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Public Blockchain Vs Private Blockchain

The hype around the blockchain is growing at a tremendous rate. If initially it was used only in the crypto industry, today the technology has become more widespread. A considerable amount of new technology is associated with it. Public and private blockchain each have their advantages, so it is necessary to find the differences before using them. It will significantly simplify the work of your company.

What is Blockchain?

Blockchain is a unique database that works in a decentralized manner. All data is stored here in a separate cell, and no one can correct and modify them. It first appeared with the invention of Bitcoin. With its help, it became possible to make financial transfers without intermediaries and commissions, one of the main advantages of cryptocurrencies. 

It is also a special software needed for storage and transactions using cryptocurrency and tokens. Smart contracts, cryptocurrency wallets and exchanges, and much more are created on its basis.

The main advantage of technology is its superior security. It is one of the most secure databases at the moment. For any ridiculous attempt to break the deposit, the hacker risks destroying the blockchain.

In the modern world, this technology has an extensive scope of applications:

  • Cryptocurrencies;
  • Agriculture;
  • Logistics;
  • Medicine;
  • Tourism and much more.

The use of innovative technologies will significantly improve the work of many departments of modern companies and shift some of the responsibilities to the computer.

Benefits of using

Today, more and more companies are beginning to think about installing a blockchain because its use has quite a few advantages:

  • Ability to use cryptocurrencies;
  • Increased security;
  • Ability to use smart contracts;
  • Increasing trust between partners;
  • Simplification of documentation.

Perfect solution if you can use artificial intelligence and blockchain technology. It will enable automatic logging of all data. It will allow companies to provide their clients and partners with the most truthful information.

Blockchain Types

In reality, there are four main types of blockchain:

  • Public;
  • Private;
  • Consortium;
  • Hybrid.

Each of them has its characteristics, advantages, and disadvantages. A simple guide lets you take a closer look at them and compare all benefits. Public vs private blockchains are the most demanded and popular. On their basis, other varieties are created.

Features of Public Blockchains

Top examples of public blockchain include Bitcoin, Ethereum, and Litecoin. They are categorized as having no permissions. Everyone will be able to join this network and create their node. Public blockchains allow all nodes to have equal rights to access this technology, create new data blocks, and validate data blocks.

This type is mainly used for working with cryptocurrencies: storage, mining, transactions, and other operations. In public nodes, blocks are created for transactions requested on the network by solving cryptographic equations. In exchange for this hard work, the miner nodes earn a small amount of cryptocurrency.

The main advantages include:

  • Open access. Anyone can view the blockchain activities. They are in the public domain.
  • Distributed ledger. All data is stored decentralized and has an additional copy, which allows you to establish confidence in the security of the data.
  • Security. It has unique software, so hackers will have to try hard to break through the protection.
  • Anonymity. The user can use the username but not advertise his real name.

Using the public blockchain, a person can enjoy all the advantages of cryptocurrencies, use them for their enrichment.

Disadvantages of public blockchains

Despite all the advantages of public blockchains, experts also highlight several disadvantages:

  • Scalability. All transactions in the system must be carefully checked, which takes a very long time. The speed of financial transfers is much slower here, discouraging many organizations such as VISA or PayPal.
  • Smart contracts. This technology still needs to be improved. All operations here are irreversible, so many companies may experience significant problems, especially if the smart contract is not spelled out quite correctly.
  • Storage restrictions. All data is stored on the computer forever, and as a result, the storage quickly fills up. It is imperative to make sure that the warehouse is huge right away.
  • Power. To ensure the operation of algorithms and mining, specialists need huge computer capacities. Usually, such equipment is quite expensive.
  • Confidentiality. Or rather, its absence. All transactions here are entirely transparent, so there is no need to talk about privacy.

If you correctly build the blockchain engine and organize the work, you can close your eyes to most of these shortcomings.

Features Private Blockchains

Private, or as it is also called personal blockchain, is a technology that is wholly controlled and operated by one organization. The central authority can decide for itself which nodes should be given more rights. Among the most famous are R3 Corda and Hyperledger.

