The introduction of blockchain technology has created a new tidal wave of technological progress. Also, this technology changed many industries and systems. It has the ability to secure data in a way that is completely transparent. Also, the decentralized system has changed this digital world and acted as a key to the rise of cryptocurrency. Before getting into the topic it’s essential to understand what blockchain actually is. Blockchain is a kind of complex technology that powers cryptocurrency.
As we know blockchain is completely decentralized, it manages both transparent and secure transactions. Transactions are totally done in blocks and each block is linked to the previous block. This mechanism makes it impossible to go back and alter a transaction. Additionally, the blockchain network is transparent. However, there are two types of blockchain that are majorly used in most of the businesses. Such as private blockchain and public blockchain. In this article, we will explore what is private and public blockchain. Also, the pros and cons of a public blockchain vs private blockchain
A public blockchain is an open-source and allows anyone to participate in its ledger and execute a consensus algorithm. Also, this kind of blockchain is known as a permissionless network. They can view Stored information, send and receive money, and they can create smart contracts within the blockchain. Also, anyone can write, join, and participate in the network. This kind of network has some incentives that encourage more participants to join.
It is fully decentralized and does not have any authority persons that control the network. In a public blockchain, there is no possibility of hackers to alter the information. so this blockchain helps in protecting the data and information. Bitcoin and ethereum are great examples of a public blockchain. Public blockchain can help many communities to share data and information openly in a secure manner.
Public blockchains can set their own rules at the initial stage. Also, it has opportunities and the ability to change the rules later. But in order to adjust the rules, the blockchain community needs to convince every user to make an update. Finally, as a result, the public blockchain becomes slow and inefficient.
Pros of public blockchain
- Trust is a more essential factor for any kind of platform. Public blockchain provides more trust.
- All data and information are completely recorded in public. So changing or altering the information is not possible
- It encourages people to do the right thing for the betterment of the network
- No need for third parties or intermediates
- It is completely decentralized. So it provides high-end security
- More people work on this network, so it is very hard for attackers to hack the data and information.
- It is impossible for malicious people to band together and gain control over the network.
- Here anyone can write, join, and participate in the network.
Cons of public blockchain
- The speed of the public blockchain is slow.
- Public blockchain like bitcoin is very slow. Because it can manage only 7 transactions per second.
- It takes more time for the network to reach a consensus algorithm
- The time needed to process a single block takes more time compared to the private blockchain.
- It also faces concerns over scalability. Considering these things, it simply can’t compete with traditional systems. In fact, using more public blockchains will slow the network. because more transactions clog the network.
- Energy consumption is more because it relies on proof of work algorithms. So it consumes a lot of electricity to function.
Private blockchains are inverse to the public blockchain. A private blockchain gives full control to the owners. This kind of blockchain restricts the people who can write, join, and participate in the blockchain network. Private blockchain has multiple-layer of data access. Thus, it provides high-end performance, security, and privacy.
This kind of blockchain is specifically used in some sectors. Such as the finance and government sector. Also, it allows third-parties to perform transactions. In a private blockchain, only the entities participating in a transaction will know about it. whereas others can not participate in this network. Hyperledger Fabric will be a good example of a private blockchain.
Pros of private blockchain
- The speed of private blockchain is high
- It has fewer participants so it takes less time for the network to reach the consensus.
- More transactions can take place. Because it can perform a thousand transactions per second.
- Private blockchains are more scalable.
Cons of private blockchain
- The decision-making process is fast because of centralization. But it is one of the major drawbacks in a private blockchain.
- Trust is a bigger issue in private blockchain
- You can not verify the validity of records independently.
- Low security
- High possibility of hacking or having data manipulated
Public blockchain vs private blockchain Which one is Best?
Private blockchain provides high-speed transactions and restricts access to some individuals. Public blockchains provide high security, trust, and avoid third parties. So both of these blockchains serve different functionalities. We can say both are best when it is utilized in the right way. So the choice of whether to adopt private or public blockchain is fully based on the individual that utilizes it. So business people should choose the best type of blockchain platform for their blockchain business.