Different Types of Blockchain Technology: What are the Differences?

Blockchain technology is rapidly advancing. The whole world is being disrupted by experimental projects that enhance the digital experience for customers and create a totally new way of life for professionals in so many industries. And it is normal – with so many types of blockchain technology, it is very easy to get lost.

But what is blockchain and which are the different types of blockchain technology? Let’s find out in this article.

What is blockchain?


Before we explain blockchain technology to you, let’s first see what experts say about it.

A blockchain is a collection of digital records, also known as blocks, which are linked with each other through cryptography. Every block contains a cryptographic hash linked to the prior block, including its timestamp and transaction information, that can be illustrated as a Merkle tree. No external forces are able to make changes to the blockchain. As such, it is a decentralized entity. Essentially, it is a representation of financial democracy.

Imagine blockchain as a network between users. Like a LAN network. But instead of people, there are transactions that are connected.  It ensures data integrity and provides a secure foundation for digital interactions. By stringing together records of transactions into blocks, blockchain technology creates a way to accurately track online activity without the need for a bank or other central authority. At least this is blockchain explained in the books.

Blockchain is like a “hive” that keeps track of transactions across many computers so that no one cannot alter the record retroactively without the change of all consequent blocks and the collusion of the network. They act as a database for transactions and have revolutionized industries such as banking, crowdfunding, supply chain management, and more. Blockchain enables smart contract functionalities that replace traditional contracts and ease many burdens for many industries, like law and medicine.

Recommended for you: Why Blockchain is Important for Software Developers?

What makes blockchain so prominent?


There are many things that make blockchain platforms so popular these days.

Fast speeds

Point 1

Blockchain technology is here to get rid of the middleman. With blockchain, you can send payments straight from one person to another, without needing an intermediary. That’s why it’s great for business owners and entrepreneurs who want to send large chunks of data in no time.

Small fees

Point 2

The fee organization of blockchain technology is the saving grace of a transaction. Unlike banking institutions, the money transfer platforms that use blockchain only charge a fixed fee. Blockchain platforms have much lower fees than banks, making them an attractive alternative for sending small amounts.


Point 3

Blockchains are live 24/7. This means that you’ll always be able to use the network, no matter if it’s early in the morning or late at night. This is why blockchains can often provide better service than traditional databases with limited operating hours for their users.

Blockchain technology types


While many people associate blockchain with the most popular cryptocurrency – Bitcoin, and the cryptocurrency exchanges, there is way more than this. Remember when we told you earlier – blockchain is in many industries.

Public network


A public blockchain is an openly distributed ledger that can track transactions between two partakers effectively and in a checkable, irreversible way. This lets the participants verify and trust the integrity of their transactions, without intermediaries, centralized systems, or permission.

Public blockchains are open and decentralized – anyone can set up a node and use the system, which means that no one person can take advantage of the platform. This creates total transparency for all of the platform’s users and participants without any requirement for third-party validation. Along with other components, this makes a genuinely secure system – one in which everyone wins!

Ethereum, Bitcoin, Litecoin, and many others the most popular cryptocurrencies are public blockchains. These are often associated with crypto-economics and cryptocurrency portfolio investments – a mixture between finances and usability.

One critical detail here is to differentiate Proof of Work and Proof of Stake – the two main consensus mechanisms.

Proof of Work (PoW)

PoW is the decentralized computational method allowing for open access, transparent consensus, and faster transaction speeds while avoiding the pitfalls of centralized data stores. Every time a node participates in a network action (like mining or validating), it receives a small financial reward for doing so. Since every transaction on the network is recorded by every single node, trust is established among peers. This process is open source and permissionless.

But the Proof of Work mechanism has one key disadvantage – it consumes a lot, and by a lot – we mean A LOT of energy. Every single transaction is slower, as it has to verify all other transactions. At some point, it can even shut down the whole electricity network.

Recently, scalability has been a topic with technology. It tends to be clunky and slow to process transactions, which leads to longer point of sales times and less customer satisfaction.

