Blockchains rely on distributed ledger technology as their foundation; these ledgers have long been employed for data management at enterprise levels, and recently, they have gained greater attention due to cryptocurrency use.
Depending on how each block in a blockchain expert has been configured, participants' content and activities can be managed and controlled accordingly. Blockchains tend to be designed with specific uses in mind, and users often gain multiple levels of access or tasks. Certain individuals can only access private blockchains. In contrast, permissioned blockchains combine public and private chains, so anyone with permission may use them.
Below we highlight some main distinctions among permissioned, public, and private blockchains.
- Anyone can join and participate in the main activities of a blockchain network.
- An operator can edit or remove entries in their private blockchain.
- Permissioned Blockchain has the characteristics of both public and private blockchains.
- Permissioned blockchains have grown increasingly popular due to their ability to grant specific permissions to different users.
What is Public Blockchain?
Public blockchains allow anyone to join and participate in their network; public chains do not require permission, making participation easy for anyone interested. Public chains are decentralized, so no single entity controls them, data stored on these blockchains remains secure as alteration or modifications to it would require altering every subsequent block validated on it.
Public blockchain offers several features:
High Security: Breaches The 51% rule ensures the area remains safe. All are invited to use the public blockchain system.
Public Blockchain Ensures Everyone Remains Anonymous: There is no need to reveal your identity or name, as everything will remain private.
There Are No Regulations: Public blockchain nodes do not fall under any governing principles restricting users' utilization of their services. There is no such restriction here!
Full Transparency: A public blockchain allows anyone to view its ledger at any time and is maintained collectively, eliminating all chances of corruption.
True Decentralization: This form of blockchain doesn't rely on a central authority; nodes alone are responsible for maintaining it, with an updatable ledger supported by a consensus algorithm, to maintain fairness by supporting updates as necessary.
User Empowerment: Users in any network typically must abide by certain regulations, some of which may not be fair; with public blockchain networks, however, all users enjoy equal power as there is no single central authority overseeing them.
Your Word Is Unchangeable: Once written on a blockchain, it cannot be altered later.
Distributed: Each node on a blockchain participates in transaction verification, eliminating the need for central database administration as seen with client-server systems.
Public Blockchain
Public blockchain networks are open networks that anyone can join at any time without restricting participation, viewing ledger data, and contributing towards consensus decision-making processes. One popular public platform, such as Ethereum, provides this experience.
Public blockchains offer the ultimate decentralized network solution, but integration may be challenging in an enterprise process. However, Bitcoin pioneered this revolution and created blockchain technology. Once people realized its benefits, they created variations to suit specific problems.
Public blockchain companies provide equal rights for everyone who participates. Participants can work towards reaching a consensus before transacting as desired with other participants on the network. Public Blockchains offer businesses security that cannot be achieved with private blockchains; all can see its ledger and ensure transparency. Public examples of blockchain have flaws; platforms tend to run more slowly and may attract malicious actors who misuse them for illicit activity. Here, we compare public and private blockchains.
Benefits
Public networks use incentives to attract and maintain members. Public blockchain offers the promise of being truly decentralized and democratized.
Public blockchains offer immense value as the foundation of decentralized solutions, serving as the backbone for nearly every solution that utilizes them. When combined with large numbers of participants participating, public, secured blockchains become even safer from potential cyber security attacks like hacking or data breaches - meaning more participation means safer use.
Drawback
Energy usage is a primary drawback of public, secured blockchains. Their consensus mechanism requires participants to compete for validation of information before receiving payments in return for using their computing power by the network. While some blockchain networks utilize energy-intensive processes for validating information validation processes and therefore use more electricity overall, many others do not utilize such measures and thus do not consume as much electricity overall.
Lack of privacy and anonymity is another problem on public blockchains; anyone can view transaction amounts and addresses; this compromises an individual's anonymity when their addresses become visible to outside parties.
Participants with less-than-honest intentions could also find public blockchains appealing. Since most public blockchains were designed to support cryptocurrency trading, hackers and thieves may find these valuable platforms irresistibly attractive.
The Best of Public Blockchain
High Security
Companies providing public blockchains always take measures to secure their platforms, with organizations and enterprises facing daily cyber attacks, which have become an obstruction over time. An economic collapse would also result in billions of dollars annually lost as losses mount up.
Public Blockchains provide numerous security protocols designed to thwart hackers while assuring projects have higher-quality data or greater truth in value.
Security protocols depend heavily on the platform used, with public blockchains possessing more robust protection measures than others.
Want More Information About Our Services? Talk to Our Consultants!
Open Environment
Public blockchains, as their name suggests, are available to everyone - regardless of location - all you need is access to both computer and Internet services to log on. Therefore, you will always be able to reap the many advantages offered by blockchain technology. Not all public platforms allow mining - so make the most out of every opportunity when mining.
