LAB51 logo

Private vs. Public Blockchains: Which Is Right for Your Business?

Private Public Blockchains Businesses
By Luigi Savarese
Luigi Savarese

4 Min

October 2, 2023

The blockchain landscape presents a fundamental choice: private or public blockchains. Each option holds distinct characteristics that cater to specific needs and objectives. In this article, we delve into the space of private and public blockchains, providing insights to help you decide which aligns better with your business requirements.

Understanding Private Blockchains

  1. Definition and Characteristics: Private blockchains are networks where access and permissions are restricted to specific individuals or entities. These entities control the validation process and overall governance, making them centralized systems. Examples of private blockchains are Hyperledger, Ethereum Enterprise, and R3 Corda.
  2. Control and Privacy: The centralized nature of private blockchains grants entities full control over the network, allowing for faster decision-making and efficient governance. Moreover, privacy is enhanced as only authorized participants can access and view the data.
  3. Efficiency and Scalability: Private blockchains often process transactions faster due to their centralized structure, making them more efficient for certain use cases. Additionally, they can be easily scaled to meet growing demands, making them suitable for enterprise applications.

Advantages of Private Blockchains

  1. Enhanced Privacy and Security: Restricted access ensures that sensitive business data is only available to authorized participants, significantly enhancing privacy and security.
  2. Faster Transactions: The centralized nature allows for quicker transaction validation and consensus, enabling faster transaction speeds compared to public blockchains.
  3. Adaptability: Businesses have the flexibility to tailor the blockchain according to their specific needs, modifying consensus mechanisms and other parameters.

Understanding Public Blockchains

  1. Definition and Characteristics: Public blockchains are decentralized networks open to anyone, and all transactions are visible to all participants. They operate on a trustless system, utilizing a consensus mechanism like proof-of-work or proof-of-stake. Bitcoin and Ethereum are two popular examples of public blockchains.
  2. Decentralization and Trust: Public blockchains achieve decentralization by distributing the control and validation process among a diverse set of participants, fostering a trustless environment where no single entity governs the network.
  3. Transparency and Immutability: Every transaction and record on a public blockchain is transparent and verifiable by anyone, promoting accountability. The immutability of data ensures that once a transaction is added, it cannot be altered or deleted.

Advantages of Public Blockchains

  1. Decentralization and Trustlessness: Public blockchains remove the need for trust in a central authority, as the network's integrity is upheld through decentralized consensus mechanisms.
  2. Community and Collaboration: A public blockchain attracts a diverse community of developers, businesses, and enthusiasts, fostering collaboration and innovation, often resulting in a wider range of use cases and applications.
  3. Inclusivity: Public blockchains provide an equal opportunity for participation, allowing anyone to engage, transact, and contribute to the network.

Related articles:

Choosing the Right Blockchain for Your Business

For businesses aspiring to venture into blockchain, the decision between private and public blockchains holds immense strategic significance. It's comparable to the choice of the best operational model that complements your business goals and aligns with your overarching vision. Making a well-informed choice here sets the stage for a successful blockchain journey. This will eventually push your business towards innovation, efficiency, and competitiveness.

First of all, you need to consider your needs and goals. This means assessing the level of control, privacy, scalability, and decentralization your project requires. Match these needs with the characteristics of private and public blockchains. You then need to evaluate regulatory and compliance requirements. Depending on your industry and jurisdiction, compliance with specific regulations may steer you towards either a private or public blockchain to ensure adherence to legal standards. Finally, a big role is played by the cost and resource assessment. Every company needs to evaluate the costs associated with setting up and maintaining each type of blockchain. In doing this, you can consider factors like operational costs, development expenses, and ongoing maintenance.


For a business looking to enter the space, the choice between private and public blockchains is pivotal and should align with your project's objectives and requirements. Private blockchains offer control, privacy, and efficiency, ideal for specific enterprise needs. On the other hand, public blockchains provide decentralization, transparency, and inclusivity, attracting a wide range of use cases and a diverse community. By carefully assessing your goals and evaluating the advantages of each type, at Lab51 we help our clients make an informed decision that suits their business model and aspirations.

Get more Insights with YOU. ME. WEB3. Newsletter