Public Vs Private Blockchains: All You Need To Know

While blockchain technology brings businesses lots of benefits, the different types of blockchains, like public and private blockchains, confuse businesses because of their contrasting features.

In this article, we’ll discuss the definition and working principles of a private blockchain and how it differs from a public blockchain in its features and capabilities.

It is very important to understand the key differences between public and private blockchains. Using a mix of both of these blockchains in your business can be very beneficial. However, choosing the wrong platform can also bring certain disadvantages.

Let’s go through a thorough comparison of public and private blockchains and which one might prove to be better for you. This way, you’ll be able to choose the type which suits your business or personal use in the best way.

Public Vs Private Blockchains

Let’s go through a comparison of public and private blockchains for your business and personal needs.

Private Blockchains

In order to understand what private blockchain actually is, you’ll need to go through its definition. This type of blockchain is exclusive to an individual or a company that has full control over the functionality of the private blockchain. This type of blockchain isn’t available for every person to join, and only the central authority has a say on which person is allowed to join the network.

Private blockchain identifies every person joining the blockchain and controls entry to the platform. This is the method private blockchains use to maintain the internal structure of an organization or company.

In a nutshell, all the nodes need to trust each other in order for a private blockchain to work perfectly. This is the main reason why only the employees of a company are permitted to access its private blockchain. While this takes away the decentralization feature of blockchain technology, it also prevents critical data breaches. We can regard a private blockchain as a partially decentralized system.

Due to their centralized nature, private blockchains can easily implement effective regulations. The rules and regulations are determined by the central authority, and every node must abide by all the rules to stay within the network.

People think that private blockchains are no different from the current governing system in that the central authority can easily reverse a transaction if they want to. However, the chances of this happening in the case of private blockchain are highly unlikely.

Moreover, since companies need a certain level of privacy in their communications and transactions, private blockchain comes forward as the perfect option to do exactly that. If there isn’t any privacy (like in public blockchain), your competitor can easily copy your business operations or even leak justice data related to your company. So, in order to keep your business private, you must invest in private blockchain solutions.

Let’s take a look at some of the best features of private blockchain.

Features of Private Blockchain

Here are some of the most effective features of private blockchain, which can help businesses to a great extent.

It’s Efficient

Private blockchains are more efficient compared to public blockchains. That is because public blockchains allow everyone to join the network without any restrictions, and that slows down the whole network significantly. Public blockchains rely on lots of resources, and this problem creates a lag in every transaction.

On the contrary, a private blockchain allows only a specific group of individuals to join the network. The central authority can even provide every individual on a private blockchain with specific tasks to perform. This way, no extra resources are needed to keep the private blockchain running, and swift transactions are entirely possible. The consensus protocol used by private blockchains is one of the most effective methods invented so far to keep the blockchain ecosystem eco-friendly.

Impeccable Privacy

The main focus of every private blockchain network is maintaining the privacy of the business it is being used in. That is why using a private blockchain is the best thing you can do to keep your business operations and transactions entirely private.

Every business goes through lots of privacy and security issues throughout its lifetime. They have to transfer private and sensitive information between different individuals on a daily basis. If sensitive information related to a business is leaked to the public, it can mean significant financial losses for that business.

So, privacy and data security are one of the major reasons why businesses today need to convert to a private blockchain.

High Stability

The stability provided by private blockchain gives you peace of mind. In the blockchain ecosystem, the network fees depend on the number of transactions being done at that particular time. For example, in a public blockchain, since there are so many people willing to do transactions at the same time, the network fees can become very high.

On the other hand, private blockchain does not have any of these issues. Since there are very few individuals present on the private blockchain at any given time, the number of transactions is very limited, and there is no increase in network fees.

Moreover, delays are nonexistent in private blockchains, despite being a major problem in their public alternative. That is also because the number of participants allowed to make transactions on a private blockchain is very limited.

Helping Businesses Grow

Rather than focusing on individual privacy, as in public blockchain, private blockchain focuses on benefiting whole businesses. A private blockchain can be used to maintain the internal processes of a business. There can be no battery used for private blockchains than this.

So, if you are a business looking to implement secure solutions, you must explore private blockchains and the benefits they can bring to your business.

Reasons for Using Private Blockchain

After checking out the benefits of private Blockchains for businesses, let’s discuss the reasons for using private blockchain-based solutions.

Minimal Fees

As we have already mentioned above, the fees in the private blockchain ecosystem are always minimal. No matter how many transaction requests are being received, private blockchains do not increase the fees. That’s because the transaction requests in private blockchains aren’t anywhere near the requests in public blockchains.

Moreover, there aren’t any hidden fees charged in a private blockchain.

Avoids Illegal Activity

Contrary to public blockchains, which allow every person to join the network without any scrutiny, private blockchains have an authentication process through which they screen every person signing up on the platform. This is a good method to prevent any unwanted people from gaining access to the private network.

Public blockchain networks are notorious for failing to stop criminal activities. This thing might work in traditional finance but can be very dangerous for companies and private entities.

When everyone on the private blockchain is registered, the chances for illegal activities become negligible.

Strict Regulations

A private blockchain is one of the best things that can happen to your business. That’s because businesses must be run under strict rules. Not following these rules can result in serious consequences both for the individuals and for the business.

Private blockchain allows you to do exactly that by forming all of the rules and regulations in your business. In order to stay within dinner work and avoid penalties, every employee must follow the rules and regulations set by the central authority.

