blockchain Technology

Blockchain technology has existed since about 2009, when Bitcoin was added to the area. Since then, many industries have advanced and followed it for diverse purposes, alongside supply chain management, vote-casting structures, and identification manipulation. As blockchain adoption has increased, the idea of public and private blockchains has drawn vital attention for organizations to figure out which sort of blockchain to apply.

This article will discover the essential element variations between public and private blockchains.

What is a Public Blockchain?

Public blockchains are decentralized networks wherein anyone can be part of and participate. This means that everybody can join the network and validate transactions. These are open and transparent networks where everyone can see the transactions and the modern kingdom of the blockchain. The public blockchains consist of Bitcoin, Ethereum, and Litecoin.

Censorship resistance is a first-rate characteristic of public blockchains. This method means that no single entity can manage the network. Once nodes inside the network validate a transaction, it is added to the blockchain and can’t be altered.

However, there are also some risks to public blockchains. For instance, they may be slower and less scalable than private blockchains due to the excessive extent of processed transactions. Additionally, since the community is open and transparent, there are concerns about privacy and confidentiality.

What is a Private Blockchain?

A private blockchain network is controlled by a single entity or employer. These networks are commonly used for commercial enterprise applications and aren’t open to the general public. Participants in a private blockchain are widely regarded as pre-approved using the network administrator. Examples of personal blockchains include Hyperledger Fabric, Corda, and Quorum.

In contrast with public blockchains, private blockchains are faster and more scalable. A single entity controls the network, and fewer nodes validate transactions. Additionally, since the network is private, there are fewer concerns about privacy and confidentiality.

Private blockchains, however, also have some disadvantages. For example, they are less secure than public blockchains because a single entity controls them. If that entity is compromised, the entire network could be at risk. Additionally, there are concerns about trust and accountability since the network is not open and transparent.

Difference between Public and Private Blockchain

Have a look at this table for better clarity regarding the differences between the two: of comparisonPublic BlockchainPrivate Blockchain
1.AccessThis blockchain does not have any permission. Anyone can read, write, and participate in this one as it is public.This is a permissioned blockchain, and only after invitation can anyone read and write.
2.Network actorsAs it is public, they do not know each otherBecause it is private, they know each other
3.Decentralized vs. centralizedIt is a decentralized oneIt is more centralized
4.Order of MagnitudeBecause a public blockchain is smaller and offers transactional throughout, its magnitude is lower than that of a private blockchain.The order of magnitude is higher compared to the public blockchain.
5.Native tokenYesNot required
7.Transactions per secondLesser than private blockchainMore as compared to public blockchain
8.SecurityDecentralization and active involvement make a public network more secure. It is difficult for “bad actors” to assault the system and take over the consensus network because of the larger number of nodes in the network.Hacks, hazards, and data breaches/manipulation are more likely to occur on a private blockchain. It is simple for bad actors to put the entire network in jeopardy. It is, therefore, less secure.
9.Energy consumptionA public blockchain needs a sizable amount of electrical resources to operate and reach network consensus, so it uses more energy than a private blockchain.Private blockchains use a great deal less electricity and energy.
10.Consensus algorithmsConsensus algorithms include proof of work, proof of stake, proof of burn, proof of space, etc.Raft, Istanbul BFT, and Proof of Elapsed Time (PoET) can only be used with private blockchains.
11.AttacksWith a public blockchain, no one is aware of the identity of each validator, which raises the possibility of a collision or a 51% attack (in which a small number of miners command more than 50% of the network’s processing power).There is no possibility of a small collision on a private blockchain. Each validator is identified and has the required credentials to participate in the network.
12.EffectsIt has the possibility of disintermediation disrupting present business paradigms. The infrastructure costs are cheaper. It does not need extreme server or system administration maintenance. Hence, the cost of developing and maintaining decentralized applications is reduced (dApps).Eliminates data redundancies, lowers transaction costs, replaces old systems, streamlines document processing, and does away with semi-manual compliance mechanisms.

Which one is better?

The choice between a public or private blockchain relies upon the business enterprise’s unique use case and necessities. Public blockchains are generally used for applications that require transparency and decentralization, which include cryptocurrency and voting systems. Private blockchains, such as supply chain and identification management, are typically used for enterprise programs requiring speed, scalability, and privacy.

Wrap Up

Public and private blockchains have their unique characteristics and benefits. While public blockchains offer decentralization and security, private blockchains provide pace, scalability, and customization. Organizations can decide the form of blockchain for their unique use case by understanding the essential differences between public and personal blockchains. Organizations should cautiously examine their requirements before determining which kind of blockchain to apply.

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