Private blockchain, public and consortia

Private

In a simplified form, blockchain is a way of recording data in sequentially interconnected cells. These data, being entered, can’t be changed and corrected, since they are protected both by cryptographic methods and by the need to coordinate these changes with all other information owners.

You can connect to this data record from any device, and with each connection, the state of the information will be automatically synchronized, so that all participants will receive an up-to-date and identical copy of the data.

In addition, for a network to be called a blockchain, it must meet the following conditions:

  • Sequence. All blocks must be interconnected.
  • Uniformity. Each participant has a complete copy of all information stored in the blockchain. If we are talking about a peer-to-peer format, then all participants also have the same access level.
  • Consensus. That means, a mechanism that reconciles the validity of new information entered into the structure.

Based on the characteristics of the organization, there are three types of blockchains - public, private and consortium networks. There are many similarities between them, as they all meet the defining criteria of the blockchain, but there are also significant differences.

Public networks

This is what the vast majority of distributed networks are. And the largest cryptocurrencies work on their basis. Such networks are called public because anyone can join them at any time. At the same time, not a single user can cause significant harm to such a structure, since he does not have the necessary computing power and motivation for this.

Such structures are very resistant to censorship and attempts of external influence - including due to automated mechanisms for rejecting those who try to disrupt the normal operation of the network.

However, the need to transmit actual data to each participating node significantly slows down the speed of work. And to make significant changes to the protocol, the consent of the majority is required - otherwise, a split or hard fork will take place, which will reduce the number of users and the total capacity of the network.

Private networks

They can only be joined with the permission of the management system. These networks are not decentralized, because there is a certain hierarchy of users. But it is still distributed, since a copy of the actual information is stored on each machine. Even with anonymity, they have problems - high-ranking nodes clearly know what is going on and who is doing it.

Also, most of these blockchains don’t use the Proof of Work consensus algorithm, since there is no need to worry about malicious activity of any individual nodes. If any suspicion arises, then the high-ranking validator node checks the information and decides on the further fate of the lower-ranking node. Since “power” is in the same hands, it is easier to monitor and implement change. Most often it is used by large organizations that want to get both the benefits of using blockchains and preserve the usual hierarchical structure.

Consortium networks

An intermediate option between private and public blockchains. They differ in that instead of one trusted validator, there are several independent ones. Which are forced to make collegial decisions about network management. At the same time, these validators are equal in rights, which eliminates the possibility of abuse by one of them of their powers.

This structure is especially effective in situations where several large separate organizations come together for a more efficient exchange of information, finances and resources.

What's better?

It all depends on what goals the blockchain sets for itself.

  • If we are talking about free exchange and efficient storage of information, as well as high resistance to censorship and external influences, then the public blockchain will be more convenient.
  • If you need precise control and high speed, and there are not so many external attacks and internal errors, then a private network is preferable.
  • If it is important to ensure fast and clear interaction between different organizations, while maintaining the advantages of blockchains, then it is better to choose consortium networks.

Unfortunately, there is no ideal system. It is necessary to choose what is most appropriate for specific tasks and conditions.