which data can be made public.
Imagine a hospital using a private blockchain to store sensitive patient data (ensuring privacy).
At the same time, when it needs to prove that a record hasn’t been altered on a specific date, it records a digital “stamp” (a hash) of that record on a public blockchain (like Ethereum) to leverage its security and immutability.
This way, you get high flexibility, combining the privacy of a private blockchain with the trust and security of a public one.
How Are These Types Used in the Real World?
The choice of network type directly determines its use cases:
- Public Blockchain: This is the foundation for open cryptocurrencies (like Bitcoin) and applications aimed at serving everyone. It’s also the environment where Decentralized Finance (DeFi) thrives and public Smart Contracts run, especially on the Ethereum network.
- Private Blockchain: Ideal for internal company use. For example, a global shipping company might use it to track its products from the factory to the consumer (supply chains) with complete confidentiality, or a bank might use it to settle internal transactions between departments.
- Hybrid Blockchain: Used extensively in sectors like real estate (to make property ownership public while keeping contract details private) or in managing medical records (giving the patient full control over who sees their data).
- Consortium Blockchain: This is the best choice for collaboration between institutions, such as for international money transfers between a group of banks, validating certificates between a group of universities, or sharing research data among research centers.
In Conclusion
What we can conclude is that blockchain isn’t a single technology with fixed rules; it’s an idea that can be adapted.
The core idea is to record data securely so it cannot be manipulated, but the way this idea is applied differs.
Sometimes, the goal is complete transparency for everyone to see, which is where public blockchains shine.
Other times, the goal is speed and total privacy within a closed group, which is what private and hybrid networks offer.
