Public vs Private Blockchain
Public Blockchain are open networks such as the Bitcoin allowing anyone to participate in the network i.e., public blockchain is permissionless. Anyone can read, write, or participate within the blockchain. The network is decentralized and does not have a single entity controlling the network. Data is secure and is not really possible to modify or alter data once they have been validated on the blockchain. The data are stored in blocks that are then chained together using cryptography proofs and linked to the previous block, creating a chronological record of all transactions. The entire data history can be traced back to the chain’s origin and is easily accessible by any participant. Anyone with an internet connection can upload data into the network, verify transactions and participate in the public ledger. Some of the features of public blockchain are:
· High Security - 51% rule
· Open Environment - open to all
· Anonymous Nature – no requirement of real identity and no one can track
· No Regulations – no regulations
· Full Transparency and User Empowerment– allows you to see the ledger anytime
· True Decentralization – no entity has the central control over the network
Private Blockchain are managed by a network administrator and participants need consent (such as through identity authentication) to join the network i.e., private blockchain is a permissioned network. There are one or more entities governing/controlling the network leading to reliance on third-parties to transact, thus participants need to follow specific rules. Private blockchain is also considered as a subset of public blockchain that set up the consensus algorithms and rules to meet the requirement of different industries, business cases, and scenarios. The only difference between private blockchain and traditional databases with controlled access is that private blockchains are distributed across a limited number of nodes. The consensus algorithm may vary depending on the blockchain network’s purpose, depending on its specific case. Private blockchain ensure security by keeping them hidden from the general public and can be managed by individuals within an organization. Unlike public blockchain, private blockchain are easier to implement, as implementing private blockchain would not require transactions like that of implement smart contracts in Ethereum (i.e., cost)-thus enabling a greater number of developers. The participating entities have the knowledge about the transaction whereas others (external entities) will not be able to access the transaction i.e., private. Some features of private blockchain are:
· Full privacy – focuses on privacy concerns.
· It is centralized i.e., there is a controlling agent over the network.
· High Efficiency & Faster Transaction – The performance is faster as there are less no of nodes participating in the ledger
·
Better Scalability – Ability to add nodes and services
on demand, providing great advantage to the enterprise (though the approval is
required from the governing body).
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