Public Blockchain

If you’ve used cryptocurrency recently, you’ve likely interacted with a public blockchain. This type of blockchain comprises the vast majority of distributed ledgers in existence today. We call them "public" because anyone can view the transactions that occur and join simply by downloading the necessary software.

We also often use the term "permissionless" in the context of public blockchains. No regulatory authority can prevent participation, and anyone can engage in the consensus mechanism (e.g., through mining or staking). Since anyone can freely join and be rewarded for their role in achieving consensus, we expect to see a highly distributed topology on public blockchain networks.
Similarly, public blockchains are expected to be more censorship-resistant than private (or semi-private) ones. Since anyone can join the network, the protocol must incorporate certain mechanisms to prevent malicious actors from anonymously gaining an advantage.

However, public blockchains also involve trade-offs in security and performance. Many servers on public blockchains face scalability bottlenecks, resulting in relatively weak throughput. Additionally, pushing changes to the network while preventing fragmentation can be challenging, as the likelihood of all participants agreeing on a proposal simultaneously is low.

Private Blockchain

In stark contrast to the permissionless nature of public blockchains, private blockchains establish access rules dictating who can view and write to the blockchain (they are permissioned environments). Private blockchains are not decentralized systems, as there is a clear hierarchy of control. However, they are distributed, with many nodes still maintaining copies of the blockchain on their computers.
Private blockchains are more suitable for enterprises that wish to leverage the benefits of blockchain without exposing their networks to external access.

In some private blockchains, proof-of-work (PoW) is redundant within the context of their security model. However, PoW has proven necessary for open environments. In private blockchains, the absence of PoW does not pose a significant threat, as each participant’s identity is known and manually managed.
In such cases, a more efficient algorithm involves designated validators—nodes selected to perform specific functions for transaction validation. Typically, this includes nodes that must sign each block. If a node exhibits malicious behavior, it can be quickly identified and removed from the network. With this top-down control, coordination across the system becomes much easier.

Consortium Blockchain

Consortium blockchains sit between public and private blockchains, combining elements of both. The most notable differences between consortium blockchains and their public and private counterparts lie in consensus. A consortium blockchain treats a small number of equally empowered participants as validators, unlike public blockchains, which are open systems allowing anyone to validate blocks, or private blockchains, which are closed systems where a single entity appoints block producers.

From here, the system’s rules are highly flexible: the blockchain’s visibility can be restricted to validators, authorized personnel, or made visible to everyone. Modifications can be easily made as long as consensus is reached among the validators. As for the blockchain’s functionality, no issues will arise as long as these participants act honestly according to predefined thresholds.
Consortium blockchains are the ideal choice for multiple organizations operating in the same industry that require shared infrastructure for transactions or relaying information. Joining such a consortium blockchain is highly beneficial for organizations, as it allows them to share industry insights with other participants.

Which Type of Blockchain is Superior?

Fundamentally, public, private, and consortium blockchains are not mutually exclusive—they simply employ different technologies:

Well-designed public blockchains often excel in censorship resistance but at the cost of lower speed and throughput. These are the best choices for providing security guarantees in transaction settlement (or smart contracts).
Private blockchains can prioritize system speed, as they don’t need to worry about core failures like public blockchains. Ideally, private blockchains are deployed in scenarios where individuals or organizations require control and confidentiality.
Consortium blockchains mitigate counterparty risks present in private blockchains (by eliminating centralized control), and their smaller node count often allows them to operate more efficiently than public blockchains. Consortium blockchains are suitable for organizations that need to communicate with each other.

Conclusion

For individuals and businesses engaged in various activities, there is a wide array of blockchain options. Even within public, private, and consortium blockchains, user experiences can vary significantly depending on complexity. Users can choose the product that best aligns with their goals based on real-world use cases.