Over the past years, Blockchain technology has marked its significance across industries as it has amazing potential to revolutionize the way businesses process. That’s why businesses prefer this technology over anything else to streamline their working methods such as process automation, securing transactions, etc.
Considering global spending on Blockchain solutions, the blockchain market was valued at AED $19 billion in 2024. With time, the Blockchain technology market size is also expanding from 2017 to 2027.
As per the stats, the global Blockchain market was priced at AED 1.57 billion in 2018 and it is predicted to grow a hundred times more by reaching AED 163 billion by 2027.
With the increasing popularity of Blockchain technology, its revenue is also predicted to experience enormous growth in the coming years with an estimate of more than US$39 billion in size by the year 2025.
These skyrocketing market statistics have led industries toward this platform for making highly secured transactions and providing their customers with a safe & amazing experience.
From creating decentralized applications (dApps) to a wallet to smart contracts to crypto trading exchanges, businesses can use different Blockchain networks to obtain proficient Blockchain solutions. Java enterprise application development make it suitable for handling the complexities of blockchain networks where scalability is a critical requirement.
But before deciding on Blockchain technology or which Blockchain network they should, enterprises must know their specific purposes and how they solve a set of issues to use them appropriately. To fully grasp the potential and applications of this technology, enrolling in a blockchain training course can be highly beneficial.
We have come up with the below guide including details about different types of Blockchain networks, along with the comparison table of four main types of Blockchain networks that will help you to choose the appropriate network while getting Blockchain development services. Let’s have a glance-
Table of Contents
What is Blockchain Network?
A blockchain network is known as a distributed, decentralized, and immutable peer-to-peer digital ledger to record transactions and data from different computer nodes. Generally, Blockchain are created for specific purposes including users getting varied types of tasks or access.
The Blockchain, a ledger of records known as Blocks is connected using cryptography. Every block includes a cryptographic hash of the previous block, transaction data, and a timestamp. Blockchain also abolishes data supplication and increases security via data integrity.
In this, smart contracts are used to originate secure transactions that are transferred to every peer node in the network later and also unalterably taped on their copy of the ledger.
Blockchain is an underlying technology used for different cryptocurrencies such as Bitcoin, but it also has likely apps far beyond these currencies.
The entire Blockchain completely works on the principles of security, transparency, and consensus. The decentralized nature of blockchain ensures that no single entity can control the whole network leading to make it unalterable to censorship and manipulation.
What Are Different Types of Blockchain Networks?
There are multiple ways to create Blockchain solutions, but depending on the business use and requirements, it is essential to choose a suitable blockchain network. Every Blockchain is created specifically for a purpose and to address particular issues.
Check out the below different types of Blockchain networks including public, private, hybrid, and consortium-
- Public Blockchain
- Private Blockchain
- Hybrid Blockchain
- Consortium Blockchain
Public Blockchain
Among all types of Blockchains, Public blockchains are the most used types. These allow everyone to join the network and are fully decentralized. It has a transparent digital ledger that can be accessed by anyone without any restriction or permission.
When it comes to private vs public Blockchain, public blockchains facilitate users for open participation and equal merits to validate and authenticate transactions to the chain. Every user in the network keeps a copy of the entire Blockchain along with security and redundancy.
Public blockchains use consensus mechanisms such as Proof of Stake (PoS) or Proof of Work (PoW). In this, PoW depends on computational power for transaction validation, on the other hand, PoS uses the stake of users AKA cryptocurrency holdings.
Advantages:
- Having no central authority makes it unaffected by censorship and a single point of failure.
- High level of transparency as all transactions are visible publicly resulting in enhanced trust and accountability.
- The vast network of nodes provides high-level security and a robust consensus mechanism.
- Anyone is allowed to join the network leading to innovation and inclusivity.
- Users are incentivized to sustain and validate the Blockchain fostering network sustainability.
Disadvantages:
- Public blockchains may have high fees for transactions at the time of heavy network usage.
- The PoW consensus mechanism used in some public Blockchains such as Bitcoin requires high computational power and leads to many environmental issues.
- Due to the openness, public blockchains can conflict with regulatory requirements in some areas, making it hard to conform to local regulations.
Private Blockchain
Private blockchains only allow participants with authorized and validated information. This works as a distributed ledger technology operating in a restricted network, a selected group of participants, and with limited access.
In public vs private blockchains, public blockchains are open to anyone but private blockchains are permissioned reflecting the allowance to only pre-approved participants.
Private blockchains permit organizations to have more control over all the data and processes making them compatible with industry regulations and other policies.