Proof of Stake (PoS)

Proof of Stake is a method of protecting a blockchain network and earning rewards by using a cryptocurrency client who participates in the secure validation or becomes a validator. It cannot be claimed, but you can help secure a blockchain and earn a reward by using a cryptocurrency client who participates in PoS validating or becomes a Validator.

One significant disadvantage of this mechanism is that the security is weakened.

You may like: Blockchain in Mobile Application Market (Infographic).


Private network


A private blockchain is a “stretched” database that upholds a continuously growing list of data records, called blocks, protected from tampering and modification. Each block consists of a timestamp and a link to the last block. A blockchain is in most cases managed by a p2p network keeping things to a protocol for validating each block.

On a basic level, blockchain technology enables complete transparency by providing a record of all transactions that have taken place on the network. But, if you’re thinking about blocking confidential data and keeping your transactions protected from outside view, a private blockchain is the way to go in that particular case.

This blockchain is private – it’s someone else’s blockchain, not yours. You are not a node on the network and do not have control over it. The network is centralized, and an outside party controls it. You cannot hold any cryptocurrencies on a private network because you do not have access to the private keys necessary to gain access to the cryptocurrency.

However, in internal voting and supply chain management, private blockchains turn out to be a significant success. They limit external access and ensure faster transaction times which might be crucial in certain situations.

Consortium network


Consortium blockchains are intended to be more decentralized than private blockchains, but they can be intricate to establish and maintain because they require the cooperation of several different organizations. The consortium blockchains are intended to be more secure than private blockchains because they’re run by a group of organizations rather than one entity. However, this benefit is balanced by the added difficulty of coordinating between multiple businesses.

For companies that already have the technology in place, consortium blockchain could be a relatively easy way to improve their supply chain. Smaller businesses that lack the infrastructure or resources could find the technology daunting to integrate into their operations.

A single party supervises the consortium blockchain network, but we need to mention it is shielded against a single authority. From executing their own rules, making alterations in the balance amounts, and terminating the faulty transactions, the supervisor can do several tasks as soon as all member approves.

A consortium blockchain network looks more like a public ledger, rather than a private one. It allows better scalability which is always a problem for big public projects. The consortium network is efficient and well-governed.

But not everything is perfect – in fact, it isn’t transparent, which is the first red light. The sense of anonymity is kind of lost. That is another alarming signal. But what makes this picture even worse is that regulations can change the direction of the blockchain, and it might become significant trouble.

Permissioned network


Permissioned blockchains are perfect for businesses that want to utilize and benefit from blockchain technology without sharing confidential data and sensitive information with the whole world. Because a permissioned blockchain is (kind of) private, there are no transaction fees associated with the blockchain, saving users a lot of money. It’s also beneficial to businesses because they don’t have to bother about competitors, hackers stealing their valuable proprietary information, or other businesses taking advantage of their data and business model.

But permissioned networks are also public which means there are a ton of pleasing things about them. The rise of the permissioned blockchain has given way to increased transparency in business operations. In some cases, however, this has also made it easier for users to misrepresent information. Blockchain technology is still in its early stages, and many businesses are taking a wait-and-see approach. As developers gain a better understanding of how identity verification and encryption work on the blockchain, a new consensus about them will emerge.

What is the best type of blockchain technology?


An often-asked question is – which is the best one? The truth is, we cannot say it for sure. Every blockchain type is different and it depends on your business to decide which one might be better, and which one – not to such an extent.

You may also like: Google is Working on its own Blockchain Technology.



Blockchain technology can potentially change many lives – whether it’s used to move budgets and digital goods without a middleman or securely share information with employees and partners. But blockchain isn’t as straightforward as some may think: your company needs to pick the right type of blockchain technology before you begin integrating it into your business processes.

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Published By: Souvik Banerjee

Souvik BanerjeeWeb developer and SEO specialist with 20+ years of experience in open-source web development, digital marketing, and search engine optimization. He is also the moderator of this blog "RS Web Solutions (RSWEBSOLS)".