I am new to blockchain therefore i am trying to understand difference between private public and consortium blockchain. I do understand public blockchain but i am unable to differentiate between private and consortium. Can anyone please explain me with any example ? Also can we create all 3 using ethereum ?
2 Answers
Public Blockchains are the blockchains where anyone can participate from the world. Suppose 1000 people are engaged in a public blockchain network, then more people can join because it is public.
Consortium Blockchains - suppose out of 1000 people 100 people are engaged in consortium blockchain and out of those 100 only 30 people are engaged in a transaction then only those 30 needs to sign transaction for its completion. But it will be updated on ledgers of all 100 people.A person can only be added upon the agreement of other 100. Therefore it is known as partially decentralized.
Private blockcahin on other hand is completely private which means no foreign entity can join that blockchain that blockchain over that suppose there are 10 people in blockchain and they are selling products to each other then no other person can know at what price products are being sold. Ex - A wants to sell product to B C D. A can sell same product to B C D for 10 , 20 ,30 tokens respectively, as it is completely private. When a transaction between A to B will happen C ,D will know that a transaction has occured but wont get to know about details of transaction. Hyperledger fabric is example of private or permissioned blockchain.
The public chain is the network that is most commonly referred to and is the one that most people interact with. Most dapps, DEXs, and interactions take place on this chain.
A private chain is one that someone would spin up on their own that does not interact with the public chain. While it is hard to create value on this chain (as the ETH and tokens here are not redeemable on the main chain or tradable on exchanges), there are advantages. Developers use private chains for testing their code so they do not have to pay gas for testing. Large companies may use a private chain to host an internal blockchain application used by their employees
A consortium is a chain where only a predefined number if people (nodes) are allowed to participate in the consensus mechanism. An example of this may be large working together to send money to each other. With a consortium chain, you can have three large banks be the nodes, and they can transfer money between each other, forcing each bank to validate the transaction. This eliminates the likelihood of malicious behaviour, as it is not one banks word against another, but rather an agreement among many of them.
answered Sep 7, 2018 at 16:58
