Public blockchain, widely known for its decentralized system, is an open network that allows anyone to view, participate in, and write data without needing to obtain permission from a central authority.
This article aims to understand what a public blockchain is, what its main features are, how it works, what its advantages and disadvantages are, and how it differs from private and permissioned blockchains.
What Is Public Blockchain?
A public blockchain is a type of system in the blockchain that is open access to anyone so that they can view, access, and even contribute to the network without needing a permit from an authority.
This system uses distributed ledger technology (DLT), which allows anyone to have a copy of the transaction records. It is distributed equally to each user and is limited to reading and keeping the proof, without any permission to change what’s in the data.
Features of Public Blockchain
Similar to a public park, some characteristics of public blockchain make it obvious to users that it’s indeed open to the public. The features are transparent, unauthorized, immutable, pseudonymous, and decentralized.
Transparent
Everyone can view the distributed transaction records anytime. It is crystal clear, consisting of all transactions, ranging from the oldest one to the most current without receipt limitations, like some e-wallets that only allow you to view the most recent transaction history.
Permissionless
In a public blockchain, everyone can participate without needing to sign up or ask for permission from anyone. You can view, note down, and even send transactions freely. No one can stop you from joining or leaving the network.
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Immutable
Once any data or transactions are approved in the blockchain, there is no method available to change or delete the records. By having immutable characteristics, putting your data in a public blockchain is regarded as safe. This way, users can rest assured. The permanent nature of the data helps prevent tampering or fraud.
Pseudonymity
One of the greatest characteristics is that public blockchain doesn’t require you to use your government name or personal information. Every transaction is only linked to a digital address and is hard to track down.
This adds a layer of privacy for users. Even if someone knows your address, they won’t immediately know who you are. This protects your identity while still allowing you to interact on the network.
Decentralized
There is no single authority that has control over the network. All networks are run by many nodes (computers) that are spread around the world. The nodes work together to check, note down, and copy every transaction to ensure the data will always be available.
This teamwork ensures there is no single point of failure. Even if one node goes down, the network still works. Decentralization is the reason why public blockchains are so strong and hard to shut down.
How Public Blockchain Works
A public blockchain works similarly to an online study group where everyone can partake in writing down, getting a copy, and checking the information. The difference lies in the inability to delete, once everyone has gotten a copy, there’s no editing allowed.
Transaction Selection
Everything starts with users who are doing transactions. If a user wishes to send one crypto coin to a friend, they can request digital receipts consisting of the sender’s wallet address, the receiver’s wallet address, and the number of coins they’d like to send. These details form the basic structure of what will be added to the blockchain.
Broadcasting
After the transaction has been made, it will be broadcast to all nodes in the public blockchain network. The transaction isn’t only saved in a server but also on hundreds to thousands of nodes all around the globe. Every node gets the same exact data. This ensures consistency and transparency for everyone involved.
Validation
After receiving, the nodes will immediately check if the transaction is legitimate or the other way around. The validation process uses consensus mechanisms like proof of work (PoW) and proof of stake (PoS).
PoW refers to when nodes are solving mathematical equations just to prove the legitimacy of a transaction. PoS refers to nodes that are picked to validate a transaction according to the staked coins a user has. Both methods exist to prevent double-spending or fake transactions from slipping into the system.
Adding to the Blockchain
Once the transaction has been verified, it’ll be put in a block where the previous transaction history is stored. This way, every block is interconnected, constructing what is named blockchain and is sealed from any modification. The new block will also contain a unique code that links it to the one before it.
That explains why it’s called a “chain,” because everything is securely tied together. Once added, all nodes refresh their logs so that everyone stays on the same page.
Synchronization
Every node in the network will refresh its blockchain records so that everyone can have the same records. The synchronization is essential so that everyone agrees with the current transaction records. This prevents confusion and allows the system to remain consistent and fair.
Reward
A node that has successfully added a block to the blockchain is usually rewarded with cryptocurrency. The rewarding process is necessary so that users are keen to keep the blockchain ecosystem stable. These rewards act as motivation for people to contribute computing power. Without them, fewer people would join, and the system could slow down or become unsafe.
The Advantages of Public Blockchain
A public blockchain is great, but it’s not limited to just being accessible to everyone. It also has many advantages that attract people around the world to trust the system when doing transactions or staking cryptocurrency.
Trustworthy
A public blockchain is trustworthy because everyone can view the transaction records anytime and anywhere, indicating that its transparency can’t hide anything. Moreover, because the system isn’t ruled by one party, the records are less likely to be manipulated.
Imagine you are competing in a game with hundreds of other people, and every point you get is immediately recorded and visible to everyone. No one can cheat or suddenly claim victory alone. That’s how trust works in a public blockchain.
User Empowerment
In a public blockchain, the users are the main characters. They all get the same permission to check and validate every transaction. They are also free to suggest any idea or project to keep the blockchain system going. Most importantly, no authority can control the system. The system is made, ruled (consensus), and maintained by users.
