Public and private blockchain concepts and examples
Public blockchain: A public blockchain is a platform where anyone on the platform would be able to read or write to the platform, provided they are able to show proof of work for the same. There has been a lot of activity in this space as the number of potential users that any technology in this space could generate is high. Also, a public blockchain is considered to be a fully decentralized blockchain. Some examples:
- Ethereum, a provider of a decentralized platform and programming language that helps running smart contracts and allows developers to publish distributed applications.
- Factom, a provider of records management, records business processes for business and governments.
- Blockstream, a provider of sidechain technology, focused on extending capabilities of bitcoin. The company has started experimenting on providing accounting (considered a function to be done on private blockchain) with the use of public blockchain technology.
Private blockchain: A private blockchain, on the other hand, allows only the owner to have the rights on any changes that have to be done. This could be seen as a similar version to the existing infrastructure wherein the owner (a centralized authority) would have the power to change the rules, revert transactions, etc. based on the need. This could be a concept with huge interest from FIs and large companies. It could find use cases to build proprietary systems and reduce the costs while at the same time, increase their efficiency. Some of the examples could be:
- Eris Industries aims to be the provider of shared software database using blockchain technology.
- Blockstack aims to provide financial institutions back office operations, including clearing & settlement on a private blockchain.
- Multichain, provides an open source distributed database for financial transactions.
- Chain Inc., a provider of blockchain APIs. Chain partnered with Nasdaq OMX Group Inc., to provide a platform that enables trading private company shares with the blockchain.
Let’s explore if there is a hybrid blockchain concept (third type). A consortium blockchain would be a mix of both the public and private. Wherein the ability to read and write could be extended to a certain number of people/nodes. This could be used by groups of organization/firms, who get together, work on developing different models by collaborating with each other. Hence, they could gain a blockchain with restricted access, work on their solutions and maintain the intellectual property rights within the consortium.