Public blockchain network is a permissionless network, anyone can join the network anytime without any restrictions. Anyone can access the full ledger and participate in the data or transactional consensus process. For instance, Bitcoin and Ethereum are using the public blockchain for distributed ledger. Blockchain technology is now also being used in firms and entities like PwC, Mastercard, and Microsoft.
However, they are using private networks but not public. Private blockchain is a permissioned network. It is usually used between companies in a partnership to share a database or a ledger in order to keep everything transparent in between. But it is not open for the public to join and is not fully decentralized like public blockchain.
Differences between Public and Private Blockchain
Let’s discuss how public and private are different.
– Access and Authority
Public blockchain is a decentralised network, it is open for anyone to read and write. So the ledger is fully transparent to the public. Participants have full autonomy to read and write. But for private blockchains, it is partially decentralised as only authorized users can access the data but may not be able to access everything. Regulations and rules, like compliance requirements, can enable the organisation seamlessly.
In a public blockchain, anyone can participate in the verification process and add data to the blockchain. In private blockchain, only authorised users can take part and control.
To understand why public blockchain is immutable, we will need to understand about cryptographic hashes. Each block on public blockchain has a unique identity called Hash which correlates and seals in the next block. No one can alter or delete the data of the block after publishing in the blockchain. In addition, if anyone attempts to change anything, the following block will reject the alteration. Besides, any modification will need the consensus of over 51% of anonymous participants in the network. This will also immensely minimizes the chance of having ‘bad actors’ to invade the system and take over the consensus process.
Contrarily, records on private blockchain have a higher chance of change happening, as the entity is able to reach out to all their users to make the consensus over 51% for alteration. However, private blockchain has lesser participation become more susceptible to a hack and manipulation as only certain approved participants can access.
– Transaction Speed/ Efficiency
Private blockchains undoubtedly will be faster than public one, as the more users the network involves the more congested it is. It can digest hundreds or even thousands of transactions per second.
Public blockchain and private blockchain contain different features and benefits, the combination of both types of blockchain can become an integrated business solution.
We hope this video will help you to understand more about the differences between public and private blockchains. Leave a comment down below, if you found this useful. Let us know if you have any questions!