Blockchain market capitalization is expected to top out at $23 billion or more over the next 5 years. This digital ledger technology, or DLT, is primarily used in the financial sector. Yet, its potential application extends beyond trading or transacting in Bitcoin and Litecoin.
Healthcare is one area where public and private global blockchain technologies may prosper. Entertainment is another. You can expect the use of these technologies to grow exponentially, especially with all the experimentation, both public and private.
But what is blockchain technology? And what is the difference between public and public blockchain technology? Private and public blockchain both have limitations.
In this article, we’ll discuss the difference between public vs. private blockchain technology.
What Are Global Blockchain Technologies?
Blockchain is like electricity, and units like Bitcoin are akin to a bulb. Sure, you can hold a bulb in your hand, but it won’t work without alternating current. That’s just one way to visualize blockchain technology.
You can use electricity for many purposes, but you need compatible technology.
One of the most ballyhooed elements of blockchain is that it is immutable. That means you cannot erase or change blockchain data once you write it.
Both public and private blockchain rely on individual members for authentication. All members/computers on the system, or nodes, must agree to authenticate the data. To prevent illegal tampering, all the nodes distribute the blocks in real-time.
Imagine an artist creating music or visual art out of blockchain. You could not change master recordings. Original art would be tamper-proof.
Public Blockchain Pros and Cons
The best thing about public blockchains is that they are open-sourced. Also, every user can view and access the files on the network. These networks are in no central locations. So, these blockchains are impossible to tamper with.
Also, public blockchains guarantee anonymity. All the users have to validate changes, which makes transaction speeds slow. The systems also take up a huge amount of power and try storage capabilities. These are real-world expenses to consider.
Private Blockchain Pros and Cons
Private blockchain networks are smaller, faster, and have better administration controls. This is because there is an administrator that grants access to individual users.
With this efficient governance comes a lack of trust and security. Since only a few nodes check transactions, it is easier to breach security.
This smaller network is perfect for institutions that want to guarantee immutable documentation. This can cover intellectual property and closed financial transactions.
The eternal documentation of blockchain technology is its greatest benefit. This extends to both private and public blockchain. The technology’s biggest defaults are that different systems are incompatible. You cannot conduct transactions between Ethereum and Bitcoin blockchains, for example.
What’s Right for Your Network?
While global blockchain technologies are not new, uses for it is still developing. The immutable aspect of blockchain, both public and private, is becoming more popular. People are looking for new ways to secure their financial and intellectual property.
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