The technical details of Blockchain technology can be difficult to understand at times and one of the things which confuse corporations is whether to use private or public blockchain for their supply chain. This blog will help you understand the difference between private and public blockchain networks.
Among the numerous use cases of Blockchain, its application in Supply Chain Management is widely regarded as one of the most revolutionary. According to a research by ResearchAndMarkets.com, The Global Blockchain Supply Chain Market was valued at $93.16 Million in 2017 and is projected to reach $9,852.91 Million by 2025, growing at a CAGR of 80.2% from 2018 to 2025. This shows the immense potential of Blockchain technology in the Supply Chain Management domain.
But Blockchain technology can still be intimidating and the decisions regarding the selection of a Blockchain network might affect a lot of factors including the performance of the system or the cost involved or its interoperability. These factors depend highly on the decision about whether the Blockchain network is Public or Private in nature.
What are Public and Private Blockchains?
A Blockchain network is a peer to peer in nature which means that each participant has a copy of the ledger and each time a new block is added it gets updated in all the systems.
The sole difference between a public and a private Blockchain network is regarding who is allowed to participate in the network.
In the case of public Blockchain networks, anyone and everyone are allowed to participate. This means that they can have a copy of the Blockchain and can see all the transactions happening. The public networks have some kind of incentivizing mechanism which encourages more participants to join. Bitcoin is an example of a public blockchain network.
A public blockchain network requires a substantial amount of computing power as the participants are required to solve complex cryptographic problems called Proof of Work to verify the transactions and keep everyone on the same page.
In Private blockchain networks, participants can only be added after an invitation and the network is usually permissioned in nature. This means that unlike public blockchain networks, not everyone is allowed to participate and also that the scope of participants is also limited. This scope is dependent on the network starter. Hyperledger Fabric is an example of a private blockchain network.
Private Blockchain networks are particularly aimed at enterprise usage. Private Blockchains can be set up in a way so that only the entities participating in the transaction will have access to it and the other entities do not have access to it.
Requirements for Blockchain-based Supply Chain Solution
The discussion and debate regarding the use of Private or Public Blockchain networks will go on but in this debate, we must remember that a Blockchain-based Supply Chain solution for enterprises should adhere to the following requirements:
- Operational Integrity
There needs to be well defined and clear contractual agreements regarding the daily operations, so organizations and corporations have some sort of accountability and liability mechanism in case something goes wrong.
- “Know Your Customer” Compliance
KYC is an important and crucial regulatory issue, especially in services that deal with payment and financial service providers.
A blockchain-based supply chain solution should work seamlessly with the existing ERP, CRM, and WMS systems that the corporations already use.
- Security Requirements
There should be adequate measures for the protection of data of the entities with proper data segregation, control requirements, and data privacy.
A blockchain solution should not only be limited to a pilot but has to grow along with the corporation in terms of transaction volume, customers, and other metrics.
Features to consider regarding Blockchain Network
While we may weigh down the pros and cons of Private and Public Blockchain networks, we must consider that the solution will depend on the particular requirements of the enterprise. These requirements will be completely unique for the enterprise or the industry.
Corporations must also keep in mind that if there are some existing consortiums in their industry, it is easier and more suitable to join those consortiums as it promotes standardization in the industry and makes it easier for businesses to do work with each other.
The following are some considerations for the blockchain network whose importance defines which network is suitable for your enterprise.
- Data Access
In public Blockchains, everyone has access to the data and can take part in the network, while in private networks only selected and authorized entities can make additions or changes to the network. In public networks such as Ethereum, every transaction is broadcasted to all the participants while only selected entities who have access to private networks can see the transactions.
Since most of the data regarding enterprises is confidential, public blockchain networks are incorporating new and innovative concepts to allow the sharing of data. One such concept is Zero-Knowledge Proof. Zero-Knowledge Proof allows for the sharing of data without disclosing the details such as price or people involved.
- System Performance
System Performance refers to the speed with which transactions are written on a blockchain network. Generally, public networks tend to be slower than the private networks because of the wider polling needed to achieve consensus. Hence, if enterprises need to store and share huge amounts of data, a private blockchain is the way to go.
- Interoperability and Standards
Public Blockchain networks are more interoperable since their decisions are based on the wider community consensus in comparison to the selected few who make decisions in the private network. Although, organizations such as International Standards Organization (ISO) and industry groups such as the Blockchain in Transportation Alliance (BITA), Digital Container Shipping Association (DCSA), W3C and the United Nations Centre for Trade Facilitation and Electronic Business (UN/ CEFACT) are heading the work to achieve standardization in the industry.
- Total Cost of Ownership
There is a cost involved when using a Public Blockchain called ‘gas’ which is the transaction fee paid to the creator of the block. There is no such transaction fee involved in the private blockchain networks but the upfront cost is usually higher than that of a public blockchain. Private blockchains also require resources to support and maintain the infrastructure which is quite less in public blockchain projects.