Also, the consensus mechanism is faster and more efficient in comparison to the public blockchain as there are limited participants. It makes private blockchain suitable for enterprise-level apps with paramount privacy and speed.
Above all, private blockchains provide enhanced security as it is only accessible to limited members only leading to less risk of unauthorized access and possible risks.
Advantages:
- It provides limited access to only trusted participants alleviating the risk of illegal entry and possible attacks.
- Faster transactions and speed along with enhanced data confidentiality and privacy.
- A private blockchain can be customized according to specific organizational requirements.
- Fewer validators and nodes result in less operational costs in comparison to public blockchains.
- Smaller network size results in more efficient consensus mechanisms.
Disadvantages:
- Decreased level of decentralization due to a controlled number of participants.
- The selected group of validators or authorized nodes can have a single point of failure if any of them gets malfunctions or compromises.
- Creating and maintaining a private blockchain can lead to enhanced Blockchain app development costs due to significant investment in administration and infrastructure.
Hybrid Blockchain
Hybrid Blockchain is among the types of Blockchain networks that is an amalgamation of public and private Blockchain networks. It comprises the best of both networks enabling decentralization, transparency, and immutability similar to public Blockchain. The Hybrid Blockchain network also has some elements of private blockchains such as faster transaction processing and enhanced privacy.
Hybrid Blockchains store confidential transactions and sensitive data on a private network that is only available to authorized participants including consortiums or businesses. On the other hand, less sensitive data will be stored on the public chain leading to inclusivity and openness.
A Hybrid Blockchain network is specifically beneficial for industries such as healthcare, finance, and supply chain management requiring regulatory compliance and secure data handling.
Advantages:
- The blend of public and private networks enables higher scalability by adapting a larger number of transactions.
- The hybrid approach facilitates organizations to tailor their blockchain infrastructure to align their specific use cases providing more flexibility than a regular solution.
- Employing a combination of public and private networks would be more cost-efficient than adopting an entire private blockchain network.
- This network is helpful to develop trust between participants as it creates a balance between data confidentiality and openness.
- Private chains offer quicker transaction processing in comparison to entire public blockchains to enhance system performance overall.
Disadvantages:
- A Hybrid Blockchain network adds complexity to the entire architecture and needs appropriate integration & synchronization between private and public components.
- The Hybrid model can have potential attack vectors as both private and public chains require to be secured properly.
- The combination of private and public elements may raise governing concerns, particularly about data privacy and compliance in related industries.
Consortium Blockchain
Consortium Blockchain network works as a distributed ledger technology comprising the benefits of both private and public blockchain networks. In this network, a group of trusted and pre-chosen participants including organizations, companies, or government entities create a network to maintain and authorize the blockchain collaboratively.
Unlike public Blockchains that are open to everyone and private blockchains regulated by a single entity, the Consortium Blockchain network provides a middle way. It allows consortium members to share confidential data securely while continuing transparency and decentralization.
The governance model of consortium blockchain includes a consensus protocol agreed upon by the active individuals to enable validated transactions that are added to the Blockchain ledger transparently.
It leads to enhanced trust and less risk of malicious activities. Overall, consortium blockchains maintain a balance between the decentralization advantages of public blockchains and the controlled access needed for enterprise use cases.
Advantages:
- Restricted access to trusted users guarantees the security and confidentiality of sensitive data while lessening the risk of unauthorized access or attacks.
- The consortium has a smaller group of validators; hence its consensus mechanism can be faster and more efficient leading to better scalability.
- Less need for intricate PoW (proof of work) or consensus algorithms outcomes in transaction fees and lower energy consumption.
- This network facilitates smooth collaborations and data distribution between organizations resulting in managed workflows and enhanced interoperability.
- The Consortium Blockchain network can be customized to align with the specific requirements of participants which makes it simple to execute industry-specific use cases.
Disadvantages:
- Decisions related to consensus mechanisms, updates, and network rules need an agreement among consortium members resulting in possible governance clashes and interruptions in executing changes.
- Though consortium blockchains provide more privacy in comparison to public blockchains that can lead to less transparency for external stakeholders and auditors. It makes data accuracy verification harder on the blockchain.
- When the Consortium is controlled by strong entities, there is always a risk of collusion in negotiating the justice and neutrality of the network.
Conclusion
As we already know, using Blockchain technology can be very helpful for enterprises, and by choosing the right Blockchain network, they can gain more advantages than expected. It is why we have brought up this guide on different Blockchain networks including public, private, hybrid, and consortium that you need to know before you hire Blockchain developers.
Whether you are looking for details on private vs public blockchain or private vs public vs consortium or anything else, this guide will help you to choose the appropriate network as per your business requirements and goals.
