Hello everyone! This blog is a great discovery about the key differences between public vs private blockchains.
There is no doubt that the popularity that blockchain has gained due to its unique features (Decentralization, Smart Contracts, and others) is unparalleled.
From education to healthcare, and from finance to supply chain management, there is no sector where this technology has not left a lasting impact.
However, despite this rise of Blockchain, there are many users, especially those who are newbies think that all types of blockchain, including public and private, have been created equally. Funny, as well as surprising…..
Although these blockchains seem to be similar, they differ significantly in their access, functionality, structure, and other features. Understanding these differences is very important to know which Blockchain suits your business better.
So, ready to know these differences? Stay connected with us till the end…..
What Are Public Blockchains?
A public blockchain refers to a decentralized network where anyone can join the network, read the data, and validate transactions.
Such blockchains are considered permissionless, which means that anyone with a strong internet connection can easily join the network and participate as a node. Below, we have listed some key features of these blockchains.
- A public blockchain network is open to everyone.
- As everyone in the network is anonymous, you don’t need to use real data and a real identity.
- You will not face any type of regulation as a node.
- No scope for corruption, and you can see the ledger at any time.
- If anything is written, it can never be changed, ensuring immutability.
What Are Private Blockchains?
On the contrary, private blockchains are centralized blockchains that are managed by an administrator of a specific network.
Here, a participant has to consent to join a network, as it is only accessible to authorized persons. For transactions, the network has to rely on third parties. Here’s further detail about these blockchains.
- As discussed, these are centralized, which means they fully focus on privacy.
- With a few participants, they offer very fast transactions.
- Several rules and regulations are set for participants, enhancing control over a network.
- This blockchain offers better scalability, meaning it can handle a large number of transactions per second with the same performance or efficiency.
Public Vs Private Blockchains – What Are the Differences?
In this section, we will discuss some differences between public vs private blockchains, focusing on how they differ in terms of scalability, security, and others.
1. Security
Security is the top priority of all sectors, from financial institutions to supply chain management. Whether you are running your own business or involved in cryptocurrencies, securing sensitive information is very important. Now, we have to see whether public or private blockchains win in terms of security.
- Public Blockchains: If we come to a public blockchain, there is a large number of nodes that are active across a network. Due to its decentralized nature, this blockchain is considered more secure, making it very difficult for hackers or cybercriminals to gain control over the network.
- Private Blockchains: On the other hand, this blockchain only consists of a few nodes, making it more prone to hacking. Here, bad actors and criminals can easily damage the entire network. However, it is less secure.
- Which one is better? Here, we don’t need to declare the winner, as you would have noticed that public blockchains offer extra layers of security.
2. Scalability
Scalability in blockchain refers to the ability of any network to handle a large volume of transactions without compromising performance. It’s time to see whether public vs private blockchains offer a high level of scalability.
- Public Blockchains: A public blockchain is decentralized, making it very difficult for a network to handle a large volume of transactions. As the number of participants and transactions increases, the network may experience slower transaction processing times.
- Private Blockchains: As compared to a public one, private blockchains offer higher scalability. As a network is a combination of a few authorized nodes, it can process transactions more efficiently and faster.
- Which one is better? This time, the winner is private blockchain, as it has the ability to handle a large volume of transactions, leading to more efficiency.
3. Energy Consumption
Most blockchains require a sufficient amount of energy to function, especially when it comes to transactions. Again, we will check which type of blockchain is better in terms of energy consumption.
- Public Blockchains: Public blockchains require a large amount of energy, as they have to rely on several electrical resources. Additionally, these blockchains use a Proof-of-Work consensus mechanism and consume significant energy for transaction validation, as well as cryptocurrency mining.
- Private Blockchains: On the contrary, these blockchains require less energy for transactions as compared to public ones. They increase output efficiency by saving a large amount of energy.
- Which one is better? Again, the winner is private blockchain due to its lower energy requirements.
4. Immutability
Immutability is the inability to alter the data that is added to the blockchain at once. It is one of the most prominent features that ensures data integrity across various sectors. Let’s compare public vs private blockchains based on immutability.
- Public Blockchain: In public networks, the entire data and transactions are highly immutable, and they can’t be altered by any node.
- Private Blockchains: Unfortunately, private networks, due to their centralized nature, can’t offer higher immutability, and the transactions can be easily altered by a member of the network.
- Which one is better? If you prefer higher data integrity, the public blockchains are the best options. They ensure permanent records where data integrity and transparency are important.
5. Stability
The ability of any network to maintain consistent performance and avoid disruptions is directly proportional to stability. Now, we will check which blockchain has higher stability.
- Public Blockchains: Public networks have lower stability, as they often face network congestion, fluctuating transaction fees, and slower processing times( discussed earlier).
- Private Blockchains: Compared to public blockchains, these are quite stable. Since a few authorized participants and nodes are involved, the network is open to all, and the environment is more predictable.
- Which one is better? When it comes to this factor( stability), public blockchains have no comparison with private ones, leading to smoother transactions with fewer disruptions.
Public Vs Private Blockchains: Final Thoughts
In recent years, blockchain technology has gained huge popularity due to its outstanding features. However, there are many users for whom all blockchain technologies are the same. To eliminate this wrong concept, we have brought this comparison guide, in which we have discovered differences between public vs private blockchains.
Both these blockchains differ in various aspects, including security, scalability, immutability, and stability. Public blockchains are ideal for decentralized and transparent systems, while private blockchains are better for businesses that prioritize speed, privacy, and control.
Frequently Asked Questions
1. What is an example of a public blockchain?
There are many notable examples of public blockchains, such as Bitcoin, Ethereum, and Kadena.
2. What is an example of a private blockchain?
Some prominent examples of private blockchains include Hyperledger and Corda. Only selected users can maintain the shared ledger, while the owner can edit and delete entries.
3. How to make a public blockchain?
To make a public blockchain, you have to follow simple steps, such as;
- Define the use case.
- Select a blockchain platform.
- Design a network.
- Develop smart contracts.
- Testing the blockchain.
