Public Vs Private Blockchain
When we try to understand the main difference between a public and private blockchain, it is important to notice that the terminology in the media gets often improperly stated.
A Public Blockchain is a permissionless blockchain. Anyone can join the blockchain network, meaning that they can read, write, or participate with a public blockchain. Public blockchains are decentralised, no one has control over the network, and they are secure in that the data can’t be changed once validated on the blockchain.
On the other hand, a Private Blockchain is a permissioned blockchain.
Permissioned networks place restrictions on who is allowed to participate in the network and in what transactions.
Some of the benefits of public blockchains are:
- Open Read and Write
Anyone can participate by submitting transactions to the blockchain, such as Ethereum or Bitcoin; transactions can be viewed on the blockchain explorer.
- Ledger Is Distributed
The database is not centralised like in a client-server approach, and all nodes in the blockchain participate in the transaction validation.
When something is written to the blockchain, it can not be changed.
- Secure Due to Mining (51% rule)
For example, with Bitcoin, obtaining a majority of network power could potentially enable massive double spending, and the ability to prevent transaction confirmations, among other potentially malicious acts.
Some of the benefits of private blockchains are:
- Enterprise Permissioned
The enterprise controls the resources and access to the blockchain, hence private and/or permissioned.
- Faster Transactions
When you distribute the nodes locally, but also have much less nodes to participate in the ledger, the performance is faster.
- Better Scalability
Being able to add nodes and services on demand can provide a great advantage to the enterprise.
- Compliance Support
As an enterprise, you likely would have compliance requirements to adhere to, and having control of your infrastructure would enable this requirement more seamlessly.
- Consensus More Efficient (less nodes)
Enterprise or private blockchains have less nodes and usually have a different consensus algorithm, such as BFT vs POW.