What Blockchain Network Should You Use?

What Blockchain Network Should You Use? A Guide to Choosing According to Your Business Model

European regulation is transforming the way companies and public administrations adopt blockchain technology. Frameworks such as the General Data Protection Regulation (GDPR), eIDAS2 and the Markets in Crypto-Assets Regulation (MiCA) require levels of governance, data protection and traceability that not all network architectures can guarantee. Choosing between a public, private or hybrid blockchain is no longer an isolated technical decision.

The type of network directly affects regulatory compliance, the allocation of legal responsibilities and the viability of the business model. Each architecture offers a different balance between performance, governance and compliance, shaping an organisation’s ability to anticipate risks, optimise resources and leverage infrastructures designed to operate in regulated environments with cross-border legal validity.

Types of Blockchain: Fundamental Differences Beyond Theory

Blockchain technology can be deployed across different types of networks, each with its own rules regarding access, governance and transaction validation. ISO 22739 establishes two independent dimensions for classification. The first distinguishes between public and private networks according to who can access the data. The second differentiates between permissioned and permissionless networks according to who can participate in consensus mechanisms.

This dual classification creates combinations that determine the legal and operational feasibility of any project within the European regulatory context. Each model responds to different requirements and has direct implications for compliance, node identity management and transaction auditability.

Public Blockchain (or Permissionless)

A public permissionless blockchain allows any user to read transactions, submit operations and participate in consensus without prior authorisation. Bitcoin and Ethereum are the most representative examples, where nodes operate pseudonymously and protocol rules are enforced through economic incentives.

Open access guarantees maximum decentralisation, censorship resistance and public auditability. All transactions are recorded in a shared ledger visible to any participant. However, this transparency and immutability create friction with the European regulatory framework.

The European Data Protection Board (EDPB), in its Guidelines 02/2025, warns that the technical impossibility of deleting on-chain data does not exempt organisations from GDPR compliance. The European Securities and Markets Authority (ESMA) also notes that in permissionless networks the infrastructure cannot be considered an external service provider under MiCA and the Digital Operational Resilience Act (DORA).

Regulatory concerns are compounded by energy consumption. According to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin consumes between 70 and 95 TWh annually.

Private or Permissioned Blockchain

In a private blockchain, only authorised participants can interact with the network. A single entity or limited group controls who may access the system, validate transactions and read records, facilitating the allocation of legal responsibilities and compliance with obligations such as Know Your Customer (KYC).

The known identity of each node enables contractual agreements, data retention policies and incident response mechanisms. The EDPB and the Spanish Data Protection Agency (AEPD) agree that permissioned networks simplify the identification of the data controller under GDPR. With fewer nodes involved, these networks process transactions with lower latency, making performance another operational advantage. Hyperledger Fabric is one of the most widely adopted examples of this model.

The trade-off is reduced decentralisation, with governance concentrated in the operating entity.

Public-Permissioned Blockchain

Hybrid blockchains combine elements of public and private networks to balance transparency and control. Information may be openly accessible for consultation, while transaction validation is restricted to authorised entities, enabling operation in highly regulated sectors.

A common variation is the consortium blockchain, where multiple organisations share governance and node operation without any single participant exercising unilateral control. Financial services, healthcare and logistics sectors naturally align with these architectures, which allow verifiable records to be shared among multiple stakeholders.

The public-permissioned model adopted by infrastructures such as EBSI and ISBE represents an evolution of this approach. Data remains accessible for verification, while only accredited entities validate operations, combining public transparency with institutional governance. Many European business and public-sector use cases are built on this architecture.

Key Factors When Choosing a Blockchain Architecture According to Your Business Model

Selecting the appropriate blockchain type depends on a matrix of factors combining business model, regulatory exposure and privacy requirements. Within the European context, this decision carries direct legal implications that affect project feasibility from the design stage onwards.

The starting point is the nature of the asset or service. Issuing regulated tokens under MiCA, managing verifiable credentials under eIDAS2 or enabling food product traceability each involve different regulatory frameworks and therefore different architectures. An electronic money token (EMT), for example, requires a network operated by regulated entities with auditable service contracts, while an internal traceability system may operate on a private network.

The presence of personal data is equally critical. The EDPB recommends carrying out a Data Protection Impact Assessment (DPIA) whenever blockchain use may create high risks for individuals’ rights and privileges solutions that keep personal data off-chain.

For projects that require the identification of a data controller and robust incident response capabilities, permissioned governance provides the best fit. Energy sustainability then becomes an additional consideration for organisations with Environmental, Social and Governance (ESG) commitments, where mechanisms such as Proof of Authority enable alignment with the European Green Taxonomy.

Each project must map its obligations carefully in order to identify the network that best combines performance, compliance and blockchain benefits for its sector.

Regulatory Context: Why Network Choice Determines Legal Compliance

Within the European Union, the type of blockchain selected for a project has direct legal consequences. MiCA, GDPR, eIDAS2 and DORA impose governance, data protection and operational resilience requirements that favour networks with identifiable counterparties and contractual oversight mechanisms.

