A public blockchain network is one that has no restrictions. It is completely permissionless, meaning anyone with access to the internet is free to join the network and read, write and audit activities on it. This is where its self-governed, decentralized nature comes into play, as no single organisation or individual has control over the ecosystem, and users can remain anonymous.
One of the primary uses public blockchains are known for is exchanging and mining cryptocurrencies such as Bitcoin, Litecoin and Ethereum. In order to validate these transactions on this network consensus algorithms such as proof of work or proof of stake are used. Once data on the public blockchain has been validated, it cannot be altered or modified despite being available publicly, making it secure.
The need for no third-party verification and anonymity has made it a popular blockchain choice. In simple words, it is a self-governed, decentralised and autonomous digital public ledger.
Main features of public blockchain
- Permissionless
It has no restrictions, anyone can access it and participate in the network without any kind of permission.
- Decentralised
It follows a distributed ledger system and is not controlled by a single entity. The nodes are responsible for maintaining the network as they process and verify transactions.
- Anonymous
You are not required to reveal personal details like your real name or identity, everything stays hidden. This means your transactions can’t be tracked back to you.
- Immutable
Data once written and validated on the blockchain cannot be changed.
- Transparent
Anyone can access and view the ledger at any time which makes public blockchains completely transparent.
Public blockchain advantages and disadvantages
Advantages
- Trustable
As users have full access to the digital ledger at any time and due to the blockchain’s decentralised nature, chances of corruption are eliminated within the network, leaving almost no room for grey areas or discrepancies.
- User Empowerment
The user is the hero in the public blockchain. They are given the power to contribute their ideas, get involved in the validation process of transactions and maintain the public network with no interference from a central authority.
- Security
The public blockchain is kept safe from hacking attempts, data breaches and other cybersecurity issues, due to the large number of participants joining the secured network at all times. Having a larger number of participants results in a safer blockchain.
Disadvantages
- Energy Consumption
Since public blockchains rely on consensus mechanisms such as proof of work which involves participants validating transactions, it consumes a lot more time and energy to complete due to its size.
- Transaction speed
It takes a long time to process a transaction on the public blockchain, making it very slow.
- Scalability
Slow transaction speed worsens issues with scalability. The number of users on the public blockchain is high, which in turn burdens the network with more transactions.
Public blockchain vs Private blockchain
A private blockchain is known as a permissioned blockchain. It is the complete opposite of a public blockchain, as it is more restricted than the former. But how exactly are private and public blockchains different from each other? Let’s dive into this table with some of their main features to better understand this.
Public blockchain use cases
- Bitcoin
- Ethereum
- Litecoin
- Bitcoin Cash
- Monero
- IOTA
Future of public blockchains
Recent years have suggested an increase in available information on public blockchains which has led the market to become increasingly well-informed. However, this also means some market participants still remain uncomfortable or suspicious of permissionless blockchains. Despite these fears, the growing recognition of this blockchain technology’s cost-saving, scalability, security, speed and transparency is becoming an increasingly popular and widely accepted blockchain choice. As blockchains develop, getting an in-depth understanding of how this technology can transform businesses and processes and staying updated about its progress is a no-brainer.
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