When you hear about blockchain, you probably think of Bitcoin or Ethereum - open networks where anyone can send crypto or check transaction history. But not all blockchains work that way. There’s another kind - one that’s locked down, controlled, and hidden from the public. It’s called a private blockchain. And while both types use the same core idea - a shared, unchangeable ledger - they’re built for completely different jobs.
Who Can Join? Permissionless vs Permissioned
Public blockchains are open to everyone. You don’t need to ask for permission. If you have a computer and an internet connection, you can join the network, send a transaction, or even run a node that helps verify everything. Ethereum, Bitcoin, and Solana are all public blockchains. As of early 2024, Ethereum had over 7,000 active nodes spread across the globe. That’s not just a lot of computers - it’s a massive, distributed system with no single owner. Private blockchains are the opposite. Only people or organizations approved by a central authority can join. Think banks, supply chain partners, or government agencies working together. These networks are usually run by a single company or a group of trusted partners. You can’t just download an app and start transacting. You need an invitation, credentials, and often a legal agreement. That control is the whole point.Transparency: Everything Visible vs Only for Insiders
On a public blockchain, every transaction is public. Anyone can look up how much Bitcoin was sent from one address to another, when it happened, and even trace the full history of that wallet. That’s why people use it for audits, public records, or proving ownership of digital art. If you want proof that something happened - and you want the whole world to see it - public is the way to go. Private blockchains keep everything hidden. Only authorized participants can see the data. That’s critical for industries like healthcare, where patient records must stay confidential, or finance, where trade deals and internal accounting can’t be exposed to competitors. A hospital network using a private blockchain can share test results between clinics without letting outsiders see who got treated or what they were diagnosed with.Security: Decentralized Defense vs Controlled Access
Public blockchains are secure because they’re hard to attack. To change a transaction on Bitcoin or Ethereum, you’d need to control more than half of all the computing power on the network. That’s nearly impossible with thousands of nodes spread across continents. Even if one node gets hacked, the rest keep the ledger intact. Private blockchains are more vulnerable. With only a handful of nodes - maybe five or ten - it’s easier for someone with insider access to manipulate the system. If a company runs a private blockchain with just its own servers, and one of them gets compromised, the whole chain could be altered. That’s why private blockchains rely on trust among participants, not just math and numbers.Speed and Scalability: Fast Business vs Slow Public Network
Private blockchains move fast. Because they have fewer nodes and don’t need to reach consensus with strangers across the globe, they can process hundreds or even thousands of transactions per second. A logistics company using a private blockchain to track shipments can update inventory, confirm deliveries, and trigger payments in seconds. Public blockchains are slower. Bitcoin handles about 7 transactions per second. Ethereum, even after upgrades, maxes out around 30. Why? Every node has to check every transaction. That’s great for security, terrible for speed. If you’re running a retail system that needs to process 1,000 sales a minute, a public blockchain will choke.
Energy Use: Green vs Gold Rush
Public blockchains like Bitcoin used to burn massive amounts of electricity. Mining Bitcoin with proof of work meant computers running 24/7, using more power than some countries. Even Ethereum’s proof of stake cut energy use by 99.95% after its 2022 upgrade, but many public chains still rely on heavy consensus methods. Private blockchains don’t have that problem. They use lightweight consensus like Proof of Authority (PoA) or Delegated Proof of Stake (DPoS), where trusted nodes - not random miners - validate transactions. That means low power use, lower costs, and less environmental backlash. For companies trying to meet ESG goals, private blockchains are a no-brainer.Control and Customization: Who Calls the Shots?
On a public blockchain, no one owns it. Changes to the rules - like increasing block size or changing fees - require agreement from developers, miners, and users. That’s messy. It took years for Ethereum to upgrade, and even then, it split the network (remember Ethereum Classic?). Private blockchains are run by a single entity or consortium. If the CEO says, “We need to add a new field to track shipment temperature,” it happens. No vote. No debate. No hard fork. That makes private blockchains ideal for regulated industries like banking or pharmaceuticals, where compliance isn’t optional - it’s built into the code.Cost: Pay Per Transaction vs Pay for Infrastructure
Using a public blockchain often means paying fees. During busy times, Ethereum gas fees can spike to $50 or more per transaction. That’s fine for sending crypto, but it’s a disaster for sending 10,000 supply chain updates a day. Private blockchains don’t charge per transaction. You pay for servers, maintenance, and IT staff - but not for network congestion. That’s why companies like Walmart and Maersk use private chains for logistics: they know exactly what it’ll cost to run them, month after month.
