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Difference between private and public blockchain?
Blockchain technology has created a prominent place for itself in the technology news of recent years. A blockchain is a distributed ledger that records transactions across many computers in a network. The blockchain is an immutable, decentralized, tamper-proof and public digital ledger. It can be programmed to record all types of transactions. Several ways of organizing a blockchain exist allowing :
- anchor / validate a transaction on a Blockchain
- to declare the participants of a Blockchain
- control/validate participants and their rights (read, write, revoke) in a decentralized network
These different modalities are decided at the creation of a Blockchain. Depending on the answers to the different modes of administration stated above, we will speak of a public, private or consortium Blockchain. What are the notable differences?
Understanding the public blockchain
The public blockchain designates a decentralized registry in which each actor of the network can read and validate all the transactions of the network, under certain conditions (which takes the form of a consensus algorithm). Thus, to validate a transaction, the actor must become a node of the network and be able to :
- Proceed to a hash calculation (or "digital fingerprint") of a new block, within the framework of a consensus algorithm called "Proof of Work
- Have a token in escrow as part of a consensus algorithm called "Proof-of-Stake".
- To have validation rights conferred by a trusted actor of the network within the framework of a consensus algorithm called "Proof-of-Authority".
In a public blockchain, stored transactions cannot be deleted or modified. They are readable by everyone, decentralized and secure.
Examples of public blockchains: Bitcoin, Ethereum, Monero or Tezos.
Understanding the private blockchain
When we speak of a private or permissioned blockchain, we mean distributed registers whose information is not publicly accessible or whose power to validate a transaction is restricted to actors pre-selected by a so-called trusted authority. In other words, these blockchains (generally found in companies that wish to control all or part of the information in the register) are characterized by the restriction of reading and/or writing new transactions.
The use cases of the private / permissioned blockchain are those of the supply chain, traceability or decentralized identity.
Examples of private blockchains include: Ripple, Tradelens or IBM Food Trust.
In the models used to build private blockchains, we find:
- The Hyperledger suite of tools, which provides ways to build your own blockchain quickly, including:
- Hyperledger Fabric, the most popular framework in the suite.
- Hyperledger BESU, which allows for the deployment of private versions of Ethereum, including privacy, permissions and an alternative consensus model (IBFT).
- Corda, developed by the company R3.
Consortium blockchains
We speak of consortium blockchains in the context of private/permitted blockchain when the blockchain is administered by a consortium of organizations that decide, collegially, on the access and writing rights of the other actors of the network. In this modality of operation of the Blockchain, each transaction is submitted to a vote between the actors of the consortium to validate the addition of a new block to the blockchain.
