Blockchain Applications in Business: Public vs Private

Blockchain vs DLTs

Just before we dive in, it is befitting at this stage to address the common confusion between blockchain and DLTs. A DLT (Distributed Ledger Technology) is a decentralized form of database managed by multiple participants, across multiple nodes. It’s the umbrella that embodies all decentralized database services that are managed and governed by participants.

Classifications and Types of Blockchains

Back to our discussion, blockchains come in varying types. They are classified into three:

  1. Public blockchains such as Bitcoin and Ethereum
  2. Private blockchains like R3 Corda and Hyperledger
  3. Hybrid blockchains such as Dragonchain

Similarities between Public and Private Blockchains

Before moving on to the varying differences of the duo of public and private blockchains, here are some of their similarities:

Differences Between Public and Private blockchains

Magnitude: Private blockchains are lighter and possess higher transactional throughput due to the reduced volume of transactions that are carried out on them, compared to public blockchains which are heavier due to the high volume of transactional activities that are always ongoing on them.

Features/ Benefits of Public Blockchains

Public blockchains are considered to be the original distributed ledger structure behind the evolution of blockchain technology. Anybody from anywhere in the world can send, receive and verify transactions on them, in addition to powers to audit them as well. For each transaction to be validated on the network, it has to be authorized by each of the constituent nodes or computers through a consensus process. Some of the most popular public blockchains are Bitcoin, Ethereum and Litecoin. Its features and benefits include:

Downsides of Public Blockchains

With all the above asserted pros of public blockchains, it is important to bring to your notice as well, some of its limitations in its integrations in your business. Such limitations include:

Features/ Benefits of a Private Blockchain

Private blockchains thrive on restricted access and permissioned relationships. New users are usually invited and validated in accordance with specific rules stipulated by the platform’s admin or founder. Typically, businesses use enterprise blockchains for intra business purposes with access restricted to company members and employees. Should there be a reason for non-members to be a part of the chain, they are given access on a need-to-know basis. Prominent examples of private blockchains are Quorum, Hyperledger Fabric, and R3 Corda. The benefits and features of this blockchain variant include:

Downsides of Private Blockchains

Lack of Trust: The running of private blockchains is hinged on some few powerful nodes that are responsible for validating transactions. That is, all other users except those with validation powers, are not trusted enough to have been clothed with governance rights of the network.

Federated/ Consortium Blockchains

Consortium blockchains have close ties with private blockchains. The main distinguishing factor is that consortium blockchains are controlled and governed by group(s) rather than a single entity. Call them a sub-category of private blockchains and you’ve hit the bull’s eye because it embodies almost everything that private blockchains are known for. In summary, they:

  • Offer a collaborative model of use cases where business competitors can gather to work together as well as compete against each other.
  • Promote individual and collective efficiency, through the collaborations that it makes possible.

Hybrid Blockchains as the Ultimate Option

Hybrid blockchains combine the two worlds of public and private blockchains. Hybrids typically combine the privacy features of private blockchains alongside the security/ transparency features of public blockchains. It avails businesses’ substantial flexibility to choose what data to make public and what data to make private. With a hybrid blockchain, a business can make the platform accessible to everyone in the world (through a public blockchain), while a private blockchain runs in the background with the purpose of controlling access to ledger modifications and editing.

Benefits of Hybrid Blockchains

Low transaction Cost: The fact that transactions on hybrids only need to be verified by a few powerful nodes, makes the running of this blockchain very cheap in terms of computing, energy power and by extension, charges of use.


Private blockchains appear to be more viable and promising for business adoption, than public ones due to factors like scalability, computing and energy power, transaction validation speeds and security, amongst others. A closer look at private blockchains would, however, reveal that they fundamentally deviate from the one thing that makes blockchain solutions attractive and promising — decentralization. Hybrid blockchains which are an amalgam of both private and public blockchain appear to be a better choice than exclusively private ones, towering over public ones.



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