Over the years, blockchain technology has proven to be a reliable distributed ledger for recording and storing crypto transactions. According to our findings, Satoshi Nakamoto developed the technology in 2008. Ever since its creation, its proponents have been working round the clock to expand the use cases of the technology. Today, beyond recording transactions, blockchain ensures these transactions run securely and verified. It is noteworthy that there are three major types of blockchains. They include private, public and consortium blockchains. However, for the purpose of this article, more focus will be on the private and public networks.
What is a Private Blockchain
Notably, a private blockchain is otherwise known as permissioned blockchain. Usually, it is operated by a single operator, permitting only verified members to join the network. These kinds of blockchain networks run to actualize specific corporate goals. Since access to this network is determined by a centralized authority, it is no doubt that it is less decentralized.
Certainly, transactions carried out on this kind of blockchain are private. This thus means the network remains the best bet for firms seeking to ensure the privacy of their transaction records. More so, it processes transactions very fast, perhaps because of it’s few participants.
Meanwhile, private blockchain share some similar features with other kinds of blockchains. Just like others, it employs a digital ledger to record its transactions within the block. As designed, any first block created on this network is referred to as Genesis block. Subsequent blocks on the network come with cryptographic hashes that refer to the previous block. By virtue of this, users are able to easily trace transactions and make changes to information by going back to the Genesis block. However, the owner of the network possesses the capacity to reverse or delete transactions on the network.
- It offers privacy of transaction records with decentralization benefits
- A private blockchain processes transactions very fast with low fees
- It is highly scalable and less volatile
- The private blockchain appears less secure because of the possibility of compromising its few nodes.
- It requires the authentication and validation of users by centralized authority.
- The centralized authority possesses the power to modify the regulations guiding the usage of the blockchain anytime.
What is a Public Blockchain?
Simply, a Public Blockchain is a decentralized platform that’s open to every individual. This implies that everyone is free to join and engage in the basic activities of the blockchain network. More so, this type of blockchain permits everyone to read, write, and audit transactions on the network. Public blockchains are permissionless and decentralized meaning one doesn’t need the approval of an authority before accessing them.
However, despite being available to everyone, data stored on this network cannot be manipulated. This is due to the variety of blocks that makes up the network. Upon validation, data stored on a public blockchain will remain intact.
Mainly, public blockchain tends to solve a particular problem placing it above private networks in terms of innovative approach. Also, public network works on a reward-based structure that gives participants returns for their participation on the network. These participants get rewards in return for keeping the network running while ensuring its security and decentralization.
More so, the network gains strength from the number of its network participants against data manipulation, hacking, cyber-attacks, and network downtime. Basically, a public blockchain is stronger base on the number of its network participants.
Additionally, its emphasis on security makes public blockchain more transparent. The absence of a central authority makes the activities of the public networks more decentralized and transparent.
However, public blockchain requires more resources for their maintenance. Against the libertarian pursuit, private networks don’t allow full anonymity. Since they can be accessed by anyone, transactions and addresses on the network are at the doorstep of every network user for accessibility. Users lose their anonymity once their addresses becomes known.
Accordingly, the flexibility of these networks in attracting new network participants has subjected them to various malicious attacks. Since most of them run for crypto projects including Bitcoin, hackers tend to attack public blockchains with the aim of looting funds stored on these networks. Lastly, most public blockchains are slow and they struggle with scalability issues because they attract a wide range of users.
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