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Public vs Private Chains

Public vs Private Chains

Kaleido offers permissioned variants of the core Ethereum protocol, allowing for authenticated and identifiable participants to communicate and transact securely in a private setting.

When exploring blockchain for your business, there are a number of considerations as to whether you should use a public versus private blockchain network. Public chains can be accessed by anyone and operate without rigid authentication schemes. They rely on a computationally intensive consensus algorithm called Proof of Work (PoW), that serves to protect the integrity of the network by making historical reversals economically impractical and nearly impossible. Nodes and server pools that successfully mine blocks on the public chains gain the network’s underlying intrinsic currency, such as Bitcoin or Ether. However, public chains lack high degrees of scalability and performance, and can become expensive to participate in.

On the other hand, private chains do not require native currency and instead rely on strong authentication mechanisms, as well as speedy consensus algorithms backed by the protection of digital signatures. Enterprises and government institutions are drawn to private, permissioned chains to get the benefits of blockchain, such as transparency and a shared digital framework, without the burden of public chains. Private chains demand additional functionality around governance, security, identity schemes, smart contracts, and more, but meet many of the requirements that enterprises require in today’s complex landscape.

Read more about the differences between public and private chains in this blog, as well as how you can blend these two together to maximize efficiency and trust.