• About Us
  • Careers
  • Contact
No Result
View All Result
Friday, May 9, 2025
DeFi Planet
  • News
    • People
    • Business
    • Crime
    • Regulation
    • Crypto
    • CBDC
  • Markets
    • Bitcoin
    • Ethereum
    • Stablecoins
    • Altcoins
    • Crypto ETFs
    • Memecoins
  • Policy
  • Articles
    • Press Releases
    • Opinion
    • Explainers
    • Guest Post
    • Sponsored
  • Directory
    • Companies
    • People
    • Products
    • Wallets
  • Multimedia
    • Videos
    • Podcasts
  • Learn
    • DeFi Basics
    • Tutorials
    • Reviews
    • Blockchain Fundamentals
  • Research
    • Case Studies
  • Explore
    • DeFi
    • Crypto Gaming
    • NFT
    • DAO
    • Metaverses
  • Jobs
  • Markets Pro
    • DeFi Planet Pro
    • Spend Crypto
    • Swap Crypto
    • Coin Prices
    • Crypto Exchanges
    • Crypto Analyzer
  • News
    • People
    • Business
    • Crime
    • Regulation
    • Crypto
    • CBDC
  • Markets
    • Bitcoin
    • Ethereum
    • Stablecoins
    • Altcoins
    • Crypto ETFs
    • Memecoins
  • Policy
  • Articles
    • Press Releases
    • Opinion
    • Explainers
    • Guest Post
    • Sponsored
  • Directory
    • Companies
    • People
    • Products
    • Wallets
  • Multimedia
    • Videos
    • Podcasts
  • Learn
    • DeFi Basics
    • Tutorials
    • Reviews
    • Blockchain Fundamentals
  • Research
    • Case Studies
  • Explore
    • DeFi
    • Crypto Gaming
    • NFT
    • DAO
    • Metaverses
  • Jobs
  • Markets Pro
    • DeFi Planet Pro
    • Spend Crypto
    • Swap Crypto
    • Coin Prices
    • Crypto Exchanges
    • Crypto Analyzer
No Result
View All Result
DeFi Planet
No Result
View All Result

Types of Blockchain: Pros, Limitations

2 August 2021
in Articles, Blockchain Fundamentals, Learn
Reading Time: 7 mins read
115 6
Home Articles

Contents

Toggle
  • 1. Private Blockchain
    • Pros of the Private Blockchain
    • Limitations of Private Blockchain
  • 2. Public Blockchain
    • Pros of public blockchains
    • Limitations of Public Blockchains
  • 3. Hybrid Blockchain
  • 4. Consortium Blockchain
  • In conclusion…

Last updated on May 31st, 2023 at 07:28 pm

Blockchain operates similarly to the internet, with interconnected computers called nodes that store and independently verify shared data. It is simply a distributed ledger of records that cannot be altered across computers in a network.

Blockchain has three key attributes: immutability, decentralization, and transparency. Data stored on the blockchain is permanent and cannot be altered; thus, it is excellent at safeguarding data from malicious manipulation. Additionally, blockchain networks verify data without relying on a central authority, and every computer in the network can verify and access the data.

These distinct characteristics of blockchain contribute to its security, making it a tamper-proof technology that can be used across various industries. However, despite its diverse applications, the full potential of blockchain technology remains untapped. To fully grasp its capabilities, it is important to understand the different types of blockchain networks and their real-world applications.

This article explores various blockchain networks, their unique attributes, and their practical applications. By examining different network compositions, we gain insight into how blockchain can revolutionize industries and foster innovation.

1. Private Blockchain

A private blockchain is a permissioned blockchain that operates in a closed network. This simply means only selected nodes have access to the network.

This kind of blockchain is used within organizations or enterprises that act as central authorities. Permission to access and use the blockchain can only be granted by the organization that owns or controls it.

Here’s a brief example

If BANK A operates a private blockchain network to store data like customers’ information and transaction records, only authorized employees of this bank will be granted access to the network.

No ‘outsider’ has access to the blockchain and anyone who needs access must get permission from the network administrator. The number of users is usually limited. The bank may decide to give access to employees of a single branch or all other branches in the city.

