What is a Public Blockchain?
A public blockchain is a decentralized, distributed ledger system that allows for secure and transparent transactions to occur between participants on the network. Unlike traditional centralized systems, where a single entity holds and manages the data, in a public blockchain, the ledger is maintained by a network of users.
One of the key features of public blockchains is that they are open-source, meaning that anyone can participate in the network and access its data. This allows for greater transparency and accessibility, as well as increased security due to the distributed nature of the ledger.
Public blockchains are often used in various applications, including coins and tokens such as Bitcoin, Ethereum, Cryptounit, etc. In these cases, the blockchain serves as a secure ledger for recording and verifying transactions between participants.
Another key aspect of public blockchains is that they are designed to be immutable. Once data is recorded on the blockchain, it cannot be altered or deleted, providing a permanent and tamper-proof record of all transactions.
Despite their many benefits, public blockchains also have their challenges. For example, they can be slow and expensive, due to the high number of nodes required to maintain the network and the computational power needed to validate transactions. Additionally, they can also be subject to malicious activity, such as hacking or manipulation of the data.
Public vs Private Blockchain: A Comparison
- Native Token: Public blockchains have a native token, while private blockchains do not necessarily require one.
- Transactions per Second: Public blockchains have a lower number of transactions per second compared to private blockchains.
- Energy Consumption: Public blockchains consume more energy, while private blockchains consume less energy.
- Decentralization: Public blockchains are decentralized, while private blockchains are more centralized.
- Access: Public blockchains are permissionless, allowing anyone to read, write, and participate in the network. Private blockchains, on the other hand, are permissioned, with read and write access granted by invitation.
- Network Actors: In public blockchains, participants do not know each other, while in private blockchains, participants are familiar with one another.
- Order of Magnitude: Public blockchains have a smaller order of magnitude compared to private blockchains, making them lighter and offering faster transactional throughput.
- Speed: Private blockchains are faster, while public blockchains are slower.
- Effects: Public blockchains have the potential to disrupt current business models, reduce infrastructure cost, and simplify decentralized application (dApp) creation and management. Private blockchains reduce transaction costs and eliminate data redundancies, streamlining document handling and reducing manual compliance mechanisms.
- Consensus Algorithms: Public blockchains use consensus algorithms such as proof of work, proof of stake, proof of burn, and proof of space. Private blockchains use algorithms such as Proof of Elapsed Time (PoET), Raft, and Istanbul BFT.
- Attacks: Public blockchains are vulnerable to potential collision and 51% attacks due to the unknown identity of validators, while private blockchains have reduced risk of collision as validators are known with appropriate credentials.
Challenges Faced in Blockchain Technology
Despite its benefits, blockchains that lack a secure network and consensus process are at risk of attacks and centralization. It's crucial to consider factors such as decentralization and processing speed. Another concern is the environmental impact, as consensus methods like proof-of-work consume significant amounts of energy. Additionally, blockchain's technological complexity can be intimidating for businesses and individuals.
The rise of cryptocurrencies marked the start of blockchain's integration into various industries and daily life. As more sectors experiment with the technology and people become more familiar with its benefits, the potential of blockchain-based products and services grows. Despite its challenges, the blockchain industry is expanding and may play a significant role in shaping our digital future.
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Cryptounit blockchain, based on EOSIO, is designed to enable vertical and horizontal scaling of decentralized applications linking the real economy and decentralized finance (DeFi).
A blockchain is a distributed ledger technology that allows for the creation of secure, tamper-proof networks. It offers many potential uses, from enabling faster and more efficient transactions to managing digital rights and identity verification.