Private vs Public Blockchains: What’s the Difference?


The main differentiating factor between public and private blockchains is whether or not they are able to be accessed by the general population. This can make a huge difference in how many people participate with your project, so what should you consider?

The “public and private blockchain examples” are two different types of blockchains that can be used to store data. Public blockchains are open for anyone to use, while private blockchains require users to have permission from the company or person who owns the blockchain.

Private vs Public Blockchains: What’s the Difference?

Private vs Public Blockchains: What’s the Difference?


Around 13 years ago, Satoshi Nakamoto, a mystery person or group, founded Bitcoin, ushering in a new age of digital currency that is already transforming the globe. Digital currencies, of course, would never be able to achieve it on their own.

However, its underlying technology, the blockchain, turned out to have much more promise than cryptos, and definitely far more than even Nakamoto anticipated.

What is a Blockchain, and how does it work?

In its most basic form, blockchain technology is nothing more than a public digital ledger that keeps track of transactions. This refers to a digitally kept ledger of transactions that is spread over a large network of computer computers.

When participants make transactions, they are processed and validated before being stored in groupings known as blocks. The blockchain is created by placing these blocks one after the other in a chronological order. It is a historical record of all transactions that occurred inside a single network.

As a result, blockchain functions as a decentralized database that is administered by a group of people. As a result, it’s also known as DLT (Distributed Ledger Technology).

Blockchain is a new and better method of decentralized, transparent, and immutable transaction monitoring. Once data is recorded on a blockchain, it is virtually hard to erase it unless the majority of the community that controls that blockchain agrees that deleting that data is in the project’s best interests. This is what makes it resistant to fraud, hacking, double-spending, and a variety of other difficulties that were previously unsolvable unless a centralized organization had complete control over all procedures.

Over time, blockchain technology has evolved in all directions, seeking prospective applications, investigating its limitations and possibilities, and more, resulting in the establishment of two kinds of blockchains: public and private. Today, we’d want to look at both of these variants of Distributed Ledger Technology to evaluate what parallels they have, what distinctions separate them, and which one has the most promise.

Blockchains: Private vs. Public

Let’s start by distinguishing between the two sorts of blockchains: private and public blockchains.

A private blockchain is one that requires users’ permission to even access. Permissions and control are used to run these blockchains, resulting in limited network membership. To put it another way, this isn’t a public blockchain that anybody can join; rather, it’s an invite-only blockchain that only permits trustworthy organizations to know about transactions. Other third parties or stakeholders will be denied access to this kind of blockchain and the data it contains.

A public blockchain, on the other hand, is the polar opposite. It is fully permissionless, which means that anybody may join the chain and participate in it at any time. Its structure is completely decentralized, with no one body overseeing or controlling the network more than other users.

Thanks to its enormous network of users from all over the globe who contribute their processing power to keep the ledger running, all data on this blockchain is still entirely safe and impossible to edit once it has been confirmed.

Of course, there are drawbacks to this kind of arrangement, such as the lack of transaction privacy. Both versions of blockchain maintain immutability, which means that records cannot be changed or removed without the permission of the chain’s administrators. Furthermore, both forms are decentralized and dispersed. They do, however, have their differences.

What are the distinctions between private and public blockchains?

There are some key distinctions between private and public chains worth mentioning, including:

1. Access

As previously stated, private blockchains are not permissionless like public blockchains. As a result, they only enable a single group to have control over the network, preventing public engagement. They often use an authorisation method to determine who is attempting to join the network and if they should be permitted to do so.

Public chains, on the other hand, have no such limits, and anybody may join, see the ledger, read, write, and even participate in the consensus process.

2. Convergence

Consensus is another feature that distinguishes these two forms of blockchain. When it comes to public chains, participants have complete freedom to join the consensus process whenever and wherever they choose. Meanwhile, in private chains, it was decided ahead of time who would participate in the consensus process and who would not.

3. Unchangeability

As previously stated, both blockchains are decentralized, with public chains enabling anybody to join the organization that operates the chain, whilst private blockchains only enable a select group to do so. This implies that both are unchangeable. Private chains, on the other hand, are still partly immutable, since transactions and even whole blocks may still be erased from the ledger under specific conditions. In the meanwhile, once a block is recorded on the public chain, it cannot be changed or erased, making public chains truly immutable.

4. Data management

Only a single organization may access, read, and write a ledger in a private chain. That also implies that just a few users will be able to achieve it. This also gives them control over the addition and deletion of blocks. In the case of public chains, anybody may access, read, and write on the ledger, but once it is saved, it cannot be changed or deleted.

5. Transactional costs and speed

Because only authorized users are allowed to participate in transactions on private chains, the speed stays constant. In terms of price, it is usually kept to a minimum and does not fluctuate much. It’s low, consistent, and accurate.

This is an obvious benefit of private chains over public chains. Since more people are joining the blockchain, this might be overwhelming, resulting in poor speeds on most blockchains that can’t keep up with the demand.

A similar problem can be observed in the pricing of public chains, which can have relatively high transaction fees, particularly when compared to private chains.

6. Effectiveness

Blockchains that are private are nearly always very efficient due to restricted permissioned nodes and limited access to the ledger, while public blockchains suffer with scalability, speed, cost, and other difficulties, making them less efficient.

Advantages and disadvantages

Finally, in order to summarize these two sorts of chains, let’s look at their advantages and disadvantages.

Private blockchains

Private blockchains are made up of tiny networks with a limited number of members. They’re notorious for having restricted access, which makes reaching an agreement that much simpler. They are also less expensive, quicker, and more efficient as a result of this. Decision-making is quicker, as are the rates at which transactions and requests are processed, resulting in cheaper processing costs. When it comes to scalability, there are no concerns, and all other parties that have access to the network know and trust the participants.

Private chains, on the other hand, may face issues with integrity, since integrity is dependent on the standing of the individuals permitted to make modifications on the chain. As previously said, participants often have the capacity to edit or even remove blocks and data, implying that they must be exceptionally trustworthy in order to be given such authority without risk of abuse. Another downside is that a smaller number of participants makes the chain more vulnerable to outside threats like hackers. Overall, private blockchain may be more efficient, but it loses its appeal since it is so similar to centralized systems.

Blockchains that are open to the public

On the other hand, public blockchains exist. They are open to the public, which means that anybody may make transactions, join the processing party, and view what is happening on, including what transactions were done, who made them, and other information. They are completely decentralized, incredibly secure, and resistant to hacking. They are incredibly safe since data cannot be stolen, edited, or removed from them, and something can only happen if the community agrees.

They do, however, have a lot of issues to deal with. Due to scalability concerns, public chains are sluggish, take a long time to execute transactions, and the cost of processing may be fairly expensive. This reduces their efficiency and increases their cost. However, they are decentralized, really irreversible, and secure, which may make the drawbacks worthwhile.

Watch This Video-

The “public vs private blockchain in a nutshell” is a question that has been asked many times. There are differences between the two, but not all of them are obvious. The most important difference is how they handle transactions.

Frequently Asked Questions

What is the difference between private and public blockchain?

A: If your blockchain is public, anyone can see the transactions. In private blockchains, only those who have permission to participate in that particular blockchain will be able to view their transactions.

Is Bitcoin public or private blockchain?

A: Bitcoin is a public blockchain.

Whats the point of private blockchain?

A: Private blockchain is a type of distributed ledger that allows for private data to be stored on the blockchain. This means that only people who are granted access can view and edit this information, which in turn keeps personal details secure from prying eyes.

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About the author

Emilia James
By Emilia James

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