The most fundamental requirement or application of a blockchain is to conduct transactions or exchange data over a secure network. The manner in which individuals utilise blockchain and distributed ledger technology or networks varies, however. In the case of Bitcoin, blockchain technology was introduced to the general public. Bitcoin is a digital currency that is transferred using blockchain and DLT technologies. This type of blockchain network is a public network because anyone can become a node, verify other nodes, and exchange bitcoins.
Assume, on the other hand, that a bank is utilising a private blockchain network. It will be a restricted network, with only authorised bank members having access to confidential information. As a result, no one outside of this closed network has access to bank data. A private network will have only authorised nodes that are monitored by a network administrator. The data transmitted over a private blockchain network remains within the network. Any new node that wishes to join a private network must first obtain permission from the network administrator. The bank gets to choose the size of their private blockchain for all of their city branches or all of their country branches. The blockchain network, like these examples, can be set up in a variety of ways depending on the use and requirements.
All types of blockchains can be characterized as permissionless, permissioned, or both.
Permissionless Blockchains: Any user can join the blockchain network in an anonymous manner and become a "node," and permissionless blockchains do not limit the rights of the nodes on the network. Permissionless blockchains are more secure than permissioned blockchains because there are many nodes to validate transactions and bad actors would find it difficult to collude on the network.
Permissioned Blockchains: Certain nodes are only allowed access to the network through permissioned blockchains, and those nodes' network rights may also be limited. The other users of a permissioned blockchain are aware of the identities of the users of that blockchain. Permissioned blockchains tend to be more efficient. Because access to the network is restricted, there are fewer nodes on the blockchain, resulting in less processing time per transaction.