Public vs Private Blockchains
One lets anyone join, read and build. The other checks you at the door. They share a data structure and almost nothing else, and banks have spent a decade choosing the second.
TL;DR
- Public chains are open to anyone: no permission to read, transact, run a node or build. Bitcoin and Ethereum work this way.
- Private or permissioned chains admit only approved participants, which is what regulated institutions have almost always chosen.
- The honest criticism of private chains is that a shared database among trusted parties rarely needs a blockchain at all.
- The interesting development is hybrids: JPMorgan issued its JPMD deposit token on Base, a public network, in 2026.
Around 2017 every large bank announced a blockchain project, and almost none of them shipped anything a customer noticed. The reason is buried in this distinction, and it matters now because the argument has recently started to resolve.
The distinction sounds academic and turns out to decide almost everything about what a chain can be used for. Educational guide, not financial advice.
The difference in one line
A public blockchain lets anybody participate without asking: you can read the ledger, send a transaction, run a node or deploy code, and nobody grants permission because there is nobody to grant it. Bitcoin and Ethereum are the obvious examples.
A private or permissioned blockchain admits only approved participants, and somebody decides who validates, who can transact, and often who may even read. That somebody is usually a single company or a consortium of them acting together under an agreement.
Nearly everything else about the two models follows from that single difference in who is allowed to take part.
What each buys you
Openness against control. Anyone can build on Ethereum without asking, which is why so much got built, and nobody builds on a bank's private chain without a contract.
Censorship resistance against compliance. A public chain will process a valid transaction regardless of who sent it, which is a feature if you are worried about being cut off and a serious problem if you are a regulated institution with obligations about who you deal with.
Transparency against confidentiality. Every public transaction is visible for ever, so two banks settling a large trade generally do not want their competitors watching, which is not villainy, it is ordinary commercial confidentiality.
Cost against speed. Public chains charge fees and can congest, but private ones are fast and cheap because a handful of known validators do not need expensive coordination.
The uncomfortable question
This is the question that quietly sank most of those 2017 projects. If everyone on the network is already known, vetted and contractually bound, what is the blockchain doing that a shared database with good access controls would not?
The honest answer, in most cases, turned out to be far less than the pitch had suggested, because the expensive machinery of a blockchain exists to make strangers agree without trusting each other. Remove the strangers and you have paid for a solution to a problem you no longer have.
There are real answers in some cases: multiple parties who do not fully trust one another but must share a record, no natural candidate to run the central copy, or a genuine need for an audit trail nobody can quietly revise. Trade finance and interbank settlement fit that description reasonably well. But a great many private-chain projects failed precisely because nobody asked this question early enough.
What actually shipped
The projects that survived are mostly interbank and settlement systems, the least visible corner of finance. JPMorgan's Kinexys platform, formerly Onyx, settles around 2 billion dollars a day in institutional payments on a private network. That is genuine volume doing genuine work, and essentially none of the public will ever see any sign of it.
What is more interesting is that the wall has started coming down. In 2026 JPMorgan issued JPMD, its dollar deposit token, on Base, a public Ethereum layer 2, for institutional clients. A regulated bank issuing a claim on real deposits onto a public chain would have been unthinkable in 2017.
Around the same time BlackRock's tokenised money market fund began trading on a public decentralised exchange. The pattern in both cases is the same: public rails for reach and settlement, permissions applied at the token level rather than the network level, so only approved addresses can hold the thing even though the network is open.
Where this is going
The pure private-chain thesis has largely lost. Building a whole network so that a closed group can share a ledger turned out to be an expensive way to obtain a database, and the institutions that tried it have mostly moved on.
What replaced it is subtler and more useful. Use the public network, because that is where liquidity, tooling and reach already are, then enforce the rules in the contract rather than in the walls. The chain stays open and the asset stays controlled.
For an ordinary holder none of this changes anything directly, but it explains a shift worth noticing: the serious institutional money is no longer trying to build its own crypto. It is turning up on the same networks everyone else uses.
Frequently Asked Questions
Permission. Anyone can read, transact, run a node or build on a public chain like Bitcoin or Ethereum without asking. A private or permissioned chain admits only approved participants, with a company or consortium deciding who validates, transacts and sometimes who may read.
Because if every participant is already known, vetted and contractually bound, a shared database with good access controls usually does the job. A blockchain's expensive machinery exists to let strangers agree without trusting each other, and closed networks have removed the strangers.
Sometimes. Where several parties must share a record but do not fully trust each other, where no one of them is the natural host, and where an audit trail nobody can quietly revise genuinely matters. Interbank settlement and trade finance fit reasonably well; many other proposals did not.
Increasingly yes, and that is the notable shift. JPMorgan issued its JPMD deposit token on Base, a public Ethereum layer 2, in 2026, and BlackRock's tokenised fund began trading on a public decentralised exchange. The permissions sit in the token rather than in the network.
Not meaningfully, and it is not trying to be. A defined set of approved validators run by a consortium is a distributed system rather than a decentralised one. That is a deliberate trade for speed, confidentiality and control, not a failure to achieve something it wanted.
About the author — Dan Clarke
Dan Clarke is the author of Bitcoin: The Complete Guide and a former content lead at Binance Academy, where he wrote crypto education for readers arriving with no background in the subject. He has worked in the cryptocurrency industry since 2017. His rule for these guides: plain language first, precision where it matters, no cheerleading.