Four types of Blockchain | Idea Usher
Types of blockchain

Before moving on to the types of Blockchain, let us first understand what blockchain is;

A blockchain is a ledger of records, called blocks, which are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp and transaction data. A blockchain is resistant to data tampering by design.

It is “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.” A blockchain is generally administered as a distributed ledger by a peer-to-peer network that follows a protocol for inter-node communication and verifying new blocks. The data in any particular block cannot be changed retrospectively without affecting all following blocks, which necessitates network majority cooperation.

Types of blockchain 

The four types of blockchains are as follows;

1. Private Blockchain 

A private blockchain is the most restricted type of blockchain access. The use of this type of blockchain is controlled by an organization, organization chart, or individual person. This type of blockchain gives users an overall view only, and they are unable to see any transaction details.

Private blockchains are typically used by large corporations (such as banks) that handle sensitive data and do not want their competitors to view the information stored in their ledgers. Information stored on private blockchains cannot be viewed without permission from an authorized person within the company.

Private blockchains are much like intranets in the early days of the Internet. They were often used internally (within companies) to provide secure access to information that was not made available via the World Wide Web until years later.

Strengths of Private Blockchain 

  1. Faster time to market – you can use a private blockchain for internal development and integration
  2. Rapid prototyping – because it is easy to implement, test and deploy, the rapid prototyping cycle is significantly reduced
  3. No need to worry about consensus – as it is not necessary, developers can focus on building decentralized apps without wasting time
  4. Replicated updates – as updates are registered to relevant database servers simultaneously across the blockchain network, companies no longer have to worry about discrepancies

Weaknesses of a private blockchain

A private blockchain is a centralized network in most cases so; 

  1. no transaction records in public
  2. Not transparent and open to the public
  3. High risk of collusion among network miners in a private blockchain.
  4. Lack of trust among the participants

Also read: 51 Essential Blockchain Terms You Should Know

2. Public Blockchain

Public blockchains are permissionless, meaning that anyone with an internet connection can join the network as a node, for example, Bitcoin and Ethereum. Public blockchains are open-source projects, meaning that anyone can submit code changes or additions to their codebase. There is no single person or group in charge of the main code repository or protocol rules. 

A public blockchain may operate under a centralized group of developers according to its white paper, but ultimately it is controlled by the consensus of its users.

Public blockchains are the most popular form of blockchain due to their availability, ease of use, and open-source nature. Public blockchains are often used for cryptocurrencies based on their decentralized nature. 

These cryptocurrencies are usually created through a process called “mining“, where nodes on the network are rewarded new cryptocurrencies for solving complex mathematical equations. However, not all public blockchains are used for cryptocurrencies; some public chains exist to provide alternative transactional functionality to existing financial services, such as smart contracts or programmable money like Ethereum.

Public blockchains are also referred to as “permissionless” because there is no access control mechanism within the protocol itself. Anyone with an internet connection can download and run a node on a public blockchain, which enables them to interact with other nodes

Strengths of Public Blockchain 

  1. The public blockchain is more scalable 
  2. The public blockchain has stricter checkpoints than the private one
  3. Public blockchains are more stable than the private ones
  4. Data is more trustable
  5. Capabilities are more than Blockchain technology
  6. Blockchain can be widely applied

Weaknesses of Public Blockchain 

  1. There is no privacy in a public blockchain
  2. You have to pay to use a public blockchain
  3. Public blockchains are not permission-less
  4. The network speed of a public blockchain is slow

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3. Consortium Blockchain 

In a consortium blockchain network, there are several “nodes” or “members” in the network. Those members set up a peer-to-peer network, which is used to validate transactions and ensure that records of transactions are accurate and permanent. The blockchain also reduces the need for third-party intermediaries since the parties involved in a transaction can verify each other directly through their computers.

The consortium blockchain is an effective solution when a number of related businesses want to work together to keep a shared ledger, but they don’t necessarily trust each other. For example, when multiple companies in a supply chain have to track goods from beginning to end, it may be more efficient to create a shared blockchain instead of setting up independent blockchains for each business involved in the process.

