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Different Types of Blockchains

Different Types of Blockchains

Different Types of Blockchains

Blockchain technology has evolved significantly since its inception, leading to the development of various types of blockchains. Each type serves different purposes and offers unique features suitable for diverse applications. This guide will explore the primary types of blockchains—public, private, consortium, hybrid, and Byzantine Fault Tolerant (BFT) blockchains like Stellar—along with practical examples to illustrate their real-world applications.

Public Blockchains


Public blockchains are decentralized and open to anyone who wants to participate. They are permissionless, meaning that anyone can join the network, validate transactions, and participate in the consensus process. Public blockchains are known for their transparency and security.

  • Decentralization: No single entity controls the network.
  • Transparency: All transactions are visible to anyone on the network.
  • Security: High levels of security due to the extensive number of nodes.
Practical Example: Bitcoin

Bitcoin is the most well-known public blockchain. It allows anyone to participate in the network by mining, transacting, or maintaining a node. The Bitcoin blockchain’s transparency ensures that all transactions are publicly accessible, enhancing trust and security. For instance, if Alice sends 1 Bitcoin to Bob, this transaction is visible to the entire network and is recorded immutably on the blockchain.

Private Blockchains


Private blockchains are restricted and permission-based. Only selected participants have access to the network, making them more controlled and centralized than public blockchains. They are typically used within organizations where privacy and control are paramount.

  • Controlled Access: Only authorized participants can join the network.
  • Enhanced Privacy: Transactions are visible only to network participants.
  • Efficiency: Higher efficiency and faster transaction processing due to fewer nodes.
Practical Example: Hyperledger Fabric

Hyperledger Fabric is a private blockchain framework designed for enterprise use. It allows businesses to create a private network with specific permissions for each participant. For example, a supply chain company might use Hyperledger Fabric to track the movement of goods, ensuring that only authorized parties can view and verify transactions.

Consortium Blockchains


Consortium blockchains are a hybrid model managed by a group of organizations rather than a single entity. They offer partial decentralization and are suitable for collaborative projects where multiple organizations need to share data and maintain a shared ledger.

  • Shared Control: Managed by a group of pre-approved participants.
  • Partial Decentralization: More decentralized than private blockchains but less so than public blockchains.
  • Efficiency: Higher efficiency and faster transactions due to controlled participation.
Practical Example: R3 Corda

R3 Corda is a consortium blockchain designed for the financial industry. It allows multiple financial institutions to share data and conduct transactions on a shared ledger. For instance, banks in a consortium can use Corda to streamline trade finance processes, reducing paperwork and increasing transaction speed.

Hybrid Blockchains


Hybrid blockchains combine elements of both public and private blockchains. They offer the flexibility to control who can access specific data while maintaining some degree of transparency. Hybrid blockchains are suitable for scenarios where privacy and transparency are both required.

  • Controlled Access: Certain data is kept private while other data is public.
  • Customizable: Organizations can customize the level of transparency and control.
  • Interoperability: Can interact with both public and private blockchains.
Practical Example: Dragonchain

Dragonchain is a hybrid blockchain platform that allows businesses to control data privacy while leveraging the security of public blockchains. For example, a company can use Dragonchain to keep sensitive business data private while publishing proof of transactions to a public blockchain like Ethereum, ensuring transparency and security for stakeholders.

Byzantine Fault Tolerant (BFT) Blockchains: Stellar


Byzantine Fault Tolerant (BFT) blockchains use consensus mechanisms designed to handle faults and adversarial conditions effectively. Stellar is an example of a BFT blockchain, using the Stellar Consensus Protocol (SCP) to achieve consensus in a decentralized and fault-tolerant manner.

  • Fast Transactions: Stellar can process transactions quickly, with confirmation times of a few seconds.
  • Low Fees: Transaction costs on the Stellar network are minimal, making it ideal for microtransactions and remittances.
  • Consensus Mechanism: Uses the Stellar Consensus Protocol (SCP), which ensures high fault tolerance and efficiency in reaching consensus.
Practical Example: DAMREV

DAMREV uses the Stellar blockchain for asset tokenization due to its efficiency and scalability. By leveraging Stellar, DAMREV can tokenize real-world assets such as real estate, precious metals, and commodities, making these assets more accessible and liquid. For instance, DAMREV’s tokenization of real estate allows investors to buy and sell fractional ownership of properties seamlessly, with all transactions recorded transparently and immutably on the Stellar blockchain.


Understanding the different types of blockchains is crucial for selecting the right technology for specific applications. Public blockchains offer unparalleled transparency and security, making them ideal for open and trustless environments. Private blockchains provide enhanced privacy and control, suitable for internal business operations. Consortium blockchains facilitate collaboration among multiple organizations, combining efficiency with shared control. Hybrid blockchains offer the best of both worlds, allowing for customizable transparency and control. Byzantine Fault Tolerant blockchains like Stellar provide robust, efficient, and fault-tolerant solutions for fast and low-cost transactions.

Duane Herholdt

Duane Herholdt