Difference between Public and Private Blockchain?
Blockchain technology has evolved a lot since the herald of the bitcoin era in 2009. Being one of the leading Blockchain companies in the United States, one question that the experts at ‘Blockchain Developers’ are commonly asked is-“What is the difference between Public and Private Blockchains?”
It’s very easy to get confused if you are not a blockchain expert, as public and private blockchains have a lot of overlapping attributes. In fact, the way blockchain has evolved over the last few years; it can be divided into three different types. In this post however, we will be mainly focusing on public and private blockchains. The third type, Consortium or federated blockchain is the hybrid of the two and will be discussed in detail in a separate post.
To make the best use of public and private blockchains for businesses, it is important to understand both the similarities and differences that exist between them. So here are some similarities and differences between private and public blockchains.
How are public and private blockchains similar?
• Both public and private blockchains are decentralized, peer to peer networks and every participant involved in the network gets the copy of the transactions.
• In both the types of blockchains, in order to make decisions, the participants need to reach a consensus using “consensus mechanisms”, such as, ‘proof of work’.
• Security is an important feature maintained by both the networks
Then how are they different?
Despite many similarities, there exist many significant differences between the two. Let’s take a look at some main differences between them:
1. Based on who can be a part of the network: One key difference between the public and private blockchain networks is based on-‘who all are allowed to be a part of the network and maintain the shared ledger’. Public Blockchain is completely open and allows anybody to be a part of the network. In fact, it incentivizes people to participate in the network in large numbers.
On the other hand, in private blockchain the firm or the organization that controls the network has some authority over who can be a part of the network. Only the individuals who qualify a set of terms and condition can be a part of the network and it is upto the company to decide who can read access to their transactions. In other words, private blockchains leverage the Blockchain technology by creating groups and participants who can internally verify the transactions.
• Based on computational power: A major drawback of public blockchain networks is that it requires good computational power as the distributed ledger needs to be maintained on a large scale. The consensus process is also more intense and slower than the private networks.
• Based on transactional speed. Public blockchain has low transactional speed compared to the private blockchain networks due to the extremely huge data that needs to be processed to complete the transactions. Private networks are comparatively faster as the parties involved in the network have an inbuilt trust and the network nodes are well connected, so it takes less time for the consensus to happen, thus increasing their efficiency.
It’s great to see businesses and individuals trying to learn the basics of the technology before they delve into the world of blockchain. If you want more information pertaining to blockchain and the recent developments in the world of blockchain, follow our blogs; or if you ever have any questions you want to ask an expert, email us at: firstname.lastname@example.org
We are a team of talented blockchain developers. We are one of the early starters in the industry and helping several clients to take a leap into the future with blockchain. We provide blockchain based application development services. Reach us at email@example.com