Strengths of Consortium blockchain 

    1. Governance issues are resolved within the consortium
    2. Faster growth of blockchain technology
    3. Lower transaction cost
    4. Incentive alignment with all participants
    5. Flexibility in executing smart contracts
    6. Privacy with powerful permissioned consensus
    7. Resilience to cyber-attacks

Weaknesses of Consortium blockchain 

  1. Decentralized verification methods lead to greater processing and bandwidth overhead while also increasing latency.
  2. Confidentiality is often compromised.
  3. Neither transparency nor privacy guarantees the ability to track the ledger back to its origin and detect fraud and errors
  4. The number of members and their number of ledgers and nodes (a replication factor) needs to be taken into consideration when setting up a consortium blockchain
  5. Secure inter-ledger communication is challenging to achieve with current protocols

4. Hybrid Blockchain 

A hybrid blockchain can be defined as a combination of permissioned and permissionless blockchains. Hybrid blockchains are primarily open to known entities but still offer some censorship resistance. Also, they permit some degree of anonymity by design.

A hybrid blockchain is a blockchain wherein the consensus mechanism is not proof of work or proof of stake. Currently, most blockchains are based on proof of work (PoW) or proof of stake (PoS), and there are multiple other types of consensus mechanisms. These include:

  • Delegated Proof of Stake (DPoS), 
  • Practical Byzantine Fault Tolerance (PBFT), and others.

A hybrid blockchain can be seen as a combination of two different blockchains: one blockchain with PoW and another blockchain with PoS. The first blockchain is there to protect the network from 51% of attacks, while the second blockchain serves as a governance layer for protocol upgrades and decisions. This way, the miners do not hold too much power over the network’s future direction.

There are different types of Blockchain technology, each with different benefits. When creating a new Blockchain project, it important to decide which type to use.

Strengths of Hybrid Blockchain 

  1. Offers high transaction throughput
  2. Enables asset digitization
  3. Offers fiat currency payments
  4. Permits private transactions
  5. Integrated Features of Both Blockchains
  6. Integration with Software as a Service

Weaknesses of Hybrid Blockchain

  1. Hybrid Blockchain should provide additional features to the original
  2. Smart Contracts should be simple enough for daily interaction between individuals
  3. Hybrids need to offer good anonymity
  4. Make it user-friendly


The blockchain is one of the marvels of modern computing. It has the potential to disrupt many industries and change the way we do business forever. 

Developers need to create standards on which blockchains can communicate with each other and non-blockchain services. And businesses will need to decide whether they want to invest in blockchain technology or stick with tried-and-true approaches.

The challenge for businesses is deciding when and where blockchain technology is best suited to their needs. Because blockchain offers significant advantages over conventional databases, it’s best suited for applications that require:

High security: Blockchain data is encrypted and therefore protected against tampering and revision.

Some degree of anonymity: For many people, there’s value in keeping their identities private – whether they’re protecting themselves from government intrusions or simply keeping their personal lives separate from their business transactions.

A high degree of trust between users: If every member of a network is constantly worried about being cheated, no one will participate or the system will collapse.

In many cases, blockchain isn’t a better option than existing technologies. A centralized database might be sufficient for simple identification tasks.

Where to find the best Blockchain Developers??

Blockchain technology is more than just a buzzword. It has the potential to revolutionize many of the Internet’s most popular services and change how we exchange money, but it’s still in its infancy. 

Let Idea Usher design, develop, and implement your blockchain solution. At Idea Usher, we deliver development that is exactly how you want it. Let us take away your pain by developing your idea into a profitable product. Whether you’re looking for an MVP or need to overhaul an existing product, we’ll design something that will win your users’ hearts and minds. Think you don’t understand blockchain? Experience isn’t required because we make sure to thoroughly educate clients about how blockchain works before building their projects. At Idea Usher, we can guide you through the best practices for implementing blockchain into your business. Contact us at [email protected] for a free consultation call today!


Here are some frequently asked questions on the types of blockchain;

Q. What are some excellent use cases for blockchain that are revenue-generating?

Some of the best use-case examples for blockchain are:

  • FutureFi (Finance, cryptocurrency)
  • BURSTIQ (Healthcare)
  • FILAMENT (Internet Of Things)
  • Ligero (Data, Fintech)

Q. What is the fundamental difference between blockchain and cryptocurrency?

Blockchain is essentially the underlying tech that supports cryptocurrencies.

Q. What are the benefits of using a distributed ledger over a traditional database?

In distributed ledgers, the entries take place without any third-party involvement. After those records are written into the distributed ledgers, they cannot be altered. Hence, until the ledgers are distributed, it is not possible to tamper with those records.

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