blockchain Public and Private Blockchains: What's the Difference?
23-02-19
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What Makes Public Blockchains Different from Private Blockchains?
The uses of blockchain technology are not limited to financial transactions.
What is a blockchain and how do public and private blockchains differ from one another?
A distributed ledger system that immutably records transactions between two or more parties is the foundation of a blockchain. Blockchains are decentralized, secure, and transparent.
Blockchains come in two major flavors, though: public and private.
We'll examine the security distinctions between the two forms in this post, along with which kind of blockchain is best for your requirements.
A public blockchain: what is it?
An open-source network where anybody may join and access the data recorded is a public blockchain.
All transactions are tracked on a central ledger that is updated by several networked computers, or "nodes." Because no one entity can control or alter the data without the agreement of all other network users, this makes public blockchains extremely safe.
Because to the fact that they provide users total control over their money and enable them to choose to remain anonymous if they so want, public blockchains are frequently utilized for cryptocurrency transactions. They also enable peer-to-peer payments to be done directly between individuals without of going through a middleman like a bank or payment processor.
A private blockchain: what is it?
In that they employ distributed ledger technology (DLT) to immutably record transactions between two or more parties, private blockchains are comparable to public blockchains in this regard.
Private blockchains, in contrast to public blockchains, are closed-source and require administrator approval before anybody may join the network.
This indicates that the data on the chain may only be seen or updated by authorized users.
Businesses who want more control over their data but don't want it accessible to the general public sometimes employ private blockchains. Because only authorized users are able to read or edit the data on the chain, they also provide more privacy. Because fewer nodes are required for each transaction to be validated, they also provide quicker transaction speeds than open networks.
Public and private blockchains have different levels of security
The main security difference between public and private blockchains is who is allowed to access or post data to the chain. In contrast to a public network where anybody may join and view stored data, a private network only allows users who have administrator permission to join and access saved data. In other words, a private chain offers better privacy since only authorized users can read or upload data to it, in contrast to a public chain where anybody may view the data stored on it.
These two different blockchain kinds' organizational structures constitute a significant additional distinction.
Sources:
[1] Forbes Business Council: Public vs. Private Blockchain: Which One Should Your Business Use?
[2] Foley & Lardner LLP: Types of Blockchain: Public, Private, and Everything In Between
[3] Investopedia: Public vs. Private Blockchains: Challenges and Gaps
