The Blockchain has created a new wave of technological advancement that can affect many sectors and systems in the future. The ability to keep data completely transparent and verifiable through a decentralized system has attracted the attention of individuals and businesses and has led many to embark on the train in search of a better alternative.
”One of the most critical questions that is often asked is the difference between a public and private blockchain, and which of these two structures is most appropriate for a particular use case.”
Transactions on the public blockchain are transparent and publicly invariable (the data can not be manipulated or altered in any way), but this could be an obstacle for companies wishing to maintain confidentiality data from their customers. . On the other hand, Private blockchains are much faster and more scalable, but they are more centralized and may be vulnerable to manipulation.
This guide will explore the differences between a Public Blockchain and a Private Blockchain to better understand the advantages and disadvantages of both structures and their future uses.
Blockchain in General
First, let’s start with the main features of what Blockchain really is. Blockchain is the underlying technology behind cryptocurrency and offers a new way to protect data transparently and securely thanks to its decentralized structure. Here’s how blockchain technology works:
Blockchain involves a “lack of trust” in a distributed computer network that works towards a common goal system, eliminating the need for intermediaries or third parties. This would greatly simplify the data verification process by enabling fast and cost-effective transactions. More importantly, the blockchain offers an incredible potential for transitional authentication without the need for a central authority.
Similarities Between Public and Private Blockchain
- Both are an ‘append-only’ ledger, where records can be added, but cannot be changed or deleted; records are therefore called ‘immutable’.
- Both are distributed, ‘decentralized’, over a Peer-to-peer network of computers, where each network node contains a complete replica of the ledger.
- Both provide a certain level of ‘immutability’ by verifying the validity of a record until the majority agree it is a valid record and reach ‘consensus’. This further prevents tampering with the records.
Differences Between Public and Private Blockchain
The main difference between a public blockchain and a private blockchain is the level of access granted to subscribers. During decentralization, public blockchains are completely open, allowing everyone to participate by checking or adding data to the blockchain (a process called “mining“). Examples of public blockchains are Bitcoin (BTC) and Ethereum (ETH), created using open source computer codes that can be inspected, verified, and downloaded by anyone wishing to become a complete node or miner.
On the other hand, private blockchains allow only certain authorized entities to participate in a closed network. Also known as “permissioned blockchain”, private blockchains grant certain rights and restrictions to network participants. Private blockchains are more centralized because only a small group of participants controls the network. Examples of private blockchains include ripple (XRP) and hyperledger.
Getting to know what the public and private blockchains are, the differences and the similarities between the two. I am so sure you can decide on your own on which one to go for. Have a nice time!!!
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