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With the development of distributed ledger technology now ten years in the making, slowly enterprises are exploring the possibilities of blockchain as well. While most of the blockchain startups working on innovative solutions focus on public and/or permissionless blockchains, enterprises will predominantly use private and/or permissioned blockchains.
The most important difference between a public and a private blockchain is that within a public blockchain, the actors involved in the network are not known, while in a private blockchain they are. As a result, within a public blockchain, trust within the system is created through game-theory incentives and cryptography. Anyone can join a particular public blockchain, simply by connecting his/her computer to the decentralised network, downloading the application, and starting to process transactions. It is not required to have a previous relationship with the ledger, and you do not need to be approved to join.
Private, or permissioned, blockchains, however, do not require such artificial incentives since all actors in the network are known to each other. New actors that want to join the network have to be approved by existing participants in the network. This enables more flexibility and efficiency of validating transactions. Private blockchains are generally used by organisations that like to keep …
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