What Are They Actually Used For?
Public blockchains shine where openness matters:- Cryptocurrency payments (Bitcoin, Ethereum)
- Decentralized finance (DeFi) apps like lending or trading
- NFT marketplaces and digital collectibles
- Public voting systems or land registries
- Transparent charity donation tracking
- Supply chain tracking (food safety, pharmaceuticals)
- Internal corporate accounting
- Banking settlement systems
- Healthcare data sharing between hospitals
- Insurance claims processing among partners
Hybrid Models Are Starting to Take Over
The real future isn’t public vs private - it’s both. Companies are building hybrid systems where sensitive data stays private, but key events get recorded on a public chain for verification. For example:- A bank processes a loan internally on a private chain.
- When the loan is approved, a hash of the approval is stored on Ethereum.
- Anyone can verify that the approval happened - without seeing the borrower’s income or credit score.
Which One Should You Use?
Ask yourself these questions:- Do I need the whole world to see this data? → Go public.
- Am I sharing info with trusted partners only? → Go private.
- Do I need to process thousands of transactions a second? → Private.
- Is transparency part of my brand promise? → Public.
- Am I in a heavily regulated industry? → Private, with public anchoring.
- Do I want to avoid high transaction fees? → Private.
There’s no single “better” blockchain. There’s just the right one for your job.
Can a private blockchain be hacked?
Yes, but differently than a public one. Public blockchains are hard to hack because they’re decentralized - you’d need to control over 50% of all nodes. Private blockchains are easier to compromise because they have fewer nodes. If one trusted node is breached, attackers could alter records. That’s why private chains rely on strict access controls, encryption, and audit logs - not just blockchain tech.
Can I use Bitcoin on a private blockchain?
No, not directly. Bitcoin only runs on its own public blockchain. But you can create tokens on a private blockchain that represent Bitcoin’s value - like a digital IOU. These aren’t real Bitcoin, but they can be traded within the private network. Some companies use this to move value internally without touching the public Bitcoin network.
Are private blockchains really decentralized?
No, by definition. Decentralization means no single entity controls the network. Private blockchains are managed by a central authority - even if that authority is a group of companies. They’re distributed ledgers, but not decentralized networks. Think of them as secure internal databases with blockchain features, not as open systems like Bitcoin.
Why do governments use private blockchains?
Because they need control. Governments don’t want strangers altering land records or voting data. A private blockchain lets them keep full oversight while still benefiting from immutability and audit trails. Estonia, for example, uses a private blockchain to secure citizen health records and digital identities - accessible only to authorized officials.
Can private blockchains interact with public ones?
Yes, and they increasingly do. This is called interoperability. A company might use a private chain to process internal transactions, then write a cryptographic hash (a digital fingerprint) of those transactions to Ethereum. That way, the public chain verifies the event happened - without exposing sensitive details. This model is now common in supply chain and finance.
Which blockchain is more secure - public or private?
It depends on what kind of security you need. Public blockchains are more resistant to external attacks because of their scale and decentralization. Private blockchains are more resistant to insider threats if access is tightly controlled. Public chains defend against hackers; private chains defend against betrayal. Both can be secure - but they protect against different threats.
Do private blockchains use cryptocurrency?
Not usually. Most private blockchains don’t need tokens because they’re not open to the public. Payments are handled through internal accounting systems. But some do use tokens - called utility tokens - to manage access rights or track internal rewards. These tokens only work inside the network and have no value outside it.
Can I switch from a private to a public blockchain later?
Technically yes, but it’s not simple. You can’t just “migrate” a private chain to a public one. Data formats, consensus rules, and access controls are completely different. What you can do is build a bridge - record key events from your private chain onto a public one. That way, you keep your internal system but add public verification for critical actions.