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Private blockchains are created and maintained by private organizations.

Private blockchains are created and maintained by private organizations. The mining rights and consensus algorithm used by the private blockchain network are under the control of the authors. Private blockchains are privately controlled distributed networks that use cryptography, digital signing, and consensus procedures to synchronize and protect the network.

Unlike public or permissionless blockchains, private blockchains have a predetermined number of participants, and no one can join without an invitation. Private blockchains have important use cases in industries like finance, healthcare, government services, retail, insurance, real estate, supply chain, and many others.

“You can think of private blockchains as being the intranet, while the public blockchains are more like the internet,” noted James Godefroy, a senior manager at Rouse, an intellectual property services provider.


The controlling organization has control over permission levels, security, authorizations, and accessibility. For instance, a private blockchain network allows an organization to control which nodes can see, add, or modify data. Additionally, it can restrict access to some information by outside parties. Private blockchains may also execute transactions faster than public blockchains because they have a smaller size.


Private blockchains have been criticized for not being true blockchains since the core philosophy of blockchain is decentralization. It’s also more difficult to achieve trust in the information since centralized nodes determine what is valid. Less security may result from the small node count, and the consensus process may be jeopardized if a few nodes act erratically.

Moreover, the source code from private blockchains is frequently closed-source and proprietary, which means it cannot be independently audited or verified by users. This may result in inferior security. On a private blockchain, there is no anonymity either.

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