What usecases do private blockchains have?

Question

Are private blockchains intended to serve as testnets only or are there other applications?

What use cases can private blockchains be applied to?

Answer 1

There are numerous use cases for private blockchains. Some of the many ones that are being currently considered in industry include:

• As an access-restricted inter-bank settlement layer for currencies and securities
• As an inter-departmental "balance sheet" within a large enterprise tracking private data such as security authorisations, finances, etc. without any one department being in authoritative control of the records
• As an access-restricted platform for the issuance of loyalty points, gift cards, etc. by a major commercial entity
• As a private tracking tool for private equity, debt, and other liquid agreements.
• etc.

For a discussion of the contrasting features and other reasons that motivate these types of use cases to consider private blockchains over public blockchains, see this question.

Answer 2

There is an Ethereum blog post that addresses this question. In a nutshell:

• Private blockchains are not necessarily just testnets
• There are two aspects of "privacy": (i) read permissions, (ii) block generation permissions.
• You may want to restrict (i) because your use-case may require privacy.
• You may want to restrict (ii) because your use-case does not require globally distributed trust, but rather trust spread across a pre-determined set of participants.