5. Public vs Private Blockchains

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Public (permissionless) vs Private (permissioned) Blockchains

Welcome back to our series on Navigating Blockchain. In the previous instalments we covered decentralisation, cryptography, DLT’s and blockchain (if you missed it, click the links to catch up). In this post we are looking at the differences between public and private blockchains.

Blockchain structures generally fall into three categories [3]; public, private and consortium (hybrid) blockchain architectures. Before we get into the specifics of each category, there are two things to know.

  1. Each type of blockchain has its pros and cons. There is no ‘perfect’ blockchain, it really depends what you want to use it for. You would not lower an anchor into the ocean using the chain you lock your gate with.
  2. Blockchains do not just come to exist out of thin air. There are companies that build and maintain the networks on which blockchains are built. We build on the Telos network, because it provides the most useful and reliable infrastructure in blockchain technology.

Public blockchain

A public blockchain can be compared to the heavy-weight chain you lower an anchor with. It is strong enough to reliably serve a very large vessel, but it’s very heavy and takes up a lot of space.

A public blockchain architecture gives the public access to the data, which is available to anyone who is willing to participate. Bitcoin, Ethereum, are examples of public blockchain systems [3]. Public blockchains are almost impossible to tamper with, being open-ended and thus decentralised. In a public blockchain, records are visible to the public, which makes it less efficient since a considerable amount of time is needed to accept new records into the blockchain. Public blockchains are good for voting and fundraising.

Private blockchain

A private blockchain could be compared to the chain you would lock a gate with – it is more light-weight, it is often used to secure items of value and it is useful within a more contained environment (than the endless ocean).

Private blockchain architectures, as opposed to public blockchains, is controlled only by users from a specific organisation (group, bank, government agency) or authorised users who have an invitation to participate. Private blockchains restrict public access and resides within one organisation [3]. Private blockchains are considered more centralised since it is controlled by a particular group with increased privacy. Private blockchains are usually considered in supply chain management, investments and in scenarios where  organisations simply cannot afford to make their processes or data public. This makes it useful even when it slightly shifts from the core feature of blockchain, i.e. decentralisation. Permissioned networks give leeway to some governmental central control. A private blockchain is a popular implementation of blockchain for distributed autonomous organisations (DOA) (more on this topic later).

Consortium  blockchain

A hybrid public-private blockchain can grant private access to see all the data (in the context of an organisation, company, etc.) and the public can only access selections of the data. All the people can have access (permission) to view data, while others have access to add new data. A government for example can use a hybrid system to record the boundaries of property ownership and history, while keeping personal identifiable information private. Or the public could have access to view all property records, but the government or estate developers reserved to itself the exclusive right to update information.

We hope we’ve provided clarity on the differences between public and private blockchains. The application and outcomes ultimately determine which of the two, or a combination, would be best suited for every situation.

Bitcoin, Ethereum and EOS are all public blockchains, which are open to all. Anyone can join the network. On the other hand, we at Yknot Blockchain Solutions serve private enterprises to build their own private blockchains for things like banking, the internet of things, supply chains and manufacturing [20]. We design your own high-performance permissioned blockchain, which does not suffer from the common scalability issues found in public blockchains [20].

In the beginning of this post we mentioned that blockchains do not just come to exist out of thin air. Companies build and maintain these networks. In the next instalment we will be explaining how blockchain developers work and why we choose to build on the Telos network.

** The rest of the series will be published on medium.com and on our website.


[3] Redka, M., 2021. The Future of Blockchain: Potential Use and Global Impact. [Online] Mlsdev.com. Available at: <https://mlsdev.com/blog/the-future-of-the-blockchain-technology-use-cases-geographical-expansion-potential-risks-and-challenges> [Accessed 22 June 2021].

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Yknot Blockchain Solutions

Yknot Blockchain Solutions

This article was written by Yknot Blockchain Solutions for educational purposes. We know the ropes when it comes to building blockchain-based solutions on the Telos network. Contact us to get all hands on deck for your next expedition.

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