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Home Blockchain

What are public, private and managed blockchains?

Alex Smith by Alex Smith
13th September 2020
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What are public, private and managed blockchains?
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A deployment pattern in the context of blockchain is the set up and composition of the network. There are three deployment patterns that exist for blockchains: public, private, and internal tagged blockchains. Private blockchains can also be referred to as managed blockchains. 

Entangled with all of this are the terms permissioned blockchain and permissionless blockchain. In a permissioned blockchain only individuals with permission are able to take part in network activities, such as validating transactions and creating smart contracts. On the other hand, network activities on permissionless blockchains are open to all. 

Public blockchains

A public blockchain is what most people think of when they hear blockchain. They are decentralized networks where every participant has access to the data, and anyone can partake in adding or validating blocks if they desire. 

Due to the openness of public blockchains there must be measures implemented to protect against malicious action. Economic incentives are by far the most common way that blockchains are able to protect against malicious action. Good actions are financially rewarded, while negative actions are punished, such as is Proof-of-Work (PoW) and Proof-of-Stake (PoS) consensus mechanisms. 

Private blockchains

A private blockchain manages all participants, ensuring that only known and trusted parties are able to view the data or contribute to adding or validating blocks. All participants in a managed network are vetted prior to being granted access. A consortium blockchain network is an option for businesses which allows them to utilize a public blockchain in a managed way. This is acheived by using the infrastructure of a public blockchain but limiting access by altering the consensus mechanism, because economic incentives are not required in a private blockchain network.  

By nature public blockchains are permissionless, but it is also possible to have permissioned public networks such as Ethereum with Casper. Similarly, while private blockchains are mostly permissioned, it is possible to have permissionless private blockchain networks.

Private blockchains have a couple of glaring issues. While the network is private and all participants are vetted and approved, immutability is not guaranteed. Additionally, if all nodes are operated within the private network the process can be expensive and slow. A tagged internal network is a possible solution to improve private blockchains. In a tagged network the current block hash would be transmitted to a public blockchain, or other immutable location, at constant intervals. Therefore, it would be possible to compare the block hashes on the public network to those on the private internal network to confirm that no changes had been made.

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Alex Smith

Alex Smith

Alex is the Founder of The Daily Chain and has been in the space for just over two years. Fascinated by the community and everything that blockchain has to offer, Alex dedicated himself to creating content and contributing back to the industry.

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