How Much Do You Know About Blockchain? Understanding Blockchain Basics in One Article

By DaDa

Compared with public chains, the biggest difference of a private chain is that it is open only to a single individual or entity. Therefore, the write permission of a private blockchain is in the hands of only one organization. The read permission is either open to the outside or restricted to varying degrees.

Features of private blockchains

(1) Extremely fast transaction speed

The transaction speed of a private chain can be faster than any other blockchain, even approaching the speed of a conventional database that is not a blockchain at all. This is because even a small number of nodes have a high degree of trust, and there is no need for every node to verify a transaction.

(2) Better protection for privacy

A private chain makes the data privacy policy on that blockchain as completely consistent as in another database, without having to deal with access permissions and use all the old methods, but at least this data will not be publicly available to anyone with a network connection.

(3) Transaction costs are greatly reduced or even zero

Completely free or at least very cheap transactions can be carried out on a private chain. If a single entity controls and processes all transactions, then they no longer need to charge fees for the work.

However, even if transaction processing is carried out by multiple entities, such as competing banks, further, for example, for the same reason, they can process transactions so quickly that the fees are still very small; this does not require complete agreement between nodes, so very few nodes need to work for any single transaction.

(4) Helps protect their basic products from being undermined

It is precisely this point that enables financial institutions such as banks to readily accept private chains in the current environment; banks and governments have a vested interest in guarding their products, and national fiat currencies used for cross-border trade still have value.

Applications of private blockchains

The Linux Foundation

The Linux Foundation is a non-profit consortium whose purpose is to coordinate and promote the development of the Linux system, as well as to promote, protect and standardize Linux. The organization was formed in 2007 by the merger of the Open Source Development Labs (OSDL) and the Free Standards Group (FSG). MeeGo is a Linux operating system managed under the Linux Foundation.

Hyperledger

Hyperledger is an open-source project initiated by the Linux Foundation in 2015 to advance blockchain digital technology and transaction verification. Its members include more than a dozen different interest groups such as ABN AMRO, Accenture and others. The goal is for members to work together to build an open platform that meets various user cases from multiple different industries and simplifies business processes. Due to the characteristics of peer-to-peer networks, distributed ledger technology is completely shared, transparent and decentralized, so it is very suitable for applications in the financial industry, as well as countless other industries such as manufacturing, banking, insurance and the Internet of Things. By creating public standards for distributed ledgers, it realizes the exchange of value in virtual and digital forms, such as asset contracts, energy trading and marriage certificates, which can be tracked and traded safely and efficiently at low cost.

R3CEV

R3CEV is a blockchain startup headquartered in New York. The R3 blockchain consortium it initiated has so far attracted the participation of 42 major banks, including Wells Fargo, Bank of America, BNY Mellon, Citibank, Commerzbank, Deutsche Bank, HSBC, Mitsubishi UFJ Financial Group, Morgan Stanley, National Australia Bank, Royal Bank of Canada, Skandinaviska Enskilda Banken (SEB) of Sweden, Societe Generale of France and others.

The above is DaDa's introduction to "private chains." Please look forward to even more exciting content coming next.