Block Chain - Private Blockchain

Private Blockchain

  • A private blockchain is a blockchain network where access is restricted. Only specific people, organizations, or entities can join, validate transactions, or view the data. Unlike public blockchains (Bitcoin, Ethereum), it is controlled by a single organization or a group of trusted parties.

Key Features

  1. Permissioned Access – Only approved participants can join the network.

  2. Centralized Control – One or more organizations decide who validates transactions.

  3. Faster Transactions – Since only a few nodes participate, consensus is quick.

  4. Lower Transparency – Data is not publicly visible; it’s shared only within the organization.

Examples

  • Hyperledger Fabric (by Linux Foundation) – Used in supply chain and enterprise apps.

  • Corda – Designed for banks and financial institutions.

  • Quorum – Developed by J.P. Morgan for enterprise blockchain solutions.

Advantages

  • Efficiency – Faster and cheaper than public blockchains.

  • Privacy – Sensitive business data stays confidential.

  • Customizable – Rules, governance, and access can be tailored to business needs.

Disadvantages

  • Centralization – Less decentralized, meaning less resistant to corruption or manipulation.

  • Trust Required – Participants must trust the organization running it.

  • Limited Transparency – Not open to public verification.

Analogy

Think of a private blockchain like a company’s internal intranet:

  • Only employees (approved members) can access it.

  • Outsiders cannot join or see the data.

  • It’s efficient for internal communication but not open like the public internet.