Public, Private, Permissioned Blockchains Compared

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Public, Private, Permissioned Blockchains Compared

Blockchains are built on distributed ledgers, which have been used to handle data at the corporate level for many years. However, they have only lately become famous and attractive since the notion of cryptocurrency was exposed to the general population.

Depending on how the blockchain is set, the material recorded on the blocks of the blockchain, as well as the actions conducted by the different members, may be regulated. Blockchains are often intended for certain purposes, with individuals obtaining various sorts of access or jobs.

Public blockchains are accessible to anybody; private blockchains are only accessible to a limited number of users; and permissioned blockchains are a combination of public and private blockchains that anyone may access as long as they have permission from the administrators.

Here are the fundamental distinctions between public, private, and permissioned blockchains.

Key Takeaways

  • In a public blockchain, anybody is allowed to join and participate in the blockchain network’s essential activities.
  • A private blockchain permits only chosen and verified participants, and the operator has the authority to overrule, amend, or remove blockchain records.
  • A permissioned blockchain combines the advantages of both private and public blockchains.
  • Permissioned blockchains have grown in popularity as a result of their ability to provide unique rights to different users on the network.

Public Blockchain

A public blockchain is one in which anybody is free to join and participate in the blockchain network’s essential functions. Anyone may read, publish, and audit the current operations on a public blockchain network, which contributes to the self-governed, decentralized character typically cited when discussing blockchain.


A public network uses an incentive mechanism to promote new users and maintain the network dynamic. Public blockchains are a very excellent alternative for a genuinely decentralized, democratized, and authority-free functioning.

Public blockchains are very significant because they may serve as the foundation for almost any decentralized solution. Furthermore, the large number of network members that join a secure public blockchain protects it against data breaches, hacker attempts, and other cybersecurity threats. The more members a blockchain has, the more secure it is.

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Public blockchains may be guarded using automated validation mechanisms and encryption that prevent single entities from modifying information in the chain (similar to bitcoin blockchains), or they can be open to everybody.


The fundamental downside of secured public blockchains is the large amount of energy needed to maintain them. The issue is a consensus technique that forces users to compete for information validation and get a payment for allowing the network to utilize their computing capacity. Because not all blockchain networks use an energy-intensive validation method, not all consume massive amounts of power.

Other concerns include a lack of total privacy and anonymity. Anyone may observe transaction amounts and addresses on public blockchains. If the address owners are identified, the user’s anonymity is lost.

Participants on public blockchains may potentially be dishonest in their intents. Most public blockchains are intended for cryptocurrencies, which are a popular target for hackers and criminals due to their high value.

Private Blockchain

Participants may only join a private blockchain network after being invited and having their identification or other needed information authenticated and validated. The network operator(s) or a clearly defined set protocol performed by the network through smart contracts or other automatic approval mechanisms do the validation.

Private blockchains have complete control over who may and cannot join in the network. If the network can mine, its private nature may limit which users may execute the consensus procedure that determines mining rights and rewards. Furthermore, only certain individuals may have access to the shared ledger. The owner or operator has the authority to override, alter, or remove the essential blockchain entries as needed or as they see suitable.


A private blockchain lacks decentralization. It is a distributed ledger that functions as a closed database protected by cryptographic ideas and the demands of the company. Only those who have authorization may operate a complete node, perform transactions, or validate/authenticate blockchain updates.

Private blockchains stress efficiency and immutability—the condition of not being able to be changed—by minimizing the emphasis on safeguarding user identities and encouraging transparency.

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These are critical elements in supply, logistics, payroll, financing, accounting, and a variety of other company and business domains.


Private blockchains, although specifically developed for corporate applications, lack many of the useful qualities of permissionless networks simply because they are not broadly applicable. They are instead designed to perform certain jobs and activities.

Private blockchains are vulnerable to data breaches and other security issues in this regard. This is because, if there is a consensus mechanism, a restricted number of validators are utilized to achieve an agreement on transactions and data.

There may not be consensus in a private blockchain, but rather the immutability of submitted data unless an operator or administrator may make modifications.

Permissioned Blockchain

Permissioned blockchains are a hybrid of public and private blockchains that provide several customisation possibilities.


The benefits of permissioned blockchain include the ability for anybody to join the network following a satisfactory identity verification procedure. Some provide unique and limited rights to execute just specified network activities. This enables members to conduct certain operations on the blockchain, such as reading, accessing, or inputting data.

Blockchain-as-a-Service (BaaS)—a blockchain built to be scalable for the requirements of many organizations or jobs that the providers rent out to other businesses—is one of the most intriguing to enterprises.

Blockchain-as-a-Service lowers expenses for many organizations that may benefit from incorporating blockchain technology into their operations.

Assume a company wishes to increase the openness and accuracy of its accounting systems and financial reporting. A BaaS supplier might offer blockchain accounting services. The blockchain would offer an interface via which end users could enter data and then automate the remainder of the accounting operations.

As a result, there are fewer mistakes and no ability for other parties to change financial data once it has been input. As a consequence, financial reports to management and executives become more accurate, and the blockchain may be seen and generated in real time.

The company may decide to automate its invoicing, payments, bookkeeping, and tax reporting. Furthermore, blockchain can prevent anybody with malicious intent from tampering with financial data or exploiting flaws in accounting systems.

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Permissioned blockchains have the same drawbacks as public and private blockchains, depending on how they are built. One significant problem is that permissioned blockchains are prone to hacking since they need internet connectivity. Some may employ immutability approaches by design, such as cryptographic security measures and validation through consensus procedures.

While most blockchains are assumed to be impenetrable, there exist flaws. When a network is attacked and private keys are taken, cryptocurrency theft happens. Permissioned blockchains are similarly vulnerable to this flaw since the networks that link users to the service rely on security mechanisms that may be circumvented. User information may be taken and accounts compromised, comparable to enterprise-level data breaches such as the one Target experienced in 2013 when a third-party with network access was hacked. 1

What Are Private Blockchains?

Private blockchains are distributed ledgers that are only accessible to individuals who have been granted explicit authorization to have specified access levels or skills on a blockchain.

Are There Any Permissioned Blockchains?

Permissioned blockchains have shown to be useful and valuable to many businesses. Walmart, for example, employs a customized version of Hyperledger Fabric, an open source project founded by IBM and the Linux Foundation for commercial usage, to trace food sources considerably quicker than it could before. 2

What Is the Difference Between and Permissioned and Private Blockchain?

A private blockchain is one to which only particular individuals have access and skills, and it is often utilized solely by the entity to whom it belongs. A permissioned blockchain is a combination of public and private blockchains that grants rights and abilities to numerous users.

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