There is no doubt that blockchain is quickly transforming the world of business by offering fast, verifiable transactions and tracking. At the very core of the technology lies its ability to record transactions made between or by every user in the chain. Whilst it is often referred to as a single technology, there are two different kinds of chains being, the public and the private.
The most well-known public blockchain is the one that cryptocurrencies such as Bitcoin use – they are totally decentralized, open source, run contracts, and all data once entered is completely immutable. They are completely transparent but they do not suit business or organisations that handle sensitive information such as personal data or commercial contracts. A business of this type is much more likely to join or create their own private blockchain which allows its users to transact data without the need to make it public.
A private blockchain provides different levels of permissions for each type of user so that access can be restricted and information can be encrypted to ensure the privacy and confidentiality of its users. To access the private blockchain the user needs an invitation from the single entity that governs the network, therefore it is not decentralized in nature. Some people argue that a private blockchain is not really a blockchain at all, but rather a centralized database that uses distributed ledger technology.
Public blockchains tend to be slow and take significant time to validate transactions, whereas private blockchains are quicker and more cost efficient.
When it comes to security, both type of blockchain fairs quite well; the public blockchain is hard to hack because all of its contents are stored across multiple nodes, and the more members the blockchain has, the more secure it is. Private blockchains, however, can be changed and amended by its owner, as well as being more vulnerable to hackers due to having one single point of origination.
Further use cases for both types of chain are still yet to be discovered, but one thing is certain – blockchain is going to seriously disrupt the way the world works.
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