Difference between Private and Public Blockchains

The term “Blockchain” has become a household name that needs no introduction. This is because it has been more than a decade since the first time it was introduced as a concept. Upon Satoshi Nakamoto’s release of the very famous cryptocurrency, Bitcoin, in the year 2008, Blockchain also made a debut. It is commonly known to people as the technology that backs up Bitcoin. This is true but since the time that it came out, blockchain has been subjected to a number of changes and innovations. These changes have contributed to its increasing popularity in today’s age and date.

Blockchain technology has successfully made its mark and plays a major role in evolving many mainstream industries. Be it healthcare or trade, entertainment or retail, blockchain remains highly relevant. However, before indulging in the types and further details of Blockchains, we must fully educate ourselves of what goes behind them.

Understanding Blockchain

To begin with, blockchain is also referred to as Distributed Ledger Technology (DLT). It is a technology that basically helps with the storage of information. Now one must think that what is so special in this? What’s truly special is that blockchain technology makes sure that the information can neither be traced nor altered or hacked. To define it in simple terms, it is a ledger that is completely decentralized and its sole purpose is to record the origin of the digital assets of a customer. It helps in minimizing the risks associated with payments and supports transparency in all possible circumstances.

So, in case you want to send money to someone using this technology, there is no need to register for any other service. All you need is a wallet that is connected to the blockchain network and you can easily initiate the transaction. People often ask how does blockchain prevent tracking? For this purpose, blockchain basically traces every activity. For instance, upon making any transaction, it will record the time and the location from where you have made the transaction. This ensures maximum security of the user and his assets, effectively and efficiently.

Now that we have looked into how blockchain works, up next are the types of blockchain. They are two in number; Public Blockchain and Private Blockchain. These will be discussed separately to avoid any confusion.

What is a Public Blockchain?

There are several kinds of Blockchains, each one with a different purpose of course. Without having sound information and command over these, it is almost impossible to apply a blockchain-based solution to any given business model. Thus, people are expected to do extensive research on different types of Blockchain to have clarity of mind before jumping into the field of crypto.

Satoshi Nakamoto came up with the idea of public blockchain in the year 2009. It is a blockchain that comes with no restrictions and is, therefore, referred to as an open network. All you need is an internet connection and you are ready to make transactions along with validating blocks. This type of blockchain uses proof-of-work algorithms to validate the transactions that are made.

Under public blockchain, there is absolutely no interference by a third person or a third party. It comes with a flow of its own, which is not controlled by anyone but still comes with an opportunity for everyone to use it. Amongst the best features of public blockchains are:

  1. High levels of security
  2. Availability of an open environment
  3. Anonymity
  4. Absence of any regulations

What is a Private Blockchain?

This type of blockchain is also known as a consortium blockchain. It is the blockchain that is solely based on invitations. It is only managed by one organization that has complete authority over the network. Permission is required for reading and having access to the blockchain. To keep certain data confidential, there are several layers attached to this type of blockchain. Due to this very reason, it guarantees higher levels of security and privacy.

Keeping in mind the nature of the private Blockchains, they are usually designed for some particular sectors. Examples of these sectors can be financial or governmental sectors. The most important aspect of private Blockchains is that the data and the transactions that are conducted are not made accessible to the public unless they are amongst the participating parties. What should be kept in mind here is that to use this type of blockchain, one must have trust among the nodes. Without this, private blockchains never tend to work. Therefore, the employees that have access to the enterprise use this type of blockchain. Among the best features of private blockchains are:

  1. Great Efficiency
  2. Maximum levels of privacy
  3. Stability
  4. Empowering Enterprises

Differences Between Public And Private Blockchains

Several aspects differentiate a public blockchain from a private blockchain. Firstly, the authority: in a public blockchain, decentralization is provided. On the other hand, in a private blockchain, there is an absence of a big authority watching over the system and instead has a partially decentralized system. Following this, comes the access. A public blockchain gives absolutely anyone to have access to the network. This is because there are no restrictions that are associated with this type of blockchain. In comparison to this, a private blockchain only gives authority to only one single entity. This means that it is not open for anyone to join, and is exclusive in nature.

Another difference is in the transaction speed of the two types. Since in a public blockchain, a transaction can be requested by anyone. Upon too many requests, the system tends to slow down with regards to the transaction speed taking a lot of time for the processing of the transaction. A private blockchain, however, never goes through this issue. This is because limited access means that there is never too much burden on the system, resulting in the transaction speed remaining the same at all times.


What needs no further emphasis here is that private and public Blockchains are two very different types. Both of these are suitable for any given situation only if we smartly pick and choose the features that will optimize our system. On doing that, success is guaranteed no matter what situation you are put into. Thus, you are advised to form a strategic plan while considering the pros and cons of both concepts.