Blockchain has been the buzzword for a decade now. It has taken the world to storm. It is changing the way we handle our data. It has major impacts on various business operations, the finance sector, trading, capital market, insurance, and many more. Now, Blockchain is not alone in its industry; there are numerous sorts of blockchain that a business opts for as per their priority. There are a few other types too. Here, we will explore the feature’s similarities and compare public vs private blockchain networks.
It has been estimated in the report of Statista that global spending on blockchain solutions is forecasted to go almost 19 billion U.S. dollars by 2024. Some of the circumstances of Blockchain are data validation, data admission, identity security, etc., which are utilized by entrepreneurs for their assignments.
Source: Statista
Besides these features, it is utilized for its various types – Public and private. The data stowed by the various owners can be specified on how it could be accessed by its users and relying on which network is constructed. That is where we can talk about public and private Blockchain contributors.
Similarities Between Public and Private Blockchain Networks
Let’s start with the similarities between Public and private blockchains. At its core, blockchain is a distributed ledger.
- Both types are append-only ledgers. Records can be attached to both but can’t be eliminated or modified. For this, the term used is unchangeable transactions.
- Both setups rely on a considerable number of users to ascertain edits.
- In both, the viability of every existing document is verified & valid.
- Every network node in both these blockchains has a whole imitation of the primary record of the transaction.
Public Vs Private Blockchain: Comparing Factors
Among various types of blockchains, the significant separation is between public and private. Since this is separated, there ought to be some major differences. It differentiates how users have admission to the web. Both have their own advantages and drawbacks of both types. Let’s start exploring Public Vs Private Blockchain network separately.
Public Blockchain Network
It is the blockchain network where all can read, compose, and modify enduring actions. This type is self-governed and decentralized in nature. Some examples of public blockchain networks are Bitcoin, Ethereum, and Litecoin. Here, contributors can work as a node, which is accountable for demonstrating exchanges and preserving a copy of the distributed ledger.
These networks incentivize contributors to keep it active. This is a true solution that offers its customers entirely decentralized, authority-free procedures. Contributors of the web uphold it secure from data infringements, breaches, or other cybersecurity matters. With more involvement of more participants in the network, more will protection will be on the set of blocks.
Public networks also have some disadvantages, like it consumes huge amounts of energy for their maintenance. There is a consensus mechanism that mandates the patron to contest to substantiate the information and obtain compensation, and let the web utilize functioning power. One more drawback is that users can lose their privacy as their transaction charges and addresses are involved. There could be the involvement of different intentions amongst the patrons too.
Private Blockchain Network
It is a blockchain type that forbids the intervention of the contributors within the network. There will be one of the multiple network operators who can send the invitation link to the new users and confirm and ascertain the entry of the new participants. This validation can be a manual method of implementing smart contracts or self-regulating approaches.
A private blockchain is for organizations that want restricted networks operated by a few to store data secured with cryptographic concepts. Without permission, a node cannot be accessed for transactions, validation, or modification. These networks focus more on productivity and are steadfast.
Some drawbacks of private blockchains are these networks are prohibited for certain tasks as they are not widely functional. In the consensus mechanism, if that is the case, there are finite validators to achieve a consensus about transactions and data, and that is why this network is also liable for protection and data infringements.
Public Blockchain Vs Private Blockchain
Comparing public and private blockchain networks for various factors.
| Sr. No. | Factors | Public Blockchain | Private Blockchain |
|---|---|---|---|
| 1 | Access | Everyone | Only invited validators to the network. |
| 2 | Centralized or Decentralized | Decentralized | Centralized |
| 3 | Speed | Slow | Fast |
| 4 | Transactions per second | Lesser Speed | Higher speed compared with public blockchain |
| 5 | Security | Has a higher number of nodes, making it impossible to take validation from all nodes is harder. Therefore it is more secure. | As these have limited nodes, they are more prone to breaches and hacking. |
| 6 | Energy Consumption | Ingests More Energy | Ingests lesser energy and power |
| 7 | Attacks | As the identity of validators is anonymity, it increases the probability to increase the risk of a potential collision. | Least or no chance of any collision, the identity of the validators is known. |
| 8 | Effects | Low maintenance and therefore cost. Potential to change the current business models. | Reduces semi-manual work reducing the compliance mechanism and simplifying the complex data handling tasks. |
| 9 | Efficiency | Low | High |
| 10 | Examples | Bitcoin, Ethereum, Monero, Zcash, Dash, Litecoin, Stellar, Steemit, etc. | R3 (Banks), EWF (Energy), B3i (Insurance), and Corda. |
What and How Public and Private Blockchain Networks Offers Enterprises
Both private and public blockchain networks have their own uses, as they both aim for and prioritize different purposes. The kind of blockchain network an entity chooses to use depends on its individual use case. As the above-mentioned table, both of these networks have different contributions for each case.
As an entrepreneur or a firm, when there is a need to choose from any of these options, choosing from the blockchain business models or owning it for personal firm use, one may prioritize their preferences for blockchain networks.
Anonymity and privacy are significant parts of the success of blockchain technology. A business can choose these factors to choose a blockchain network. Replacing the manual and semi-manual tasks within the firms is preferred with the private blockchain network. However, a public blockchain is more for those who want to genuinely work on a decentralized, totally transparent, immutable system to work with larger communities.
Both these blockchain networks are continually evolving and addressing their shortcomings. So it becomes too difficult to choose the right option to develop a blockchain platform for business and determine the important aspects like cost, efficiency, access, security, speed, etc.
Take A Step Towards Your Blockchain Journey
The rapid development and widespread adoption of blockchain technology has piqued the interest of various industries, leading to an increased demand for blockchain integration within their respective domains. As a result, businesses must decide between utilizing a public or private blockchain network. In this blog, we have delved into a detailed comparison of these two options, aiming to provide a thorough understanding of each and ultimately aid in the decision-making process.
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