Private Blockchain is the direct opposite of public blockchain. In Private blockchain, one can not be read / written or checked at any time unless you have permission to do so.

In private blockchains, the owner of the blockchain is a single entity or company that can override / delete commands in the blockchain as needed. For that reason, it is not decentralized in the true sense of the term, and therefore can not be called a distributed ledger or a cryptographic database to protect it.

But it’s not so bad compared to the public blockchain, it’s much faster and cheaper because you have a lot of energy, time and money to reach consensus.

In another sense, however, it is much less secure and closed compared to a publicblock chain, as it can be edited / written or read at will and by the beneficiary parties.

Example is the Bankchain

In such a blockchain type:

-> Not everyone can run a complete node and start mining.

-> Not everyone can do transactions in the chain.

-> Not everyone can check / audit the blockchain in a blockchain explorer.

Pros and Cons of a Private Blockchain

Restricting access to data or certain functions, such as writing or reading data, is one of the main advantages of private and authorized blockchains. Private blockchains have different consensus mechanisms and are more suitable for a consortium of organizations such as the banking sector. Here are the pros and cons of a private blockchain:


Faster: Private blockchains can handle transactions per second (TPS) much higher than public blockchains because only a few authorized subscribers were involved in obtaining a consensus for the network. This allows more transactions to be processed for each block. Private Collateral (TPS) versus 7 Bitcoin TPS.

Scalable: Since only a few nodes are authorized and responsible for managing the data, the network supports and processes much larger transactions. Control of a decentralized system in which the decision-making process is more central and thus much faster.


Trust is needed: You do not have to trust anyone in the public blockchain. The integrity of the private chain network depends on the credentials of the authorized nodes. You need to be reliable and validate authentic transactions. In addition, the validity of the records can not be independently verified. External actors must be on a private blockchain network. Therefore, a degree of trust and accountability is required.

Security: With fewer nodes, it is much easier for a “bad actor” to gain control of the network and endanger the entire network. A private network is much more vulnerable to the risks of hacking and data manipulation

Centralization: The private network or a consortium of industrial companies, which includes the management of a complex identity and access management (IAM) system for users. This often leads to a centralization that we would prefer to avoid with Blockchain!

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