Why do you think companies are using blockchain technology? There is one simple reason: it offers better transaction security because it processes data using a secure network. But there are a few different ways in which you can utilize blockchain, and that’s the reason why it has two parts: public blockchain and private blockchain.
A public blockchain doesn’t require any permission. Everyone can read, write, and join the network using the same blockchain technology. However, it is decentralized and has many entities operating and controlling the network. This is one of the most secure blockchain segments you will ever come across. You can’t alter or modify data once they get validated on the respective blockchain platform. That is why Ethereum and Bitcoin are so popular because of their decentralized approach.
Unlike a public blockchain, private blockchain requires permissions. They work depending on various access controls that restrict people from joining or participating in the blockchain network. Private blockchain relies on third parties for completing transactions. There is only a single entity controlling the network, which is why a third-party control payment. Apart from the participating entities, no one else has knowledge or access about the blockchain system. That is why it is always wise to check the market condition of cryptocurrencies operating on private blockchains. BTC Profit System is one trading tool that keeps investors updated about fluctuating market prices of cryptocurrencies.
Although the two blockchains have a few similarities, the differences are pretty much obvious due to the way they operate.
- Order of magnitude
The order of magnitude is more in private blockchains than public blockchains, giving the latter an edge over its competitor. Public blockchains are lighter and that is why they offer a better transactional throughput.
- The access level for participants
Public blockchain allows anyone to participate by adding and verifying data to the respective blockchain. However, private blockchains work differently. Here, only authorized entities can control the network and participate in the blockchain
- Speed of transactions
Private blockchains edge ahead of public blockchains when it comes to the number of transactions per second. Since private blockchains don’t have too many authorized participants, it usually processes thousands of transactions every second. This also makes them more secure than its competitor.
- Scalability issues
Public blockchains are accessible to millions of users in the world. Since it has more nodes, the transaction speed is comparatively slower. That is why there are scalability issues with public blockchains. On the other hand, private blockchains only deal with a few nodes. This helps to manage data efficiently. The transactions get processed within a second as compared to minutes taken by public blockchains.
Although both private and public blockchains have different pros and cons, it is essential to understand the purpose for which you are using this technology. If you want to use blockchain within a closed network, there is nothing better than private blockchain. A public blockchain, as the name suggests is for customers who can access this system from all around the world.