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Public Versus Private Blockchains – Right Model For Your Needs

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Blockchains are decentralized and distributed ledgers that can record any information including financial transactions across a network of computers.

A block is an information system that holds a group of transactions or recordings in chronological order and is connected to other blocks, forming a chain. Hence, the name of the technology is ‘blockchain.’

Cryptocurrencies – functioning on blockchains – serve as digital currencies to record and execute transactions.

Cryptocurrencies or ‘digital currencies’ are specific applications of blockchain technology, which are decentralized ledgers recording various transactions.

Understanding The Blockchain Technology

Blockchain is a novel and promising technology that promises to revolutionize the industry of finance and other sectors such as logistics, databases and many more.

Blockchain stands upon three main pillars or principles – decentralization, transparency and superior security.

With blockchain technology powering digital currencies such as Bitcoin and Ethereum, it is possible to transact money without middlemen such as banks or any other financial institutions.

To achieve this, blockchain technology employs a trustless consensus mechanism.

The consensus mechanism is a computer code that does not require humans to trust the counterparty when sending or receiving digital currencies called, ‘coins.’

These coins are called cryptocurrencies, as the blockchain is protected using cryptographic hashing.

Let’s delve into the fundamental principles of blockchain technology.

Decentralization

Blockchain operates on a network of computers called, ‘nodes,’ and each of them holds the same copy of the ledger with recordings of transactions.

They compare their copies of blocks to reach a consensus and quickly identify any inefficiencies or fraud, making it almost impossible to hack the network.

As a result, the entire blockchain isn’t under the control of a single entity – instead, consensus on transaction validity is achieved through the majority of nodes.

Decentralization is a cornerstone of all public blockchain networks, as it eliminates the need for a central governing entity.

Transparency

All the information about transactions on the blockchain is visible to all participants in the network.

Once a block is added to the chain, it becomes immutable – meaning no one can modify it.

This ensures that information is transparent and nothing is hidden or can be changed to manipulate the information. No one can delete any information from the blockchain either.

Security And Consensus Mechanism

Blockchain technology employs cryptographic techniques to ensure the security of transactions.

The chain is resistant to fraud and tampering because of these hashing algorithms.

Adding a new block to the chain is only possible if nodes on the network all agree that the transaction is valid.

Consensus mechanisms vary depending on the algorithms. The most popular consensus mechanisms are POW (proof-of-work) and POS (proof-of-stake).

Bitcoin uses the POW mechanism while Ethereum, which is the second most popular cryptocurrency, uses the POS mechanism.

Public Blockchains

Public blockchains are decentralized networks where transactions are transparent and visible to all participants or non-participants using specialized tools.

The key difference between public and private chains is their availability.

Public blockchains allow global participation and various consensus mechanisms for security and are often associated with cryptocurrencies such as Bitcoin and Ethereum.

Private networks do not allow participation to anyone and are exclusively given by the group that operates the network.

Decentralization is the key feature of all public blockchain networks, allowing anyone to download and run the node with a copy of all blocks.

The majority of altcoins are public blockchains, including Litecoin, Bitcoin Cash, Ethereum Classic and many more.

Read Also: JPMorgan’s Ambitious Expansion With JPM Coin In Blockchain Transactions

Private Blockchains

Unlike public blockchain networks, private blockchains are centralized networks where access is restricted to authorized participants.

Private blockchains are usually operated by specific organizations or groups of people and prioritize privacy, efficiency and control governance.

These characteristics make private blockchains suitable for enterprise applications, supply chain management, consortiums and more.

Some popular private blockchains include Hyperledger Fabric, R3 Coda, Quorum, Multichain and many more.

Factors To Consider When Choosing

Before deciding which type of blockchain suits your needs, several factors need to be considered.

Security Requirements

The sensitivity of the data that needs to be recorded and saved on the blockchain is the main concern for deciding which type of blockchain to choose.

If the information is confidential, then a private network may be considered. Understand the impact of the potential impact of data exposure, unauthorized access or tampering.

Personal information and financial information are highly sensitive data you do not want to expose to anyone else.