MiCA requires crypto-asset issuers and service providers to maintain appropriate oversight of the infrastructure they use and to establish detailed outsourcing agreements. In public permissionless networks, such contractual relationships do not exist, forcing organisations to implement compensatory measures to demonstrate the required level of control. Permissioned blockchain architectures solve this issue by providing institutional governance with identifiable counterparties.

GDPR creates a structural tension with immutability. Both the AEPD and the EDPB agree that storing personal data on-chain complicates rights such as erasure and rectification. Keeping personal data off-chain while using blockchain to anchor integrity proofs and timestamps is considered the most viable approach.

eIDAS2, the European regulation updating the framework for digital identity and trust services, introduces qualified electronic ledgers as trust services with legal validity equivalent to traditional documents. Blockchain records may therefore serve as evidence in administrative and public procurement procedures, provided the network satisfies qualification requirements. The benefits of blockchain for public administration become tangible through infrastructures designed specifically to operate within this legal framework.

ISBE: Blockchain Infrastructure for Regulated and Competitive Environments

The Spanish Blockchain Services Infrastructure (ISBE) applies the public-permissioned model at national scale. Its multi-network architecture combines a Bare Network with the highest level of regulatory compliance and Use Cases Networks offering greater flexibility for applications, enabling compliance, performance and cost to be adjusted according to each project’s requirements.

ISBE integrates GDPR and eIDAS2 compliance by design, both technically and through governance, to ensure trust and legal validity. Requirements stemming from MiCA, DORA, the Data Act, the Spanish Securities Market Law (LSMV), the National Security Framework (ENS) and the NIS2 Directive on network and information systems security have been embedded into the infrastructure, enabling continuous adaptation to legal and technological developments.

Companies and public administrations deploying projects on ISBE operate in an environment where identity, electronic signature and personal data management requirements are pre-integrated.

Its decentralised governance model ensures operations are shared between public and private entities, preventing unilateral control. ISBE forms part of the Collaboration Agreement between the Community of Madrid and the Alastria Network Consortium, funded by the European Union through Next Generation EU. Its interoperability with EBSI enables credentials and records issued in Spain to be verified across other Member States.

Aligned with the European Green Deal, ISBE achieves carbon neutrality through three pillars: low-energy design based on Proof of Authority, audited environmental impact measurement and footprint reduction through shared infrastructure. Smart contracts, APIs and open-source resources complete a ready-to-use offering that accelerates deployment and reduces costs.

Does Your Project Require Blockchain Infrastructure with Legal Validity and Integrated Regulatory Compliance?

Discover how ISBE enables solutions to be deployed on a public-permissioned infrastructure, interoperable with Europe and designed to accelerate implementation.

Visit redisbe.com and explore the use cases already transforming businesses and public administrations.

Is It Possible to Migrate a Project from a Public Blockchain to a Permissioned One if the Business Model Changes?

Migrating a project from a public blockchain to a permissioned one is possible, although the process involves both technical and legal challenges. Migration requires deploying new smart contracts on the destination network and creating bridge mechanisms to transfer assets or credentials.

From a GDPR perspective, migration may provide an opportunity to strengthen data protection, but it also requires reviewing legal bases, consent mechanisms and obligations under MiCA and other sector-specific regulations.

What Role Does Energy Consumption Play in Choosing a Network for Sustainable Businesses?

Energy consumption is a decisive factor for companies with ESG commitments. Proof-of-work networks such as Bitcoin consume between 70 and 95 TWh annually, according to the CBECI.

Permissioned infrastructures using mechanisms such as Proof of Authority drastically reduce this impact, facilitating alignment with the European Green Taxonomy and anticipating potential regulatory restrictions.

Is Data Privacy Incompatible with Blockchain Technology in the Public Sector?

According to European authorities, data privacy is not incompatible with blockchain technology in the public sector, although tensions remain difficult to resolve in public permissionless networks containing on-chain personal data.

Public-permissioned infrastructures such as EBSI and ISBE demonstrate that blockchain and privacy can coexist through off-chain storage, integrity hashes, decentralised identities and institutional governance with clearly identified responsible entities.

How Is Interoperability Guaranteed Between Different Blockchain Networks?

Interoperability between blockchain networks is ensured through technical standards such as verifiable credential formats and W3C decentralised identifiers (DIDs), common APIs and coordinated governance frameworks.

EBSI uses these standards so that credentials issued in one country can be verified in another. ISBE has been designed to interoperate with EBSI and other European networks through its multi-network architecture.

Who Is Legally Responsible if an Error Occurs in a Smart Contract on a Public Network Versus a Private One?

Legal responsibility for an error in a smart contract varies depending on the type of network.

In public permissionless networks, responsibility becomes diluted because there is no central entity operating the infrastructure. As a result, courts and regulators tend to focus on promoters, developers and user interfaces.

In permissioned networks, an identified consortium or operator assumes specific contractual obligations, supported by code audits and incident management mechanisms that facilitate the attribution of liability.