Foundations of Blockchain Technology

Blockchain networks can be categorized by their permission model and governance structure, each serving different use cases and trust requirements. Public blockchains prioritize decentralization and censorship resistance, operating on the principle that no single entity should control the network. They achieve this through open participation in consensus mechanisms, where economic incentives align participants toward honest behavior. The trade-off is performance—public networks are slower and more expensive due to their global consensus requirements. Consortium blockchains emerge as a middle ground, typically used by industries like banking or supply chain where multiple organizations need to coordinate but share some level of trust. These networks often use Byzantine Fault Tolerant consensus algorithms, allowing faster finality while maintaining multi-party governance. Private blockchains sacrifice decentralization for performance and control, making them most suitable for internal organizational use cases where a single entity maintains the validator set and can implement traditional access controls.