Public vs Private Chains — creating trust, not opening your data

Think of the internet (public, open, accessible through basic standards) and an intranet (private, closed, accessible through a security gateway). That is an easy analogy for the public and private chains. There are nuances and the benefits of each model are counterbalanced by drawbacks.

A quick overview

When we talk about public chains and creating trust, this can be summarised by understanding that everyone with the appropriate technology can participate in the chain by using the right technology. So, in our internet example an appropriate web browser and connection to the network can allow us to consume and add to the information on the internet. In a public chain, there are defined standards and technology, that when met allows anyone to join in.

For a private chain, we would need to agree who is trusted to join that chain, who gets the appropriate standards and technology to access and how they prove they can be trusted. Using our previous analogy, intranets can be built on varying standards, have particular software required to access and sit behind security systems to keep access restricted.

Trust versus openness

The public chain is inherently trustable, because the number of people involved means that the verification of the data as it flows through the network is being done on potentially infinite occasions — the opportunities to for nefarious parties to interfere with your data are infinitesimally smaller. The downside, is that with deep analysis, it is possible to understand what your organisation is pushing through the blockchain.

Many organisations do not want their data out in the wild, so the simple solution is to restrict access to the blockchain — i.e. have a private chain. Now, you decide who can have access to the data, but you have added the requirement to evaluate trust to come into the network. If you allow a party into the network with ulterior motives and you do not have sufficient numbers of verifying systems within the private chain, you have the increased or risk of deliberate corruption of your data.


There is a second issued with public chains — as data is never removed, they grow rapidly in size. This size also reduces the speed at which they are able to process data. For example, Bitcoin’s Blockchain has passed 115Gb of size in May 2017 and will continue to grow. Private chains are a way to keep their growth down and to keep a higher processing rate available.

Balancing out

The concern with private chains is that they do not bring the full range of benefits of the blockchain — creating and verifying trust. However, with the creation of Delegated Proof of Stake this is no longer the case. Worry about centralized trust is not a problem since organisations large enough to host a private chain will also have the infrastructure needed to run their own delegated nodes, thus creating the trust needed to verify transactions. The future will be in developing application program interfaces to allow data to be moved between private chains and public chains and to do so in a way that does not openly allow data to be exposed to the public where it shouldn’t be.

Of course, the benefits of the public chain should not be forgotten. Readily accessible data can transform open government and reduce the need for regulation and interference to balance out the economic power of contracting parties.

This is part of our introductory guide to Blockchain technologies. See the other posts in this series:

  1. What is Blockchain?
  2. Cryptocurrency
  3. Smart contracts
  4. Public vs private chains
  5. Delegated Proof of Stake
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