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Learn how blockchain technology is influencing several business sectors owing to its capacity to increase fairness and transparency while saving companies time and money.

In this article, we will learn about one of the most well-liked blockchain technologies at present “private blockchain”

What is Blockchain?

In simple words, A distributed append-only database is a blockchain. Not like a regular database, but one where data is structured in a particular way. The data is kept in blocks on the blockchain, which creates a transparent chain of blocks by chaining the blocks together. It is very hard to tamper with the chain since it is encrypted.

There are several implementations of blockchain technology- Public Permissionless Blockchain and Private Permissioned Blockchain.

To understand what a private blockchain is and how it works, it is necessary to first understand what is a public blockchain.

What is a Public Blockchain?

Public blockchains are permissionless networks that are accessible to all users. Anyone may join the network, read, publish, or participate in this kind of blockchain.

Let’s understand the example of a Public Blockchain;

Bitcoin and Ethereum are both the biggest examples of a public blockchain. Anyone with network access may see and add blocks to the chain. Public blockchains are also mostly anonymous, in contrast to private blockchains, where the identities of those engaged in the transaction are not obscured.

Continuing the article, let’s know: What is a private blockchain?

What is a Private blockchain?

Private blockchains are permissioned blockchains governed by a single entity and are also often referred to as managed blockchains. The central authority decides who is allowed to be a node in a private blockchain. Additionally, the foremost authority may not always provide every node the same privileges to carry out tasks. Because they are not accessible to the general public, private blockchains are only partially decentralized. The business-to-business virtual currency exchange network Ripple and Hyperledger, a collection of open-source blockchain projects, are two instances of private blockchains.

Benefits of Private Blockchain

  • In the case of a public blockchain, all users take part in network operations. The effectiveness and speed of the blockchain might be impacted by this. A private blockchain, on the other hand, just utilizes the necessary resources. Processes are made faster and more efficiently as a result.
  • Higher levels of privacy are also ensured by private blockchains. Transactions may only be viewed and verified by a limited number of parties.
  • Private blockchains feature a smaller network with fewer users, they are simpler to operate, have less downtime, and offer maximum uptime.

Who can use Private Blockchain?

Businesses across a variety of industries, including retail, healthcare, insurance, financial services, and even government, can use private blockchains. They offer scalable, fast, incredibly secure, and reliable database services to businesses.

Key Features of Private Blockchain

  • Privacy

Private blockchain solutions prioritize privacy over complete transparency. Consequently, private blockchains are undoubtedly for you if you’re interested in a technology where privacy is of utmost importance.

However, if a business can utilize a private blockchain to enhance its security measures, it will be difficult for any hacker to access the system.

  • Scalability

Private systems are more reliable, and they will function at their peak. The same is true with scaling. A firm must be scalable to operate effectively. Therefore, it must also increase with time. But on a public blockchain, after a while, as the network expands, it also begins to slow down.

  • Robust Design

Private networks now have one of the strongest network architectures. They are designed to withstand any problems. They thus include a high degree of security mechanisms that aid in preventing malicious activity.

What separates a private blockchain from a public blockchain?

Public Blockchain  Private Blockchain
Anyone can access the public system. In a private blockchain, it is a single organization.
A public blockchain has very high transaction costs. Whereas, private blockchain has a very low transaction cost.
Transaction speed is slow on a public platform. In private blockchain transaction speed is high.
In terms of data handling, everyone has access to read and write on a public blockchain. Read and Write for a single organization on a private blockchain.
Consensus is permissionless. Consensus is permissioned.


Private blockchains are advantageous in terms of security. Users may conduct all transactions securely without worrying about hacking or dangerous software. Private blockchains have the advantage of transparency, but traditional databases are still preferable for data storage.

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