The art and craft of blockchain networks
The differences between public non-permissioned blockchain networks and private permissioned blockchain networks have been well chronicled. In brief, a public permissionless blockchain has no access restrictions to view its data or participate. Usually, such networks offer economic incentives for those who secure them and utilise some type of lottery-based consensus algorithm. Some of the largest, most known public blockchains are Bitcoin and Ethereum.
A private permissioned blockchain network requires permission to read the information on the blockchain and limits the parties who can transact or participate. Some examples include R3’s Corda, as well as various Hyperledger frameworks, including Hyperledger Fabric and Hyperledger Sawtooth among others. There are few cases, if any, where a private permissionless network would make sense, but there are some examples of public permissioned networks appearing to facilitate better scaling of public networks.
Ethereum creator Vitalik Buterin captured the difference between public and private networks nicely when he said, “Essentially, instead of having a fully public and uncontrolled network and state machine secured by cryptoeconomics (eg. proof of work, proof of stake), it is also possible to create a system where access permissions are more tightly controlled, with rights to modify or even read the blockchain state restricted to a few users, while still maintaining many kinds of partial guarantees of authenticity and decentralisation that blockchains provide.”
When MonetaGo was in the architectural planning stages of a blockchain network deployment in India that aimed to reduce instances of fraud around receivables financing, the team had to assess which type of blockchain framework fit that particular use case. Would a public or private blockchain network be more appropriate? Should the network be tokenised? Which specific blockchain technology is the best choice in this instance?