Blockchain technology is becoming a recent trend and created a huge hype in the technology sectors. Many startups and entrepreneurs started their business journeys based on blockchain development services. Nowadays, blockchain is becoming the hot talk of the town. Though blockchain technology has created a vast buzz in many industries. Such as banking, finance, healthcare, supply chain management, and more. This technology has also proved its great efficiency in developing cryptocurrency. So this technology brought us bitcoin and ethereum. Which has been popular all over the world now.
After the birth of the first digital currency, blockchain technology got introduced to many people. The huge spread of blockchain technology helped to generate many blockchain development services. Blockchain is not only used in digital currency development. because other big sectors are also benefited from the blockchain. Such as supply chain management, Data analytics, Tourism, agriculture, and much more. Blockchain has two main types such as private and public blockchain. In this blog, let us see the major difference between private and public blockchain with its features.
What is Public Blockchain?
A public blockchain is an open-source and permissionless network. Also, this kind of blockchain is open to everyone without any exception. Anyone can download it on their personal computer. Also, they can view the whole history of blockchain. Stored information, send money, receive money, and even they can create smart contracts within the blockchain. So here anyone can write, join, and participate within the blockchain. Mining is also one of the features in the public blockchain that helps users to get rewards for maintaining the network.
The public blockchain is fully decentralized and does not have any that controls the network. Once the information is completely validated in blockchain, there is no possibility of cyber-attackers to alter or modify the information. so it helps to safeguard the data and information. It is fully encrypted and stored in many devices that possess a copy of the blockchain. The purpose of the public blockchain reaches far beyond a cryptocurrency like Bitcoin and ethereum. These two cryptos are good examples of a public blockchain. It can help many communities to share data securely and openly.
Public blockchains can set their rules at the very beginning. Also, it has a few opportunities for later changes. To adjust the rules, the community needs to convince every user to make an update or accept a bug fix. As a result, public blockchain becomes slow and inefficient.
Features of public Blockchain
- Anonymous nature
- High security
- True decentralization
- Distributed ledger
- No regulations
- Full user empowerment
- Full transparency
- Open environment
What is Private Blockchain?
Private blockchains are contradictory to the public blockchain. A private blockchain is not a permissionless network and gives full control to the owners. So it restricts the people who can access and participate in the blockchain network. Here participating entities should have permission to read, write, or modify the blockchain. In order to keep data and information confidential. This blockchain has multiple-layer of data access. Thus, private blockchain provides a higher level of performance, security, and privacy.
Private blockchains are confidential in nature. So this blockchain is specifically used in some sectors. Such as the finance and government sector. This kind of blockchain has one or more entities that control the network. Also, this leads to third-parties or any intermediate to transact. In a private blockchain, only the entities joining in a transaction will know about it. whereas others will not have access and can not participate in it. Hyperledger Fabric will be a perfect example of a private blockchain.
Private blockchains can be also adopted in the corporate sectors. Here the details need to be shared only between certain nodes. For instance, a consortium of banks can adopt a private blockchain. here financial transaction details are fully shared only with the concerned parties. Media corporations Comcast, Disney, NBCUniversal, and other companies have already recognized the value of private blockchains. So they started to utilize this blockchain type to share advertising data.
Features of private Blockchain
- Faster transactions with high efficiency
- Better scalability
- Full privacy
- Compliance support
Before seeing the difference between these two types of blockchains. First, let us see the similarities between them.
Similarities Between a Public and Private Blockchain
Blockchain technology has evolved for many years and the terminology is often distorted. It is due to the private and public blockchain having some similarities between them.
- First, both are peer to peer blockchain network
- Both blockchains maintain a shared append-only ledger of digitally signed transactions. Which means that both have immutable records.
- Both are completely distributed over a peer to peer network of a computer.
- In both, the validity of the records are completely verified
- Both blockchains maintain sync through a protocol referred to as consensus.
- Private and public blockchain provides guarantee on the immutability of the ledger
Now, let us see the major difference between a public blockchain vs private blockchain
Public Blockchain vs Private Blockchain
|S.No||Basis of comparison||Public blockchain||Private blockchain|
|1||Acces||In this type of blockchain, anyone can read, write, and participate in a blockchain. so it is a permissionless blockchain. Also, It is public to everyone.||In this type of blockchain, read, write, and edit can be done only after the owner gives permission. So it is not a permissionless blockchain.|
|2||Network actors||Don’t know each other||Know each other|
|3||Type of the network||A public blockchain is more decentralized||A private blockchain is more centralized|
|4||Order of magnitude||The order of magnitude in a public blockchain is less compared to a private blockchain. Because it is lighter||Here the order of magnitude is high compared to the public blockchain|
|6||Security||It is more secure due to decentralization and active participation. Due to the higher number of nodes in the network. The possibility of attacking the system is very less. Also, it gains control over the consensus network.||This blockchain is more prone to hacks, risks, and data breaches. It is easy for attackers to endanger the entire network. So this type of blockchain is less secure.|
|7||Transactions per second||In a public blockchain, transactions per second are less.||In a private blockchain, transactions per second are high compared to a public blockchain|
|8||Consensus algorithm||In a public blockchain, it follows some consensus algorithm. Such as proof of work, proof of stake, proof of burn, proof of space, and much more||In the case of a private blockchain, it follows Proof of Elapsed Time (PoET), Raft, and Istanbul BFT|
|9||Energy consumption||It consumes more energy than private blockchain. It requires sufficient energy resources to achieve the network consensus.||It consumes less energy and power.|
|10||Native token||yes||No need|
|11||Effects||Low infrastructure cost and no need to maintain servers radically. So it reduces the cost of creating the Dapps.||Reduces transaction costs, data redundancies, and replaces legacy systems. simplifying documents handling|
|12||Attacks||No one knows each other. so the risk of potential collision or attack is high.||No minor collision and know each other. Also, they have some credentials to participate in the network.|
|13||Example||Bitcoin, ethereum, dash, stellar, and more||Corda, EWF(energy), and hyperledger fabric|
Public Blockchain vs Private Blockchain What to Choose?
Currently, security measures for public blockchain have become stronger. Also, their value will increase further in the future. However, private blockchain provides more control and restricts access to specific individuals. . so both of these blockchain technologies serve different business scenarios. Public blockchains provide a better service to B2C players. whereas private blockchains are well suited to B2B scenarios. So in the end, the choice of whether to adopt private or public blockchain is fully based on the organization that utilizes it. So businesses should choose the type of blockchain platform.