Public vs. Private Blockchain – Key Differences, Advantages, and Disadvantages

If you want to learn what the main private blockchain vs. public blockchain differences are, you’ve come to the right place. We’ll list their main benefits and drawbacks to help you decide which one is more suitable for your needs. We’ll also give you a few public and private blockchain examples.

That said, here’s all you need to know about private and public blockchains.

The Basics of Blockchain Technology

Blockchain is a digital ledger that records information and stores it in blocks that create a chain. This information cannot be deleted because the blockchain has built-in mechanisms that prevent unauthorized entries.

This is why blockchain technology is often used for conducting payments and tracking orders. Blockchain is maintained by nodes that act as a point of contact between the network and the computer. They also validate blocks and monitor transactions. The main features of blockchain technology include decentralization, immutability, and consensus.

That said, there are several types of blockchains:

• Public blockchain
• Private blockchain
• Hybrid blockchain
• Consortium blockchain
• Permissioned blockchain

Public vs. Private Blockchain

The key private vs public blockchain differences are laid out in the following sections:

Access Control

The first difference between private and public blockchains is their environment. Public blockchains are open-source networks, which means that anyone can join them. Moreover, they don’t have a central authority.

On the other hand, private blockchains are closed networks managed by a central authority or organization. This means that only authorized members can access the network, and all transactions will be hidden.

Participants

Public blockchains allow all members to participate in the network’s main activities. That is, everyone can write, read, and access transaction details. In contrast, private blockchains will give access only to selected participants. The network operator can also edit, delete, and override all entries.

The public network is anonymous and open, while the private network is known and permissioned.

Speed and Scalability

Public blockchains are slower and less scalable than private blockchains. Namely, all transactions within public blockchains must be verified by nodes. This leads to higher fees and slower transaction times. Private blockchains have a smaller number of users, which makes transactions much faster.

To put things in perspective, public blockchains usually process seven transactions per second, while private blockchains can process 100 transactions per second.

Decentralization

Public blockchains are decentralized, while private blockchains are more centralized. Why? Because they are managed by a central authority. This makes public blockchains a better choice for organizations as they are less prone to manipulation. On the other hand, private blockchains are more suitable for individuals as they offer greater control over the network.

Consensus Mechanism

Public blockchains usually rely on PoW and PoS consensus mechanisms, which consume large amounts of energy. Private blockchains use PoA and DPoS consensuses, which are less energy-consuming.

What Is a Public Blockchain?

A public blockchain can be described as an open-source network. This means that anyone can access it, although its participants will be anonymous. Moreover, all transactions within the network will be finite and available for viewing. These networks are also fully decentralized, which makes them transparent and resistant to attacks.

Examples of public blockchains are Bitcoin, Ethereum, and Polygon.

Advantages

The main advantages of public blockchain are:

Disadvantages

The main disadvantages of public blockchains include:

What Is a Private Blockchain?

Private blockchains are closed networks that can only be accessed by authorized members. These networks are centralized as they are managed by a single entity or organization. The identity of its participants will be known, while all transactions will be subject to editing and deletion by the operator.

The best examples of private blockchains include Ripple, Hyperledger, and Corda.

Advantages

The key advantages of private blockchains are:

Disadvantages

Private blockchains come with the following drawbacks:

Conclusion 

The key public vs. private blockchain difference lies in their accessibility. On that note, the former is accessible to all people, while the latter can only be accessed by selected groups. Moreover, public blockchains are fully decentralized, which makes them suitable for organizations. On the other hand, private blockchains are more appropriate for individuals since they provide more control.

The main benefits of public networks are anonymity, transparency, and immutability. Private networks excel in speed and scalability.

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