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Understanding the Differences between Public and Private Blockchains

Understanding the Differences between Public and Private Blockchains

Are you curious about blockchain technology and the differences between public and private blockchains? Since its emergence in 2009 with the advent of Bitcoin, blockchain technology has made significant strides in various industries, from supply chain management to vote-casting systems. As organizations increasingly embrace blockchain, the distinction between public and private blockchains becomes crucial in determining which type is most suitable for specific applications. In this article, we’ll explore the key differences between public and private blockchains, shedding light on their unique features and benefits. Whether you’re interested in transparency and decentralization or speed and scalability, understanding the disparities between public and private blockchains will help you make an informed decision.

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What is a Public Blockchain?

Public blockchains are decentralized networks where anyone can participate. They are open and transparent, allowing everyone to view transactions and the current state of the blockchain. Examples of public blockchains include Bitcoin, Ethereum, and Litecoin.

One of the key features of public blockchains is censorship resistance. This means that no single entity can control the network. Once a transaction is validated by nodes in the network, it is added to the blockchain and cannot be altered.

However, there are some concerns and limitations with public blockchains. They can be slower and less scalable due to the high volume of processed transactions. Additionally, because the network is open and transparent, there are concerns about privacy and confidentiality.

What is a Private Blockchain?

In contrast to public blockchains, private blockchains are controlled by a single entity or organization. These networks are commonly used for business applications and are not open to the general public. Participants in a private blockchain are typically pre-approved by the network administrator. Examples of private blockchains include Hyperledger Fabric, Corda, and Quorum.

Private blockchains offer several advantages over public blockchains. They are faster and more scalable since a single entity controls the network and fewer nodes validate transactions. Additionally, because the network is private, there are fewer concerns about privacy and confidentiality.

However, private blockchains also have some disadvantages. They are less secure than public blockchains because a single entity controls them. If that entity is compromised, the entire network could be at risk. Additionally, there may be concerns about trust and accountability since the network is not open and transparent.

Difference between Public and Private Blockchain

Let’s explore the key differences between public and private blockchains:


Public blockchains do not have any permission restrictions, allowing anyone to read, write, and participate in the network. On the other hand, private blockchains are permissioned, meaning that only invited participants can read and write.

Network actors

In public blockchains, network actors do not know each other since it is open to everyone. In private blockchains, participants know each other as the network is restricted to a select group.

Decentralized vs. centralized

Public blockchains are decentralized, meaning that there is no single controlling entity. Private blockchains tend to be more centralized, with a single entity or organization controlling the network.

Order of Magnitude

Public blockchains are generally smaller and offer lower transaction throughput compared to private blockchains. Private blockchains have a higher order of magnitude in terms of transaction capacity.

Native token

Public blockchains typically have a native token, such as Bitcoin or Ether, which is used for transactions. Private blockchains do not require a native token.


Public blockchains can be slower due to the decentralized nature and high transaction volume. Private blockchains, being more centralized, tend to be faster.

Transactions per second

Public blockchains have a lower transaction throughput compared to private blockchains, which can process more transactions per second.


Public blockchains offer enhanced security through decentralization and a larger number of nodes. It is more difficult for malicious actors to attack the network and take over the consensus mechanism. In contrast, private blockchains are more susceptible to hacks and data breaches since they are controlled by a single entity.

Energy consumption

Public blockchains consume a significant amount of electricity to operate and reach consensus, resulting in higher energy consumption compared to private blockchains.

Consensus algorithms

Public blockchains use consensus algorithms such as proof of work or proof of stake. Private blockchains can utilize specific consensus algorithms like Raft, Istanbul BFT, and Proof of Elapsed Time (PoET).


Public blockchains face the risk of 51% attacks, where a small number of miners control the majority of the network’s processing power. Private blockchains, on the other hand, have each validator identified and require the necessary credentials to participate, reducing the possibility of collusion.


Public blockchains have the potential to disrupt existing business paradigms through disintermediation. They offer cheaper infrastructure costs and reduce the development and maintenance costs of decentralized applications (dApps).

Private blockchains eliminate data redundancies, lower transaction costs, replace outdated systems, streamline document processing, and simplify compliance mechanisms.

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Which one is better?

The choice between a public or private blockchain depends on the specific use case and requirements of the enterprise. Public blockchains are typically used for applications that require transparency and decentralization, such as cryptocurrency and voting systems. Private blockchains are commonly used for business applications that require speed, scalability, and privacy, such as supply chain management and identity systems.

Organizations should carefully examine their requirements before deciding which type of blockchain to implement.

Wrap Up

In conclusion, public and private blockchains offer distinct characteristics and benefits. Public blockchains provide decentralization and security, while private blockchains offer speed, scalability, and customization. To choose the appropriate blockchain for a specific use case, organizations need to understand the fundamental differences between public and private blockchains and consider their specific requirements.

For more technology-related updates, visit www.onpassive.com.

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Source: https://onpassive.com/blog/understanding-the-differences-between-public-and-private-blockchains/

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