There are three types of blockchains; public, private and consortium. While there would be only a few people who may not have an understanding of what is a public blockchain, many people don’t know the consortium and private blockchains.
Consortium and private blockchains serve a slightly different purpose. They are not designed to expose the record of transactions which they store to the whole world. And they get maintained by a limited number of nodes, comparatively much efficiently than their public counterparts.
While consortium blockchains are governed by a group of institutions (for instance, a consortium of banks), private blockchains are maintained by a single organization. Unlike the public blockchains, the concept of these chains is not to reform their existing business processes but to supplement them.
These types of blockchain are most used in financial institutions and large-scale organizations. Such corporations can exchange assets using the blockchain technology, and thus, not having to involve an intermediary along with instant transaction settlement. Moreover, they can also track the private P2P networks in real-time, whenever they want.
So, let’s begin with understanding the benefits of using private blockchain development services for industries wanting to limit their blockchain application.
Looking to make your online business GDPR Compliant, Read this: How Private Blockchains Can Help Companies Quickly Become GDPR Compliant
As we know that a blockchain is a distributed ledger, it has no single point of failure. The nodes working within a private blockchain network don’t require to depend on a central node running it. Therefore, the probability of a sudden system shutdown, due to unexpected errors, is nominal.
Those advocating anonymity on public networks may tolerate chaos, arose from the lack of regulation, and risk their privacy.
However, banks accept no shadiness. They want a governance model that’s clear-cut (not a model managed by some anonymous miners) and the ability to tweak the protocol and revert transactions, if necessary.
Private blockchains are ‘Member Only,’ and that’s why are efficient.
As we’ve talked about it earlier, there’s no way to put implication on who can transact on a public blockchain; they are designed to let everyone access it. Nonetheless, a large number of nodes, all situated far apart, hinder the network’s agility.
Therefore, the capacity of (transaction throughput) private blockchain is much superior to a public network.
You may not want to miss reading this blog: Hybrid Blockchain: Bringing the Best of Both Public and Private Blockchains
Miners (validators) don’t remain anonymous on private blockchains. They are pre-selected by an institution and thus, are highly trusted. There are bleak chances of someone performing malicious activities, which public blockchains fear the most.
Regulations:: Public blockchains are unregulated. Thus, there are chances of criminal activities, such as the repeated use of Bitcoin for the same.
However, that’s not the case with private blockchains. These can be built in complete compliance with AML (Anti-money laundering), KYC (Know Your Customer), and HIPPA (Health Insurance Portability and Accountability Act) laws.
Higher Transparency within the organization
Faster and low-risk transactions because of KYC authentication
Reduced Transaction Costs
Permissioned yet completely decentralized
Share a myriad of data and files
Customizable as per the type of business model
Transaction details aren’t available on public nodes
Create and connect to a Private blockchain
Modify the Blockchain guidelines
Modify the runtime criterion
Develop multiple key values
Design identity ledgers on your Blocks
Monitor and validate at each network level
Control all transactions in a dynamic way
Dynamic access to control assets