Public Vs. Private Blockchain : A Comprehensive Comparison


Ever wondered what would be the most fundamental reason for people adopting blockchain technology? The very fact that it creates a high level of trust for people to secure their data and processes over a secure network. Right from the advent of the Bitcoin in 2008 by Satoshi Nakamoto, blockchain technology is disrupting each and every industry as it is adopted at a massive rate by enterprises of every nature: small, medium, and large. More and more companies are realizing the revolutionary potential of this technology and are looking to leverage it for their daily operations, thereby making it less of a buzz word and transforming it into a forward-thinking mantra.


So, What Exactly Is A Blockchain?


Understanding Blockchain


It is a distributed, decentralized public ledger which is a continuously growing list of records which are stored in the form of blocks. These blocks in a blockchain are connected to each other through cryptography, which keeps the confidentiality of the transactions intact. A blockchain is a time-stamped series of immutable (tamper-proof) record of data which is not managed by a central authority but managed by a cluster of computers. Each and every data shared on this network is visible to all participants and each and every one of them are accountable for their actions. A blockchain perfectly defines a democratized system.


What Is A Public Blockchain?


A public blockchain is permissionless. Anyone can join the network and read, write, or participate within the blockchain. A public blockchain is decentralized and does not have a single entity which controls the network. Data on a public blockchain are secure as it is not possible to modify or alter data once they have been validated on the blockchain. Bitcoin and Ethereum are well-known examples of a public blockchain.


What Is A Private Blockchain?


A private blockchain is a permissioned blockchain. Private blockchains work based on access controls which restrict the people who can participate in the network. There are one or more entities which control the network and this leads to reliance on third-parties to transact. In a private blockchain, only the entities participating in a transaction will have knowledge about it, whereas the others will not be able to access it. Hyperledger Fabric of Linux Foundation is a perfect example of a private blockchain.

Similarities Of Public And Private Blockchains


  • Both function as an append-only ledger where the records can be added but cannot be altered or deleted. Hence, these are called immutable records.


  • Each network node in both these blockchains has a complete replica of the ledger. Both are decentralized and distributed over a peer-to-peer network of computers.


  • In both, the validity of a record is verified, thus providing a considerable level of immutability, until the majority of the participants agree that it is a valid record and reach consensus. This helps prevent tampering with the records.


  • Both blockchains rely on numerous users to authenticate edits to the distributed ledger thus helping in the creation of a new master copy which can be accessed by everyone at all times.



Differences Between Public And Private Blockchains


  • The order of magnitude of a public blockchain is lesser than that of a private blockchain as it is lighter and provides transactional throughput.


  • Level of access granted to participants- In a public blockchain, anyone can take part by verifying and adding data to the blockchain. In private blockchains, only authorized entities can participate and control the network. Examples are Bitcoin and Ethereum.


  • A public blockchain is decentralized, whereas a private blockchain is more centralized. Examples- Hyperledger and Ripple.


  • Consensus algorithms such as Proof of Elapsed Time (PoET), Raft, and Istanbul BFT can be used only in case of private blockchains.


  • Transactions per second are lesser in a public blockchain when compared to private blockchains. As the number of authorized participants is less in a private blockchain, it can process hundreds or even thousands of transactions per second.


  • A public blockchain cannot compete with a private blockchain in terms of scalability issues as it is slow and hence can process transactions only at a slow pace. In a private blockchain, as only a few nodes need to manage data, transactions can be supported and processed at a much higher pace.


  • Public blockchains are trustless, and in a private blockchain setup, participants must not trust one another. In a private blockchain, the validity of records cannot be independently verified as the integrity of a private network relies on the credibility of the authorized nodes.


  • A public network is more secure due to decentralization and active participation. Due to the higher number of nodes in the network, it is nearly impossible for ‘bad actors’ to attack the system and gain control over the consensus network. A private blockchain is more prone to hacks, risks, and data breaches/ manipulation. It is easy for bad actors to endanger the entire network.


  • A public blockchain consumes more energy than a private blockchain as it requires a significant amount of electrical resources to function and achieve network consensus. Private blockchains consume a lot less energy and power.


  • In a public blockchain, it is necessary to grant access to a centralized authority to oversee the entire network, thus making it a private blockchain at this point. In a private blockchain, anyone who is overseeing the network can alter or modify any transactions according to their needs.


  • In a private blockchain, there is no chance of minor collision. Each validator is known and they have the suitable credentials to be a part of the network. But in a public blockchain, no one knows who each validator is and this increases the risk of potential collusion or a 51% attack (a group of miners which control more than 50% of the network’s computing power).





As you may now know, blockchain technology is a highly complex and profound field which consists of numerous concepts and different types of blockchains. It is important to understand these concepts as being aware of the features which differentiate public blockchains from private blockchains is necessary and advantageous to help elevate your understanding to the next level. Understanding the types of blockchain networks is as important and essential as knowing what a blockchain is and how it applies to cryptocurrency.


Coming to the question of which blockchain is better, a public blockchain seems to stand out as the best option as it can be applied in a majority of use cases as it is free from restricted access. In the case of other hybrid solutions, using a combination of both public and private blockchains may represent viable solutions for businesses.

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