Table 1 Characteristics of blockchain types
Feature | Types | ||
|---|---|---|---|
Public | Consortium | Private | |
Pros | Anyone can join and participate without permission or identity verification (Open) | Transactions are processed faster than public blockchains due to lower network latency and higher throughput (Faster) | Transactions are faster, scalable, efficient, secure and fully controlled by a single node |
| Â | All transactions are publicly visible and verifiable by anyone (Transparent) | Transactions can handle higher volumes than public blockchains due to lower computational complexity and resource consumption (Scalable) | Lower network latency and higher throughput make transactions faster than public blockchains |
| Â | Transactions are validated by a large number of nodes using a cryptographic consensus mechanism that prevents double-spending, fraud, or censorship (Secure) | Transactions consume less energy than public blockchains due to simpler consensus mechanisms that do not require intensive proof-of-work or proof-of-stake algorithms (Efficient) | Lower computational complexity and resource consumption make transactions scalable to higher volumes than public blockchains |
| Â | Transactions are permanently recorded on a distributed ledger that cannot be altered or erased by anyone (Immutable) | Transactions are validated by a smaller number of nodes using a cryptographic consensus mechanism that prevents double-spending, fraud, or censorship (Secure) | Simpler consensus mechanisms that do not require intensive algorithms make transactions efficient and consume less energy than public blockchains |
| Â | Transactions are executed according to predefined rules that cannot be changed by anyone without consensus from all nodes (Censorship-resistant) | Transactions are executed according to predefined rules that can be changed by agreement from a subset of nodes (More control over governance and consensus) | Cryptographic consensus mechanism that prevents double-spending, fraud or censorship makes transactions secure |
| Â | Â | Â | Predefined rules that can be changed by decision from a single node give full control over governance and consensus |
Cons | High electricity consumption and processing power required for consensus | Less transparent and democratic than public blockchain | Highly centralized and dependent on a single authority |
| Â | Low scalability due to limited throughput and high latency | Prone to collusion or corruption among the controlling entities | Lacks immutability and security compared to public blockchain |
| Â | Vulnerable to 51% attacks if a single entity gains majority control over the network | May face legal or regulatory challenges due to cross-border transactions | May not benefit from network effects or innovation due to limited participation |
Usage Scenario | Cryptocurrencies: Online payments without intermediaries or trusted third parties (e.g., Bitcoin) | Cross-border payments (e.g., Ripple): A global payment network that enables fast, cheap, and secure transactions across different currencies and jurisdictions | Enterprise solutions: IBM Blockchain Platform - A platform for developing, deploying, and managing private blockchain networks for business use cases such as trade finance, asset tracking, digital identity, etc |
| Â | Smart contracts: Decentralized applications that run on self-executing contracts (e.g., Ethereum) | Supply chain management (e.g., Hyperledger Fabric): A framework for building enterprise-grade blockchain solutions that enable transparency, traceability, and efficiency across complex supply chains | Banking and finance: Corda - A distributed ledger platform designed for financial institutions that enables secure transactions with smart contracts |
| Â | Decentralized applications: Applications that run on distributed networks without centralized servers or authorities (e.g., Uniswap) | Identity verification (e.g., Sovrin): A decentralized identity network that enables self-sovereign identity management using verifiable credentials | Healthcare records: MedRec - A prototype for managing electronic medical records using blockchain technology |
Centralization Level | Network and data are not controlled by any single entity | Anyone can join and participate without permission or identity verification | Network and data are controlled by a group of entities |
| Â | All nodes have equal rights and responsibilities | Some nodes have more rights and responsibilities than others | Only one node has all rights and responsibilities |
Participants | Any node can join and do transactions without permission or identity verification | Members only can join and do transactions with permission or identity verification by a group of organizations that jointly manage the network | Individual or company can join and do transactions with permission or identity verification by a single entity that owns |