A private blockchain is a permission-based distributed ledger whose access is limited to a set of participants. In addition to that, public blockchains allow anyone on the data-sharing network to join and validate transactions, but private ones are managed by an organization or group of entities. This design offers an increased ability for privacy, scalability and transaction speed making them suitable for enterprise needs such as supply chain management, banking and healthcare.
The participants in this instance must be authorized to either read, write, or validate any transactions, ensuring data privacy and regulation compliance. Private blockchains, on the other hand, while giving up some centralization of power, provide more manual control and scalability. Governance rules are pre-established, and the consensus mechanism is usually much lighter than in public networks, so the computational costs are lower, and performance can be increased.