What is a private blockchain?
While a public blockchain is designed for anyone to read, write or audit the ongoing activities on a blockchain ledger, a private blockchain is the exact opposite.
A private blockchain operates by invitation only and is often run by an entity or ‘trusted intermediary’ that the majority of blockchain’s were designed to separate from. The governing entity shares the network with a number of organisations and decides everyone’s roles from who participates in the consensus process to who is able to read and write the ledger.
As a result, private blockchains are often the preferred place for businesses and larger groups who want greater control over their information.
How does a private blockchain network work?
- No network users on a private blockchain are born equal, meaning their rights differ depending on what job they perform on the network
- Access to data is decided by a central authority and only those with granted permission can access it
- Specific rules dictate who can and can’t gain access or have influence over the consensus protocol and is established by the network participants