Steemit Crypto Academy Season 4 Beginners' course - Homework Post for Task 5: Public Chain
What Is Public Chain and What will be the Advantages and Disadvantages of Public Chain?
Before I delve into the question, it is expedient that I define Blockchain.
A Blockchain is simply an irreversible and distributed ledger that enables the efficient recording of transactions and management of assets in a corporate system.
What is a Public Blockchain
A public Blockchain is a self-governed, decentralized platform that is permissionless and accessible to the general public. That is to say that, anyone can be part of, read or write information on the network. A consensus mechanism is used to validate transactions on a public Blockchain. There are two top public blochains which are: Bitcoin and Ethereum. They both use the Proof-of-work (PoW) consensus mechanism although Ethereum has begun it's transition into using proof-of-stake (PoS) consensus mechanism.
There is great transparency of transactions in public blockchain as compared to a private blockchain. It is more decentralized and no one person has ultimate control over the network and surpasses the need of an intermediary. Conversely, there is low transaction speed and issues with scalability as well as a limited consensus mechanism when compared to a private network.
There are a few similarities between a public and private blockchain and some of it are; each node on the Blockchain has a replica of their ledger, the stored data cannot be altered and they both depend on transaction validators. Basically, there are no restrictions in the use of a public blockchain as anyone with an internet connection can have full access to the blockchain, transact and validate blocks. It gives some incentives to people who validate blocks and uses Proof-of-work and proof-of-stake consensus mechanism to validate the transactions.
Features of Public Blockchain
There are different features of a public blockchain and some of them are:
There is anonymity for both user and transaction. This invariably means that transactions cannot be traced back to the user.
It has a slow transaction speed especially when compared to the private blockchain
It is fully decentralized and there is no central authority.
Data is immutable and cannot be changed once validated.
It is accessible to the public and anyone can download and add nodes to the network
Every node on the network has access to read and write of the digital ledger
Examples of Public Blockchain
Most of the big names in the world of cryptocurrency are actually built on the public blockchain although the most popular ones noteworthy are Ethereum and Bitcoin.
What Are The Advantages?
Transparency
Public blockchains are built to be transparent. No one has full control over the network and users have a commonly shared consensus in the network. This helps to curb fraudulent acts because everyone can keep track on the transactions made.
A decentralized system
Like I have already stated, the network is fully decentralized and all nodes in the system have a replica of the ledger which is usually update efficiently using consensus algorithms. There is no need for a central authority as seen in traditional systems. It also uses peer to peer network of computers.
User friendly
It is open to any user with an internet connection. He can download a copy of the Blockchain and has access to read or rewrite it. This simply means that the affairs are controlled by the general public.
Immutability
Transactions in a public network are immutable. That is to say that they cannot be altered or tampered with. Once an entry has been de and verified by the validators, it cannot be changed. If a user attempts this, the transactions will be rejected by the nodes.
Anonymity
The validators and users of a public blockchain are kept anonymous
What are the disadvantages?
Transaction speed
The speed of transactions in a public blockchain is very slow especially as companies cannot restrict access and it gets worse when more users join the network. To illustrate, Bitcoin processes about 4.6 transactions per second while we other companies like Visa process about 1700.
Fraud
A user is not required to prove his identity before using the.network.and this can be used for illicit transactions especially as the identity of the user is anonymous and cannot be linked to any transactions.
Consensus mechanism
Some of the consensus mechanisms in a public blockchain requires users to solve difficult mathematical puzzles to validate transactions and not everyone can do this.
Uses
Mining and Exchanging cryptocurrencies
Create a record with a chain of custody such as electronic motorization of certificates/affidavit and ownership or property
Suitable for NGOs and social support groups
Good in the health sector for keeping records.
Conclusion
Public Blockchain is a permissionless and self-governed platform that offers lots of benefits such as immutability, anonymity and user empowerment. It is detested by some people because of it's low transaction speed and requirement to solve complex mathematical issues in other to validate transactions. It can be used to create records of a chain of custody and also suitable for NGOs.