Understand the difference between public and private virtual currency chains in one article?

Blockchain is a technology based on cryptography principles and distributed computing, which can be used to record various types of transactions and information. Blockchains have different classifications, and can be divided into public chains and private chains according to their different access and writing permissions. A public chain is a decentralized blockchain network, while a private chain is a permissioned blockchain network in which only specific authorized participants can join the network. A simple introduction to concepts still doesn’t allow everyone to understand the difference between public and private virtual currency chains? In fact, the difference between public chains and private chains is quite big, mainly in terms of participants, data, permissions, centralization, etc. The editor will explain it in detail below.

What is the difference between public and private virtual currency chains?

There are big differences between virtual currency public chains and private chains in many aspects, mainly reflected in the seven aspects of participants, data, permissions, centralization, consensus, incentives and performance. The public chain is a An open, public blockchain network. A private chain is a blockchain network that only allows specific participants to join. Unlike public chains, participants in private chains need to be authenticated and authorized to join the network.

The following is a detailed analysis of the difference:

1. Participants:

The public chain is open to everyone, and anyone can join or exit the network; the private chain is open to specific People or organizations are open and can only join or exit the network with authorization.

2. Data:

The data on the public chain is transparent and verifiable to everyone; the data on the private chain is invisible or partially visible to outsiders.

3. Permissions:

The public chain has no permission control and anyone can read, send or verify transactions; the private chain has strict permission control and only specific participants can read it , send or verify the transaction.

4. Centralization:

The public chain is completely decentralized, and no centralized agency or organization can control or review the network; the private chain is centralized or semi-centralized , there are one or more centralized institutions or organizations that can control or regulate the network.

5. Consensus:

Public chains require complex consensus mechanisms to ensure that all nodes in the network can reach consensus and maintain data consistency and security; private chains do not require complex consensus mechanisms. Consensus mechanism because there is already a certain degree of trust among participants.

6. Incentives:

Public chains need incentive mechanisms to encourage network participants to contribute computing resources, storage space or bandwidth, etc., to maintain the operation of the network; private chains do not need incentive mechanisms because There is already a certain degree of interest among the participants.

7. Performance:

The public chain requires a lot of calculation and verification, so the transaction speed is slow, the transaction cost is high, and the privacy protection is weak; the private chain does not require a lot of calculation and verification. Verification, faster transaction speed, lower transaction costs, and stronger privacy protection.

Which one is better, virtual currency public chain or private chain?

Choosing a public chain or a private chain for virtual currency depends on your specific needs and application scenarios, because both have their own advantages and scope of application. If you need to develop a highly versatile, open and transparent application or digital asset trading platform, a public chain may be more suitable; if you need to control data access permissions, protect privacy, or customize specific business processes, a private chain may be more suitable.

The public chain has the characteristics of decentralization. Anyone can participate and view the data and transaction records of the network, which has higher transparency. Public chains usually have a wider range of application scenarios, supporting various types of digital asset transactions, smart contract deployment and decentralized application (DApps) development. Because the public chain has more nodes participating in the verification and consensus mechanism, it has relatively higher security and anti-tampering capabilities.

The private chain has a strict permission control mechanism. Only authorized participants can join the network and access data, providing higher privacy and security. Private chains can be customized and optimized according to actual needs, including consensus mechanisms, data structures, access control, etc., which are more suitable for the needs of specific business scenarios. Since private chains have fewer participating nodes, data transmission and processing speeds are usually faster than public chains, making them suitable for scenarios that require efficient transaction processing.

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