Public vs Private Blockchain: Which is Right for Your Business?
In today’s world, there is a lot of debate on choosing between Public and Private Blockchains for business operations. It is important to understand the difference between the two to decide which one is right for your business.
| Public Blockchain | Private Blockchain | |
| Definition | Public blockchains are decentralized and open to anyone who wishes to join, meaning that anyone can see, validate, and add to the data stored in the shared ledger. | Private blockchains, on the other hand, are owned by a single entity, and the participating nodes have to be invited to join and access the data stored in the ledger. |
| Decentralized & Centralized | A Public Blockchain is Decentralized | A Private Blockchain is Centralized |
| Offerings | Public blockchains offer greater transparency and accountability. | Private blockchains, on the other hand, offer greater privacy and scalability. |
| Type | They are open source, meaning anyone can access the blockchain and see the transactions taking place. This helps to reduce fraud and build trust with customers. | They are distributed, but access and transactions are limited to the participants in the network. This makes them better suited for businesses that require sensitive data and want to keep the transactions private. |
| Consensus Process | Public Blockchain is a decentralized system where all nodes are responsible for the validation and the consensus process. | A private Blockchain is a centralized system where one or more parties are responsible for the consensus process. |
| Transparency | Public Blockchain is transparent, and secures | Private Blockchain is less secure. |
| Accessibility | Public Blockchain allows anyone to access the data and contribute to it | Private Blockchain requires permission. |
| Efforts | Public Blockchain requires a larger effort to implement. | Private Blockchain requires lesser effort. |
| Speed | Slow | Fast |
| Transaction per second | Less | More |
| Customization | Public Blockchains have limited customization capabilities, and private blockchains have much more flexibility when it comes to applications and features. | Private Blockchains are much more customizable and can be tailored to specific use cases and specific organizations. |
| Anonymous | Public blockchains are completely anonymous, and the identities of users have hidden | Private Blockchains are transparent, and the identities of users can be identified. |
| Consensus Algorithm | Some are proof of work, proof of stake, proof of burn, proof of space etc. | Proof of Elapsed Time (PoET), Raft, and Istanbul BFT can be used only in the case of private blockchains. |
| Order of Magnitude | A public blockchain is lighter and offers transaction throughput. Therefore, its order of magnitude is smaller than a private blockchain’s. | Comparing the order of magnitude to the public blockchain, it is higher. |
| Features | High Security Open Environment Anonymous Nature No Regulations Full Transparency True Decentralization Full User Empowerment ImmutableDistributed | Full Privacy High Efficiency and Faster TransactionsCentralizedBetter Scalability |
| Examples | Bitcoin, Ethereum, Monero, Zcash, Dash, Litecoin, Stellar, Steemit etc. | R3 (Banks), EWF (Energy), B3i (Insurance), Corda. |
When deciding which blockchain is right for your business, consider the nature of the data and who needs access to it. Public blockchains offer more openness and transparency, while private blockchains provide more control and security. Both have their advantages and disadvantages, so it’s important to weigh them up and decide which one is right for you.
In conclusion, Private blockchains are more secure and efficient but are limited to specific users. Public blockchains, on the other hand, are open and accessible to anyone but may be slower and more vulnerable to attack. It’s up to you to decide which type of blockchain best suits your needs.
This content was originally published here.