Security
The more users join the blockchain network, the safer the system will be. If a cyber invasion occurs by a hacker, they have to attack thousands of nodes together which seems unlikely to succeed. The blockchain is also protected by advanced encryption, making it harder to breach.
Imagine you put a secret in a locked box, and thousands of your friends have copies of the key. If the box is opened, all your friends can immediately lock it again. This way, the hacker will be caught and locked out again before he can do anything.
The Disadvantages of Public Blockchain
Even though the public blockchain has many advantages, it doesn’t mean that the system is perfect without gaps. Some challenges and limitations need to be considered, especially when you’re using the system on a large scale. These issues may affect how reliable or practical the blockchain is for certain purposes.
Scalability
Imagine you are playing an online game, and the more players join, the slower the server becomes. The same thing can happen to the public blockchain. If the number of users and transactions increases, the speed of transaction processing can slow down. This is called a scalability problem. This occurs when the blockchain has difficulty handling large servers quickly and efficiently.
Energy Consumption
Some public blockchains, especially those using PoW systems, require advanced nodes to perform complex calculations. As a result, the electricity used can be equivalent to that of a small town. This can be a huge problem for the environment, especially in the long term.
Privacy Concerns
Public blockchains are open-access and transparent, but that can backfire. Since all transactions are visible to the public, personal information becomes prone to getting doxxed.
Users don’t use their government names, but if someone can track down the wallet address, users’ transactions can be monitored by everyone. To some users, this is a breach of privacy.
Regulatory Uncertainty
Knowing that public blockchains operate without authority, many areas in the world are still unsure of how to regulate them. This includes regulations on taxes, permits, or data security.
Without clear rules, users and businesses might feel confused or hesitant. Governments are still working on creating suitable laws. Until that happens, people have to deal with legal grey areas that could bring risks later on.
Vulnerability to Attacks
Although public blockchain is considered secure, there is still the possibility of cyberattacks. For example, a 51% attack refers to if one group has more than half of the computing power on the network, and they can manipulate transactions. Moreover, a Sybil Attack can occur when someone creates many fake accounts (nodes) to disrupt the system. Even though the success rate is low, these types of attacks can still occur.
The Differences with Other Types of Blockchain
Each type of blockchain serves a different purpose. Understanding the contrasts between each type is essential to knowing when to use them. This part will explain the differences between public blockchain, private blockchain, permissioned blockchain, and hybrid blockchain.
| Differences Between Public, Private, and Permissioned Blockchains | |||
| Type of Blockchain | Who has permission? | Who authorized? | When to use? |
| Public | Everyone | No one | Cryptocurrency |
| Private | Only a few people | Company, organization | Financial, logistic |
| Permissioned | Anyone if allowed | Per user | Accounting, tax |
Private Blockchain
As previously stated, public blockchain is similar to an open competition, whereas private blockchain is similar to a family WhatsApp group that only those who are invited can join.
This type of blockchain is usually preferred by companies. They decide who can join and set their own rules, making it suitable for financial companies and logistics. Since not everyone can access it, the process is faster and more efficient.
Read More: Permissionless Blockchain: Concepts, Mechanisms, and the Future
However, it has its disadvantages too, such as a lack of transparency that makes it prone to being manipulated because only a few people are in charge. The fewer users who can control the system, the more the system is prone to being manipulated and attacked.
Permissioned Blockchain
Permissioned blockchain is a combination of public and private. So, anyone can join if they get permission. However, after joining, not everyone has the same rights. Some can only view data, some can add data, and some can edit if it is set that way.
The advantage of this type of blockchain is that it can be adjusted according to the company’s needs, making it more flexible and cost-effective. Moreover, it can be used for services such as Blockchain-as-a-Service (BaaS), a blockchain that companies rent for specific purposes, such as automated accounting or financial reporting.
However, this type of blockchain also has disadvantages, such as the need for an internet connection. Through an internet connection, it can still be hacked. Moreover, if the security system is weak, data can be hacked or stolen.
Hybrid Blockchain
In addition to the three main types, there is also a hybrid blockchain, which is a combination of two types of blockchain. For example, public, but permissioned. This means that the data can be seen by everyone, but those who can write or change the data must get permission first.
Conclusion
A public blockchain is a decentralized system that allows anyone to participate, view, and verify data without needing permission. Its transparency, user empowerment, and strong security make it a trusted choice for crypto transactions and decentralized apps.
Still, it’s not perfect. Issues like scalability, energy use, and unclear regulations remain challenges. By understanding both its strengths and limits, as well as how it differs from other blockchain types, we can make smarter decisions about when and how to use it.
Disclaimer: The information provided by HeLa Labs in this article is intended for general informational purposes and does not reflect the company’s opinion. It is not intended as investment advice or a recommendation. Readers are strongly advised to conduct their own thorough research and consult with a qualified financial advisor before making any financial decisions.
Hey, I’m Kamila. I am a content strategist with a strong focus on blockchain and crypto. I help simplify complex Web3 topics, making them easier to understand and more relatable. My content is crafted to educate, engage, and drive interest in the ever-evolving crypto space.
