The terms of the week
Blockchain is a revolutionary technology that has brought about remarkable changes in various industries, including finance, healthcare, supply chain, etc. However, there are two main types of blockchains: private and public. These two variants have unique characteristics and are used in different contexts.
Public Blockchain
A public blockchain is a decentralized network, open to anyone who wishes to participate. Bitcoin and Ethereum are common examples of public blockchains. In this network, anyone can join and participate in the transaction validation process (mining in the case of Bitcoin). Transactions in these networks are transparent and verifiable by any participant. This offers a high level of security, but also comes with scalability and privacy issues.
Ethereum, another popular public blockchain, was the first to introduce smart contracts – self-contained programs that execute transactions when certain conditions are met. Ethereum has paved the way for decentralized projects, asset tokenization, decentralized applications (dApps), and much more.
Private Blockchain
A private blockchain, on the other hand, is a closed network operated by a single entity or a small group. This type of blockchain is very similar to a centralized database, but with some of the characteristics of the blockchain, such as data imperviousness. Network access and write/read permissions can be restricted, offering greater control and privacy. However, a part of the decentralization and security element that characterizes public blockchains is lost.
Hyperledger Fabric: A project from IBM, Hyperledger Fabric is a private blockchain platform aimed at enterprises. It offers features such as private channels to share confidential data, as well as the ability to create and implement smart contracts.
Choosing between public and private blockchains depends on the specific needs of a project. If you need complete transparency, decentralization, and security, public blockchain is an ideal choice. On the other hand, if privacy, efficiency, and control are your priorities, a private blockchain might be a better fit.
However, there are also so-called “hybrid blockchains”, which try to combine the advantages of both types of blockchains. These blockchains offer a balance of transparency, security, and control