If you’re a newbie in the crypto space, you may have been hearing the word “Blockchain” a lot. The truth is that there won’t be cryptocurrency projects without the blockchain. Even the most popular crypto, such as Bitcoin, Ethereum, Ripple, Litecoin, are all built on blockchain technology.
A blockchain is a public ledger or data structure where users store records of transactions to ensure transparency, decentralization, and security. Blockchain technology is a public database for digital assets, which means that anybody can use it.
Presently, there are many types of blockchain. But in this article, we’ll be concentrating on the two popular ones-public and private blockchains. So, if you want a clear understanding of the differences between the private and public blockchains. We can help you with that as we discuss them in this article.
This is a type of blockchain which anyone can use. According to the name, public blockchains are open, and the codes are accessible for anyone to write, read, or participate when they want. Users of public blockchains don’t require permission to use the network. It is decentralized, distributed with transactions recorded as blocks that link together to create a chain.
On public blockchains, every new block must have a timestamp, and all computers connected to the networks must validate the block. These computers are what we call nodes, and before recording any block on the public blockchain, the nodes must validate it.
Every transaction on these blockchains are public, and the nodes or computers are equal. That’s why we refer to the public blockchain is immutable. Once the nodes verify the data and record it on the ledger, no one can alter it.
If you want to join the public blockchain network, all you need to do is download it and run a public node. Once you do that, you can validate transactions through the consensus protocol, which can be Proof of Stake (POS) or Proof of Work (POW).
Another point to note about public blockchains is that they allow the creation of smart contracts. Also, the privacy of users has always protected the network identifies ownership of wallets through a string of numbers that no one can identify nor control. Few of the cryptocurrencies that are on the public blockchains include Bitcoin, EOS, Ethereum, etc.
Another name for private blockchains is permissioned blockchains. It is a blockchain that a company, an individual, or a firm sets up and allows participation by granting permissions.
In a private blockchain, transactions are verified by the participants, committees, or even groups selected for it. These types of blockchains operate under a central authority or legal entity. It is not open for everyone, and it is purely centralized.
The central authority governing the operations of the blockchain reserves the power to delegate mining rights or not. Even though we can’t say that private blockchains are more secure than their public counterparts, they help organizations to manage data, improve security, and enforce privacy rules on the blockchain.
When it comes to operations, every validator or participant of a private blockchain is known to all others. Also, private blockchains are scalable, and members trust one another and not the network code. participation is based on invitation only, and unless you have the permission to write, read, or audit, you cannot do them.
Due to the centralized nature of operations, access to information is based on hierarchy. This means that some information may be encrypted for some participants according to their levels. But, private blockchains are more efficient, faster, and even cost-effective when you compare to public blockchains.
Private Vs. Public Blockchain
When it comes to the privacy of the network, Private blockchains take it to a different level. These networks are not open to everyone. If you must be a participant, you need permission from the central authority to do so.
But public blockchain allows everyone to download the code and run a node. You can write, read, or audit without the permission of any authority. So, while private blockchains are closed and centralized, public blockchains are open and decentralized.
Private blockchains are scalable. They’re often built for one particular purpose of which a large organization aims to pursue. As a result, it’s easier to scale the network. But public blockchains are not scalable because many people adopt them for different reasons, and every day, transactions on the network increases.
Both public and private blockchains don’t support interoperability. They don’t allow cross-blockchain or cross-platform transactions yet. However, supporters believe that one day it will happen.
Now you know what to expect when you’re on private or public blockchains. While the private types are only for some selected participants, the public blockchains are open and accessible to all and sundry.