Due to its decentralized and immutable characteristics, which make it perfect for secure and transparent data storage and transfer, blockchain technology has become more popular over the past ten years. Public and private blockchains are the two main varieties. We shall examine the distinctions between public and private blockchains in this post, as well as each type’s unique applications.
Public Blockchains
- Public blockchains are decentralized networks that welcome participation from all users. Anybody may read data from the blockchain, post data to it, and take part in the consensus process that certifies transactions. These blockchains are accessible to everyone, and no authorization is needed. The public blockchains for Litecoin, Ethereum, and Bitcoin are examples.
- Applications that need security, decentralization, and transparency should use public blockchains. Public blockchains provide several important benefits, one of which is security. This is because public blockchains are secured by a consensus mechanism that ensures that any changes to the blockchain must be approved by a majority of network users. Public blockchains are the best option for storing sensitive data, including financial transactions, medical records, and identity verification, because of their security.
- Since no single entity has authority over the network thanks to the consensus mechanism, public blockchains are also more resilient to censorship and manipulation. Public blockchains are the best choice for applications that require trust, like voting systems or supply chain management, due to their resilience to manipulation.
- Public blockchains do, however, also have significant drawbacks. They are frequently slower and more expensive than private blockchains since they are accessible to the general public. Also, the restricted scalability of public blockchains might result in longer processing times for transactions and higher costs.
Private Blockchains
- Permission is needed to access private blockchains, also referred to as permissioned blockchains. Companies and organizations often utilize these blockchains to safely store and transfer data among a small number of participants. Hyperledger Fabric and Corda are a couple of examples of private blockchains.
- Applications that need anonymity, efficiency, and scalability should use private blockchains. Private blockchains are frequently quicker and more effective than public blockchains since they are not accessible to the general public. Private blockchains are also suited for enterprise-level applications like supply chain management or financial transactions since they can be tailored to specific company requirements and use cases.
Why is a public blockchain superior to a private one?
Using public blockchain has some benefits over utilizing private blockchain, including:
- Decentralization: Unlike private blockchain, which is governed by a single entity, public blockchain is decentralized and has no central authority. Decentralization makes ensuring that no one organization has total control over the network and contributes to maintaining the honesty and openness of the system.
- Security: Private blockchains frequently rely on permission access controls, whereas public blockchains frequently use a consensus process to maintain network security. Public blockchains contain more nodes confirming transactions, making them less susceptible to assaults.
- Transparency: Public blockchains are transparent since every transaction is recorded on the ledger, but private blockchains have the option to restrict information access. For applications where openness is crucial, such as supply chain management, voting processes, and identity verification, public blockchains are especially helpful.
- Interoperability: Compared to private blockchains, which can be segregated and restricted to a single network or organization, public blockchains are more interoperable. Public blockchains can communicate and share data, allowing for the development of more sophisticated decentralized applications.
The use of public blockchain has various drawbacks over private blockchains, such as longer transaction times and more energy usage. Moreover, public blockchains might not be appropriate for applications where confidentiality and privacy are essential. The choice between public and private blockchain ultimately comes down to the particular use case and the requirements of the company.