What You Need to Know About the Four Main Types of Blockchain Networks


Chances are, you’ve been hearing a lot about Bitcoin and are familiar with the term “blockchain”. But if you’ve been thinking about using a blockchain network for your business or personal needs, you might be surprised to hear that there are four different types of blockchain networks, all with their own assets and uses. Here you’ll learn about these different types and discover which one could be the right fit for your needs.


  1. Private Blockchains

Private blockchains are smaller-scale networks that work inside of restrictive environments. They can also be controlled by a single entity, and are usually operated on small, privately-owned networks within organizations. Not everyone can join a private blockchain, although they do operate similarly to public blockchains (which you’ll learn about next) in that they use decentralization. The big pros that come with private blockchains are all about the amount of control the organization has over its private blockchain.

You have the power to set all permission levels and oversee security and can prevent other parties from accessing your data. Because this blockchain is privately owned, it’s pretty limited in size, so it’ll almost always be faster than a public network. Disadvantages might include less security via tools like a session border controller since users cannot audit their own source code. Private blockchains could work well for companies that want to use blockchain without potentially leaking information to competitors. Any top-secret, highly sensitive operations can be done a lot more secretively through a private blockchain network.


  1. Public Networks

Public networks are where Bitcoin originated and are held as the blueprint of blockchain technology. Anyone with access to the internet can gain access to a public network, access past and present records, and mine for bitcoin through the blockchain. The big advantage that comes with a public network is that users don’t have to worry if the organization that created the network shuts down business. The network will stay up and running as long as there are still users connected to it.

A disadvantage might appear if the users do not commit to rigorous safety standards, potentially opening the network to security threats. Public networks can also be quite slow, depending on the number of users, and if bad actors take up a majority of the userspace they could potentially use it for their own purposes. These networks are most often used as spaces for mining and trading Bitcoin, or for organizations that want to build a reputation of total transparency.


  1. Consortium Networks

This type of blockchain is also known as a “federated blockchain” and has features of both public and private blockchains. It’s a decentralized network in which multiple members of an organization can operate with limited access, eliminating the danger that comes with a private network where a single entity controls the entire network. The benefit of this is that consortium blockchains tend to be a lot more secure and efficient than other networks. But, since there are more restrictions placed on the network, it can hinder its own operations with its built-in limitations. It’s best used in situations where payments or transactions are taking place, such as in banks and supply chains.


  1. Hybrid Networks

Hybrid networks, as you might have guessed from the name, also combine features of private and public blockchains. With a hybrid network, organizations have the option to set up a private network alongside a public one. The private network requires permissions to be accessed, so it generally stores any sensitive information that the organization wants limited access to, while the public network can hold data that’s open to anyone.

This is a good option for organizations like real estate companies, who often need a level of transparency to the public, but still, have plenty of information they want to be kept private. Blockchain networks provide organizations with tons of options for how they want their networks to serve them, and hopefully, you now understand what your options are.

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