Private blockchain

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A private blockchain, also known as a permissioned blockchain, is a type of distributed ledger technology (DLT) where access and participation are restricted to a select group of authorized users or organizations. Unlike public blockchains (such as Bitcoin or Ethereum) where anyone can join the network, view the ledger, and participate in the consensus process, entry into a private blockchain requires explicit permission from the network administrators or a governing body.

In a private blockchain environment, the identities of participants are typically known, fostering a higher degree of trust, accountability, and data privacy. This controlled access allows organizations to define specific rules, governance structures, and consensus mechanisms tailored to their needs. Private blockchains often offer higher transaction speeds and greater scalability compared to their public counterparts because the number of validating nodes is limited and often pre-vetted. They are frequently employed by enterprises for applications like supply chain management, inter-company data sharing, and internal record-keeping, where confidentiality, control over data, and regulatory compliance are critical requirements. While offering enhanced privacy and efficiency, they are inherently more centralized than public blockchains.

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