The rise of private blockchain
There are three types of blockchain technology; public blockchain, private and federated blockchain.
Among these three, public blockchain is the most popular and widely used. Each of these three has its individual features that offer diverse, unique benefits.
Most cryptocurrencies today are built on the public blockchain; Bitcoin, Ethereum, Litecoin are notable examples.
We rarely hear of projects built on private bitcoin. However, there has been a steady rise in private blockchain adoption over the years.
One of the major factors influencing the growth of private blockchain is its ability to minimize the number of users allowed to join the ecosystem; this makes it a perfect option for closed establishments.
You cannot use the public or federated blockchain where private blockchain is required.
What is Private Blockchain?
A private blockchain is a semi-decentralized network that (although) built on a distributed ledger gives room for a single authority or centralized organization to control the network.
A good example of a public blockchain is Bitcoin, where anybody can be part of the ecosystem no matter where they are. The private blockchain is the opposite. Only a selected few can join the ecosystem. They must be given a special permit; this makes the private blockchain suitable for enterprises and other closed projects.
Companies looking to secure their data from hackers or theft should give the private blockchain a try since only a few people can be part of the system.
The benefit of using private blockchain is insurmountable; the big question is how many people are willing to integrate private blockchain into their operation?
There are efforts in place by blockchain companies to make sure companies can easily adopt blockchain; these blockchain companies want to make private versions available for the sake of secrecy. A good example of this effort is Ethereum which we all know as a public blockchain; currently, there are efforts in place by EEA to make ethereum a more private blockchain by increasing its privacy while maintaining its features.
With centralized authority, the essence of blockchain (which eliminates centralized authority) seems to be defeated; well, even though it has a central authority, it still offers partial decentralization.
Development of Private Blockchain
There has been debate on the status of private blockchain. Some people believe it is blockchain, while others feel that it is no longer blockchain since it is centralised.
Some crypto experts argue that simply because the private blockchain uses blockchain technology doest mean it is blockchain since it doesn’t follow the core values of decentralization (you can get more information on this from British Bitcoin Profit.)
This argument may or may not be true, but one thing is certain, the private blockchain has all the features of blockchain except the fact that it is private. Companies who want to utilize blockchain cannot use a public blockchain because they probably have too much information vulnerable to leak; only a private ecosystem can be used in situations like this.
In the End
Private blockchain has come a long way, it might not yet be at the same level as a public blockchain, but it serves a unique purpose: creating a secured platform for enterprises. Today, there are already many solutions based on private blockchain.
Despite how far private blockchain has come, many people still don’t agree that blockchain is centralized.
This assumption is not true. There are instances where enterprises use blockchain solutions in a private ecosystem, and it works perfectly; besides a private ecosystem is not completely centralized. The organization using the chain can determine the level of decentralization, so you can find private blockchain out there with a good degree of decentralization.