Public Blockchains

In contrast to private blockchain, public blockchain allows every person to participate in the network without imposing any rules and regulations. The joining process is completely automatic, and no identity checks are needed either. Moreover, there is a public ledger in which every transaction is recorded, and any person on the public blockchain can easily view the public ledger and every transaction listed on it without any restrictions. A perfect example of this system would be the Ethereum blockchain.

If you do not need the privacy features of a private blockchain, then using a public blockchain is your best bet for decentralized features. However, public Blockchains are not well-suited for businesses since they do not provide a sufficient level of privacy.

Anyways, public blockchain has the first type of blockchain to ever exist. Bitcoin was the first ever public blockchain to exist.

However, since the public blockchain technology has its own shortcomings, developers started to develop other variations of blockchain in order to get rid of all the drawbacks.

One of the major advantages of the public blockchain technology is that it provides every participant with equal rights regardless of the number of shares they have in the network. You can join a public blockchain platform easily and take part in the consensus without any trouble.

Public blockchain technology provides impeccable security and is immune to hacking. This is something that is really hard to find in private blockchain solutions. The fact that everyone can see the public ledger makes sure that the whole network stays transparent.

But public blockchain platforms have their own Robb as well. For example, most public blockchains are slower compared to their private alternatives. Moreover, since every transaction is anonymous, illegal actors can easily make transactions and stay unnoticed.

Features of Public Blockchain

Here are some of the most significant features of public blockchain technology.

Impeccable Security

Security is the main highlight of every public blockchain. This is because businesses around the globe are struggling to defend against hacking attempts and data breaches. Cybercrime is proving to be one of the major hindrances in the way of technological revolution.

Due to data theft and successful hacking attempts, businesses lose billions of dollars every year.

However, by implementing a public blockchain in their business processes, businesses can easily stop cybercrime. Moreover, the use of public blockchain in businesses can make them much more efficient as well.

While the security protocols used by every public blockchain might be different, they are more or less the same and provide robust security.


The anonymous nature of public blockchain is probably one of the most liked features of this technology. In the system, you do not need to use your real name or even your identity to create an account and make transactions. Moreover, no one can track you by your name or public identity.

While the anonymous nature of blockchain makes sure that your possessions are kept secret from other people on the platform, this feature is also being used for illegal activities. For example, cybercriminals pay for illegal things on the dark web with the help of cryptocurrency and go unnoticed by even the best government agencies. Therefore, one of the biggest advantages of public blockchain can also be termed as its biggest disadvantage.

Open Nature

As we have already mentioned above, public blockchain is free to join for everyone. Therefore, you can use this technology regardless of your location or age. All you need is a strong Internet connection and a laptop, and you will be all set to go. These days, you can even use a mobile application to access any public blockchain.

Therefore, every person joining the public blockchain enjoys all of its benefits without any restrictions. You can make transactions without getting noticed by anyone and can also do mining to earn cryptocurrency. However, not every public blockchain supports mining.

Zero Regulations

Although public blockchains are also made up of different nodes, these nodes do not have to follow any rules and regulations. Therefore, developers can use a public blockchain in whichever way they want without getting restricted by any central authority. But this feature is what keeps businesses away from the public blockchain technology.

The public blockchain technology cannot be used by companies because without regulations; it is very hard or even impossible to follow the needs of a particular project. This is the main reason why only consumer platforms are currently focusing on the public blockchain technology. It is not a good way to carry out internal networking within a business. So, this can also be termed as a disadvantage of public blockchains.

Reasons for Using Public Blockchain

Here are some of the best reasons why you should use a public blockchain.

Decentralization At Its Finest

True decentralization can only be found in public blockchains. This feature is usually lacking in private blockchains. Decentralization in the public blockchain technology works by distributing the same copy of the ledger to every participant. This way, the whole system becomes distributed and becomes perfectly decentralized as well.

In public blockchains, there is no need for central authority because the public ledger is automatically updated, and a consensus algorithm updates the copies of the ledger to keep the platform fair.

However, with the help of these features, a fair environment is achieved in public blockchains, and decentralization is made sure.

Immutable Nature

Public blockchains are also known for their immutable nature. Immutable usually means that once a piece of information is written on a block, there is no way to delete that information from the public blockchain. This feature makes sure that no one can change anything in the blockchain network, and the rights of every person are protected.

Almost every business suffers from issues like alteration in data. However, in the public blockchain technology, this issue is eradicated with the help of a consensus algorithm. This way, whenever a person tries to change any piece of information on the blockchain, he will create an entirely new chain, and this cancels any changes the user has made to the original chain.

Empowers Users

In private blockchains, employees have to follow strict rules and regulations set by the central authority. This way, private blockchain technology empowers businesses. However, the public blockchain technology empowers users by not imposing any rules and regulations on them. This is made possible by eradicating the need to have a central authority.

Moreover, no one can stop you from joining the network and making transactions. So, this is how the public blockchain technology gives full freedom to its users.


These were some of the most basic features and drawbacks of both the public and private blockchain technology. While both of these technologies are great, they work well for different segments of society.

For example, the public blockchain technology empowers users by providing them with full freedom to join any public blockchain, providing them with anonymity, decentralization, and many other features. However, the anonymous nature of public blockchains provides cyber criminals with a perfect chance to pay for illegal things with the help of cryptocurrency without getting detected.

On the other hand, private blockchains allow businesses to set strict rules and regulations for every person who is willing to join their private network. This way, the business can easily set milestones for every user, and make sure that all the requirements for a specific project are met.

This was a brief comparison of both the public and blockchain technology. You should now be able to choose one of these revolutionary technologies depending on your personal preferences. While businesses can perform well by using private blockchains, individuals should always use public blockchains to ensure transparency in transactions.

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