4 Types of Blockchain Compared

‘Blockchain’ is the buzzword in the IT industry. Everyone is talking about it, and rightfully so. It has revolutionised the way we think about data storage, security, and transparency. Since its inception in 2009, blockchain has evolved beyond cryptocurrency. Today, various kinds of blockchains cater to different needs. Depending on the use case, they are divided into public, private, hybrid, and consortium blockchains. In this blog, we will explore the four types of blockchains. 

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1. Public Blockchain 

It is one of the most popular types of blockchains, which was the first blockchain to be introduced to the public. A public blockchain, as the name suggests, is available to everyone. This means that anyone can access the network, become a node, and mine cryptocurrency. It embodies the essence of blockchain, i.e., decentralisation. The network is distributed in a peer-to-peer manner, putting everyone in an authority position. Let us look at the features of public blockchain in detail. 

Features of Public Blockchain

Several features signify this blockchain. They are:

• Decentralisation
• Transparency 
• Security
• Permissionless

Advantages of Public Blockchain

What made public blockchains popular was their vast range of advantages. They are:

1. Trustworthy: Utilising consensus mechanisms such as Proof of Work or Proof of Stake, validates all transactions. Therefore, it becomes virtually impossible to conduct fraudulent transactions. This ensures trustworthiness in the network. 
2. Immutable: Data is treated delicately in this type of blockchain. This is because, once a block is added to the blockchain, not even Satoshi Nakamoto can change it. Therefore, you know data is valid when you find it on the blockchain. 
3. Decentralisation: This feature allows the blockchain to be safe and secure. More nodes ensure that one system failure won't affect the entire blockchain network. Thus, this feature facilitates security. 

Disadvantages of Public Blockchain

Every technology faces challenges, and public blockchains are no exception. With all the advantages it offers, it is not free from drawbacks. 

1. Slow: One of its greatest features, decentralisation, causes slower transaction speed. Since a large number of nodes participate in a public blockchain, TPS (Transactions Per Second) increases tremendously. 
2. Carbon Footprint: Adding blocks to a blockchain requires a significant amount of energy (eg: Bitcoin mining), leaving a massive carbon footprint. As the threat of climate change looms over us, mining on a public blockchain is widely criticised. 
3. Scalability: High energy consumption and the presence of a large number of nodes prevent it from being scalable and therefore hinder its widespread adoption. 

2. Private Blockchain

This type of blockchain, also known as permissioned blockchain, allows only specific authorised people to access the blockchain. Although powered by a peer-to-peer network, a centralised authority oversees a private blockchain. Unlike public blockchains, every node is not equal and cannot perform whatever function it wants to. The general public cannot access this blockchain as the source code is a closed one. 

Key features of Private Blockchain

Certain factors differentiate it from a public blockchain. Let us discuss them below:

• Centralisation
• Permissioned 
• Efficient 

Advantages of Public Blockchain

They uphold several advantages over public blockchains. Organisations, too, prefer to use a private blockchain to manage their operations.

1. Speed: As private blockchains do not have a large number of nodes, TPS is extremely fast. Moreover, they require less computing power to operate and validate.
2. Privacy: In our extremely public digital world, maintaining privacy is a real challenge. With a public blockchain, organisations can still leverage blockchain technologies while keeping their information private. 
3. Scalable: Smaller network size ensures less computational power. This ensures that the blockchain is scalable and that widespread adoption is possible. 

Disadvantages of Private Blockchain

While it offers speed and privacy, there are certain disadvantages to using a private blockchain. 

1. Centralised: One of the most talked about disadvantages is its centralised feature. Blockchain is based on the foundation that it offers a decentralised network. However, a central authority controls all its operations. 
2. Not secure: Centralised authority increases the tendency of getting hacked. 
3. Trust: There is limited trust among nodes. So, there is a chance of data integrity getting hampered. 

Also Read:- Nonce in Blockchain: What is it and How it Works

3. Hybrid Blockchain 

The third type of blockchain, hybrid, combines the best of both worlds, private and public. They allow organisations to maintain privacy while being accessible to the public. A central authority manages it. Transactions and records are not made public, however, validation is open to the public. Data is encrypted to ensure privacy. Industries such as banking and finance prefer this blockchain. 

Features of Hybrid Blockchain

Let's look at the features that make it a convergence of public and private blockchains. 

• Flexible
• Interoperability
• Scalable 

Advantages of Hybrid Blockchain

Hybrid networks offer several benefits over both private and public blockchains. 

1. Security: Combining data integrity with public access makes it secure for organisations to handle sensitive data.
2. Transparent: Unlike private networks, which offer little to no transparency, hybrid blockchain takes a unique approach to fostering transparent communication. So, while data is encrypted, public nodes can validate blocks. 
3. Closed ecosystem: Cybercrimes, such as 51% of attacks, are less likely to plague hybrid networks due to their closed nature. 

Disadvantages of Hybrid Blockchain

Some disadvantages of hybrid blockchain types include:

1. Complex: Since it combines both types of blockchains, setting it up is complex and time-consuming.
2. Governance: It requires sincere governance to function properly. Moreover, since it is centralised, it does not uphold blockchain's basic features. 

4. Consortium Blockchain

In a consortium blockchain, multiple entities govern the blockchain's operations. This is ideal for blockchain applications where more than two organisations collaborate to maintain a blockchain. Examples include supply chain management and the healthcare industry. 

Features of Consortium Blockchain

Let’s discuss what features set it apart from other types of blockchain.

• Partial Decentralisation
• Permissioned
• Shared Control
• Efficient 

Advantages of Consortium Blockchain 

Opting for this blockchain offers several advantages. They are:

1. Private: Blocks added in this blockchain are not accessible to the public, therefore making it secure and private. Only nodes involved in the blockchain can access them. 
2. Balanced Decentralisation: Every node part of this blockchain is equal and shares equal authority over its governance. 
3. Scalable: As it is not accessible to the public, the number of nodes is reduced. This makes it extremely scalable. 

Disadvantages of Consortium Blockchain

Just like every other type of blockchain, it also has several drawbacks. 

1. Compromise: A single validator node governs the whole blockchain. As a result, the chance of the blockchain being compromised by unauthorised access is significantly high. 
2. Transparency issue: It is less transparent than public blockchains. 
3. Complex: The involvement of multiple entities makes it difficult to develop and set up. 

Comparison 

Let us visualise the comparison in a tabular form to better understand the differences among different blockchain types:

Conclusion 

Public, private, consortium, and hybrid cater to different use cases of blockchain in different industries. As blockchain continues to evolve as a technology, different types of blockchain follow through. Understanding them will help you choose the ideal blockchain for your needs. Are you interested in applications of blockchain? With Amity University Online, you can master blockchain technology from the comfort of your home. Enroll in the two-year online MCA in Blockchain and enter your dream industry today!