Why Private Blockchains Are Not Pointless

3 min readDec 17, 2019

Public blockchains, such as Bitcoin and Ethereum, provide trustless computing. Private blockchains, such as Hyperledger and Quorum, do not. Therefore, it may appear that private blockchains do not provide any more than traditional databases. They are not a new innovation, but rather, they are a useful unconventional database architecture. I will discuss how the added value of private blockchains over standard databases includes decentralized administration and the availability of complete secured histories.

Decentralized Administration

Databases typically have a few administrators with unlimited access. This is a security vulnerability. Public blockchains avoid this by eliminating the need for administrators. Private blockchains, on the other hand, increase security by:

having several administrators each with a copy of the private blockchain
requiring all the administrators to agree on certain actions
rejecting all actions that do not adhere to certain protocols

Complete Secured Histories

Private blockchains provide the complete histories of all their stored information and secure it with cryptography. This feature assists with decentralized administration and is typically not available with conventional databases.

Use Cases

In addition to providing additional value over regular databases, private blockchains have the following advantages over public blockchains:

better performance
restricted access
greater and easier customizability

Consider companies involved in a supply chain that do not all trust each other. They may need to process shared data faster than is currently possible with a public blockchain. For commercial reasons, they may want to restrict access to that data. To please auditors, they may also want to implement many customizations. A private blockchain with an administrator from each company may be the best choice!

Implementations

A private blockchain can be implemented with a few additions to a Git repository! Note that Git supports several computers maintaining identical copies of repositories. Note also that Git provides complete secured histories! Creating a private blockchain from Git would only require the following additions:

component requiring all administrators to digitally sign all new commits
component rejecting all commits that do not obey certain protocols
component rejecting all modifications to existing commits

Conclusion

Private blockchains provide some of the advantages of public blockchains as well as some additional ones. Decentralized administration and the availability of complete secured histories allows them to serve many use cases that ordinary databases cannot. They can be easily implemented with conventional tools such as Git. Hopefully now it is clear why private blockchains are not pointless after all.