What is a Public Blockchain?
In 2009, when the first cryptocurrency, Bitcoin, came into existence, a pseudonymous Satoshi Nakamoto wished for a financial world with no centralized authority to control users’ finances. One of the primary goals of creating crypto based on blockchain was to create a public blockchain ledger. This would eliminate the need for a supervisor who has control over your funds and transactions, and charges steeply to execute the transactions on top of it.
A public blockchain is decentralized and open to anyone. It operates in a permissionless manner, meaning any individual can join, validate transactions, and even participate in the consensus process in return for rewards. The most notable examples include Bitcoin and Ethereum. Its transparency and security are upheld by a broad and diverse network of nodes. Public blockchains stand out for their open, immutable, and censorship-resistant qualities, revolutionizing trust in online transactions without an intermediary.
Public blockchain networks usually function based on proof of work or proof of stake consensus models where the participants have to validate transactions and reach consensus on them to maintain the chain. Public blockchain networks have eliminated the need for a third party to control or make the transfer of data possible. The participants on the network can do all that by themselves. In technical terms, a public blockchain ledger can thus be defined as a self-governed, decentralized, and autonomous public ledger. The participants themselves secure a public blockchain ledger, and the data added to the chain cannot be reversed.
Characteristics of Public Blockchain Networks
While learning about what is a public blockchain, you will require knowledge about its architecture as well. A public blockchain ledger has simple characteristics, which is why it has become popular globally. The architecture of a public blockchain ledger is what makes it different from other kinds of blockchains. Some of the prominent characteristics of a public blockchain are:
- Every participant or node on the network has access to read or write on the ledger.
- Any participant can also download the data from the ledger or make another user a node.
- It is an example of completely decentralized technology since no central authority exists to control the public blockchain ledger.
- The advantages of public blockchain include transparency, anonymity, open-source codes
- A public blockchain is a bit slow compared to other ledger forms as it introduces additional levels of complexity thorough consensus mechanisms
Key Advantages of Public Blockchains
1. Higher Transparency
While introducing public blockchain technology to the world, Satoshi showed the world what liberty in financial transactions looked like. Central banks and authorities have always hidden the transaction processes from the public and charged various fees to transfer money from one place to another. A public blockchain ledger is completely transparent, and anyone can read the information related to each transaction. Every participant can keep a track of any transaction that they want – from the transaction initiation stage through its finality. This removes the need for a third party to confirm the transaction. Public blockchain keeps things out in the public eye to earn the trust of its users. Also, the data can be validated by anyone, and the whole system flows seamlessly with the help of each participant.
2. Fully Decentralized Structure
One of the biggest advantages of public blockchains is the decentralization it offers. This technology creates a ledger that can be accessed and edited by anyone with an active internet connection. The edits cannot be done to already added blocks, but users can pick up a new transaction, validate it and add it to the block. The flow of information on a public blockchain only occurs in this manner. All the nodes in the network have a copy of the whole or partial ledger, and they can use consensus mechanisms to validate the blocks. There is no requirement for a central authority in a public blockchain ledger.
3. User Authorization & Immutability
Another of the key advantages of public blockchain is that they offer universal access to anyone honestly willing to secure the network. This means that any participant with active internet on their device can download the ledger and validate the transactions. There are typically no permission controls or permission levels, making it easier for every participant to access the data. It also means there is no central authority controlling the public blockchain ledger and its operations. Autonomous network protocols sanction any deceptive or malicious nodes. Additionally, the resources needed to alter or manipulate data on a blockchain are prohibitively high.
4. Open-source Protocol
Open-source protocols stand as a pivotal advantage of public blockchains. They foster a transparent and collaborative ecosystem, allowing developers from around the world to inspect, improve, and build upon the code. This collective oversight not only ensures constant enhancements but also bolsters security. Vulnerabilities are rapidly identified and rectified, thanks to the global community’s collective vigilance. By democratizing development, open-source protocols ensure the robustness and longevity of public blockchains.
5. Permissionless Innovation
Permissionless innovation is a cornerstone advantage of public blockchains. It refers to the unrestricted freedom for developers and entrepreneurs to create, iterate, and deploy applications or solutions on the blockchain without seeking approvals or facing gatekeepers. This openness accelerates technological progress, fosters creativity, and democratizes access to the blockchain’s benefits. In such an ecosystem, breakthrough ideas can emerge from anywhere, unhindered by traditional barriers or centralized controls. This decentralization of innovation catalyzes rapid advancements and broad-based participation. Anyone literally can build a decentralized app (dapp) over base blockchain layer.
In contrast, developing on platforms like iOS or Android involves multiple overheads: paying developer account fees, navigating app store review processes, adhering to strict platform guidelines, managing platform-specific SDK updates, sharing revenue through app store commissions, and possibly even investing in proprietary software or tools. These overheads can pose significant barriers to entry and ongoing challenges for new developers.
5. Data Ownership
Public blockchains empower individuals with data ownership, a pivotal shift from traditional systems. On these decentralized networks, users control their data rather than big corporations. Transactions and identities are secured cryptographically, ensuring data isn’t easily accessed or manipulated without consent. This model fosters transparency, minimizes privacy breaches, and shifts power back to the individual, ultimately promoting a more equitable digital landscape.
6. Reduced Intermediaries and Token Incentives
By facilitating direct peer-to-peer transactions, blockchains slash the need for middlemen, often cutting costs and transaction times. Concurrently, native tokens incentivize network participation and security. These tokens not only reward users for various contributions but also drive stakeholder alignment, fostering an ecosystem where participants are financially motivated to uphold network integrity and propel its growth.
Public Blockchain Examples
There are several big names on this list, and you may have heard before. Firstly, the biggest name on this list is the Bitcoin network. It was the first ever blockchain network introduced in 2008 while also introducing us to its native token by the same name – bitcoin (‘B’ is capitalized when referring to the network and it is in small case when referring to the crypto) or BTC by its ticker symbol.
Understanding various public blockchain networks helps users to be aware of them and peruse them for both personal and commercial use when they choose to. The other popular blockchain network is Ethereum with native crypto token ‘ETH” or Ether. While Bitcoin pioneered decentralized payments via its groundbreaking blockchain protocol, Ethereum has shaped the crypto industry’s contemporary identity. Ethereum’s innovation in enabling programmable blockchain functions, especially through smart contracts, has facilitated real-world applications without the need for intermediaries. Beyond the clear benefits of blockchain technology for international remittances system, such as speed and affordability, Ethereum’s influence spans varied sectors from finance to identity verification to real estate, underscoring the vast potential of the technology.
More recent public blockchain networks include Avalanche, Polygon and Shardeum.
Conclusion
When the pseudonymous Satoshi Nakamoto first launched Bitcoin, even they might not have thought that their idea would travel such a long journey so fast. In just 12 years, Bitcoin network alone reached an all time high (ATH) of over $1 trillion in market cap compared to other traditional institutions that took three or four decades to reach that figure . We do hope with this post, you have the answer to ‘what is a public blockchain?’. Like every other technological innovation/network, public blockchains do have their shortcomings but those shortcomings are mostly self-imposed to maintain its high level of decentralization and security removed from the centralized abuse and inefficiencies.
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Last Updated on October 25, 2023
