Types of Blockchains

In this article, we learn about the three different types of blockchains that come as a result of categorization based on access limits.

Table of contents.

  1. Introduction.
  2. Different Types of Blockchains.
  3. Summary.


Bitcoin code is open source, this means we can create a new form of digital currency just by modifying the original source code. Since its release in 2009, this code has been extended to release about 300 other different cryptocurrencies.

In addition to this bitcoin supports Scripts for conditional transfer of value. Bitcoin uses a scripting system for transactions. A script is a simple, stack-based programming language processed from left to right. It is turing-incomplete and has no loops. This is intentional to avoid infinite execution among other security issues.

A script is a list of instructions recorded with each transaction describing how the next person that wants to spend the transferred bitcoins can gain access to them. Ethereum has extended Bitcoin's scripting feature into a code execution framework referred to as smart contracts which we shall discuss in subsequent articles.

A smart contract provides code execution capabilities, this allows us to embed business logic into a blockchain.
Code execution capabilities lead to the categorizing blockchains into three major categories;

  • A blockchain dealing only with cryptocurrency, an example is Bitcoin.
  • A blockchain supporting cryptocurrency and business logic e.g Etherium.
  • A blockchain that only supports business logic e.g hyperledger.

Different Types of Blockchains.

Content stored on a blockchain, including participant activities on a blockchain, can be managed depending on how the blockchain is configured and how it fulfills its intended purpose for a business.

Code execution also raises issues such as blockchain access. This leads us to further categorize blockchains into three more categories based on access limits.

The different types of Blockchain are:

  • Public Blockchains
  • Private Blockchains
  • Permissioned Blockchains
  • Hybrid Blockchains

All four are implementations of a similar technology but in different ways based on access to the said blockchain.

Public Blockchains.

Public blockchains allow anyone to join and participate in the network activities. Bitcoin is a public blockchain, anyone is allowed to join and leave as they please.
Transactions on the Bitcoin blockchain are public and are broadcasted for all to see, it is also possible to trace transactions and the participants involved in the transaction, this however is tasking since participants have a level of anonymity. To view recent bitcoin transactions this link is useful.

Anyone can read/write or audit the blockchain, this gives bitcoin a self-governing nature that cannot be corrupted by a single centralized entity. The network is run by the people. Bitcoin operates on incentives. This is whereby miners are rewarded for taking on additional responsibilities(mining, validating transactions, validating blocks, etc) to maintain the network. This means more people are able to join and this makes the network better and better in all aspects such as immutability, security, and decentralization, just to mention a few.

Pros involved with public blockchain are;

  • Transparency - all transactions and blocks are broadcasted.
  • Public blockchains are resistant to censorships - due to the decentralized nature, no single entity can control what can and cannot happen.
  • They eliminate a single point of failure - if a single node fails, the network will still thrive.
  • Public blockchains provide access to everyone.

Some cons involved with public blockchains include;

  • Public blockchains need a lot of power to maintain their large distributed immutable ledger.
  • They lack anonymity and privacy since all transactions are public although one can also maintain anonymity.

Examples of public blockchains include Bitcoin, Etherium, and Cardano among others.

Private Blockchains.

Here access is only limited to a few blockchain participants within a particular organization. This means simpler block creation, transaction processing, validation, and consensus due to the small size of the network.
These are mainly used by large organizations who want to only allow a select few access to the blockchain. Additional participants join the network only after verification by an overseer of the blockchain.

A single entity in a private blockchain decides the consensus protocol, verifies miners, and sets rewards for mining blocks, he/she can also manage participants by adding or deleting them from the chain. This entity also performs network activities such as creating, reading, updating, and deleting entries in the private ledger.

Some pros of private blockchains include;

  • They are secure - blockchains are built to be secure in that mutation in a single block makes it invalid.
  • Scalable, this is because they are limited to a select few. They are faster and have higher throughput, also they host a limited number of participants.

Cons of private blockchains include;

  • They are centralized - they are owned and operated by a central entity or organization.
  • They lack immutability - the organization can decide to change the ledger for their own reasons, which may be valid or not.

Examples of private blockchains include, Morpheus Network, Patientory, and Corda among others.

Permissioned Blockchains.

These types of blockchains are also referred to as consortium blockchains. They are meant for collaborating parties so they can be able to transact on the blockchain.
This results in easier governance and accountability. For example a consortium of health care, startup funding, and government.
This type of blockchain carries all permissions of the public blockchain for users with permission to collaborate and transact.
These blockchains are built so they can grant special permissions to their participants. They are mostly preferred for businesses since they allow the business to restrict participants while configuring and controlling the activities of its users.

Some pros of permissioned blockchains include;

  • They are better in terms of performance since they host a limited number of permissioned participants.
  • They have varying levels of decentralization.
  • Easier governance since they have a single source of authority, no consensus needed.

Some cons include;

  • Security is inconsistent
  • Need for external storage since they are not as decentralized.

Examples of permissioned blockchains include, the energy web chain, ripple, among others.

Hybrid Blockchains.

This is a blockchain that uses the best parts of public and private blockchains. That is, it offers freedom and controlled access at the same time.
These blockchains are not public meaning not everyone can participate in them but offer some of the features of public blockchains such as transparency, security, and integrity.

Its architecture can be changed from time to time. In addition to this, members of the blockchain can decide who participates and what transactions are made public. Transactions in such a blockchain may not be public but can still be verified when need be. Also, the transactions once recorded remain immutable. In summary, the administrators of such s blockchain only control if transactions are made public or remain private, they cannot change them.

Some pros of hybrid blockchains include;

  • Such a blockchain is resistant to a 51% attack because not everyone can participate in blockchain activities.
  • They uphold privacy and at the same time open to the public.
  • They work in a closed ecosystem meaning that organizations don't have to worry about leaked confidential information while still using blockchain technology.
  • Transactions on such a blockchain have less transaction fees because the network is not as congested as a public one.
  • A hybrid blockchain network is faster because there are a limited number of participants.

Some cons include;

  • Hybrid blockchains lack transparency due to the fact that they get to choose the transactions they make public.
  • They are not open to everyone, only a few are chosen to participate in such blockchains.

An example of a hybrid blockchain is the IBM food trust.

The following image summarizes the different types of blockchains;


A public blockchain allows anyone to join and leave as needed, participants are also able to participate in the core activities of the blockchain.
A private blockchain allows a selected few to participate in the blockchain, here, the operator has the right to override, edit, create and delete entities on the network.

A permissioned blockchain has aspects of both public and private blockchains. They have the capability of allocating specific permissions to specific users on the network.

Private and permissioned blockchains are implemented since they allow for controlled access to the blockchain. This results in many diverse business models built on top of a blockchain.