Among the main advantages of private blockchain are:

  • Controlled access. A limited number of people have access to all data, which increases the security of the data.
  • Fast transactions. Because there is no need to check many contained nodes as in the public blockchain, transactions are many times faster.
  • Effective management and control. A central authority can control all activities on the network, from simple transactions to the creation of new nodes.

This type is perfect for large corporations that use it for cryptocurrency transactions and other purposes. With it, a company can quickly solve many problems.

Disadvantages of private blockchains

Private blockchains have several disadvantages:

  • Lack of trust. Many partners want more  certain information, and remote access to some data can reduce the level of trust.
  • Security. Because the number of people who have access to the primary nodes is small, it is easier for hackers to figure out an algorithm that can break the system.

If you build the work as correctly as possible and enlist the support of trusted partners, then these shortcomings will not be so significant. In addition, to solve the above problems, specialists have developed hybrid and consortium blockchains.

Comparison of Private and Public Blockchain

A comparison of the two types of blockchain will allow a better understanding of how they work. 

Similarities between public and private blockchains

Even though Public VS Private blockchain are complete antipodes, they have several things in common:

  • Immutability. No one can make changes to the data, regardless of who is the owner of the information. It will help avoid data falsification.
  • Authentication. They rely on their users and principals to authenticate or approve changes, such as entering new transactions or actions into the virtual ledger.
  • Peer-to-peer Ledger replica. To prevent cases of illegal interference, the technology maintains and distributes representations of blocks or data in real-time to all computers without exception.

All of the above qualities are true for all types of blockchain and are their essence. 

Differences between public and private blockchains

Public blockchain vs private blockchain has a lot of differences. Among the main ones are:

  • Scale. In private blockchains, many times fewer transactions take place since the number of users is small.
  • Access level. In public blockchains, anyone can access information, while private ones give access to a limited number of people.
  • Control. Public blockchains are not controlled by anyone, while private ones have the central node that regulates many processes.
  • Security. Practice shows that public blockchains are more secure. It is due to a large number of users, each of whom increases the level of security. Private blockchains are more susceptible to hacker attacks.

The choice between private and public blockchain depends on the goals that you pursue to achieve the objective. So, you can use private ones to work with your own company or small industry, and public ones - to work with a wide range of people.

Consortium Blockchains

Consortium blockchains are very similar in their properties to private ones. The only difference is that there is not one central node in the center but several at once. This principle of operation can be beneficial if several companies use one blockchain at the same time. So, for example, it can be helpful for use in healthcare, where patient information will be available in different hospitals.

This type allows the development of not a specific company but an entire industry or a vast corporation, including many subjects. Despite all the advantages, this technology is not yet widely used.

Hybrid Blockchains

The hybrid blockchain developers were able to find a near-perfect consensus between two seemingly different platforms. It combines all the benefits of private and public. The main point is that the owners of the information decide for themselves which data can become private and public.It allows hiding confidential or classified information that should not be disclosed to the public.

Also, hybrids take the same security principle to prevent hacker attacks. This kind of technology can be used in almost all areas.

One of the most famous hybrid blockchains is Dragonchain.

Hybrid blockchains have a low transaction cost since a small number of nodes must verify all the data. It also reduces the speed of execution of financial transactions.

Private blockchains have pretty big problems with communicating with the outside world, and it becomes rather difficult to present information from this system to business partners. Hybrid blockchain can solve this problem.

Another plus is their ability to operate efficiently in closed ecosystems. Enterprises don't have to worry about competitors getting their data. It is especially important to keep the production technology secret.


Basically, the choice between private and public blockchain depends entirely on the goals you are pursuing. If you decide to launch your cryptocurrency wallet, exchange, or mine, then the public blockchain is the best solution.

A private or hybrid type is better for a large company that wants to take advantage of the technology since the owner will control the system's operation.

In general, modern IT companies offer a reasonably wide range of services. You can order the development of a software for your own needs, and then the developer will take into account all your wishes and create a project that suits you perfectly. It will allow you to fully enjoy the benefits of innovative technologies.