Private blockchain vs Public blockchain
Since the time of its invention, the blockchain that had introduced the ever infamous bitcoin to us has mutated into several other types of blockchain.
But out of all the blockchains that are there in the market, there are two very particular ones that is important to the whole ecosystem as they have a lot of potential and add on a lot of value. They are namely:
- Public blockchain
- Private blockchain
In a public blockchain, anyone and everyone can participate in it. The reason being that it is an open-source and free to the whole public to use and contribute to it. Hence no one is completely in charge over here. Anyone on this type of blockchain can be part of the consensus as there are no rights and no access done on this for the general public.
As a result, anyone is free to join or leave, read or write, audit or not the ecosystem and the network will still remain trustless. Trustless here refers to one not having the need to set up a third party or outside entity to have all the operations overlooked. This type of blockchain hence still remains censorship resistance.
The decision making on a public blockchain is very difficult and extremely hard to tamper with. The public blockchain is a type of self-governed decentralized and trustless autonomy that is ensured on the system by this form of decision making. Since this decision making is unique in the fact that it cannot be tampered with, it is called realm in this context.
Bitcoin and Litecoin run on the public blockchain, hence there are a lot of members in the ecosystem, thereby making the platform consume a lot of energy, time and money due to mining. Miners in return can be assured based on the dividend, trustlessness and the information and sensitive data remains tamper resistant.
On the blockchain networks of bitcoin and litecoin, anyone and everyone can do the following:
- Anyone can run BTC/LTC full node and start mining.
- Anyone can make transactions on BTC/LTC chain.
- Anyone can review/audit the blockchain in a Blockchain explorer.
This blockchain is nothing but the exact opposite of that of the public blockchain. This is because on the private blockchain, most of the functions that are open-sourced to the general public as on the public blockchain, is not available here.
On this network anyone is not free to join or leave, read or write, audit or not the ecosystem. In order to do that, one would require permission. In a private blockchain, the owner of the ecosystem is a single entity or could even be an enterprise. They can override or even delete the commands in the network if needed to be done at any given point in time.
This is the reason why private blockchains are not considered as decentralized and therefore is referred to as a distributed ledger or database that comes in with cryptography to have it secured.
But there is always a trade off. Looking in at it, it is not actually all that bad when one compares the private blockchain to that with the public blockchain, because the private blockchain is faster, cheaper and one need not use an enormous amount of time, energy and money to come to a consensus over here.
The cons of the private blockchain is just that it is less secure and less closed as when compared to the public blockchain as it can be read, written and edited as and when deemed fit by the benefitting parties. Bankchain is a great example for this.
On the private blockchain one is restricted from the following:
- Not everyone can run a full node and start mining.
- Not everyone can make transactions on the chain.
- Not everyone can review/audit the blockchain in a Blockchain explorer.
Similarities between the Public Blockchain and the Private Blockchain
Knowing these differences between the two can help a lot in knowing which is the right type of blockchain to be used for various use cases that one might want to apply depending upon the business framework and the need for one. Apart from the differences, there are also some very important similarities that must not be overlooked.
The public blockchain and the private blockchain are similar in the sense as in:
- Both the types of the network are decentralized
- Both of them are peer to peer (P2P)
- A replica of the ledger is maintained by both of them at each node
- Both of them gets updated with a consensus
- There is immutability of different levels that is provided by both the types of chains
Before we get carried away by the similarities that we just jotted out, let’s also not forget the differences between the two chains that were well described earlier here.
In spite of the fact that there are differences and similarities between the two chains, we know for certain that the public blockchain has the power to revolutionize the world and take it by a storm. It also has an immense potential to disrupt many industries. But this does not mean that the private blockchain is not any less important. The private blockchain has the capacity to save millions of dollars for various other industries thereby reducing expenditures and having most of the things automated in a very trusted form through the technology of blockchain.