Demystifying Private Blockchains: Enhancing Security and Efficiency

Post Category :

In recent years, blockchain has evolved and played an important role in technology optimisation, security, and transparency. Blockchain is not just a cryptocurrency and bitcoin; blockchain has the potential to deliver good solutions beyond just cryptocurrency. A private blockchain is a concept that can show true potential beyond cryptocurrency and provide strong solutions for enterprises to maintain transparency and security. In this article, we will dive into the world of private blockchain and explore its benefits and some solutions that can transform solutions in various industries.

What is Blockchain, and what are its types?

Blockchain is a peer-to-peer distributed ledger that is cryptographically secured, append-only, immutable & updatable only via consensus or agreement among peers. There are two types of blockchain: public blockchain and private blockchain.

In a public blockchain, validators and developers are welcome to join as validators or develop a  product and deliver it on the public blockchain. Which will be managed by public validators, and decisions will be taken on a consensus basis. Ethereum and Bitcoin are the most used and known public blockchain to date.

In a private blockchain, some groups of people can access this type of blockchain with permission. There will be limited numbers of validators who can maintain this blockchain with restriction and need permission to register as validators. Only limited applications will be hosted in private blockchain as it has predefined use cases with niche products hosted.

Private Blockchain Development Frameworks:

Several frameworks are available nowadays for private blockchain, such as Hyperledger, R3 Corda, IBM Blockchain Platform, etc. Let’s see the 3 most used frameworks for private blockchain.

Hyperledger Fabric

Among all these platforms, Hyperledger Fabric is the most frequently used. Hyperledger Fabric is a Linux foundation project for blockchain enterprise solutions. Fabric helps in customised consensus mechanisms, privacy, smart contracts, etc. Hyperledger Fabric is the most used private blockchain framework.

R3 Corda

R3 Corda is a designed enterprise solution as well. It is used for enterprise and financial solutions that require private and secure transactions between all parties associated with the answer.

IBM Private Blockchain Platform

IBM provides a thorough private blockchain platform that uses Hyperledger Fabric as a foundation. IBM provides tools for managing, creating, and deploying blockchain networks. IBM also provides features like analytics, access control, and identity management.

Advantages Of Private Blockchain

More Privacy and Security

Participants of private blockchains have much more trust in each other. This high level of trust allows secure and confidential information to be shared securely with each other. A public blockchain allows everyone to access information; unlike a private blockchain, it enables private networks to have controlled access, reducing the risks of unauthorised access.

Efficient Resource Utilisation

Private blockchain has limited resources among networks that allocate tasks efficiently among each other. In a public blockchain, huge numbers of validators will consume more energy and result in higher costs.

Customizable Governance

Private blockchain gives an advantage to establish their own governance and rules model. This flexibility helps organisations develop their network and rules along with blockchain technology.

Faster Transactions

Private blockchain has a smaller network with better management, so it helps achieve a faster transaction rate. In a public blockchain, there are more validators, and a huge network makes it a slower transaction rate than a private blockchain network.

Use Cases and Real-world Case Studies

As we discussed, private blockchain provides enterprise solutions and is used widely for healthcare and supply chain industries. As these solutions require managing data among trusted parties and want a decentralised solution for transparency, a private blockchain is the best fit.

Supply Chain is important for our daily life. There are local, national, and international trades all over the world to meet the requirements of consumers. To manage authenticity and check where it was built and which materials were used from which corner of the world, private blockchain helps us with this. 

An Italian cheese maker uses blockchain-enabled microchips to track their product and see material information used in the process, such as which grade milk was used from which vendor was supplied. These microchips also help in finding the authenticity of the product. This allows consumers to find authentic products as many replicated products are available.

Healthcare is another one of the best real-time use cases for private blockchain. Organisations maintain patient records on a decentralised ledger between permissioned organisations. One can’t expose patients’ records publicly in health care, so private blockchain is the best fit.

Challenges And Considerations

While there are numerous advantages of a private blockchain, there will be many more challenges as well. One of the biggest challenges is centralisation, as there are limited permissioned validators that control the network. This will raise a question about the decentralisation that blockchain technology underpins, and the closed nature of private blockchain may limit collaborations and innovations that public blockchain networks encourage.

Organisations must carefully assess consensus mechanisms, control, scalability, network design, governance, collaborations, data privacy, and more. Collaborative efforts among participants are crucial in shaping the network’s success, functionality, and alignment with organisational requirements.


Private blockchains can be appealing solutions to enterprises seeking to join hands with the power of blockchain technology while not taking control over data privacy and operations lightly. These networks offer enhanced faster transactions, security, and a customisable governance model that makes it more suitable for various solutions.

The evolution of private blockchains is on a trajectory of continuous growth and innovation. As technology evolves continuously, we can see further improvisation, advancements, and innovation in private blockchains. A private blockchain can reshape digital transformation in the supply chain, identity management, or optimising financial transactions. By leveraging the strengths of blockchain technology while addressing its limitations, private blockchains are paving the way for a more secure, efficient, and interconnected future.

VE3 is a pioneering player in the blockchain arena and has been at the forefront of shaping the trajectory of private blockchains. Through our innovative solutions and commitment to advancing the technology, we actively participate in the continuous growth and refinement of private blockchain ecosystems. We offer & capabilities to manage your blockchain networks securely, from node deployment and management to smart contract development and deployment. Leverage our extensive network support with our decentralized network infrastructure that eliminates the need for a server or central authority, enabling users to send transactions over a network connected via blockchain. We provide a platform where users can build applications that are secure, transparent, and tamper-proof, making it suitable for a variety of use cases.


Like this article?

Share on Facebook
Share on Twitter
Share on LinkedIn
Share on Pinterest