Public vs Private Blockchain: Differences

A public blockchain is a network that anyone can join, read and write to without asking for permission, such as Bitcoin or Ethereum. A private blockchain is a network where an administrator or a consortium decides who may participate. The main difference is who is allowed to publish blocks. Speed, cost, privacy and trust follow from that rule.

The US National Institute of Standards and Technology (NIST) uses the terms permissionless and permissioned for the same split. This article uses “public” and “private” in the everyday sense and points to the NIST terms where they are more precise.

What is a public blockchain?

A public blockchain is a ledger that anyone can read, send transactions to and help maintain. NIST calls this a permissionless blockchain network: anyone can publish blocks without needing permission from an authority. Bitcoin and Ethereum are the best-known examples.

Because anyone can take part, malicious users can try to publish blocks that subvert the system. Public networks therefore use a consensus mechanism that makes publishing blocks cost resources. Bitcoin uses proof of work, which is described in the Bitcoin whitepaper. Ethereum uses proof of stake. Publishers of valid blocks are rewarded with the network’s native cryptocurrency.

Public blockchains are not anonymous. NIST describes Bitcoin as pseudonymous: the person behind an account is not named, but the account identifiers and all transactions are publicly visible. Anyone can follow the flow of funds between addresses.

What is a private blockchain?

A private blockchain is a ledger where only authorised parties publish blocks, and often only authorised parties read it. NIST calls this a permissioned blockchain network. It compares a permissioned network to a corporate intranet and a permissionless one to the public internet.

Permissioned networks are typically run by one organisation or by a consortium of organisations that want to share a ledger without fully trusting each other. Participants are identified, so they can be held accountable and their rights can be revoked. Some platforms can show a transaction’s contents only to the parties involved. Hyperledger Fabric is an example of an open-source platform for this model.

Note that “permissioned” does not always mean “closed”. NIST points out that a permissioned network may still let anyone read the chain, or anyone submit transactions. Reading and writing can be restricted independently.

How do public and private blockchains differ?

They differ mainly in access, consensus cost and how much you must trust the operator. The table summarises the points below.

Point	Public (permissionless)	Private (permissioned)
Who can publish blocks	Anyone	Authorised parties only
Participant identity	Pseudonymous addresses	Known, often verified
Consensus	Proof of work or proof of stake, which cost resources	Usually faster and less computationally expensive, per NIST
Trust in an operator	Not required	Required, in the owner or consortium
Changing past blocks	Hard, but possible with enough resources	Possible if the owner or consortium decides
Read access	Open	Open or restricted

Which is faster and cheaper?

Private networks are usually faster per transaction, because their consensus is cheaper. According to NIST, permissioned networks do not need to expend resources to publish blocks, because all publishers are known and trusted to a degree. The consensus models there are “usually faster and less computationally expensive”.

On a public network, the cost you pay depends on demand. Ethereum users pay a gas fee that rises when many transactions compete for block space. Our guide on how to estimate gas fees shows how that fee is calculated. A private network has no such market unless its operator builds one, but you also carry the cost of running it.

Is a blockchain immutable?

No chain is completely immutable, and the two types differ in who can change history. NIST states that blockchains are tamper evident and tamper resistant, but cannot be considered completely immutable. On a public network the newest blocks can be replaced by a longer competing chain. This is why most users wait for several blocks before treating a payment as final. A 51 % attack, in which an attacker controls most of the resources, is possible in principle but expensive.

On a private network, NIST notes that the owner or consortium can legitimately replace any number of blocks if it wants to. The record is therefore only as trustworthy as the group that controls it. If you need a record that nobody can quietly rewrite, a public chain gives you stronger protection, and a private chain gives you accountability through contracts and identity.

Which is more private and more secure?

A private network is more private in the sense that outsiders cannot read it. It is not automatically more secure. Security depends on the consensus design, the software and the operators, so neither type is secure by default. A private network shifts the main risk from open attackers to the people who hold publishing rights.

What is a permissioned public blockchain?

Permissioned and public are separate axes, and mixed designs exist. A network can let anyone read the data while only approved parties may publish blocks. Some networks require every user to be identified before they can send transactions. Check the exact read and write rules of a network before you design around the label.

Which type should I use?

Use a public blockchain if you need open participation, assets that any wallet can hold and a record that no single party controls. Use a private blockchain if participants are known, the data must stay between them and one operator or consortium is willing to run the network.

For crypto payments, the question is usually settled by where your customers hold funds. They hold them on public networks such as Bitcoin, Ethereum, Tron and others. The Chaingateway API reference covers public networks only, with a mainnet and a testnet mode that you select with the X-Network header. If you want to accept payments on these networks without running nodes, see the Chaingateway blockchain API.