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Types of Blockchains and Distributed Ledgers

The Need for Blockchain Classification​

As blockchain technology has evolved, it has become clear that there is no universal solution suitable for all use cases. Depending on objectives, security requirements, transparency, and governance models, different types of blockchains are used. In practice, three main types are commonly distinguished: public, private, and consortium blockchains.

Blockchain classification helps to understand when a particular approach is appropriate and what trade-offs are involved.

Public Blockchains​

A public blockchain is an open network that anyone can join without prior permission. Data stored in such blockchains is generally public and available for independent verification. Participation in the network includes the ability to become a validator (subject to protocol requirements) and/or to submit transactions.

Key characteristics of public blockchains include:

  • absence of centralized control,
  • a high degree of decentralization,
  • open access to participation and data verification.

Examples of public blockchains include Bitcoin, Ethereum, Solana, and other public networks.

Private Blockchains​

A private blockchain is a network with restricted access, where participants are defined in advance. Governance of such a network is typically carried out by a single organization or a limited group of trusted entities.

Key features of private blockchains include:

  • controlled access to data and operations,
  • higher performance and throughput,
  • a lower degree of decentralization compared to public networks.

Private blockchains are commonly used in corporate and institutional environments, where participants are known in advance and confidentiality requirements outweigh the need for full decentralization. Technologies used to deploy such networks include Hyperledger Besu, Hyperledger Fabric, Quorum, and similar solutions.

Consortium Blockchains​

A consortium blockchain occupies an intermediate position between public and private systems. Network governance is shared among a group of organizations, each of which has defined rights and responsibilities.

This model makes it possible to combine:

  • distributed governance,
  • access control,
  • increased reliability compared to fully centralized solutions.

Consortium blockchains are often deployed using the same technological foundations as private blockchains, with additional governance mechanisms layered on top.

Distributed Ledger Technology (DLT) and Blockchain​

Blockchain is a specific instance of a broader class of technologies known as Distributed Ledger Technology (DLT). As discussed in Section 1.1, not every distributed ledger is implemented as a chain of blocks.

A distributed ledger is a system in which data is synchronized and stored across multiple participants, and agreement on the ledger state is achieved through predefined rules. Unlike classical blockchains, such systems may rely on alternative data structures (for example, directed acyclic graphs) and different consensus mechanisms.

DLT-based systems are often used in scenarios where the following factors are critical:

  • high throughput,
  • low latency,
  • data confidentiality,
  • a controlled set of participants.

Thus, blockchain can be viewed as the most widely adopted, but not the only, implementation of distributed ledger technology.

Platforms and Ecosystems​

As the technology matured, blockchain platforms emerged that are designed not only for value transfer but also for executing programmable logic and building decentralized applications.

Examples of such platforms include:

  • Ethereum — for smart contracts and decentralized applications,
  • enterprise solutions based on Hyperledger,
  • experimental and specialized blockchain networks.

Each platform represents a different set of trade-offs between decentralization, security, and scalability.

Criteria for Choosing a Blockchain Type​

When selecting a blockchain or distributed ledger architecture, the following factors should be considered:

  • the level of trust between participants,
  • requirements for data transparency and confidentiality,
  • the need for decentralization,
  • performance and scalability constraints,
  • regulatory and legal requirements.

The effectiveness, security, and long-term sustainability of a system largely depend on choosing the appropriate architecture.

Key Takeaways​

There are multiple types of blockchains and distributed ledgers, each designed to address specific classes of problems. Understanding the differences between public, private, and consortium blockchains, as well as between blockchain and DLT in general, enables a more informed and deliberate approach to applying distributed technologies in real-world projects.