Private blockchains can be used by electoral bodies, health institutions, supply management firms, and more. Examples are the Hyperledger project and Corda.

Pros of the Private Blockchain

Despite working in a restricted and permissioned manner, private blockchains have a number of advantages (aside from privacy).

Speed: Because a limited number of nodes are connected to private blockchain networks, operations occur at greater speed. The speed also applies to the addition of data on new blocks.

Private blockchains can facilitate between 1,000 to 100,000 transactions per second (TPS) typically.

Easily scalable: Private blockchains are scalable. In this context, scalability means determining the size of your blockchain, based on your needs. Let’s assume you kick-start your enterprise with 30 nodes on your private blockchain. If expansion or reduction occurs, and you need to increase or decrease the number of nodes, this can be done without much hassle.

Limitations of Private Blockchain

Below are some reasons why private blockchains may be unfavourable.

Limited trust: A private blockchain, especially one operated between multiple organizations, has limited users. This means the owner of the blockchain will grant only ‘trusted’ workers access to the network. After all, no organization wants confidential information flying around.

Less Security: Because private blockchains have a limited number of nodes, they are prone to security breaches. Assuming a rogue node gains access to the central network, accessing all other computers connected to the network becomes a walkover. This makes hacking and ransomware easy.

It is centralized: Private blockchains are centralized because they’re controlled by a sole administrator. No user can access it without permission from the owner of the network.  Therefore, they do not possess the many advantages that have made public permissionless blockchains (such as Bitcoin, Ethereum, and so on) popular.

Just like our example with BANK A above, private blockchains need a central Identity and Access Management (IAM) system that has all the monitoring and administrative rights to function optimally.

2. Public Blockchain

A public blockchain is a non-restrictive, permissionless distributed ledger system that can be accessed by any node connected to the network.

Unlike a private blockchain, every computer that is connected to the public blockchain is authorized to access present and past records, verify transactions, and mine new blocks.

At present, public blockchains are mainly used for the exchange of cryptocurrency and crypto-based assets.  Transaction validators are rewarded through a mechanism that is intrinsically linked to the consensus mechanism of a specific blockchain, for instance, ‘proof of work’ mining (and associated mining rewards) is the approach taken by the Bitcoin blockchain.  Due to the large number of participants on the network, public permissionless blockchains tend to be very secure since malicious attacks are less likely to be successful. 

Public blockchains accommodate an unlimited number of users. Notable examples are the Bitcoin and Ethereum blockchains.

Pros of public blockchains

Public blockchains operate an unrestricted open ledger. They can be accessed by all nodes connected to the network.

Here are some of the positives  of public blockchains:

  • Trusted: With public blockchains, users don’t need to know the identity behind a connected node. Rather, transactions are shared as an open ledger across the ‘unlimited’ computers connected to the network. Each node has the complete ledger of transactions at all times.
  • More security: Public blockchains can be accessed by many nodes around the globe. The decentralized nature of the public blockchains makes it difficult for hackers to manipulate the whole network.

Assume that 100,000 nodes are connected to a public blockchain, a hacker can successfully hack the network only if he manipulates the data on 51% (that’s 51,000) of the connected nodes. This is quite an expensive and daunting mission.

With every node participating in the verification process, each added block is legitimate, making public blockchains more secure than private ones.

  • Transparency: Public blockchains make a copy of the ledger and distribute it across all connected nodes. This makes the network transparent. 

All connected nodes get to see when the ledger is updated. Thus, no nodes can hide or show manipulated transactions.

Limitations of Public Blockchains

  • Less speed: Because an unlimited number of nodes are connected to a given network, the number of transactions per second is usually lower compared to private blockchains. This explains why the Ethereum blockchain processes around 15 TPS and the Bitcoin process a maximum of 7.
  • Less Scalable: Because the processing speed is slow, it is difficult to drastically increase the number of transactions on a network, thus the scalability problem. However, to overcome this problem, various solutions are being developed.  For instance, a number of alternative public permissionless blockchains are being developed which use ‘proof of stake’ consensus mechanisms.  Proof of stake system aims to reduce the computational burden required in a proof of work system, thereby increasing the speed of the network.  Examples include Cardano, Polkadot, and Algorand.  

