Blockchains are generally categorized as private or public and permissioned or permissionless depending on the level of access they provide. They can be any combination of any of the two as follows:
Private / Permissioned: This type of blockchain offers no decentralization. The applications on the chain and the nodes running those applications must be invited to join the network and meet certain criteria before being granted permission to contribute to the chain. This type of blockchain would be best suited for the storage of a corporation’s internal data.
Private / Permissionless: Applications deployed on the blockchain are required to be invited to join the network and can be removed without warning. The nodes which constitute the network and run said applications can freely and anonymously join and contribute, typically in exchange for the network’s native cryptocurrency; however, other nodes in the network will only acknowledge the existence of other nodes and not share data with them. The applications on these blockchains not only define who is allowed to perform contract actions, but also who is allowed to read the contract and all related data.
Public / Permissioned: Applications can be built or removed without having to notify anyone, reveal their identity, or meet any application criteria requirements. The network maintainer has the ability to appoint privileged parties (give permission) to run a node with abilities that are unavailable to the general public.
Public / Permissionless: This type of network is the most decentralized. Applications can be deployed in production or removed, without having to notify anyone, reveal their identity, or meet any application criteria requirements. Additionally, there is no central authority that decides who can run a node. The nodes which constitute the network can freely and anonymously join and verify blocks, typically in exchange for the network’s native cryptocurrency.
Blockchains are also commonly categorized by the type of consensus mechanism they utilize: proof-of-work (Bitcoin) or proof-of-stake (Cherry Network). They may also be grouped according to their layer: layer 0, layer 1, layer 2, which indicates the blockchain’s position in the infrastructure hierarchy. For example, Polkadot is a layer 0 (aka relay chain) that layer 1s can be built on. Ethereum is a layer 1 and Polygon is a layer 2 built on top of Ethereum.
No matter which way you categorize them, all blockchains are either private or public and either permissioned or permissionless each with their own benefits and drawbacks.
