Learning Objectives – after this chapter you will be able to:
- Classify blockchains as public, private, consortium or hybrid.
- Explain permissionless vs permissioned access (read, write, validate).
- Describe the layered architecture of a blockchain system.
- Identify node types and their roles.
Permissionless vs Permissioned
Blockchains differ in who may (1) read the ledger, (2) submit transactions and (3) take part in consensus.
- Permissionless: anyone can do all three without asking anyone (Bitcoin, Ethereum).
- Permissioned: an authority or a group decides who can join and what each participant may do (enterprise networks).
Types of Blockchain
| Type | Who controls / participates | Advantages | Limitations | Examples |
|---|---|---|---|---|
| Public | Open to anyone; no single owner. | Highly decentralized, censorship-resistant, transparent. | Lower throughput, fees, all data public. | Bitcoin, Ethereum |
| Private | One organisation controls who can join and validate. | Fast, private, easy to govern. | Centralized trust; limited benefit over a database. | Internal enterprise ledgers |
| Consortium (federated) | A group of organisations jointly run validator nodes. | Shared control, efficient, suitable for industry collaboration. | Requires governance agreements; partly centralized. | Bank or supply-chain consortia, often built on Hyperledger Fabric or R3 Corda |
| Hybrid | Combines a private network with selected data or proofs anchored on a public chain. | Privacy for sensitive data plus public verifiability. | More complex design. | Private systems that publish hashes to a public chain |
Layered Blockchain Architecture
| Layer | Responsibility |
|---|---|
| Application layer | dApps, wallets, user interfaces, APIs such as Web3.js. |
| Execution / contract layer | Smart contracts and the virtual machine (EVM) that run business logic. |
| Consensus layer | PoW, PoS or BFT rules that agree on the next block (and the incentives that reward participants). |
| Network layer | Peer-to-peer discovery and gossip of transactions and blocks. |
| Data layer | Blocks, hashes, Merkle trees, digital signatures and the chain structure. |
| Infrastructure | Hardware, storage and internet connectivity of the nodes. |
Layer 0 / 1 / 2 terminology
- Layer 1 (L1): the base blockchain itself – e.g. Bitcoin, Ethereum.
- Layer 2 (L2): networks built on top of an L1 to increase speed and lower cost while relying on the L1 for security – e.g. rollups, Lightning Network (Chapter 30).
- Layer 0: infrastructure that lets multiple blockchains be built and communicate (interoperability frameworks).
Types of Nodes
| Full node | Downloads and verifies every block and transaction against the rules. |
| Archive node | A full node that also keeps all historical states. |
| Light node | Keeps only headers and uses proofs from full nodes (SPV). |
| Mining / validator node | Creates new blocks (PoW miner or PoS validator). |
| Bootnode | Well-known node that helps new nodes discover peers. |
Enterprise example – Hyperledger Fabric: a permissioned platform where members are identified through a Membership Service Provider, transactions are endorsed by selected peers, ordered by an ordering service and then validated, and private “channels” keep data visible only to authorised members.
Key Takeaways
- Public = open to all; private = one owner; consortium = group of owners; hybrid = mix of private and public.
- Blockchain systems are built in layers: data, network, consensus, execution and application.
- Full, archive, light and validator nodes play different roles in the network.
Question / Answer (15 questions)
Answer : In a permissionless blockchain anyone can read data, submit transactions and take part in consensus without approval. In a permissioned blockchain an authority or group decides who can join and what each participant is allowed to do.
Answer : A public blockchain is open to everyone and has no single owner; anyone can run a node, transact and participate in consensus. Examples are Bitcoin and Ethereum.
Answer : A private blockchain is controlled by one organisation that decides who can join and validate. It may be used inside a company to keep a tamper-evident audit trail across departments, though often a conventional database is sufficient.
Answer : A consortium (federated) blockchain is governed by a group of organisations that jointly operate the validator nodes. It suits industries such as banking or supply chains where several companies must share data but none should control it alone.
Answer : A hybrid blockchain combines a private, permissioned network for sensitive data with a public blockchain for transparency – for example by publishing hashes or proofs of private records on a public chain.
Answer : Advantage: strong decentralization and censorship resistance. Limitation: lower throughput and higher fees, and all transaction data is public.
Answer : Because a single organisation controls all nodes, users must still trust that organisation. The main blockchain benefit – removing the need to trust one party – is largely lost.
Answer : Infrastructure (hardware), data layer (blocks, hashes, signatures), network layer (peer-to-peer gossip), consensus layer (PoW/PoS/BFT and incentives), execution layer (smart contracts and VM) and application layer (dApps, wallets, APIs).
Answer : The structures that store information securely: blocks and headers, hash links, Merkle trees, transactions and the digital signatures that authorise them.
Answer : Layer 1 is the base blockchain that provides security and final settlement, such as Ethereum. Layer 2 is a network built on top of it to process transactions faster and more cheaply while relying on Layer 1 for security, such as rollups.
Answer : Layer 0 refers to underlying infrastructure and frameworks that allow multiple blockchains to be built and to communicate with each other (interoperability).
Answer : A full node downloads every block and independently verifies every transaction against the protocol rules, then relays valid data to peers. It does not need to trust anyone else’s view of the chain.
Answer : A bootnode is a well-known node whose address is built into client software so that new nodes can connect to it and discover other peers in the network.
Answer : Hyperledger Fabric (hosted by the Linux Foundation’s Hyperledger project) and R3 Corda.
Answer : It uses channels – separate ledgers visible only to authorised organisations – together with a Membership Service Provider that identifies all participants, so data is shared only with permitted members.
MCQ Test : Check Your Understanding (5 questions)
Select an option and press Check Answer, or answer all questions and press Submit Test to see your score. Each answer comes with an explanation.
Bibliography/References
The notes, questions and MCQs on this page are original explanations written for this course. The works listed below were consulted and are cited for attribution and further reading. Product names, logos and trademarks belong to their respective owners. Short quotations, where used, are marked and attributed.
- Yaga, D., Mell, P., Roby, N., & Scarfone, K. (2018). Blockchain Technology Overview (NISTIR 8202). National Institute of Standards and Technology. https://doi.org/10.6028/NIST.IR.8202
- Hyperledger Foundation. (n.d.). Hyperledger Fabric Documentation. https://hyperledger-fabric.readthedocs.io/
- ethereum.org. (n.d.). Nodes and clients. Ethereum Developer Documentation. https://ethereum.org/en/developers/docs/nodes-and-clients/
- ethereum.org. (n.d.). Scaling. Ethereum Developer Documentation. https://ethereum.org/en/developers/docs/scaling/
- Narayanan, A., Bonneau, J., Felten, E., Miller, A., & Goldfeder, S. (2016). Bitcoin and Cryptocurrency Technologies: A Comprehensive Introduction. Princeton University Press. ISBN 978-0-691-17169-2.