Private blockchains give users the absolute privacy they want.
Private blockchains (which are authorized settings) establish rules governing who can see and write to the chain, in contrast to permissionless public blockchains. There is a clear hierarchy of control in these systems; therefore, they are not decentralized. However, they are scattered because many nodes still maintain a copy of the chain on their machines.
A private blockchain network requires an invitation, which must be approved by the founder of the network or a set of rules established by the initiator of the network. Companies that create a private blockchain typically do so on a licensed network. This limits who is authorized to participate in the network and for what specific transactions. Participants must first obtain an invitation or authorization.
Existing participants could decide on potential participants; a regulatory authority could issue participation licenses or a consortium could decide. Once a company joins the network, it will help keep the blockchain running in a decentralized manner.
This kind of authoritative blockchain paradigm allows users to leverage over 30 years of technical literature to reap considerable benefits. & Nbsp;
Private chains are best suited to business environments when a company wants to benefit from the qualities of blockchain without exposing its network to the public. Digital identification, dealing with supply chain issues, disrupting the banking sector, or facilitating secure exchanges of patient / provider data in healthcare are some of the use cases for private blockchains. Hyperledger Fabric from the Linux Foundation is an excellent example of a private blockchain.
The controversial claim that private blockchains are not actual blockchains, given that the underlying principle of the blockchain is decentralization, is one of the downsides of private blockchains.
Because centralized nodes determine what is valid, it is also more challenging to build truthful information on a private blockchain. A minimum number of nodes can also imply a lower level of security. The consensus mechanism can be compromised if some nodes go rogue.
Furthermore, the private source code of the blockchain is often proprietary and locked. Users cannot independently verify or verify it, which may result in reduced security. On a private blockchain, there is no anonymity.