- Compliance for Personal Data Protection
Governments all over the world are enforcing stronger policies regarding the storage and processing of personal data. One such law is the European Union’s General Data Protection Regulation (GDPR) which presents a robust global standard for the storage and processing of the personal data of persons living in EU member countries.
Since data on public blockchains can be accessed by anyone, enterprises are facing difficulty in protecting their personal data and their trade data. This is why enterprises are moving towards private blockchain networks to comply with the data protection laws.
Although, some public blockchains are coming up with innovative solutions to comply with the data protection laws such as sophisticated ID management with obfuscation.
Public blockchains are governed by the masses i.e. majority of the users whose interests might not align with those of the supply chain operators. Private Blockchains on the other hand are constituted of supply chain entities only whose goals, objectives, and interests align more.
Private Blockchains can also face some governance issues if, say, the owner of the network introduces some fees or changes regulations. Hence, there needs to be a prior agreement between the parties of the supply chain regarding the interests, goals, and objectives.
The debate between whether private blockchains are better or the public ones, comes down to the enterprise which has to use it. There is no clear cut answer to the question as it totally depends on the individual needs and requirements. The industry is still in the building phase and enterprises need to learn about what they specifically need instead of what’s better for everyone else.
The decision on whether to use Public or Private Blockchain will depend on the particular use case and the features which are particularly required by the enterprise.
QuillTrace, A Complete Supply Chain Solution
QuillTrace is a Blockchain-based procurement platform by Quillhash which makes the supply chain of any business transparent, sustainable, and secure by integrating with the existing Supply Chain systems.
The Blockchain experts at Quillhash will guide you in selecting the perfect Blockchain network for your supply chain. We can build a Blockchain-based supply chain solution specifically for your requirements to aid you in increasing transparency in your supply chain, in turn increasing sales.
Contact us now for a demo!
China aims to let foreigners use digital yuan at Winter Olympics in 2022
China’s central bank is looking to enable foreign athletes and visitors to use the country’s digital currency during the Beijing Winter Olympics in 2022, according to a top central bank official.
Li Bo, deputy governor of the People’s Bank of China, said that the upcoming Winter Olympics could potentially become the first test of China’s central bank digital currency, or CBDC, by foreign users.
“For the upcoming Beijing Winter Olympics, we were trying to make e-CNY available not only to domestic users, but also to international athletes and like visitors,” Li said Sunday at a CNBC panel at the Boao Forum for Asia. The bank previously announced its plans on testing the digital yuan at the event in August 2020.
The official said that the PBoC doesn’t intend to replace the United States dollar’s dominance as the world’s reserve currency. Li reportedly noted that the central bank is focused on the domestic use of the digital yuan.
“For the internationalization of renminbi, we have said many times that it’s a natural process and our goal is not to replace the U.S. dollar or any other international currency. I think our goal is to allow the market to choose and to facilitate international trade and investment,” he stated.
Despite the PBoC’s focus on the domestic digital yuan, China’s central bank is still exploring cross-border CBDC use. “At the same time, working with our international partners. Hopefully, in the long term, we have a cross border solution as well,” Li said. At the forum, Li also said that China’s central bank now views the major cryptocurrency Bitcoin (BTC) as an “investment alternative.”
After launching its first domestic digital yuan tests in 2020, China started cross-border CBDC pilots in collaboration with central banks in Hong Kong, Thailand and the United Arab Emirates in February 2021. On April 1, PBoC director of research bureau Wang Xin announced that China’s central bank completed the first cross-border pilots of the digital yuan with the Hong Kong Monetary Authority.
Chinese authorities have stressed multiple times that the government is not seeking to replace existing fiat currencies including the U.S. dollar with the digital yuan. “We are not like Libra and we don’t have an ambition to replace existing currencies,” Zhou Xiaochuan, the president of the Chinese Finance Association and former PBoC governor, said in late 2020.
As previously reported by Cointelegraph, the U.S. has taken a careful approach toward CBDCs due to the U.S. dollar’s status of the world’s reserve currency and other CBDC-related challenges like privacy. The European Central Bank is also still deciding whether Europe needs a digital euro, with ECB President Christine Lagarde expecting the digital currency to be adopted in four years, at the earliest.
UK government establishes central bank digital currency task force
Her Majesty’s Treasury and the Bank of England have begun preliminary central bank digital currency studies that could result in the creation of a national digital currency.
In a document published by HM Treasury, the exchequer announced the creation of a CBDC taskforce in collaboration with the U.K.’s central bank.
Jon Cunliffe, deputy governor of the Bank of England and Katharine Braddick, director general of financial services at HM Treasury will co-chair the task force.