These examples provide entirely new blockchain networks in the hope of transactions migrating to them from existing ones, or of capturing new use cases for blockchain technology.  However, there are other solutions being created for existing blockchains to enable them to scale better. These so-called “Layer 2” solutions create additional protocols that are built on top of existing blockchain platforms. Examples include Bitcoin’s Lightning Network and the Ethereum Layer 2 solution, Polygon (formerly known as Matic).

  • High Energy Consumption and Emission: Mining Bitcoin is energy-consuming. Due to increased competition amongst miners and the involvement of corporate mining, the process requires specialized computers and hardware components to solve complex mathematical algorithms.

This poses a threat economically to the viability of mining in the long run; and in any case, the computational burden of bitcoin really affects its scalability.  It may also potentially pose an environmental threat depending on the source of miners’ electricity supply at any point in time.  It is worth noting, however, that the economic incentive to source increasingly cheaper sources of electricity has led miners towards environmentally friendly sources such as geothermal, solar, etc. 

3. Hybrid Blockchain

Hybrid blockchains are flexible networks that combine the features of both private and public blockchains. It has a permissioned and permissionless system in the same network.

Here, users determine who can access the different categories of stored data. In the hybrid network, not all data goes to the public blockchain. Confidential data is restricted to the private network.

An advantage of this type of blockchain is transactions that need to be verified privately are done in the private network. However, the transaction can also be made available to the public space for verification.

This gives more security and transparency. Dragonchain is an example of a hybrid blockchain.

4. Consortium Blockchain

A consortium blockchain is managed by multiple organizations. It can be viewed as a partially decentralized network.

More than one organization can act as a core node.  For instance, a bank and an insurance company can run as a consortium on the same blockchain network. And both organizations can exchange information with each other. 

Quorum, R3, and Corda are examples of consortium blockchain.

In conclusion…

  • Although private and public blockchains are the two main types of blockchain, there are variations  such as consortium and hybrid blockchains.  A private blockchain is a restrictive or permissioned blockchain that operates in a closed network.  Whereas a public blockchain is a non-restrictive, permissionless system that can be accessed by any node connected to the network.

Both the private and public blockchains have distinctive features, however, the main differences relate to security, scalability, transparency, and energy consumption.

Follow DeFi Planet on Twitter and LinkedIn.

Don't miss out!

Subscribe To Our Newsletter

Receive top education news, lesson ideas, teaching tips and more!
Invalid email address
Give it a try. You can unsubscribe at any time.
Thanks for subscribing!
Tags: blockchainBlockchainnews
Share70Tweet44Share12
Previous Post

Introduction to Blockchain Technology: Overview, Working Principles & Properties

Next Post

Bitcoin mining giant, Core Scientific ready for Nasdaq listing following $4.3B SPAC merger

Lucy Adegbe

Lucy Adegbe

Samuel Adeneye

Samuel Adeneye

Sam is a Web3 product manager with a passion for cutting-edge technology and innovation. When I'm not busy with product management, I enjoy relaxing by playing or watching football.

Related Posts

Press Releases

New Purpose-Built Blockchain T-Rex Raises $17 Million to Transform Attention Layer in Web3

9 May 2025
Press Releases

Flipster Makes Esports Debut as Official Crypto Exchange Partner of TALON’s Dota 2 Team, Powering a New Era of Fan Engagement

8 May 2025
Press Releases

Bybit Bounces Back: Kaiko Validates Fast Liquidity Recovery Post-$1.5B Hack

7 May 2025
Press Releases

ProMeet Unveils the Promeeters Program to Boost Influencer Impact and Long-Term Earnings

6 May 2025

Featured Posts

source: buddyxtheme.com

Best AI-Powered Tools for Managing Crypto Portfolios

byOlayinka Sodiq
26 January 2025
0

Is Mass Adoption of Cryptocurrency Achievable, or Will It Remain a Niche Technology?

byOlajumoke Oyaleke
19 January 2025
0

source: casinosblockchain.io

Does Cryptocurrency Encourage a Gambling Mentality in Investments?

