What Is Blockchain Security? Public And Private Blockchains



Basic Blockchain Security

Blockchain technology enables decentralization through the participation of members through a distributed network. There is no single point of failure and no single user can change the transaction history. However, blockchain technology differs in several important security aspects.

Differences in Security by Blockchain Type

Blockchain networks can have different who can participate and who can access data. Networks are typically classified as public or private, which describes who can participate, and permissioned or unlicensed, which describes how participants access the network.

Public And Private Blockchains

Public blockchain networks are generally open to anyone to join and participants can remain anonymous. Public blockchains use computers connected to the internet to validate transactions and reach consensus. Bitcoin is perhaps the best-known example of a public blockchain, where consensus is achieved through “bitcoin mining.” Computers or “miners” on the Bitcoin network try to solve complex cryptographic problems in order to validate transactions by generating proof-of-work. Other than public keys, these types of networks have very little identity and access control.

Private blockchains use identities to verify membership and access, and generally only allow known organizations to join. Together, these organizations form a private “business network” dedicated to its members. A private blockchain on a permissioned network achieves consensus through a process called “selective endorsement” in which a known user confirms a transaction. Only members with special access and privileges can manage the transaction ledger. This type of network requires more identity and access control.

When building a blockchain application, it is important to evaluate the type of network that best fits your business goals. Private and licensed networks can be tightly controlled and are preferred for compliance and regulatory reasons. However, public and permissionless networks can achieve greater decentralization and distribution.

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