Private institutions like banks realized that they could use the core idea of blockchain as a distributed ledger technology (DLT), and create a permissioned blockchain (private or federated), where the validator is a member of a consortium or separate legal entities of the same organization. The term blockchain in the context of permissioned private ledger is highly controversial and disputed. This is why the term distributed ledger technologies emerged as a more general term.

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Hey there! I am Sudhir Khatwani, an IT bank professional turned into a cryptocurrency and blockchain proponent from Pune, India. Cryptocurrencies and blockchain will change human life in inconceivable ways and I am here to empower people to understand this new ecosystem so that they can use it for their benefit. You will find me reading about cryptonomics and eating if I am not doing anything else.

Saying that, Interoperability has been the missing link in conquering the obstacles faced by both private and public blockchains by empowering them to interact and exchange values across platforms seamlessly. Developers use of the Gallactic blockchain technology, that allow for private and public blockchains within its eco-system, will drive the potential to combine both public and private blockchains with innovative new solutions, designed to accomplish cross-chain exchange and greater compatibility is the way forward for all parties and their concerns.
Given all of this, it may seem like private blockchains are unquestionably a better choice for institutions. However, even in an institutional context, public blockchains still have a lot of value, and in fact this value lies to a substantial degree in the philosophical virtues that advocates of public blockchains have been promoting all along, among the chief of which are freedom, neutrality and openness. The advantages of public blockchains generally fall into two major categories:
Blockchains that are private or permissioned work similarly to public blockchains but with access controls that restrict those that can join the network, meaning it operates like a centralised database system of today that limits access to certain users. Private Blockchains have one or multiple entities that control the network, leading to the reliance on third-parties to transact. A well-known example would be Hyperledger.
Contrary to popular belief, aided by deceptive blockchain marketing, blockchains are not a good solution for storing data. Each piece of information that you store in the blockchain sits in hundreds or more nodes (more than 100,000 in the case of Bitcoin) making it an extremely costly solution. This is why the Iryo Network doesn’t store data on blockchain but instead, uses blockchain to ensure the transparency of transactions. As a disclaimer, competitors also don’t save medical data on the chain itself (even those who use private chains). Instead, only the fingerprint aspect of a medical record file or a hash is stored on the blockchain.
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Federated Blockchains operate under the leadership of a group. As opposed to public Blockchains, they don’t allow any person with access to the Internet to participate in the process of verifying transactions. Federated Blockchains are faster (higher scalability) and provide more transaction privacy. Consortium blockchains are mostly used in the banking sector. The consensus process is controlled by a pre-selected set of nodes; for example, one might imagine a consortium of 15 financial institutions, each of which operates a node and of which 10 must sign every block in order for the block to be valid. The right to read the blockchain may be public, or restricted to the participants.
“The reason why you put up private blockchains is potentially because you want to have control over the participants in the blockchain. So as we have banks and financial institutions, who have to worry heavily about regulations, they can’t use the public blockchains right now because they are open and permission-free, and anyone can participate, and that’s contradictory to the regulations to which they must abide.
^ Jump up to: a b c d Bhaskar, Nirupama Devi; Chuen, David Lee Kuo (2015). "3 – Bitcoin Mining Technology". In Cheun, David Lee Kuo. Handbook of Digital Currency: Bitcoin, Innovation, Financial Instruments, and Big Data. Academic Press. pp. 47–51. ISBN 978-0-12-802117-0. Archived from the original on 25 October 2016. Retrieved 2 December 2016 – via ScienceDirect.
We use node 2 to receive a payment of 200 via the smart contract function, receivePayment(). Note that the receivePayment() function can accept a second parameter for the account address that is used to create this transaction. (Note that you can also set web3.eth.defaultAccount = "<…account address…>", after which you can just call receivePayment(200) with one parameter.)
Fully private blockchains: a fully private blockchain is a blockchain where write permissions are kept centralized to one organization. Read permissions may be public or restricted to an arbitrary extent. Likely applications include database management, auditing, etc internal to a single company, and so public readability may not be necessary in many cases at all, though in other cases public auditability is desired.
The Loom Network recently released their SDK which supports what they call “Dappchains,” an Ethereum layer-2 sidechain solution with each sidechain comprised of their own DPoS consensus mechanism. This enables highly scalable dapps, specifically games built using their tools. Loom emphasizes the earlier comment about sidechains enabling innovation in scalability, rather than providing it directly. Loom’s sidechains have their own set of rules and are used to offload computation from the primary Ethereum chain. Their sidechains are application-specific, meaning that they enable highly scalable dapps through an efficient consensus mechanism and can periodically be settled on the main Ethereum chain depending on their security needs. You can find more information on their model here.

The block time is the average time it takes for the network to generate one extra block in the blockchain.[27] Some blockchains create a new block as frequently as every five seconds.[28] By the time of block completion, the included data becomes verifiable. In cryptocurrency, this is practically when the transaction takes place, so a shorter block time means faster transactions. The block time for Ethereum is set to between 14 and 15 seconds, while for bitcoin it is 10 minutes.[29]
Using Rootstock as an example, in order to transfer assets from one chain to the other a user on the parent first has to send their coins to a special output address where they will consequently become locked and un-spendable. Once the transaction is completed, SPV then confirms it across the chains and after waiting out a contest period, which is just a secondary method to help prevent double spending, the equivalent amount will be credited and spendable on the Sidechain and vice versa.

“Not only is decentralization, open protocols, open source, collaborative development and living in the wild a feature of Bitcoin, that’s the whole point. And if you take a permissioned ledger and say, that’s all nice, we like the database part of it, can we have it without the open decentralized P2P [peer-to-peer] open source non-controlled distributed nature of it, well you just threw out the baby with the bathwater.” 
Blockchain-based smart contracts are proposed contracts that could be partially or fully executed or enforced without human interaction.[55] One of the main objectives of a smart contract is automated escrow. An IMF staff discussion reported that smart contracts based on blockchain technology might reduce moral hazards and optimize the use of contracts in general. But "no viable smart contract systems have yet emerged." Due to the lack of widespread use their legal status is unclear.[56]
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