Anonymous Nature
Public blockchains offer one of the most attractive benefits: anonymity. Everyone stays anonymous; nobody uses their real identity or name here. Therefore, no one could track you back to an individual persona.
This public blockchain feature only protects your possessions; people have taken to using it illegally as well. Criminals have often employed Bitcoin to fund unlawful activity on the Dark Web - another downside associated with public blockchains.
Avoid being misled by its past. Any new technology can be utilized for good or evil and shouldn't hurt public blockchain systems.
There are No Regulations
Public blockchain does not contain regulations to guide node operators' behavior; therefore, there is no restriction on how users utilize this platform. Unfortunately for businesses, however, an environment without regulation is not conducive to effective working conditions.
Why? Without regulations in place, meeting all requirements of a project becomes challenging. Therefore, I advise using public networks for consumer platforms; that way, you will not use it internally but as an external networking system (like public blockchain does). This approach may present less difficulty in meeting all demands than internal networking systems alone would do.
What is the Use of This?
True Decentralization
Public Blockchain networks provide true decentralization. Private ones do not boast this benefit - the ledger remains spread out among its many owners because everyone owns copies. No central entity exists within this form of blockchain network management. Instead, nodes are solely accountable for keeping up with updates via consensus algorithms to keep their ledger up-to-date and promote fairness that promotes equitable solutions. Both features ensure that the system remains decentralized. Let's continue our discussion of public versus private blockchains by looking at one more aspect.
Full Transparency
Nothing beats an open and honest platform. Public blockchain companies strive to design platforms that offer total transparency for anyone on the ledger.
Everyone involved can view the ledger at any time, eliminating any possibility of corruption or discrepancies. Everyone must cooperate and reach a consensus around its use and maintenance.
Read More: Public vs Private Blockchain For Businesses Based on Today's Scenario
The Immutability of the Law
Blockchain is a public network that cannot be altered. That means that when new blocks are added to the chain, they cannot be modified or deleted - thus guaranteeing no changes that benefit another block on its path through time. Every organization faces issues of alteration. That could happen offline or online, making hash functions ideal as security protocols.
As soon as a person attempts to alter blocks, their new modifications become separated from their original reporting chains - undoing all their alteration efforts. Next up on our journey through blockchains is private blockchain - as part of our guide on public and private cryptocurrency blockchains.
Users are Empowered to Make Decisions
On any network, users must abide by certain regulations and abide by them at all times - this might even include unfair rules in some instances, but with blockchain networks, this is no longer true: all users share equal power since no central authority controls them.
Platforms are accessible to everyone, and no company can impede anyone from joining in the consensus by downloading nodes. Private platforms won't offer this freedom: on blockchains that operate under strict user permission policies, users cannot fully experience its benefits.
Private Blockchain
Before we compare any two blockchains, let's first define "private blockchain." A "private blockchain" refers to any blockchain in which only a specific organization is granted control - meaning access isn't openly accessible by all.
Private blockchain solutions feature an authentication system to monitor who enters their platform, making these platforms ideal for use as integrated parts of an organization's internal network. Trust must exist between all nodes on this platform to function effectively; otherwise, it won't function. Only employees from an organization have access to it.
How is It Decentralized? Unfortunately, it's technically impossible; private blockchains do not share the same degree of decentralization as public platforms do, and this type of scenario resembles semi-decentralization more than full decentralization.
As is usually the case on private platforms, all nodes must abide by certain guidelines to maintain business operations smoothly and successfully. Private blockchain platforms also generate controversy; some believe their government could intervene and stop inappropriate transactions, though that seems highly unlikely.
Private blockchain cases provide businesses that require maintaining privacy a great option to protect valuable information on their platforms from competitors who could gain entry and exploit that vulnerability to access and leak it to others. Longer-term, this can hurt brand value, while privacy can be necessary for other situations.
Benefits
Private blockchains aren't decentralized databases like their counterpart; the public blockchains are. Instead, a private blockchain operates like any distributed database: only those authorized can run its nodes, make transactions, or validate/authenticate changes made.
Private blockchains that emphasize immutability over user identity promote this state instead of its protection and promotion. Various aspects of business and enterprise must be considered, including supply chain, finance, accounting, and payroll responsibilities, as well as others.
Drawback
Private blockchains may be suitable for enterprise use cases; however, their capabilities fall far short of permissionless systems because they are designed specifically to fulfill limited tasks and perform specific functions.
Private blockchains may be vulnerable to security breaches due to only having a handful of validators who can come together to agree upon transactions and data when there's a consensus system in place.
Private blockchains may only have the capacity to store unmodifiable information until an authorized individual (user or administrator) makes changes or additions.
