Distributed ledger databases specific to a single company or consortium. Since only people with permission are part of the system, security and confidentiality are enhanced.
These distributed private ledgers could provide solutions to enterprise problems that public blockchain models can not, such as abiding by certain regulations. In comparison to a public blockchain, in private protocols, only a few people are part of the system, thus making transactions quicker and safer with a more painless consensus process. It is also a highly powerful solution to develop novel cryptography mechanisms and increase auditability in a company's privacy and confidentiality processes.
Private blockchains are usually applied in intrabusiness. They are essentially forks of the original public blockchain but are used by granting permissions. To gain access to this network, one must be invited and then validated by specific rules that were put in place by the network starter. Once inside the network, different nodes/participants might have different permissions to read, write, or audit blocks. The transactions can be viewed and validated by the entity or automatically run with Smart Contracts, depending on the network starter’s decision.
While promising, these private protocols are highly criticized by the blockchain community. As the initial goal of the blockchain was to generate transparent and accountable transactions accessible to all members, private blockchains operate contrary to this prerogative. The fact that private blockchains require permission processes makes the whole process less automated as compared to a public protocol. Many concerns have been raised regarding the widespread use of private blockchains, such as jeopardizing the decentralized aspect at the core of blockchain processes.
Just like email was for a long time a private protocol used mainly by governments, universities, and corporations until the World Wide Web was released, private blockchains might the necessary means by which blockchain becomes widespread and perfected. Some argue that private protocols may stress the democratization process of the blockchain, but others state that by gathering insights in safer and encrypted settings, the blockchain is expected to reach a greater level of development that wouldn't be able in public distributed ledgers. This is crucial to overview and understand the current conflicts inside the blockchain that may cause a future fragmentation of the whole distributed ledger.