I don’t know if crypto would be able to change the future or not. But I have a particular belief in blockchain! Do you know many big brands and companies such as Visa, Walmart, Unilever, FDA, British Airways, and the Government of Dubai are using it?
Blockchain has been coming along with the concept of cryptocurrencies. But what do we know about blockchain, and how much?
Blockchain technology is based on distributed ledger technology (DLT), in which several blocks are connected like a chain. Each block contains the same set of information or records (transaction data, a timestamp, and a cryptographic hash). They get updated as soon as they get new information and pass it to another block simultaneously.
The definition of blockchain itself is a crazy explanation of innovation because the data transaction is irreversible. For example, sending information to the “Block A” of the blockchain will automatically pass the data to all the blocks of that chain in no time.
I mean that once your data has been recorded in a ledger, you can’t erase it! What’s special about blockchain is that all the data stays encrypted, which means it will be secured with other security layers. Even if someone tries to steal the data or tamper with the blockchain, their location will be tracked at the same time with an alert system.
However, anyone with the decryption key can read, write, and audit the information available in the blockchain. At this point, we get the concept of private and public blockchain!
If the decryption key and participation are available to only specified or certain people, it will be known as a private blockchain. Bitcoin, Ethereum, and almost all cryptocurrencies are applications of public blockchain.
To understand the concept better, you must know the difference between public & private blockchain. If you don’t, I have an easy and brief guide for you, so you can also check this out.
What Are Private Blockchains?
Understanding private blockchains is quite simple. As the name suggests, it is a private or personal blockchain of any organization or group of individuals. We are talking about a small circle here. It is also called permissioned blockchain as it has some restrictions, and you can’t join or access the network without any authentic invite.
So, if you are the creator of a private blockchain, you can decide who can access the information or participate and who cannot. Such a network is commonly used by domains with critical or sensitive data, such as finance, real estate, supply chain, health, government, and so on.
Features of Private Blockchains
Only selected individuals can read and write in the network, and no outsider can join without invite.
They have a centralized authority or a consortium of entities that control and manage the network.
Participants have more control over who can view and access the data on the blockchain.
Due to the restricted number of participants, transactions are faster.
It is more scalable as the participants are limited and can be added or removed as required.
Consensus mechanisms can be tailored without the concern of achieving consensus among many anonymous nodes.
Follows smart contracts and P2P transactions
Selective transparency
Higher throughput and lower latency
Less amount of energy and material used.
Integration with existing systems
Some Examples of Private Blockchain:
Here are some examples of private blockchains:
Hyperledger Fabric: It was developed by the Linux Foundation and designed for enterprise use. It is mainly used to manage supply chains and create their own private blockchain.
Quorum: It is an Ethereum-based private blockchain platform developed by JPMorgan Chase. It is designed for financial applications, offering enhanced privacy features such as confidential transactions.
Corda: It is an open-source blockchain platform developed by R3. It is designed for businesses in the financial sector and facilitates secure and private transactions among participating parties.
Ethereum Quorum (formerly Pantheon): It is an enterprise-focused version of Ethereum developed by ConsenSys. It is designed to create customizable and modular architecture for private and consortium blockchains.
Ripple: Ripple is a private blockchain solution designed for real-time gross settlement systems, currency exchange, and remittance networks. It is primarily used in the financial sector to enable fast and secure cross-border transactions.
Chain Core: Chain Core is a blockchain platform designed for financial services. It offers a permissioned blockchain solution, allowing organizations to create and transfer digital assets securely.
IBM Blockchain Platform: IBM offers a blockchain platform allowing organizations to create private, permissioned blockchains. It is built on top of Hyperledger Fabric and provides additional tools and services for enterprise blockchain development.
Is The Private Blockchain Is Secure?
Just because it is based on a high level of encryption, it doesn’t mean you can completely rely on blockchain. However, if we are talking about private blockchain, it seems kind of more secure than public networks. But does it?
Take Bitcoin and Ethereum, for example. In case you lose your decryption key, no one will be able to recover or fetch your data or assets, and no recourse will be provided. If you have $1 million in a public blockchain, it will be hard for anyone to withdraw the money without the key.
On the other hand, owners have the complete control over it. They can reverse the transaction easily as the chain is short. They can even delete a block completely.
Here, the power moves directly to the single authority, which can be scary or insecure for the other chain members. Also, attacking private blockchains is quite easy for bad actors than public ones. Currently, many private blockchain development companies are working on it.
However, private blockchains can be secured by following tips:
Integrate privacy considerations in the early design phase of the private blockchain development. Address data management, retention, and deletion in alignment with regulatory requirements such as GDPR.
Connect with other business units and collect insights to identify potential risks. Establish controls to protect data within acceptable residual risk levels and seek input from all stakeholders.
Periodically review your documents for connectivity, as they can be deleted or modified.
Place your key safely and include features like key backup, automated rotation, enforced management requirements, and possibly hardware storage.
Apply standard security controls, such as firewall protection, two-factor authentication, file integrity monitoring, and endpoint security.
Engage a trusted cybersecurity vendor for thorough audits, including penetration tests, security assessments, smart contract reviews, source code examinations, and blockchain infrastructure audits.
In The End:
I hope you enjoyed reading here. Stay connected with me. if you want to know more about blockchain and such emerging technologies. Also, check out my other blogs and share them with your friends.