According to the terms of reference document, the task force will synergize the efforts of all relevant statutory bodies in the U.K. regarding CBDC development.
As part of its duties, the task force will explore preliminary issues associated with the design, implementation, and operation of a CBDC in the U.K. The task force will also interface with stakeholders across academia, fintech and other relevant industries to identify the technological hurdles involved in creating a sovereign digital currency.
The joint HM Treasury and BoE task force will also monitor CBDC-related developments on the international scene especially as other nations are actively exploring their own central bank digital currency projects.
According to a BoE press release issued on Monday, the central bank will also run its own internal CBDC unit headed by Jon Cunliffe.
The establishment of the task force is yet another indication of the U.K. government’s focus on digital currencies and fintech in the aftermath of Brexit. In November 2020, Rishi Sunak, chancellor of the Exchequer said that Brexit offered an opportunity for the U.K. to revamp its financial services sector.
Since Brexit, Sunak has overseen a significant policy shift towards harnessing novel fintech innovations like CBDC and stablecoins. As previously reported by Cointelegraph, U.K. financial services minister John Glen has identified stablecoin regulations as the major focus of the government in the area of cryptocurrency regulations.
According to a report by Reuters, the U.K.’s financial market focus is also extending towards distributed ledger technology firms. Speaking during a financial industry conference on Monday, Sunak announced that the government plans to establish a fintech sandbox for blockchain startups.
China ‘endorses’ BTC investment: 5 things to watch in Bitcoin this week
Bitcoin (BTC) is beginning a new week grinding back to $60,000 as the shock of a weekend price crash settles.
After dropping to as low as $52,000 in a snap sell-off event, Bitcoin has spent the past two days slowly recovering its losses. What’s next?
Cointelegraph presents five factors to consider as a new trading week gets underway and cryptocurrency holders across the board nurse their wounds.
Stocks primed for “up only” short term
The macro picture is fairly stable in Asia and Europe, with United States markets yet to open.
A mixed picture greeted investors at the open, but volatility has been broadly absent, with only oil showing signs of more pronounced weakness.
As such, little impact on Bitcoin is to be expected from equities moves, these forecast to continue building on record highs in the coming weeks.
Russel Chesler, head of investments and capital markets at the Australian branch of crypto-friendly investment manager VanEck, captured the mood in a note quoted by Bloomberg.
“Our current view is that with short-term interest rates set to remain low for the medium term and our expectation that earnings will continue to increase, it is unlikely that the increase in long-term interest rates will trigger an equity market fall,” he wrote.
Coronavirus concerns still linger despite stocks’ relentless surge higher, with more reported official cases last week than ever before worldwide.
Economic responses continue to vary, with a patchwork of openings and closings characterizing countries’ latest attempts to control the outbreak.
Bitcoin recovers from $52,000 crash
In Bitcoin circles, the main talking point naturally remains the weekend’s events, which saw a sudden cascade of selling send BTC/USD down by $7,000 in a matter of minutes.
Bouncing at just above $52,000, the crash echoed several similar events this year, and Bitcoin managed to regain around 50% of its lost ground within hours.
Responses, however, are split between those who consider the volatility “business as usual” and more conservative voices calling time on the latest bull run.
As Cointelegraph reported, suspicions are focusing on a Chinese power blackout hitting hash rate, as well as rumored legal action by U.S. regulators against unnamed financial institutions related to money laundering.
In his own breakdown of what happened, popular statistician Willy Woo highlighted both China and skittish moves by futures investors as contributing to the losses.
“We just saw the single largest 1-day drop in mining hash rate since Nov 2017. The hash rate on the network essentially halved, causing mayhem in BTC price as it crashed,” he told Twitter followers.
In a sign that the future could see fresh sustained upside, Woo reiterated the “reset” in an on-chain metric, the spent transaction output ratio (SOPR), showing that long-term investors will likely soon stop selling altogether.
“The on-chain SOPR metric near a full reset. A classic buy the dip signal,” he added.
“In simple terms, profit taking by longer term investors is completing, very little sell power left unless investors want to sell at a loss from their entry price. Unlikely in a bull market.”
Fundamentals point higher
It’s not just SOPR — a whole range of Bitcoin network indicators and fundamentals are buoying bulls’ cause, even as BTC/USD remains below even February’s high of $58,300.
For Woo and others, particularly important are the transfer of funds to investors who have traditionally hodled, not sold — another classic trait of Bitcoin’s rise in recent months.
“Serious strong-handed holders are buying this dip. In the last 24 hours, over 200,000 Bitcoin became illiquid, a 3-year record,” fellow analyst William Clemente added Sunday.
“This illiquid supply increase is not only just dip buyers with no history of selling, but partially accumulation from 5-6 months ago of which those wallets have just crossed the ‘illiquid’ threshold for this metric.”
