https://www.techtarget.com/searchcio/feature/What-are-the-4-different-types-of-blockchain-technology
The four main types of blockchain networks are public blockchains, private blockchains, hybrid blockchains and consortium blockchains.
A blockchain is a type of distributed ledger technology (DLT) that securely records and verifies every transaction across multiple connected computers, or nodes, all at once. Because the data on a blockchain is meant to be immutable, it is difficult -- but not impossible -- to alter or tamper with the recorded data without the other nodes noticing.
Diverse use cases exist for blockchains, including sharing healthcare record-keeping, improving workflow processes using AI and decentralizing financial services. However, there are downsides to using blockchains, such as regulatory concerns and the tech's massive energy consumption and e-waste.
As blockchain use continues to evolve, more companies will accept stablecoins for everyday transactions, governments may use blockchains for digital securities and organizations will aim to improve the governance of blockchain networks.
Here's what to know about the different types of blockchain technology.
A public blockchain is where cryptocurrencies like bitcoin originated and helped to popularize DLT. It removes the problems of a central authority, including less security and transparency. DLT doesn't store information in any one place, instead distributing it across a peer-to-peer network.
Its decentralized nature requires some method for verifying the authenticity of data. That method is a consensus algorithm whereby participants in the blockchain reach agreement on the current state of the ledger. Proof of work and proof of stake are two common consensus methods.
A public blockchain is nonrestrictive and permissionless, and anyone with internet access can sign on to a blockchain platform to become an authorized node. This user can access current and past records and help conduct mining activities, which are the complex computations used to verify transactions and add them to the ledger.
No valid record or transaction can be changed on the network without the participants' knowledge. Anyone can verify the transactions, find bugs or propose changes because the source code is usually open source.
The most common use cases for public blockchains are mining and exchanging cryptocurrencies. They can also be used to create a fixed record with an auditable chain of custody, such as electronic notarization of affidavits, public records of property ownership and digital assets. One example of this is non-fungible tokens (NFTs).
This type of blockchain is ideal for organizations that are built on transparency and trust, such as social support groups or nongovernmental organizations. Because of the network's public nature, private businesses likely want to steer clear.
A private blockchain works in a restrictive environment, like a closed network or when it is under the control of a single entity. While it operates like a public blockchain network in the sense that it uses peer-to-peer connections and decentralization, this type of blockchain is on a much smaller scale and can be customized to suit a company's needs.
Instead of just anyone being able to join and provide computing power, private blockchains are typically operated on a small network inside an organization.
The speed of private blockchains makes them ideal for cases where the blockchain needs to be cryptographically secure but the controlling entity doesn't want the information to be accessed by the public, such as personal data or financial records.
The healthcare sector might use a private blockchain to exchange confidential patient information among collaborating providers, improving a patient's quality of care. A private blockchain for supply chain management (SCM) creates a secure online record that tracks every transaction and movement of goods in real time, improving transparency and efficiency.
Other use cases for private blockchains include asset ownership and internal voting.
A Hybrid blockchain combines elements of both private and public blockchains. It lets organizations set up a private, permission-based system alongside a public, permissionless system, enabling them to control who can access specific data stored in the blockchain and what data is opened up publicly. When a user joins a hybrid blockchain, they have full access to the network. The user's identity is protected from other users unless they engage in a transaction. Then, their identity is revealed to the other party.
Typically, transactions and records in a hybrid blockchain are not made public but can be verified when needed, such as allowing access through a smart contract. Confidential information is kept inside the network but is still verifiable. Even though a private entity might own the hybrid blockchain, it cannot alter transactions.
Highly regulated markets, such as financial services, can see benefits from using hybrid blockchains. Real estate companies can use a hybrid blockchain to run systems privately but show certain information, such as listings, to the public.
The retail industry can streamline existing processes with hybrid blockchains. Hybrid blockchains can also potentially improve existing healthcare practices, such as safeguarding data, improving medical records management and monitoring outbreaks via digital tracking.
Blockchains can be categorized into two main types based on access and permission levels: permissioned or private blockchains and permissionless or public blockchains.
Permissioned blockchains allow access only to approved nodes. This structure enables greater control over who can join the network and what data they can access. Permissioned blockchains are also known as private or enterprise blockchains.
Permissionless blockchains are open for anyone to join, participate in and interact with freely. The participating nodes validate transactions and contribute to the network's overall functionality without the need for additional approval. Permissionless blockchains are also known as public blockchains.
A consortium blockchain, also known as a federated blockchain, is like a hybrid blockchain in that it has private and public blockchain features. But it's different in that multiple organizational members collaborate on a decentralized network.
Essentially, a consortium blockchain is a private blockchain with limited access to a particular group, eliminating the risks that come with a single entity controlling the network on a private blockchain. In a consortium blockchain, the consensus procedures are controlled by preset nodes. It has a validator node that initiates, receives and validates transactions. Member nodes can receive or initiate transactions.
Banking and payments are two uses for this type of blockchain. For example, different banks can form a consortium and decide which nodes validate the transactions.
Research organizations can create a similar model. Consortium blockchains are also ideal for SCM, particularly food and medicine applications.
Blockchain technology can be a part of an enterprise IT strategy. Each type of blockchain has potential applications that can improve trust and transparency and create a better record of transactions.
Understanding the distinctions between the types of blockchains is crucial to determine which model fits specific applications and use cases, balancing the tradeoffs among control, security and accessibility.
For example, when a company's primary concern is privacy, opting for a private blockchain might be a likely choice. Investing in a hybrid blockchain is an option if an organization wants to share important data but protect confidential information. A consortium blockchain is ideal if the participants want to easily share data with other nodes that depend on the data.
Editor's note: This article was updated in March 2025 to improve the reader experience.
Christine Campbell is a freelance writer specializing in business and B2B technology.
Guilliean Pacheco, MFA, is associate site editor for Informa TechTarget's SearchCIO, SearchERP and Sustainability & ESG sites.
31 Mar 2025