What is Private Blockchain?
Blockchain technology has evolved over past years and became something of many different variants. One of categories to classify different blockchains is whether they are public or private. But first be first, in order to understand Private blockchain you need to know what Public blockchain is.
Public Blockchain
Conventional blockchains, including Bitcoin make every participant of blockchain to share entire ledger and guarantee security by cross-checking the ledger. Key characteristics of public blockchain is just that – sharing of entire ledger by every participant in the blockchain. The word “public” in its name refers to its open nature of carrying ledgers.
Private Blockchain
But not all information is needed nor required to be shared by everyone. In fact, some information, like personal information or confidential corporate information should not be open. That is what troubles some entities to fully adopt public blockchain. Private blockchain has been developed to resolve this, allocating authority to use ledgers to specially permissioned person or group.
Properties of Private Blockchain
Easier Information Management
Compared to public blockchain, private blockchain network can easily modify its policies and transaction information.
When a flawed transaction is approved, intervention of authorized institution can swiftly deal with the problem. Changes are made within limitedly authorized institutions, which makes approval process relatively simple.
Faster Transaction Speed
Thanks to simplified approval process, private blockchain usually comes with higher transaction speed. Bitcoin, the most famous of public blockchain can deal with approximately 4 transactions every second(4TPS), while Ripple of private blockchain exceeds 1,500TPS.
Tamper-free
Private blockchain is still a blockchain and has the same strong suit of blockchain – it is resilient to data tampering. Though the ledgers in private blockchain are not fully distributed to every member of the network they are still distributed among the group of trusted few, making it more reliable than conventional centralized system. However, lesser participants compared to public blockchain by nature calls for more caution in tampering at private blockchain.
Scalability
Private blockchain’s characteristics of sharing information among the few makes it more suitable for corporations or government agencies. Inside information of corporations and government agencies requires protection from unauthorized access from the outside. Not to mention personal information, financial or planning information and unreleased information can cause much trouble when shared in real-time. Sensitive information like this are usually managed by specifically authorized personnel under sealed condition with limitation in reading or editing. Private blockchain is much more friendly to adopt this sort of structure, and it leads to its superior scalability for different industries.
Lack of Transparency
Public blockchain retains transaction transparency through validating transactions by many participants, if not all. As said, in private blockchain only selected few are given authority to validate and modify transactions. In that aspect private blockchain relatively has weaker transparency than public blockchain.
Summary
In short, private blockchain is a blockchain which allows only some of the participants to access the network system-wise. It is suitable to enclose sensitive information from the public. Private blockchain inherits both good and bad parts from public blockchain and centralized system. Nowadays hybrid blockchain, which tries to mix private and public blockchain to overcome their shortcomings, is being developed to catch two hares as well.