A private blockchain is one which requires permission to access it in the form of an invitation or the satisfaction of certain criteria. A public blockchain, on the other hand, is one which does not require any permission to be granted access onto a network and anyone can participate on it.
These restrictions on private blockchains ensure that only specific and particular individuals or entities are granted access, for protection and privacy purposes, for example.
Private blockchains protect the information of users and preserve privacy, valuable assets of any system involving sensitive data and activities.
A Wide Range Of Applications
Private blockchains are not only applicable to the financial industry. To demonstrate the pragmatic nature and wider applicability of blockchain technology, it can be used to great effect in:
Benefits of a Private Blockchain
In a private blockchain, transactions can be declined in line with established rules and regulations, providing greater control over the blockchain and its activities.
Transactions in private blockchains are not available to the wider public. This is a major advantage for businesses and institutions trying to protect sensitive data.
Transactions also only need to be verified and confirmed by a few high-performance computers, rather than thousands of smaller ones as with public blockchains, resulting in lower transaction fees.
With permissioned access and tight control of participants on the network, it is safer than public blockchains, where access is not restricted and anyone can join, opening the door to the possibility of a hack or attack within the network.
Transactions in private blockchains can be confirmed quicker than in public blockchains, resulting in a more efficient and time-effective process.