Lastly, around 13.5% of the total available Bitcoin supply has been active above $53,000, something which Woo says is confirming its status as a trillion-dollar asset. At around $53,800, Bitcoin’s market cap becomes a solid $1 trillion.
“This dip happened while unprecedented numbers of new users are arriving onto the network per day. There’s been a retail influx in the last 2-3 weeks,” Woo additionally noted, with total wallet numbers nearing 10 million.
Difficulty takes care of miner woes
A closer look at hash rate, which at one point dipped by almost half, shows that a recovery in line with price is underway.
According to rough estimates from on-chain monitoring resource Blockchain, Bitcoin network hash rate is already back above 150 exahashes per second (EH/s), having broken through the 200 EH/s barrier for the first time in history last week.
Miners leaving the network due to power problems leads to Bitcoin’s network difficulty decreasing to incentivize more to come online.
Further confirmation that the weekend’s issue was firmly temporary comes from difficulty forecasts — in two weeks’ time, when it next adjusts, difficulty will only drop by around 4%, a modest move which could yet be cancelled out altogether as miners return.
This balance between hash rate and difficulty is arguably the most important aspect of Bitcoin, one which allows it to govern itself and preserve security and functionality regardless of sudden events impacting network participants.
Chinese central bank praises Bitcoin and stablecoins
In another unanticipated event which is arguably yet to be fully appreciated by the market, China has given an unprecedented stamp of approval to cryptocurrency as an “investment alternative.”
Speaking at a conference organized by CNBC, Li Bo, deputy governor of China’s central bank, the People’s Bank of China (PBoC), broke ranks to validate both Bitcoin and stablecoins.
“We regard Bitcoin and stablecoin as crypto assets… These are investment alternatives,” he said.
The comments are surprising as despite being a center for Bitcoin mining activity, China has had a blanket ban in place on trading and transacting in cryptocurrencies since September 2017.
“Every country that bans Bitcoin eventually reverses that ban. You simply cannot be competitive in the 21st century economy without it,” Charles Edwards, founder of investment firm Capriole, responded.
“China is playing 4D chess. The last 3 days have made very clear they still dominate global mining. Slowly, slowly then all at once.”
The market barely reacted to this high-level affirmation of Bitcoin’s long-term potential. At the time of writing, Bitcoin is still hovering at $57,000, as yet failing to see an attack of familiar resistance levels.
Crypto has arrived.
CoinSmart Appoints Joe Tosti as Chief Compliance Officer
Dogecoin (DOGE) and Maker (MKR) soar as the altcoin market cap tops $1T
European Hedge Fund Brevan Howard to Invest $84 Million In Cryptocurrencies
$600 Million in BNB Gone: Binance Completes the 15th Token Burn
TA: Ethereum Corrects Rally, But 100 SMA Could Spark Fresh Increase
Turkey to ban cryptocurrency payments
SWFT Blockchain (SWFTC) is now available on Binance Smart Chain and Huobi ECO Chain
Brian Brooks defends fintech charter to House Financial Services Committee
Cathie Woods’ Ark buys a further $110M worth of Coinbase shares
SafeEarth Donates $100,000 to TheOceanCleanUp Kicking Off Blockchain Eco Project
Cardano Founder Spills The Beans on “Fakeness” of Silicon Valley
Our Man in Shanghai: Coinbase listing scorned, graphics cards seized, nostalgia coins rule
Shift toward full decentralization pushes Maker (MKR) price above $4K
Cathie Wood’s Ark Funds Now Hold Over One Million Coinbase Shares
Fundamentals go Out The Window, $1 Dogecoin incoming?
Nhash – Profitable Pool Mining Made Easy
Dogecoin doubles in a day as YTD gains hit 5,000% while Bitcoin price dips
Turkey to Ban Cryptocurrency Usage as Payment Instruments From April 30
Chainlink releases new whitepaper — and it could be a game-changer for smart contracts
Blockchain1 week ago
How NFTs, DeFi and Web 3.0 are intertwined
Blockchain1 week ago
Altcoin Season 2021 Booming as BTC Dominance Hits 2-Year Low: The Weekly Crypto Recap
Blockchain1 week ago
11% Of Business In Spain Use Blockchain Technology, Report
Blockchain1 week ago
Has the rally ended for altcoins like LINK, ADA, and NPXS?
Blockchain1 week ago
XRP Price Analysis: 10 April
Blockchain6 days ago
NYSE celebrates historic ‘first trades’ with NFT series
Blockchain6 days ago
By The Numbers: The Rate Bitcoin Must Climb To Reach $100K By July
Blockchain6 days ago
Bitcoin’s time has come: TIME magazine to hold BTC on balance sheet