The conflict of public vs. private blockchains is quite similar to that of the internet vs. the intranet when both technologies were in their nascent stage. There were just too many problems associated with putting the information of a company or enterprise on internet for the world to access. Intranet seemed like the obvious solution to enterprises at that time & it was quite useful. However, eventually with internet security & scalability issues being resolved, intranet started becoming obsolete & the world had no other option but to adopt internet for almost every enterprise operation.
The blockchain technology was designed simply to eliminate the middleman in exchange of assets. The the goal is achieved by setting up a block of peer-to-peer transactions. the transaction are verified and synchronised by every node that is affiliated with the blockchain network before being approved and written in the system. Until these conditions have been met the transactions can not be recorded or authorised, in this system anyone with a computer and internet connection can set up a node which is then synchronised with the entire blockchain network data.
Although this entire process makes the transactions extremely secure it also makes them slow and energy consuming which proves to be a challenge while implementing such blockchain for everyday transactions. The sheer amount of energy required to verify each transaction increases with every new node that gets added to the chain. However the most advantageous feature of such a network is that every transaction is public and the users can maintain anonymity. Complete transparency and individual anonymity are the biggest features of such public blockchain networks. There are issues associated with slow transaction speed & high costs but they are still faster and economical then the global financial & accounting systems being used today, hence proving to be a popular option among the early adopters.
Examples of Public Blockchain: Bitcoin, Ethereum.
Private blockchains introduce the middleman feature in a blockchain network. the company or the middleman has the ability to write verify each transaction. This allows for much faster, efficient and economical transactions. Although up private blockchain does not provide the decentralised security of a public blockchain but as of now it seems like the most probable method to introduce blockchain in current business environment. As as private blockchain provide the ability to companies and institutions of controlling the level of access given to outsiders.
A private blockchain is perfect to implement in traditional business and governance, once private blockchain establish themselves as underlying Technology for daily business operations then we can forward to public blockchains being introduced in the system.
As the public blockchains are still fighting problems of high cost and limited scalability Private blockchains eliminate these problems as they are a hybrid of cloud computing and blockchain technology. Private blockchains are less demanding to embed inside the present structures of society and businesses. They enable institutions to state they are utilising blockchain while not exposing themselves to the transparency a worldwide open blockchain. Private chains are extremely just a handy solution for now until public blockchains improve & become ready for mass reception. As soon as public blockchains solve security and scaling problems, the benefit of public blockchains will be evident and turn private blockchains out of date.
Examples of Private Blockchain: Ripple, Hyperledger.