Blockchain (When, When not and What type) to use?

Akshat Jain
4 min readNov 18, 2019


So, Blockchain has been around for quite a while and you must be tired of hearing all the buzz about it but let’s see if it is right for your business or not and if it is then what type (because there are a few different types) which are used for very specific purposes.

So, before we make our decision let’s remind ourselves that some factors require a little thinking around before we move on, such as:

· Number of users in the system, participants and parties

· Kind of performance expected, need of efficiency desired for transactions or complete processes per second

· Location of the participants in the system, in company/organisation outside to help understand the level of trust that could be drawn here

Please hang on as I know I’m going at a fast pace here, but it will all make sense in a minute.

We need to understand a little more about the limitations and capabilities of each blockchain before considering the switch from traditional databases to decentralized setup.

Blockchain is well suited for business models where few of the points below are applied:

· The need for one common shared database

· Users involved in the above do not have trust among other participants or needs a transparency

· There are a number of different types of parties involved in making changes to the database

· The decision made is transparent

· The need for an audit trail, history of undeletable and tamper-proof logs

· Avoid the need for the third party and relying on a middle man to complete the process.

The above factors are all geared towards keeping the data public and focused away from keeping part of the database private. If those factors are what makes sense to your business then Public Blockchain works just well, but there are a few downsides to that such as speed and efficiency, which if not important would make public blockchain the trivial use case.

And for these cases not covered above, if we still desire the Blockchain model it could be used on a private network so that only the users allowed to access the Blockchain are able to make any writes. That’s where private Blockchain steps in, so let’s talk about some of the deciding factors about private Blockchain.

· The biggest and most weighted reason for opting for this private Blockchain is that you want to have control over participants in the Blockchain, which means you can change the rules of Blockchain and modify data which is definitely a better choice for institutions.

· Private Blockchain has its advantage over a Public one because of their speed, where more transactions can be achieved without any scalability issues.

· For financial bodies like banks and companies operating within the funds industry, Private Blockchain would be a great use case because they are to abide by certain laws and regulations. This also includes that only mentioned parties take part in the system, which is why private Blockchain completely fits in giving the required efficiency, traceability, trust, and security.

So, with that brief explanation, I hope you have a better understanding of the Public vs Private Blockchain and how/why they are used. But there’s a missing piece of the puzzle here — Yes, the Hybrid Blockchain. Now since you have understood both types of Blockchain, Hybrid Blockchain marries and uses the best of both worlds to give you transparency with high resistance towards tampering and gains in speed and efficiency.

We can just use a Public Blockchain to make the ledger available to everyone in the world while using Private Blockchain in the background to make any addition to the ledger. This way security cannot be compromised but also only selected/trusted participants are able to make changes to the database, which is secured, and the integrity could be maintained by the whole world.

The classic example I would like to bring up here is the Ripple network which uses centralised servers to make high-speed transactions. Another example is Facebooks Libra Project, which is intended to be the public-facing Blockchain whereby a user can make a purchase via their digital wallets and behind the scenes the banks control the private Blockchain, regulating the digital currency.

So, with all that in mind, I hope you have learned the key differences and use cases for the two different types of Blockchain and can see, which is best suited for you and your business.

We all are convinced that Blockchain is a really powerful tool and can make our world a lot better but there are also cases when you don’t need Blockchain so let’s cover those instances too.

· There is highly confidential data involved

· The data being stored is huge

· Not many parties/users are involved (one or few parties)

· Customisation and Blockchain don’t get along that well

· Super high performance is key

· Need to keep data separate (siloed systems)

Let’s try to visualise what we just learned. This flowchart simply puts all the above learnings into the picture. Hope this has helped you ;)