These types of data usually require stronger security measures and high levels of privacy.

Government And Control

Governance defines who oversees the network and involves deciding on centralization or decentralization desired.

Public chains have no central authority and are fully decentralized, allowing public participation. Private blockchains offer more centralized control, restricting access to authorized entities.

Companies and organizations will mostly choose private blockchains to ensure the sensitive data is not exposed to outside parties, ensuring integrity and a seamless decision-making process.

Scalability Needs

Another crucial part before deciding on your preferred type of blockchain network is to consider the current and future growth expectations of blockchain applications.

The blockchain will have to handle increasing transaction volumes efficiently, and it is critical to ensure that blockchain can accommodate growth without compromising performance or transaction speeds.

Well-developed and maintained private networks can be super-efficient with high speeds and low costs, while public blockchains are usually slower and require transaction fees but are more secure.

Conclusion

Blockchains are amazing new ways of conducting financial transactions without middlemen, ensuring decentralization, security and transparency.

Public blockchains are open to anyone who wants to participate and offer the availability of information.

Private blockchains are networks that are controlled not by the public but instead by groups of people or organizations.

Private blockchains are perfect for organizations to ensure sensitive data is not exposed outside the company.

The choice between private and public blockchain depends on the needs and purposes of the user. The main considerations include security, data privacy, scalability and efficiency.

Ultimately, it all comes down to the personal needs of the user, and both can be very useful and efficient.



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Cryptocurrency

Cryptocurrency Market Update: Bitcoin Slips Below $70,000 Amidst High Liquidation

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In a swift turn of events, Bitcoin (BTC), the pioneering cryptocurrency, dropped below the $70,000 threshold early on Wednesday following a wave of investor sell-offs. Just a day prior, Bitcoin had crossed the $71,000 mark, but market sentiment swiftly shifted, dragging other major altcoins—including Ethereum (ETH), Dogecoin (DOGE), Ripple (XRP), Solana (SOL), and Litecoin (LTC)—into the red zone.

According to CoinMarketCap data, the overall Market Fear & Greed Index stood at 75 (Greed) out of 100, indicating a mix of optimism and apprehension among traders. Notably, the Bittensor (TAO) token emerged as the top gainer with a remarkable 24-hour surge of over 7 percent, while dogwifhat (WIF) experienced the largest loss, plummeting nearly 16 percent.

Bitcoin (BTC) Price Update Bitcoin’s price tumbled to $69,089.01, marking a 24-hour dip of 3.05 percent, as reported by CoinMarketCap. On the Indian exchange WazirX, BTC was priced at Rs 60.93 lakh.

Other Major Cryptocurrencies Ethereum (ETH) saw a 24-hour loss of 4.81 percent, trading at $3,508.86, while Dogecoin (DOGE) registered a dip of 5.59 percent, currently priced at $0.1879. Litecoin (LTC) and Ripple (XRP) also experienced losses, with Solana (SOL) marking a 24-hour loss of 3.44 percent.

Top Gainers and Losers Bittensor (TAO) led the pack of gainers with a 7.30 percent surge, while dogwifhat (WIF) suffered the most significant loss, dropping by 15.58 percent.

Market Analysis and Expert Insights Experts weighed in on the market scenario, attributing Bitcoin’s downturn to heightened liquidations and cautious sentiment ahead of the upcoming US CPI data release. While Bitcoin’s immediate support rests at $67,700, resistance is expected at $70,400. Ethereum proponents face challenges amid hopes for an ETF approval, with the SEC providing limited updates on the matter.

Final Thoughts The cryptocurrency market remains highly dynamic, with prices fluctuating rapidly and investor sentiment playing a pivotal role. As the market navigates through volatility, it’s essential for investors to stay informed, exercise caution, and seek expert advice before making any investment decisions.

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Cryptocurrency: A Scapegoat for Foreign Policy Failures?

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Cryptocurrency has once again found itself at the center of a heated debate, this time regarding its alleged role in facilitating illicit activities and circumventing sanctions imposed by the United States. The Biden administration, in particular, has come under scrutiny for its handling of the issue, with some accusing it of using digital assets as a convenient scapegoat for broader foreign policy shortcomings.

