Types of Blockchain: Insights, Pros & Cons

Blockchain Technology brought about a disruptive innovation in money through the introduction of digital currencies. This disruptive technology has been deployed in sectors like banking & finance, health care, gambling, insurance, logistics , business management, etc.

Decentralization is the main feature of blockchain. But did you know there are different types of blockchain and as such blockchain may also behave in a centralized manner? Before we go into full details, let’s take a look at what blockchain really is…

What is Blockchain?

Blockchain is a distributed ledger used to record transactions and track assets in a network through the use of cryptography. So blockchain is like a book of keeping records but in a digital form, where transactions are recorded as they occur and these transactions can be viewed by anyone but cannot not be altered or modified after it has been validated on the network.

N/B: Blockchain is decentralized, transparent, anonymous and immutable.

Now that you have an understanding of what blockchain is. There are three types of blockchain, namely; Public blockchain, Private blockchain and Hybrid blockchain. Let’s take a look at each of them.

Types of blockchain

Public Blockchainwhat is a public blockchain?

This is a type of blockchain that can be accessed by anyone and it is maintained by everyone within the network known as node operators or miners. A good example of a public blockchain is bitcoin. Public blockchains are permissionless, transparent, decentralized meaning no one has total control over the network and there are secure in that the data can’t be changed once validated on the blockchain this makes it immutable.

Satoshi Nakamoto’s Vision

Public Blockchain was the model Satoshi Nakamoto proposed through the creation of the bitcoin blockchain in 2009. In a public blockchain there is equal rights to view, modify and approve consent to a transaction while the identity of transacting parties is never disclosed to the visible network participants. In a public blockchain every participant in the network remains anonymous.

Why Public Blockchain?

  1. Decentralization: Public blockchains are controlled by no central organization. It is accessible to anyone within the network and also maintained by every network participant(node).
  2. Transparency: Public Blockchains are transparent meaning every transaction that occurs within the network can be seen by every single entity through the blockchain explorer. e.g Bitcoin transactions can be viewed by anyone within the network but cannot be modified once validated on the blockchain.
  3. Anonymity: every individual and entity in the public blockchain network is anonymous. Transactions within the network remains anonymous as there are no data of the sender or receiver, neither are there data of node operators.
  4. Immutability: Public Blockchain transactions cannot be changed under any circumstances after a transaction has been confirmed on the blockchain. This helps prevent the problem of double spending which was one of the reasons Satoshi Nakamoto created bitcoin to solve as stated in the bitcoin whitepaper.

Private Blockchain

A Private blockchain is developed and maintained by a private organization that has absolute control over the blockchain including the mining process and consensus algorithm. Private blockchains are a major contrast to the core values of why blockchain was created which are decentralization, immutability and anonymity.what is a private blockchain?

Here the private organization determines who can join the network, mine the cryptocurrency and be a node participant. Despite all these centralized features a private blockchain still operates based on peer to peer transactions. Ripple(XRP) is an example of a private blockchain.Example of a private blockchain ripple

More Insights

Private blockchains are permissioned blockchains. Typically, private blockchains have administrators who can control permissions of adding or modifying data on the blockchain. The creation of private blockchains paved the way for corporations to enter the blockchain industry. IBM Food Trust is an example of a private blockchain owned by a big corporation.private blockchain IBM food trust by ibm

Why private blockchain?

  1. Less expensive and time consuming: It’s quite expensive and time consuming to maintain a public blockchain network. The process of validating transactions in a public blockchain is called mining. This process is carried out using expensive computers and hardwares that solve algorithms to find new blocks. This process of mining is expensive, time consuming and not just that, the amount of electricity consumed by these computers are quite high and has an overall impact on the environment. Private Blockchains were created by corporations as a solution to this major problem by having premined coins and reducing the number of participants managing the network thereby reaching a consensus quite easily.
  2. Speed: Private blockchains are much faster than public blockchains because the network is managed by a handful of trusted nodes whose motives are clearly for the benefit of the network. Such trusted nodes are known by the private organization and permission to access the network is granted by them.
  3. Compliance: Participants in a private blockchain are not anonymous and as such the private organization is in possession of data of each node operator. The private organization that developed and maintains the blockchain is compliant to laws within the jurisdiction in which they operate. This plays a major role towards compliance to government laws and regulations for the blockchain industry at large.

Hybrid Blockchain

A Hybrid blockchain possesses characteristics of a public and private blockchain. In an hybrid blockchain set-up, transactions are broadcasted and verified on the public blockchain while the hash containing information is generated & stored on the private blockchain. Any changes or modifications to entries or transactions within the hybrid blockchain will be done in the private blockchain and will undergo a strict approval process, making it next to impossible for a single network participant to meddle with the transaction or entries.

A major benefit of the private blockchain in the hybrid blockchain set-up is it restricts the rights to view, modify and approve transactions to selected trusted members. An example of hybrid blockchain is Xinfin, an enterprise ready hybrid blockchain.xinfin hybrid blockchain

Why Hybrid Blockchain? 

Hybrid blockchains provides an enterprise-ready blockchain solution that is much better suited to highly regulated and compliant corporations as it enables them to have control over what data is kept private and what data can be shared on a public blockchain and accessible to everyone.

While Satoshi’s vision for blockchain was decentralization, government and corporations do not believe in decentralization. Decentralization takes away power from the center but with hybrid blockchains a consensus can be reached between decentralization and centralization. So big corporations looking to integrate blockchain technology can determine which information is to be made public and which would remain private.


In this article we have been able to outline the three types of blockchain with insights on their pros & cons. With blockchain garnering interests from corporations and governments it’s safe to say that hybrid blockchains are the ideal type of blockchain for them to integrate.

While removing centrallity was the reason behind the creation of blockchain, wide adoption of blockchain by governments and corporations can only be achieved by reaching a consensus between decentralization and centralization. That consensus is hybrid blockchain.

We would like to hear from you. Please comment with your questions, suggestions and contributions.

You can also follow us on Twitter and join our telegram group to stay updated.