There is a prominent interest in Blockchain nowadays. As Blockchain: the prime technology behind cryptocurrencies has slowly started gaining popularity, organizations around the world have begun expressing their desires to have a Blockchain based database system for their daily operations.
Not only in the financial sector, but the revolutionary technology is also achieving immense popularity among other areas as well. In this article, the two kinds of networks, i.e., Public & Private Blockchain is explained and differentiated.
The similarities of public and private blockchain:
Many flavors of blockchain have grown over the years, and the terminology is usually misunderstood. Here are some of the similarities between private and public blockchain:
- Both are decentralized peer-to-peer networks, where each member keeps a replica of a shared append-only ledger of digitally signed transactions.
- Both maintain the replicas in sync by a protocol referred to as consensus.
- Both give certain guarantees on the immutability of the ledger, even when some participants are faulty or malicious.
So, how are they different?
Public Blockchain:
In Public Blockchain, anyone can read and write the data on blockchains as it is available to everyone in the world. A person can become a member of the Blockchain network and can store, send and get data after downloading the needed software on his device.
A Public Blockchain is entirely decentralized as the permissions to read and write data onto the Blockchain are shared fairly by all the connected users, who come to a consensus before any data is stored in the database.
A Public Blockchain is based on an entirely trust-less system where no user is given exclusive privileges on any decision.
As it is decentralized, a Public Blockchain is also mathematically very hard to hack as the cost of hacking shifts too steep for a system. As every node connected is synced with the complete Blockchain database and notably once a hack is found, the value of the hacked coins would reduce exponentially — thus provoking massive losses on the hacker.
As all transactions in a public Blockchain require to be confirmed by thousands of users, the transaction verification system can become very time-consuming. The users pay a higher amount of transaction fee here as compared to the Private Blockchain.
Private Blockchain:
In a Public Blockchain, here the authorities to write information onto the Blockchain are managed by one organization which is extremely trusted by the other users.
This organization may/may not let users to have access to read the data, as public readability might not be required in most cases. In some circumstances, the organization might need the public to audit the data. Confined read grants also give a greater level of privacy to the users, a trait not possible in Public Blockchains.
The organization in control can alter the rules of a Private Blockchain and may also reject transactions based on their set rules and regulations.
In a Private Blockchain, the transactions are responsive as they can be tested by a small number of devices. Thus, the users pay lesser amounts of transaction charges as the number of people confirming the transaction is lesser than in a Public Blockchain.
Also, the devices are very well-connected, and any flaws can be corrected by human intervention, which can be immediately approved by the users since the users believe the single organization in control of the Blockchain.
Wrapping Up: Which Blockchain Model is best for you?
No Blockchain can be suggested to everyone. Each model has its pros and cons. The principal interests circling Public Blockchains are privacy and scalability. Both can be mitigated to some degree but are not entirely solved at present.
Similarly, Private Blockchains have a singular point of failure and bringing various organizations to use a common model remains a concern.
Both the models are needed in diverse industries, and constant developments are being executed on both the Public and Private models.
So, which model that would f you the best? Well, that apparently depends on the type of data being stored, and who all will require the access to read and write data on the Blockchain and either all these members need to be given same or different rights of reading and writing on the database in concern.
Recommended Read: Blockchain Glossary – Learn Blockchain Frequently Used Terms