In a recent hearing before the Senate Banking Committee, Deputy Treasury Secretary Wally Adeyemo raised concerns about the misuse of cryptocurrencies by foreign adversaries such as Iran, Russia, North Korea, and militant groups like Hamas. Adeyemo’s remarks underscored a growing unease within the U.S. government regarding the potential national security implications of unregulated digital currencies.

However, voices from within the cryptocurrency industry and Congress have pushed back against the administration’s narrative. Faryar Shirzad, Chief Policy Officer at Coinbase, one of the leading cryptocurrency exchanges, pointed out that the prevalence of illicit activity in the crypto space is relatively low compared to traditional finance. Instead of demonizing cryptocurrencies, Shirzad argued, the focus should be on targeting bad actors operating offshore.

Senator Tim Scott, the ranking Republican on the Senate Banking Committee, echoed these sentiments, accusing the Biden administration of using digital assets as a distraction from its failure to effectively combat financial flows to sanctioned entities. Scott’s criticism reflects broader skepticism among some lawmakers about the government’s approach to regulating cryptocurrencies.

One area of potential agreement between the Biden administration and the cryptocurrency industry is the need for clearer regulations governing stablecoins, a type of digital asset pegged to a fiat currency like the U.S. dollar. Both sides recognize the importance of addressing the potential risks associated with stablecoin issuance and usage, particularly in the context of national security and financial stability.

The debate over stablecoins has intensified following reports of their alleged role in facilitating illicit transactions, including those linked to Russia’s war effort in Ukraine. The Treasury Department has called for increased oversight of stablecoin issuers and transactions, while also advocating for legislation that would subject them to stricter regulatory standards.

Despite the contentious nature of the discussion, there are signs of bipartisan cooperation on certain aspects of cryptocurrency regulation. A bipartisan bill addressing stablecoin regulation passed the House Financial Services Committee last year, signaling a potential path forward for legislative action in this area.

As the debate over cryptocurrency regulation continues to unfold, it is clear that finding the right balance between innovation and security will be paramount. While concerns about illicit activity and national security must be addressed, policymakers must also recognize the potential benefits of cryptocurrencies in fostering financial inclusion and technological advancement.

Ultimately, the resolution of these issues will require thoughtful collaboration between government officials, industry stakeholders, and lawmakers to develop a regulatory framework that promotes innovation while safeguarding against misuse. Only through constructive dialogue and cooperation can we ensure that cryptocurrencies fulfill their potential as a force for positive change in the global economy.

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Bitcoin Resurgence: Why Wall Street Is Embracing the Crypto Revolution

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Andrew Pratt of Wiser Wealth Management in Marietta, Ga., finds little resistance as he proposes Bitcoin investments to his firm’s committee. With Bitcoin surging 140% in the past year and backed by giants like BlackRock, skepticism has waned. Pratt sees the potential to allocate a modest 1% of client portfolios to Bitcoin, acknowledging the limited downside risk compared to potential gains.

The debate over Bitcoin’s intrinsic value seems to have lost its relevance amidst its soaring market performance. Once dismissed, Bitcoin now boasts a market value of $1.3 trillion, driving the total crypto market to $2.5 trillion. Wall Street, once wary, now views cryptocurrency as an opportunity for profit rather than a speculative venture.

Despite lingering doubts about Bitcoin’s utility beyond speculation, Wall Street executives are increasingly supportive. BlackRock’s CEO, Larry Fink, notably reversed his stance, endorsing Bitcoin’s long-term prospects and championing the iShares Bitcoin Trust, now one of the largest Bitcoin ETFs with nearly $18 billion in assets.

While skepticism persists about Bitcoin’s status as a real asset or currency, its growing acceptance on Wall Street underscores the evolving landscape of finance. As institutions embrace cryptocurrencies, Bitcoin’s journey from pariah to portfolio asset highlights the transformative power of digital assets in reshaping traditional investment strategies.

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