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Mar 22, 2019

Public, open, private or permissioned blockchain: what's the point?

Every blockchain corporate implementation begin with a determining choice but really complex: is it better to opt for a public blockchain or a private one?

Beyond the defiance on principle shared by many industralists concerning public blockchain, it is suitable to recall that for Deloitte France, 44% of companies could be working on a public blockchain project.

Indeed, privacy guaranty isn't the private blockchain privilege. Public blockchain can, also, protect your datas from unwanted external readings.

As you will see it, public blockchain offers serious advantages either to the entrepreneur as to the logistician who provides himself with the means to win over it.

But, before going further, it is necessary to explain the meanings of "public" and "private" words.

Public/private: a vocabulary distortion

While media commonly use the public/private duality, this verbal tic is deceptive and lot of confusion occured from it. In fact this classification refers to the (alleged) access to blockchain datas.

Therefore, it is better to use the open/permissioned opposition which will get everybody to agree (begining with blockchain community purists) refering to the blockchain protocol access.

Speaking of an open blockchain rather than a public blockchain is more a reflection of a tangible reality where access is not conditional on obtaining authorization from a blockchain regulator.

It is possible to draw a parallel with the Internet/intranet, characterized by the regulation of network access: in the same way, the regulation of blockchain access characterizes their open or closed aspect.

It should be noted that just because a blockchain is open does not mean that the data it contains is accessible to everyone. Thus, Monero, ZCash or another blockchain with anonymized transactions, are indeed so-called "public" blocks, but the content of these transactions is only visible to those who have carried them out - their readability is therefore "private".

The so-called "private" blockchain does not have free access to be a network node, so it naturally makes it possible to prevent external third parties from reading its data. However, this feature is only one option because it is quite possible to open up the consultation of transaction data to everyone - and then make transactions public. For this reason, the term "closed" is preferred to "private", which refers more to this accessibility or not to the data.

For example, many "permissioned" blockchains dedicated to food traceability allow consumers to see this traceability and thus ensure the origin of the products. These consumers do not need to request access to the blockchain. This permissioned blockchain is therefore "public" insofar as its database is readable by the outside public.

Permissioned blockchain or the possibility to modify your data

On paper, the permissioned blockchain has everything to reassure, starting with its supposed filtering at the entrance for the consultation and use of the company's internal data.

The permissioned blockchain reassures to the extent that it allows its owner or a sufficient group of its users to control its access and modify, if necessary, the data entered in the blockchain.

But since the permissioned blockchain does not have an open protocol to validate transactions, its security relies on anything but the obfuscation of the network and the trust between its members. Very far from the "trustless" aspect - without the need for trusted third parties - of open blockchains.

Most of the security provided by permissioned blockchains is therefore based on their barriers to entry, which makes them almost as fallible as conventional databases.

Open blockchain, a still unknown evidentiary value

As we have explained, despite the misuse of the term "public", an open blockchain nevertheless makes it possible to guarantee the private nature of transactions. But its main advantage lies in the evidentiary value it provides.

Because it has miners who are economically encouraged to cumulate transactions in blocks, consensus is therefore achieved mathematically by entities that are not trusted third parties. Once the block is created, it will take more and more energy to go back until it becomes almost impossible on Bitcoin after an hour for example. The immutability of the data produced by the protocol used means that this information can be used as evidence of the existence of a transaction towards an external third party.

For example, at Ownest, the traceability we provide to supply chains and retailers must have a probative value. To obtain this probative value, it is out of the question that our clients should be judges and parties with a means of controlling and modifying transactions and, equally, we cannot act as a "trusted third party" if we are paid by one of the parties. That is why we must use the open blockchain.

Want to know more on the public blockchain benefits for your supply chain? Don't hesitate to contact us.

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