Private Blockchains are also known as enterprise blockchains; the difference from public blockchains is that they are permissioned.
Some of the key features of private blockchains are:
Controlled membership and access: Only trusted nodes are permitted to join the enterprise blockchains. New users are validated through the identity management system of the organization. This implies that access to information is only given to users who have proper authority or are authenticated to access the information.
Governance: For operating and developing a private blockchain, every enterprise is required to design processes, methods, tools, and standards. To accomplish this, enterprises are required to have frameworks and tools like security auditing tools, testing frameworks, and many more. To ensure that the operations remain for a long duration, high-quality documentation is required to be developed. Proactive governance is required to accomplish this.
Consensus: The complexity of transactions in the private blockchain is a lot high; the best example of this is, sending Bitcoin payments from one address to another. In this, the consensus mechanism is required to perform different roles in the transaction lifecycle, from the requestor to the acceptor.
Resilience: There should be a minimum requirement of human intervention, should have built-in redundancy and automated monitoring.
Performance at a scale: For large businesses, it is very common to process 100,000’s transactions per second (TPS). Therefore it is very essential for the enterprise blockchains to scale so that they can deliver the same level of performance. To achieve this feature, processes are compartmentalized using containers or through approaches that are similar to them.
Integration: All enterprise has their system of record (SOR) application, which is required to be regularly communicated by private blockchain. Therefore, to ensure this communication, businesses need to implement the required application programming interface (API) that could integrate the SOR application and private blockchain, before going live with the blockchain.
A degree of centralization: A certain degree of centralization can be avoided by the enterprise blockchains. But allowing only the trusted nodes to join the network, it is evident that private blockchains cannot be as decentralized as public blockchains are.
Supportability: Maintaining private blockchains by businesses is a must. Maintaining private blockchain involves troubleshooting, patching, and day-to-day administration. To monitor service level agreements (SLA) and manage operations, businesses are required to implement necessary processes.
Security and confidentiality: For security, all the data is required to be encrypted by the enterprise blockchain. Also, enterprise blockchains could implement cryptographic standards that are applicable to public blockchains, for the security of the transaction messages and to ensure the authenticity of the transactions.
Disclaimer: The article should not be considered as any financial advice. It is advisable to conduct thorough research before investing.
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