Private vs Public Blockchain: Differences and Applications

In a few years, the blockchain technology has greatly evolved and mutated into different types, particularly public and private. Let’s find out what the difference between these two blockchains is, and how we can reap advantages from both solutions.

What is a public blockchain?

A public blockchain is an open-source code, which means any person can be the part of the consensus, and no one is in charge. You can read, write, or audit the code — the access to the network is free. A public blockchain is trustless: no entity is required to control the operations, and yet the network will stay resistant to censorship.

Such blockchains as Litecoin or Bitcoin are totally public due to the following facts:

• Anyone can mine BTC or LTC and run the full node.
• Any user can make transactions on LTC or BTC chain.
• Anyone can audit the network using Blockchain explorer.

What protects a decentralized self-governed blockchain? The trustless autonomy is powered by a difficult method of decision making (Proof-Of-Work, Proof-Of-Stake, etc) that is impossible to tamper with.

What is a private blockchain?

In terms of access, this is an absolute opposite of public blockchain. Here, authorized people only can read and edit the code. Besides, the private blockchain is in power of a single entity or enterprise that can execute and cancel commands on the blockchain. In that sense, a private blockchain cannot be called fully decentralized — this is just a distributed ledger that leverages cryptography to protect data.

Although a private blockchain kills the idea of decentralization and transparency, it boasts a few merits. Due to the fact that a private network is accessible for insiders only, it consumes much less energy, time and money to reach a consensus. Besides, it’s cheaper and faster.

Wonder whether it’s possible to take the best from both technological solutions? A hybrid blockchain makes that possible.

A hybrid blockchain: the golden middle

A hybrid blockchain combines the advantages of both public and private blockchain. In this case, network participants or a particular entity can decide which transactions can remain public, and which should be accessible for a small group of members only.

A hybrid blockchain makes every transaction private but verifiable by an immutable record, which is the peculiarity of a public blockchain. The every transaction is approved by the network, and there’s no need for a central entity or any intermediary to control operations.

In a hybrid blockchain, everyone has equal rights to view and perform transactions, but the identity of transacting parties is not disclosed to the network participants. Some financial institutions also implement the KYC (Know Your Customer) in their hybrid blockchain: although it stays decentralized, secure and transparent, there are different levels of permission.

A hybrid blockchain technology can be applied in different spheres: travel, energy, delivery, etc, but the biggest benefit can be reaped by businesses that need decentralization for financing, supply-chain, or procurement. There are a few projects that help businesses implement a hybrid blockchain into their infrastructure, and one of them is Precium.

Precium is a Korean project that leverages its proprietary Onyx chain — a hybrid blockchain that uses a public blockchain to authorize hashing of a private block, and yet sustains the privacy of participants. While any person can view the Onyx chain’s public blocks, private blocks are accessible for particular users only. Onyx chain gets external information through Oracle technology, which makes it superb to a public blockchain that requires a multitude of nodes to validate smart contracts.

Precium gives any business the opportunity to implement a hybrid blockchain: it provides sets of codes for companies to construct their own smart contract. That allows for making transactions faster and cheaper without hurting clients’ privacy and safety.

Hybrid blockchain is the most optimal solution for enterprises and businesses striving to reach maximum efficiency and transparency.