A Comprehensive Guide on Private Blockchains

This article talks about private Blockchains, how they differ from public ones, why they are crucial for enterprises, and enlists some of the sectors where private Blockchains can be applied for good. 

Table of Contents 

  • What are Private Blockchains?
  • How They Differ From Public Blockchains?
  • Why Are They Gaining Momentum?
  • Use-Cases Where Private Blockchains are Applied
  • Concluding Lines

What are Private Blockchains?

A private blockchain is a permissioned blockchain. Private blockchains function based on access restrictions that limit individuals who may interact in the network.



In other words, it is a permissioned and restrictive blockchain that operates in a closed network. These are used mainly within an organization where only particular members are participants of a Blockchain network. These are best suited for enterprises and businesses that want to use Blockchain only for internal uses. The best part is that no one can enter this type of network without proper authentication. 

Recently such Blockchains have gained a lot of importance as they help in safeguarding companies’ sensitive information. If you want to learn more and become a Certified Blockchain Expert, get enrolled in Blockchain Council now!

How They Differ From Public Blockchains?

There has always been a battle between both types of Blockchains. Let’s briefly explain the differences between the two.  

Talking about Public Blockchains, they enable anyone to write to the Blockchain, and transactions are published to everyone on the Blockchain.

On the other hand, private blockchains enable users to be sure who’s participating, and organization controls write access to the Blockchain. Thus, private Blockchain maintains complete privacy by restricting unauthorized users.

Another difference is that public Blockchains are completely decentralized, whereas private ones are partially decentralized.

To get a more clear picture, let’s distinguish both in a tabular form.

Features  Public  Private 
Accessibility  Anyone  Single Person/ Central Incharge 
Who can join? Anyone  Permissioned and known identities
Consensus Mechanism PoS/PoW Voting or multi-party consensus algorithm
Transaction Speed  Slow  Lighter & Faster 
Decentralization Completed Decentralized  Less Decentralized 

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Why Are They Gaining Momentum?

  • Fees are lower

This network allows you to transact with the lowest possible fees, and most importantly, you may not even need a fee to start with most of the time.

  • Efficient 

Such Blockchains are more efficient, and this is because they have fewer participants, meaning they can move faster.

  • No Involvement of Unauthorized Parties

Private Blockchain does not offer any scope for any unauthorized/third party to enter the network, making it more secure and reliable.

Other benefits of such Blockchains are that they have higher transaction per second (TPS) and are highly scalable. 

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Use-Cases Where Private Blockchains are Applied

  • Real Estate

The real estate market is unquestionably stressful due to fragmented operations, criminal activities, monotonous paperwork, money expenses, and the possibility of fraud. 

Private blockchain companies can help real estate sectors by offering people ownership, securing payment, and getting rid of any underlying criminal problems.

  • Insurance 

Insurance sectors deal with complicated agreement issues, deceitful claims activity, third-party transactions, and handling tremendous data. Private Blockchains offer faster and better access that leads to smoother interaction between insurers and their customers. Moreover, technology can help automate the entire insurance claim process, saving the inconvenience of waiting in line.

  • Healthcare

The healthcare sector suffers from fragmented data, delayed communications between the participating parties, and a lack of interoperability. Private Blockchain companies can help maintain patients’ confidentiality and offer access to doctors with the consent of patients. Moreover, Blockchain technology can be efficient for assuring integrity in the drug supply chain, including tracking and tracing and the concepts of provenance.

KitChain, MELLODDY Project, MyClinic.com, Verified.Me are some of the top healthcare projects that are powered by Hyperledger.

It is important to note that private Blockchains are not specified to these particular areas; instead, they can be applied in many areas such as in banking and finance, supply chain, media, entertainment, and others. 

Concluding Lines 

Private Blockchains such as Ethereum, Hyperledger, Corda, Quorum are best suitable for enterprises who want to take complete advantage of the Blockchain technology but don’t want to expose their critical data. 

If the idea of building on a private blockchain sounds interesting to you, you can get enrolled in Blockchain Council and become a Certified Blockchain Expert. 

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