Compare Public And Private Blockchains

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Compare Public And Private Blockchains

At times, blockchain networks can behave like exclusive clubs or high-end restaurants where only certain invited guests are able to attend. These are known as private blockchain networks. Although the differences between public and private blockchain are not difficult to grasp, it is very important to realize that the two types of networks yield widely different characteristics as far as privacy, scalability and necessary computational resources are concerned.


The most common cryptocurrencies circulating the airwaves, like Bitcoin, Ripple, and Ethereum, are found on a public blockchain network. The popularity of these coins goes hand in hand with their networks being available to everyone and anyone. This is the major defining trait of a public blockchain: anyone can participate. Essentially, these blockchain networks must brace themselves for scaling quickly. This means that the consensus protocols deployed on this network must be able to connect and authenticate from every node on the network. As you can imagine, the surge in popularity of a coin can really call into question the scalability of its consensus protocol.

On the other hand, a private blockchain network can scale at a much slower pace. This is because the major characteristic of private blockchain networks is to only allow participation by invitation. Essentially, these blockchains are exclusive to a particular group of people that have been reached out to by either the Network Starter (the person who started the blockchain network) or by someone who was already using the network. This ensures that only vetted parties end up using this blockchain.


Nitpicking the differences between these networks can often lead to the disregard of their similarities. By focusing on questions of scalability and authority, the purpose of using the blockchain in the first place can get lost. Essentially, both types of networks share the superior privacy and security features of a peer-to-peer network.

Some major characteristics that both types of networks share are:

  • Decentralized: there is no hierarchy within the network (even within a private blockchain, all nodes are the same, regardless of if they are the Network Starter)
  • Distributed Ledger: each node carries a copy of the ledger of transactions occurring on the network
  • Consensus Protocol: although these protocols vary from network to network, all blockchains must have their own consensus protocol used to establish and confirm new transactions
  • Immutability of Transactions: both types of networks ensure that transactions cannot be changed or removed from the ledger after confirmation


There are pros and cons associated with both Public and Private blockchain networks. Let’s start off with some of the pros of using a private blockchain network. It’s important to realize that private networks are typically significantly smaller than public networks, meaning less computing power is required. Not to mention, the exclusivity of this network ensures only trustworthy parties are allowed to participate, which prevents 51% attacks. By manipulating the blockchain to have control of 51% of the nodes, hackers are able to double charge users on transactions.

51% attacks are carried out by miners with a significant amount of mining power on a blockchain. By colluding 51% of the mining power, disingenuous transactions are verified and wallets are double charged for making transactions. A private network is extremely robust against such attacks, since the nodes on this network, which can only participate by invitation from a current user, are more likely to be trustworthy and less likely to abuse their ability to validate transactions.

On the other hand, a public network carries more investment benefits than a private network. Since a lot of computing power is required to mine on these networks, public blockchains offer greater incentives and rewards for miners. This increases the popularity of these networks. The most famous cryptocurrencies are actually run on a public blockchain, the most obvious being Bitcoin. Therefore, the popularity and ease of access of public blockchains make them a good way of earning high returns.

In conclusion, there are tradeoffs involved with both public and private blockchain networks. To provide the optimal solution, it’s important to understand the differences between these networks and employ the one most suitable to a project on a case by case basis. This is bound to vary immensely, but it basically depends on the scale of the blockchain project. Ultimately, the exclusivity of a blockchain can be a useful tool for catering to this new technology across a wide variety of use cases.

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