Public Blockchain Meaning
What is a Public Blockchain?
A public blockchain, also called a permissionless blockchain, is a network that anyone can freely access and participate in. No single entity has authority over public blockchains. A blockchain is a distributed data system that records transactions and data. Bitcoin and Ethereum are the most notable examples of public blockchains.
Public blockchains are:
- Permissionless – Public blockchains are open to anyone to participate in the mining and validation processes, as well as using the protocols to conduct transactions.
- Transparent – Transaction information is traceable and accessible to the public.
- Highly decentralized – There is no single entity or group controlling operations within the system. Instead, the control of a public blockchain is evenly spread among its users.
- Trustless – Users can execute transactions via the network in a peer-to-peer manner, without relying on the trust of a third party.
- Censorship-resistant – No entity can restrict anyone from participating in the operations of a public blockchain network. In addition, the rules cannot be tailored for personal gains.
While a public blockchain allows anyone to view and upload data to the network, private blockchains limit access to approved users. A private blockchain is a permissioned blockchain that is controlled by a single person, an organization, or a group of individuals. This means that users’ identities are required for access. The upside of permissioned blockchains is that they are scalable, and discrete due to their limited access. An example of a private blockchains is Hyperledger.
How Public Blockchains Work
In a public blockchain, users validate transactions that are then timestamped and shared publicly through consensus mechanisms. Being public, it means that anyone can join and participate in the network. The transaction data on the blockchain is immutable – the history cannot be tampered with, modified, or altered.
One of its merits is that a public blockchain is accessible to all, and eliminates any probability for corruption. Network participants, known as miners or validators, help maintain the network’s integrity and secure it from malicious actors. The participants are rewarded with the particular blockchain’s native currency for playing a role in achieving consensus.
In addition, users can suggest changes or updates to the ecosystem, contributing to its governance. For example, Bitcoin and Ethereum use Bitcoin Improvement Proposals (BIPs) and Ethereum Improvement Proposals (EIPs), respectively, to get update proposals from their respective communities.
However, with this great power to empower the everyday user, a public blockchain is not without its tradeoffs. For instance, public blockchains tend to struggle with throughput and transaction speed issues. As the number of network users increases, it becomes congested or burdened with transactions, causing scalability issues.