Private Blockchain: Best Features
High Performance
Public blockchains were among the first developed, but their inefficiency is less severe due to how people enter them and then take advantage of their features; when more users access their features simultaneously, their resources become strained and eventually exhausted.
On the other hand, private blockchains only permit certain individuals into their network; any extra members could potentially slow it down by using up precious resources for personal gain, thus prolonging its performance.
Private blockchains may use eco-friendly consensus protocols to reach an agreement among their members.
Read More: Based On The Present Circumstances, Public Vs. Private Blockchain For Companies
Full Privacy
Private blockchains provide greater privacy protections for your business than public ones, making this an excellent option if it is paramount that all aspects of its activities be kept hidden and confidential.
At first blush, this may appear extreme; but that is exactly how things stand: businesses face constant security and privacy risks due to dealing with sensitive data regularly should any be compromised and leaked out, the consequences could be disastrous for their organization.
Companies understand the value of having a secure network environment, and private blockchains provide an ideal solution.
Empowering Enterprises
Blockchain solutions designed for private use empower companies as an entity rather than individuals. While companies need technologies to support their processes, these private blockchain solutions offer additional benefits when implemented into internal enterprise systems, making private blockchain one of the greatest uses.
Start developing solutions utilizing blockchains today, as they offer security and protection to any company.
Stability
Private blockchain solutions will give you the security and peace of mind you require, with each platform charging an appropriate fee to complete transactions - although public platforms' transactions could require paying an increased fee due to nodes' requests for transactions.
Transaction processing takes time and costs more as more transactions come through; however, with private blockchain platforms, there's no delay as only certain people can request transactions at once.
Fees remain identical.
What is the Use of This?
Discounted Fees
Private blockchain platforms boast extremely competitive transaction fees that do not change with how many requests come through - unlike public platforms where prices fluctuate depending on requests made for specific transactions, fees remain consistent and accurate regardless of the demand for them.
There are no hidden costs involved.
Savings on Money
Private blockchains can save a considerable amount of money. Maintaining them is much simpler and requires far fewer resources than public platforms, which must meet demand by accommodating millions. Over time this saves both resources and cash. Cheap doesn't necessarily indicate affordability.
No Illegal Activity
As is well-known, private blockchain networks require authentication before users may gain entry to prevent hackers from infiltrating and exploiting the system. As previously discussed, public blockchains can often be associated with criminal activity and have an unsavory past; as an enterprise setting, this can only prove detrimental. Only verified users may gain entry to the system, thus discouraging any illegal activity or breaching of security.
Regulations
A private blockchain can be an ideal technology solution for enterprises, as you must abide by many rules and regulations when operating one. Otherwise, consequences will be enacted. Blockchain works similarly, enabling you to establish rules that employees must follow.
Blockchain Permissioned
Permissioned Blockchains combine the best aspects of both public and private chains, offering customization capabilities.
Benefits
Permissioned blockchain offers many advantages, including allowing anyone to join after going through an identity verification procedure and offering special permissions for certain network activities; participants can perform various functions like accessing or reading data from the blockchain.
Blockchain-as-a-Service (BaaS), one of the more unique capabilities offered by permissioned blockchains, offers several functions beneficial to businesses. One such BaaS service provider rents their service out for rent to other firms or tasks as needed by multiple clients simultaneously.
Imagine, for instance, that a company wants to improve the transparency and accuracy of its financial reporting and accounting processes. A BaaS provider could offer blockchain accounting services - offering end users the interface necessary for entering data onto it while automating accounting as it goes along.
By creating financial reports within blockchains, errors can be reduced significantly. Other parties cannot alter or change existing data once entered, producing more accurate management and executive financial reports that can be viewed for real-time updates and generation.
Businesses have several options to automate invoicing, payment, bookkeeping, and tax reporting processes using blockchain. Doing this prevents individuals with malicious intentions from manipulating financial data, exploiting weaknesses in accounting processes, and taking advantage of weak accounting processes.
Drawback
Dependent upon their configuration, permissioned blockchains share similar disadvantages as private and public blockchains in financial terms of vulnerabilities to hacking. Permissioned chains require internet connectivity, which makes them susceptible to hacking; some blockchains use techniques that cannot be compromised, such as cryptographic security measures and consensus mechanisms that offer unchangeable solutions.
However, most blockchains may seem impregnable at first glance; weaknesses remain. Once hackers gain entry to a network, private keys can be stolen easily; permissioned blockchains also fall victim to this weakness as user accounts and information may become exposed easily - something Target found out the hard way back following an enterprise data breach incident.
Want More Information About Our Services? Talk to Our Consultants!
Conclusion
The public vs. Private Blockchain comparison has concluded. You should now be able to see that there are distinct differences between them both, both options may be suitable for enterprise environments tailored specifically to their user's requirements, ultimately the choice lies with you; hopefully, this guide can assist in choosing which will best meet the needs of your organization.
