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Private Blockchain vs Public Blockchain: An In-Depth Comparison

Blockchain protocols can be divided into two main categories based on whether they are open to the public. On the one hand, we have public blockchains like Bitcoin and Ethereum, that anyone can access and use without special permissions. Those are also known as permissionless networks. On the other hand, we also have ‘permissioned’ or private blockchain protocols, designed to serve a limited number of network participants.

Each type offers unique features, use cases, and limitations, and choosing between the two is a crucial decision for blockchain developers and tech enthusiasts alike. In this article, we will explore the intricacies of private and public blockchains, compare their security, scalability, and governance, and look toward the future of blockchain technology.

Introduction to blockchain

Blockchain technology is centered around decentralized digital ledgers that store transaction records across many computers so that the registered transactions cannot be altered retroactively. Networks like Bitcoin and Ethereum have public ledgers, meaning anyone can access and inspect the records or even store and upkeep their own copy of the ledger if they have the necessary software. Meanwhile, private blockchains seek to implement the same core principles, but for use cases that require a certain level of confidentiality.

Blockchain technology is typically associated with cryptocurrencies, but its potential applications span far beyond, touching sectors such as healthcare, finance, and supply chain management.

What are public blockchains?

As we established, public blockchains like Bitcoin and Ethereum are open and decentralized platforms where anyone can participate and transact. These blockchains are known for their high security due to strict consensus mechanisms such as Proof of Work (PoW) or Proof of Stake (PoS) and their ability to provide true decentralization and full user empowerment. However, they have certain limitations, most notably in terms of scalability (the ability to process an increasing number of transactions quickly), energy consumption (concerns PoW consensus mechanisms which require energy-intensive computations) and privacy (public blockchains and the information they store are, by design, open to everyone).

That openness and the high level of decentralization is what makes public blockchains so well-suited for facilitating broader ecosystems of diverse decentralized services and applications. They are aimed at supporting large communities and seek to drive the next stage of the evolution of the Web.  

What are private blockchains?

Private blockchains operate within closed networks, restricting participation to specific members. This setup offers enhanced privacy, control, and efficiency, making private blockchains suitable for businesses that require confidentiality and fast transaction processing. Despite their advantages, private blockchains are often criticized for their centralized nature, which can introduce security risks and reduce transparency.

Private blockchains are particularly useful for enterprise-grade solutions. For example, you may need a private network to facilitate communication and tracking across the supply chain of a multinational corporation.

Public vs. private blockchains: security, scalability, and governance

When it comes to security, public blockchains have the edge due to their higher level of decentralization, which makes them less vulnerable to attacks. However, private blockchains can offer higher transaction speeds and greater scalability due to their restricted access which generally means they are required to process much lower transaction volumes. Governance is another area where these two blockchain types diverge significantly. Public blockchains operate on a decentralized governance model, while private blockchains are managed by a single entity or a consortium, allowing for quicker decision-making but potentially limiting consensus.

Emerging trends and industry adoption of blockchain technology

The blockchain sector is constantly evolving, with new advancements aimed at overcoming the limitations of current technologies. Combining the best features of public and private blockchains, hybrid models have emerged as a promising solution for many applications. Additionally, developing more energy-efficient consensus mechanisms like Proof of Stake and integrating blockchain with other emerging technologies, such as artificial intelligence and the Internet of Things (IoT), are set to expand the possibilities of blockchain applications further.


Blockchain developers and tech enthusiasts play a critical role in the ongoing evolution of blockchain technology. By understanding the key differences between private and public blockchains and exploring innovative solutions to their limitations, the blockchain community can drive forward the adoption of this technology across various industries. Whether you’re interested in creating a private blockchain for your organization or contributing to the development of public blockchain projects, your efforts contribute to the exciting future of blockchain technology.

Navigating the complex landscape of blockchain requires considering the specific needs and goals of your project or organization. Whether you opt for a private blockchain to maintain control and privacy or a public blockchain to leverage decentralization and transparency, your choice will significantly influence the outcome of your blockchain initiative.

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Researched and written by

Savina Todorova
Marketing @LimeAcademy

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