byOlajumoke Oyaleke
18 January 2025
0

Bitcoin and Wealth Inequality Who Truly Benefits from Perpetual Price Increases

Bitcoin and Wealth Inequality: Who Truly Benefits from Perpetual Price Increases?

byOlayinka Sodiqand1 others
5 January 2025
0

Exploring the Role of AI in Enhancing DeFi Security

Exploring the Role of AI in Enhancing DeFi Security

byOlayinka Sodiq
1 October 2024
0

Read More

Chain of Thoughts

DAOs and the Coordination of Human Endeavour

DAOs and The Coordination of Human Endeavour

byOlu Omoyele
27 April 2025
0

...

Should DeFi Be Regulated?

Should DeFi Be Regulated?

byOlu Omoyele
27 March 2025
0

...

Is Tokenization All That It’s Cracked Up To Be?

Is Tokenization All That It’s Cracked Up To Be?

byOlu Omoyele
26 February 2025
0

...

We Must Balance Innovation and Regulation for Crypto to Really Thrive

We Must Balance Innovation and Regulation for Crypto to Really Thrive

byOlu Omoyele
29 January 2025
0

...

Markets Update

Your Weekend Crypto Roundup | April 2025 (Week 4)

2 weeks ago

Ukraine Proposes 18% Tax on Earnings, What Does It Mean for the Broader Crypto Market?

2 weeks ago

Bitcoin’s Wild Week: Market Volatility, Key Levels, and Predictions. Can It Smash the $100K Resistance in 2025?

2 weeks ago

Why Conor McGregor’s REAL Token Failed

2 weeks ago

Trump’s Tariff Talk Tanked the Crypto Market — So Why Did Suspending Them Spark a Rally?

2 weeks ago

March’s Crypto Winners and Losers – What to Expect in April

3 weeks ago
Read More

Events

Next Block Expo
Next Block Expo
19 May 25
Warszawa

Spotlight

All about Ethereum
All about Algorand
All about Bitcoin
All about Gora

Press Releases

New Purpose-Built Blockchain T-Rex Raises $17 Million to Transform Attention Layer in Web3

bychainwire
9 May 2025
0

Flipster Makes Esports Debut as Official Crypto Exchange Partner of TALON’s Dota 2 Team, Powering a New Era of Fan Engagement

bychainwire
8 May 2025
0

Bybit Bounces Back: Kaiko Validates Fast Liquidity Recovery Post-$1.5B Hack

bychainwire
7 May 2025
0

ProMeet Unveils the Promeeters Program to Boost Influencer Impact and Long-Term Earnings

bychainwire
6 May 2025
0

Casper 2.0 Goes Live on Mainnet, Positioning Casper Network for the Real-World Asset Era

bychainwire
6 May 2025
0

Read More

ADVERTISING

ABOUT

TEAM

CAREERS

CONTACT

TERMS & CONDITIONS

PRIVACY POLICY

© Copyright 2025 DeFi Planet

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In

Add New Playlist

No Result
View All Result
  • News
    • People
    • Business
    • Crime
    • Regulation
    • Crypto
    • CBDC
  • Markets
    • Bitcoin
    • Ethereum
    • Stablecoins
    • Altcoins
    • Crypto ETFs
    • Memecoins
  • Policy
  • Articles
    • Press Releases
    • Opinion
    • Explainers
    • Guest Post
    • Sponsored
  • Directory
    • Companies
    • People
    • Products
    • Wallets
  • Multimedia
    • Videos
    • Podcasts
  • Learn
    • DeFi Basics
    • Tutorials
    • Reviews
    • Blockchain Fundamentals
  • Research
    • Case Studies
  • Explore
    • DeFi
    • Crypto Gaming
    • NFT
    • DAO
    • Metaverses
  • Jobs
  • Markets Pro
    • DeFi Planet Pro
    • Spend Crypto
    • Swap Crypto
    • Coin Prices
    • Crypto Exchanges
    • Crypto Analyzer

© Copyright 2024 DeFi Planet   |   Terms & Conditions   |   Privacy Policy

-
00:00
00:00

Queue

Update Required Flash plugin
-
00:00
00:00