Private Blockchain: How it is Different From Public Blockchain?

If you are wondering what are the types of blockchains and how public blockchain differs from private blockchains, you have landed on the right page.

Learning Of Blog

  • Introduction to Blockchain Technology
  • Standard Features of a Public and Private Blockchain
  • Differences Between both the Blockchains
  • Conclusion


Introduction to Blockchain Technology

Blockchain technology has enabled a new wave of technological progress that is disrupting many industries, be it the finance domain, healthcare, supplychain management, asset management, or any other space. Its ability to seamlessly secure data in a transparent and verifiable manner through a decentralized system has gained the attention of businesses and organizations globally. Blockchain technology incorporates ‘trustlessness’ through a distributed network of computers, can streamline the data verification process, and enable cheap and fast transactions without the need for a central authority.


When talking about blockchain, one of the primary questions is what is the difference between public and private blockchains. Further, in this article, let’s take a look at the pros and cons of public vs. private blockchains.


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Standard Features of a Public and Private Blockchain


Before understanding the differences between the two types of Blockchains, let’s figure out what are some standard features of a public and private blockchain.


  • Private and public blockchains are distributed and decentralized over a peer-to-peer network, where each node contains a complete copy of the ledger. Moreover, both the types of blockchains are ‘append-only’ ledger, where records can be added, but cannot be modified or deleted.



  • Both blockchains also provide a certain level of ‘immutability’ by verifying the efficacy of a record until the majority admit it is a valid record and reach ‘consensus.’ This concept further prevents record tampering. 



Differences Between Both the Blockchains- Private vs. Public Blockchains 


Public Blockchain


It is a permissionless blockchain where anyone can join the blockchain network and can read, write, participate, or leave with a public blockchain.

There is no access or rights management done in this type of blockchain, and anyone can be part of the consensus. Thus we can say that Public blockchains are completely open, unlike private blockchain. Examples include Bitcoin and Ethereum. 


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Private Blockchain


Unlike a public blockchain, a Private Blockchain is a permissioned blockchain where networks place restrictions on who is allowed to engage in the network to perform activities and in what transactions. It allows only certain authorized entities to participate in a closed network and grants specific rights and restrictions to participants in the network.

When compared to the public blockchain, a private blockchain is more centralized. This is because only a small group of participants controls the network.


Examples- Ripple(XRP) and Hyperledger.


Now, as we have understood the significant difference between both the blockchains, let’s learn about the pros and cons of each of the blockchains.


Pros of Private Blockchains over Public Blockchain


  • Higher Transactions Per Second(TPS)

Private blockchains can process much higher TPS when compared to public blockchains, because of the existence of a few authorized participants in the network.


  • Scalability

As only a few nodes are authorized and efficient for managing data in private blockchains, transactions can be processed at a much higher speed. Also, the decision-making process is much faster as compared to the public blockchain.


Cons of Private Blockchain Over Public Blockchain


  • Centralized– Private blockchain is more centralized as it is generally utilized by smaller groups such as businesses and enterprises.



  • Security– When it comes to security, private blockchains are more prone to security threats and other vulnerabilities because it has fewer nodes; thus, bad actors can gain access quickly.



  • Needs Trust– Private blockchain requires trust as authorized nodes must be trusted to verify and validate authentic transactions, unlike public blockchain.



Public Blockchain- Pros and Cons 


Now as we have seen how both the blockchain differs, it is easy to say that unlike Private Blockchain, Public Blockchain is


  • Open and transparent
  • Trustless and most importantly,
  • Secured 


What are its cons? Public Blockchain is slow and deals with scalability issues.




Both the blockchain offers several different purposes, and to say which is better than the other, won’t be right as it all depends on the objective and goals of your businesses. Today majority of the use cases rely on a public blockchain, but this does not mean private blockchain does not offer viable solutions. To end up the discussion, we can say that a lot of real-world use cases make use of permissionless and permissioned blockchain integrated seamlessly.


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