Public crypto Vs private crypto: A Detailed Guide for Beginners
It’s 2021 and almost everyone knows about the craze of cryptocurrency. While an expert bitcoin professional can enjoy a huge chunk of success with this digital wallet, many beginners are out there who are still trying to figure out how things work there.
If you are one of such first-timers, crypto is a compilation of binary data that you can send and receive just like your regular bank account. There was a time when bitcoin was the only factor in the cryptocurrency market. Now, while still the biggest, it is just one of the multiple important tokens and coins.
The increasing craze of cryptocurrency has pushed more and more people to know about the basics of this industry. So, if you are a novice and want to learn more about digital money, there are two kinds of currencies to begin with — the private coins and the public coins.
Your guide to the basics of cryptography
You can’t compare cryptocurrency with anything else that has value in the real world. Crypto is purely digital and you can’t get any physical bill or document tied to the currency. Before you try to learn crypto trading, you need to learn about private and public keys and their roles in safeguarding your transactions. Read this blog ahead to get an in-depth look at both types of blockchain.
These are the most common types of blockchain you will encounter while exploring the blockchain platform. As the name suggests- the general public can access the permissionless blockchain network whenever they want to.
The Key Features of Public Blockchain
· First and foremost, public blockchains are entirely decentralized. It means that there is no control or restriction over the activities that happen within the platform.
· Everyone can transact with either their peers or other users in the public network, without any restrictions
· The consensus process is also open to everyone
· However, despite the openness of this platform, your transactions are safe and private. You have to be worried about any third-party getting access to your details
· You can remain anonymous while making transactions as public blockchain networks are permissionless
The pros of using public blockchains
The benefits of using public blockchains are pretty straightforward:
1. Every participant has equal rights and access to the blockchain network
2. Since every user can see the record, it is a transparent network where the transactions are immutable
Drawbacks of Public networks
However, the public network has its downsides too and those are:
1. As everyone can join this public blockchain network, it becomes less scalable. A lot of excess work needs to be done to secure the trustless network
2. The consensus mechanism of this platform slows down the transaction rate and it leads to overall inefficiency
Unlike the public blockchains, the private one works on permissions. It means, only a few verified users can participate in it. The private networks ensure a high level of privacy, security, performance, and compliance. Do you know what is the best part of using the private blockchain platform? There is a centralized organization to look after the network and dictate all activities within the network.
The Key Features of Private Blockchains
Usually, private blockchains have three major traits-
- This platform works on permission
- It has a centralized authority
- A user has full control over the activities happening on the platform
The Pros of Private Blockchain
- Unlike public blockchains, private blockchains are very efficient. As the network works with only the trusted users there is no need to employ the consensus mechanism
- Private blockchain platforms represent an efficient distribution of tasks, where the labor is divided more evenly. As a result, it promotes faster transaction speed than public blockchains.
Reduced chances of virus attacks
The public blockchain network is always at high risk of virus attacks as literally anyone can be a participant there. But the private network verifies every entry before permitting them to enter.
The cons of private blockchains
However, no matter how much a blockchain professional likes the private platform better than the public one, it has some drawbacks too.
- They don’t work based on decentralization, the very first principle of blockchain technology
- They are very exclusive and thus everyone can’t access the network
If you want to know more about the characteristics of public and private bitcoins, Blockchain Council will be your ultimate destination for all kinds of crypto training and certifications.