Public and private blockchains, what are they? What are their pros and cons? Why is it important to know the difference?

The general gist is this: Public blockchains are permissionless blockchains available for any Internet user, focusing on decentralization and security. Private blockchains are much more restrictive and are often more for use within organizations where privacy and efficiency are paramount.

Previously, we touched on topics such as the different layers of blockchain, top blockchains for Layer 1, and top chains for Layer 2. Diving deeper into the intricacies of blockchain, we will move on to two types of blockchain that everyone exploring the blockchain landscape should know about public and private blockchains.

Public Blockchains

What is it?

Public blockchains are open networks where anyone can read, write, and participate. Their ability to freely participate aligns with the decentralized nature of blockchain technology. There isn’t a single entity controlling the network. Public blockchains are mostly for crypto exchanges/transactions and mining. Chains like Ethereum and ThunderCore are good examples of a public blockchain.

Pros

Decentralization– Public blockchains offer decentralization by avoiding giving control to any single entity. Operating on a network of nodes makes it harder for public blockchains to be censored or attacked.

Security– Public blockchains use cryptography measures to protect the network from attacks. The nature of public blockchains protects transactions through distribution and consensus mechanisms. The open nature of public blockchains also makes it easier to detect and pinpoint security concerns. 

Immutability– Blocks can’t be altered once added to the blockchain. Everything written is there to stay, so things like transactions can’t be changed or manipulated, reinforcing immutability and enhancing security. 

Transparency– Transactions are visible to anyone on the network. This makes it so that anything and everything is open for viewing, establishing transparency that adds to security and decentralization. 

Interoperability– The open nature of public blockchains makes it so partnerships and collaborations are encouraged. This offers interoperability where people can collaborate to bring innovations to the platform.

Cons

Scalability– One of if not the biggest challenges that public blockchains have is the issue of scalability. Much like when we talked about Layer 1 blockchains, public blockchains can have slower transaction speeds and higher fees as the number of users and transactions increases. This results in worse experiences for users on the chain in general.

Privacy– As everything is open for viewing, privacy is extremely limited for public blockchains. There isn’t much in terms of transaction confidentiality.

Energy Consumption– Public blockchains, especially PoW ones like Bitcoin, will require incredible computational power for mining, leading to high energy consumption. This raises concerns for the environment while making network operations much more expensive.

Governance– Decision-making can get complicated in public blockchains as no one entity is in charge. This can often lead to division within the blockchain that can cause the community to separate. Upgrades will be issues for discussion and can’t be carried out without involving active and continued participation from members of the community.

Private Blockchains

What is it?

Private blockchains are restrictive blockchains that require permission and operate in a closed network as opposed to the open ones of public blockchains. Joining a private blockchain requires an invitation or providing information that will need to be verified and validated by operators or protocols. One or more entities control the network, and private blockchains rely on third parties for transactions. Transactions are private, and this type of blockchain is best for businesses and enterprises.

Pros

Control– Private blockchains excel over public ones by having more control over everything from consensus mechanisms to general rules regarding the network. By having total governance control, private blockchains are better at making quicker decisions, including more customized changes. 

Efficiency– Compared to public ones, private blockchains are often much more efficient. By having fewer nodes participating in the ledger and distributing nodes locally, private blockchains can have faster confirmation times and transaction throughput. This is part of a trade-off between security and efficiency. 

Privacy– The answer is in the name. Private blockchains have much better security due to being closed networks. This is significant for those wanting their transactions and actions to stay private because transactions can only be seen by those taking part. 

Scalability– Private blockchains can add nodes when needed, offering better control and potential for scalability. By having the ability to meet specific needs whenever required, it’s much easier to scale with growth.

Cons

Transparency– Due to providing more privacy, private blockchains lack transparency. The lack of the ability to view every single transaction can serve as a blockade when it comes to trust and reliability. 

Security– With a lack of trust comes security concerns. Private blockchains will have issues with security as the well-being of the network is entirely dependent on one or a few participants. With a limited number of validators used to reach consensus, private blockchains are more susceptible to malicious attacks. 

Interoperability– Private blockchains are isolated networks that do not interact with other networks. The nature of this characteristic makes interoperability difficult. This can be damaging in terms of communication and exchange between different networks.

Centralization– This is a problem that combines all the above concerns. Due to private blockchain being of a centralized nature where transparency is lacking and decisions are made by choice participants, it’s easy to think of these networks as the opposite of blockchain technology’s decentralization goal. The general idea is that in pursuit of conveniences such as efficiency and privacy, sacrifices are needed. It’s up to users to pick what’s best for them.

What Do I Choose? What Are the Significances?

The good news is that unless you have specific organization needs where you need to have greater control over data and more privacy, you would almost always use a public blockchain. The most common and popular blockchains are all public ones.

Understanding the difference between private and public is crucial to clarifying what we are gaining and sacrificing. There’s always a possibility that you might want to utilize the privacy of a private blockchain, so it’s vital to know the difference and understand what you can expect to gain or lose.

ThunderCore as a Top Public Blockchain

ThunderCore is a top public blockchain that offers high transaction efficiency and low costs. Founded in Silicon Valley in 2017, ThunderCore provides a robust infrastructure for DApps and the broader DeFi ecosystem. Its high-performance blockchain offers a breakthrough consensus protocol PaLa, 4,000+ TPS, sub-second confirmation times, and low gas fees.

With over 8 million addresses, 680 million transactions, and 133 million block height on its network, ThunderCore is dedicated to bringing blockchain technology to broad adoption. You can learn more about ThunderCore’s historical information on our Medium Blog.

What’s Next?

With our past articles on the layers of blockchain and top chains for Layer 1 and Layer 2, we will continue to provide vital information through future Thunder Academy posts. Stick around and continue enriching the database in your brain as you traverse the blockchain and cryptocurrency landscape. Watch out for our next post!