Kadena’s Private Blockchain 101

Vivienne Chen
Published in
4 min readMar 9, 2019


Evaluating how our private blockchain solution sets us apart from the competition

What is Kadena’s Private Blockchain?

Kadena’s private blockchain platform is one of the most reliable, fast, scalable enterprise blockchains in the market, enabling organizations to efficiently transact and share data in a decentralized manner. Kadena’s team brings experience from building JP Morgan’s blockchain and algorithmic trading technology as well as systems for the U.S. Securities and Exchange Commission.

This next-generation technology solves the challenges with current generation blockchains — issues such as speed, scalability and security limitations:

  • On speed: Kadena is proven to support up to 8,000 transactions per second
  • On scalability: Kadena is proven to support high speeds across 500 nodes, without any performance degradation
  • On security: Kadena is a real blockchain with the safest smart contract language, Pact, purpose-built with blockchains in mind

What is a private blockchain?

A private blockchain, sometimes known as a “permissioned” blockchain or an enterprise blockchain, is a distributed ledger where only invited users can join and access the ledger data within the network. This differs from public blockchains like Bitcoin, Ethereum, or Kadena’s public blockchain, where anyone can join a public, decentralized network and contribute to the ledger. Both types of blockchain provide a means of recording and replicating an immutable, cryptographically secure ledger. On private blockchains, this is performed through consensus mechanisms like voting; on public blockchains, this is performed through various consensus mechanisms including mining. (Extra: find out more on why mining isn’t compatible with private blockchain.)

Why use a private blockchain?

Private blockchains are advantageous when you want to get the benefits of blockchain — instantaneous, perfect replication, effortless administration, upgrades without service interruption, and ease of growing the network — but only want approved users to participate in accessing or sharing the sensitive data.

Our private blockchain can also be used effectively as a “side-chain” to a public blockchain to speed up transaction processes and create new marketplaces for data.

What is an example of a private blockchain use case?

Problem: Healthcare insurance providers have a regulatory mandate to maintain accurate directories of the care providers in their network so that consumers can search for “in-network” physicians whose services are covered by their health plan. These insurance providers spend $2.1B annually chasing and maintaining this provider data, and 75% of that cost is duplicative. In 2017, roughly half of the records in these provider directories had errors, and each error can incur a $25K penalty by regulators.

Solution: Kadena completed a pilot proof of concept project for a large healthcare consortium that demonstrated how blockchain technology eliminates the duplication of effort in collecting and verifying provider data used for directory information. Kadena’s enterprise blockchain solution showed how providers can share data and buy and sell records using a blockchain-powered marketplace which provides security at scale and speed. This transforms the burden of maintaining provider data from a cost center into an enterprise business asset.

What makes Kadena’s Private Blockchain different from other private blockchains?

On its own, Kadena’s permissioned blockchain delivers scalability and usability beyond any other private blockchain today.

As part of the Kadena hybrid blockchain ecosystem running the smart contract language Pact and with integration to our public blockchain, Kadena’s private blockchain becomes even more powerful. Here are a few of the additional features and benefits that only Kadena can provide to the private blockchain market:

  • Automatic bug detection through formal verification
  • Human-readable code that is accessible to programmers and executives alike
  • Flexibility to upgrade smart contract terms to reflect changing business needs
  • Easy integration to existing enterprise databases with a native API
  • Advanced security options like key rotation and pluggable encryption allow you to dial up security to meet your specs

Kadena’s heritage in JP Morgan and the SEC gives us profound insight into the strict requirements and business workflows that secure $100B order books. We have designed our tools to satisfy these existing needs, and thought ahead to solve the challenges that will face the market.

What is Kadena’s private blockchain consensus mechanism?

Kadena’s private blockchain uses a “Byzantine Fault Tolerant” (BFT) consensus protocol. BFT refers to the ability for a network (a group of computers) to continue working in the face of breakdowns or errors. The term comes from an old computing problem (see, “Byzantine General’s Problem”),. Kadena’s BFT consensus means that participants do not need to have absolute trust in each other to collaborate securely on the ledger. This is important, as it allows for use cases where industry competitors can form a consortium to share sensitive data in ways that benefit everyone and know the ledger will remain tamper-proof.

Try our AWS and Azure versions for free today and experience why Kadena’s Private Blockchain is used by Fortune 500 companies and startups alike.