Differences between Public and Private Blockchains

One of the biggest innovations involving blockchains is cryptocurrency. However, cryptocurrencies like ADA or ETH are digital currencies that use blockchain technology to operate. Blockchain has various use cases and can be implemented in different ways. A public blockchain is a decentralized ledger of transactions that is maintained by a network of computers, or nodes, who support the maintenance of a database. Examples of public blockchains include Cardano, Bitcoin, and Ethereum. A key characteristic of a public blockchain is that they are permissionless, meaning anyone can participant as a node or user of the blockchain. 

In comparison, a private blockchain is permissioned, where typically a single authority or entity has control of who can participate. The owner controls who can participate in the network, execute the consensus protocol that gets them rewards, and who maintains the shared database. Let’s look at some of the differences between public and private blockchains.



  • Public — Has better security than a private blockchain since public blockchains are secured by the decentralized consensus mechanisms where many different nodes validate and confirm transactions, making the blockchains less susceptible to hacks.
One potential attack vector on public blockchains are 51% attacks, which are unlikely for cryptocurrencies with bigger market capitalizations and are sufficiently decentralized. A 51% attack on a proof of work blockchain is only possible if the entity controls over 50% of the network’s mining hash rate or computing power. That would be very expensive for any entity to try for Bitcoin. 

To do a 51% attack on a proof of stake blockchain, the entity must control over 50% of the staked cryptocurrency. Cardano currently has a a circulating supply of around 34 billion ADA and has around 25 billion ADA staked. If an illicit entity wanted to control the network, they would have to buy almost 13 billion ADA, which at today’s prices would cause over $11 billion. In addition, since they would be purchasing over 35% of the circulating supply, buying ADA could potentially cause a significant increase in price, costing them more than $11 billion to get more than 50% of ADA staked. If an illicit entity purchased 51% of staked ADA and decided to add an illegitimate transaction to the blockchain, everyone would know due to the transparency of Cardano’s public blockchain. This action would cause a decline in ADA price, which would be counterproductive to the entity because the value of their stake would decline.

  • Private —  Private blockchains are much less secure than public blockchains as there may only be a single point of failure that could compromise the blockchain. If the owner is corrupted, they could change, reverse, approve their own illicit transactions. Even if there are other nodes who can confirm or reject a transaction, since access is permissioned, the owner can decide who can participate, creating the potentiality that nodes can be or will be corrupted. 

Permissioned vs Permissionless

  • Public - Permissionless, meaning everyone can participate. This creates more decentralization.

  • Private - Permissioned access, which means the blockchain is only partially decentralized. Users and nodes are authenticated before joining and can only join by the invitation or acceptance by the owner. Less decentralization increases the risk of hacks and could create sustainability issues.


  • Public — All transactions are fully immutable, meaning that transactions added to blockchain are irreversible.

  • Private — Transactions can be reversed and altered by the owner or the permissioned nodes. The owner can edit, delete, or overwrite transactions of the blockchain at their discretion.


  • Public — Public blockchains are not completely anonymous and can be tracked. Using centralized exchanges such as Coinbase or Binance as fiat on or off ramp can allow others to track and identify both the source and receiver of digital assets.

  • Private — A private blockchain, on the other hand, typically focuses on the privacy of its users. A Central Bank Digital Currency (CBDC), which uses a digital ledger, which may or may not be a blockchain, would likely not have the transactions of users publicly available. A publicized database of individual user transactions would violate the financial privacy laws that financial institutions must follow in many countries. While a private blockchain is not anonymous to the owner, it would generally have more privacy from third parties than a public blockchain would.


  • Public — Decentralization comes at the cost of the speed for transaction finality. On public blockchains, transactions must be propagated to the whole network of nodes, allowing them to confirm or reject the transaction. Transactions on Cardano are propagated to over 3,000 nodes all over the world, which requires some time to do.

  • Private — Transaction speed can be much faster than a public blockchain as a private blockchain can have just one node or a couple of federated nodes. In addition, a private blockchain ran by a corporation would likely have the funds to buy expensive hardware that allows for faster processing of transactions. In contrast, decentralized public blockchains like Cardano focus are keeping hardware requirements relatively cheap. The more expensive the hardware, the more centralized the network becomes as less entities can afford the hardware to become a node. Some cryptocurrencies have sacrificed decentralization to gain fast transaction speed by limiting the number of nodes or making the required hardware needed to be a node prohibitively expensive for most people. Some Bitcoin ASIC miners cost over $10,000 to purchase and have high variable energy costs on ongoing basis to operate. This high cost has made bitcoin mining cost prohibitive for many people, causing bitcoin hash power to centralize around entities with more capital and access to cheaper energy.



  • PublicThe consensus mechanism of public blockchains, such as proof of stake or proof of work, requires propagating transactions to hundreds or thousands of nodes, which takes time. The average transaction confirmation for bitcoin is around 10 minutes while Cardano typically takes a couple of minutes. This current transaction confirmation speed would make day-to-day use for routine purchases such as restaurants or online shopping improbable. Scalability remains a major source of investment for most public blockchains and a barrier to mainstream adoption for various use cases.

  • Private — Since private blockchains only have one node or a couple of permissioned nodes, scalability isn’t an issue. At the cost of little to no decentralization, private blockchains can achieve much more scalability and faster transaction speeds than many public blockchains.


In the future, as CBDCs, stablecoins, and DeFi applications grow, different entities will have preferences on whether to use public or private blockchains for these tasks. Both private and public blockchains have strengths and weaknesses. Private blockchains will allow better consumer protection, a reduction in illicit activity, and higher speed. On the other hand, private blockchains could be less secure, less open to hundreds of millions of people who might want to participate, and eventually could be weaponized by nation-states to enforce public policy or economic sanctions. Public blockchains have the benefits of openness, security, decentralization, and immutability. But many public blockchains still suffer from low transaction speeds and lack of scalability, making usability for billions of people not possible currently.