Blockchain, the centralized ledgers, are used to track and store the transactional data of a user. In recent years, this technology has become more popular and many of the organisations are adopting it, due to the level of the data security a Blockchain Technology provides to its users. Although it took many years to get people familiar with this technology, there are still many who are not aware of the two categories of Blockchain, i.e. Public and Private.
Public Blockchain: The Public Blockchain is also known as Permissionless Blockchain. As the name suggests, the Public Blockchain is simply the one, which is available to everyone and anyone can join the network. In this way, the participants are allowed to read, write, and audit and they can also leave the network at any time. The Public Blockchain is an open-source and decentralized network, where no one is the in charge. Having no management to look over the ongoing processes, makes the network trustless. Being trustless does not mean that the network is prone to the data leak, but it means that the network is fully automated, and the operations running on this network are not under a single entity. Cryptocurrency is the most basic example of a Public Blockchain, which includes Bitcoin, Ethereum, Litecoin, etc.
Private Blockchain: On the other hand, Private Blockchain requires permission for every sort of access to it. The Private Blockchain is an invite-only network, that is handled by a single entity or the starter of the network. The initiator of the network or the established set of rules for the network, validate the invitations and the entrants to it. Only the participants with the permission from the managing entity of the network can read, write or audit the blockchain. The existing participants can also decide who can participate in the network, but only the owner can permit those entrants to join the network. These type of Blockchain networks are often used by big organisations to employ distributed ledger technology without making the data public.
The basis of the Private Blockchain starts with knowing who the users are. And then, the set of rules are created based on what data they can and cannot access over the network. Private Blockchain is also known as the Permissioned or Enterprize Blockchain. Some of its examples are Hyperledger, Hashgraph, Corda, etc.
Comparison between Public Blockchain & Private Blockchain
1) Addition of Participants: As we have already discussed, the Private Blockchain is managed by a single entity, only the invited participants can join the network, whereas, on the other hand, anybody can join the Public Blockchain network.
2) Security: Since Public Blockchain does not require the identity of the participants, it is more secure than that of the Private Blockchain.
3) Access: In the case of Private Blockchain, only the participants with permission can read, write and audit with the network, and in the Public Blockchain, the reading and writing permission is shared equally by all the connected users.
4) Decentralized: Public Blockchain is a decentralized network and open-source. But the Private Blockchain operates like a centralised database system which employs distributed ledger technology.
5) Immutable: Once the data in public Blockchain is verified, it cannot be changed.
6) Speed: Private Blockchain networks are faster than the Public Blockchain network.
Also, in a Public Blockchain, every node participates in the transaction validation, whereas in the Private Blockchain the transactions are processed by selected nodes.
As the Private Blockchain is a centralized network, many of the Blockchain experts do not consider it as a Blockchain, but a centralised network that uses a distributed ledger for secure transactions. In the end, both types of Blockchains are being widely used and have their own purposes.