Blockchain-Based Internet of Things …

31

block valid. A public blockchain is even safer than private due to these practices

and thoughtful cryptogenic encryption techniques.

• The public blockchains are open for all participants, and the data are also trans-

parent. Copies of blockchain information (digital ledgers) are accessible at any

registered node. As a result, blockchain technology is completely transparent and

open. Nobody discloses a fictitious transaction or conceals an existent one, since

each node maintains an up-to-date copy of the database at all times.

Disadvantages of Public Blockchain

• The number of transactions per second on a public blockchain is really low. This

is because it is a big network with several nodes, and each node must spend

time validating transactions and performing proof-of-work. That is why public

blockchains such as Bitcoin can only process seven transactions per second,

whereas the Ethereum network can handle fifteen transactions per second (TPS).

On the other hand, a private network such as Visa operates at a pace of 24,000

TPS, demonstrating a huge difference in transaction processing and execution

speed.

• As public blockchains have a slow processing rate, this often creates scalability

problems. And the more we try to maximize the network size, the slower it is

going to get. Solutions like Bitcoin’s Lightning Network, however, are helping to

resolve this problem. It preserves the transaction rate as we increase the network

size.

• Because specialized systems (hardware components) are required to run a special

algorithm, the proof-of-work process is highly energy-consuming. It is a matter of

concern, both from an environmental and economic point of view. Test-of-work

equipment is costly and uses a lot of resources. There is no question that the

software needs to generate energy-efficient consensus processes.

4.2

Private Blockchain

The Private Blockchain is also known as the Permissioned or Restrictive Blockchain.

The Private Blockchain has prohibitions on who can access and participate in the

transaction and validation. Only the pre-chosen individuals have the authorization to

access that Blockchain. These individuals are selected by the respective authority and

are granted permission by the Blockchain developers during the construction of the

Blockchain application. Assuming there is a need to assign new users permissions

or revoke existing users’ permissions, the Network Administrator can take care of

this [7].

Thus, private Blockchain works only in a closed network and is typically used

by an association or corporation where only targeted respondents participate in a

blockchain network. The level of protection, authorizations, approvals, accessibility

is in the control of the managing organization. Private Blockchain networks are used

for voting, supply chain management, digital identity, asset ownership, etc.