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Private blockchains, trusted third parties ?

Blockchains privees

With the exception of the world of cryptocurrencies, blockchain-based applications often remain in the realm of experience. Numerous projects built on public blockchains have never seen the light of day. For their promoters, they have often been failures. Yet many experts predict that blockchains will have their success stories, provided they are seen and used as digital tools and not as pipe dreams to change the world.


In this article, we’ll look at how private blockchains can restore trust in complex systems and enable a new way of sharing information. First of all, let’s review the differences between private and public blockchains.



Private blockchains vs. public blockchains



“Blockchain is the greatest of all computing innovations – the idea of a distributed database where trust is established through mass collaboration and intelligent code rather than a powerful institution controlling authentication and operation.” Don Tapscott, The Blockchain Revolution

Blockchains are storage technologies characterized by three main points:

1. Blockchains are write-only and read-only. Blockchains are often compared to an accounting ledger on which there are no deletions, no corrections, only additions,
2. blockchains are based on a Peer-to-Peer (P2P) model. In other words, blockchains are decentralized. There is no central administrator, and all participants in the blockchain can hold a duplicate,
3. Each new transaction must be validated before being added to the blockchain. Any record added to the blockchain cannot be deleted or modified. Validation is based on a common consensus between participants, and is referred to as mining.


A blockchain is therefore a platform on which applications and information are stored.

  • Blockchains are public when applications and information can be accessed by anyone. Cryptocurrencies, such as Bitcoin and Ether, are public blockchains: any buyer or seller of cryptocurrency interacts with a public blockchain,
  • Blockchains are private when applications and information are accessible only by authorized organizations.

Private blockchains are also less expensive than public ones. In a public blockchain, every transaction must be validated by miners, who are paid a fee of 5 to 10 cents per transaction. Private blockchains, on the other hand, can emancipate themselves from the miners with their own transaction rules. Transaction times on private blockchains are therefore much faster than on public ones.



Private blockchains restore trust in complex systems



Although private blockchains are not accessible to everyone. They nevertheless retain all the characteristics of public blockchains :




Numerous computers and servers store copies of the blockchain. The information and applications contained in the blockchain are not centralized in a single location. As a result, blockchains are protected from the incidents that can befall conventional databases : hacker attacks, fires, natural disasters,




Any organization, company or individual eligible to access the blockchain can instantly consult all the information entered,




Any data written in the blockchain cannot be modified or erased,




All data stored on the blockchain adopts the same format, regardless of its origin.

All these qualities attributed to private blockchains guarantee that records in the blockchain are verified. In other words, they are exactly identical and related to those previously recorded. The blockchain makes it possible to trace the origin of a transaction, or the source of information, block by block.



Can private blockchains make complex systems transparent ?



A complex system is defined as a set of interacting entities whose purpose is to perform a common mission.

In the business world, industry, logistics, finance and insurance are all complex systems. If they prove to be effective in carrying out their main mission, i.e. providing companies and consumers with a range of resources, services and goods, then they will be able to achieve their objectives. During economic, financial or health crises, they are criticized for their lack of transparency. The information that circulates between players is difficult to access.

To improve information sharing, many companies in the finance, insurance and logistics sectors are initiating private blockchains.



The case of Wallmart


Walmart’s example perfectly illustrates this concern for transparency. Following a health crisis in the USA that contaminated over 200 people with e-coli bacteria in 2018. Given the very large number of intermediaries in the supply chain it took over 7 days to trace the source of the contamination. With the blockchain implemented with IBM, this time has been reduced to 2.2 seconds. The condition is that each player in the supply chain feeds traceability information into the blockchain in real time.

The objective of a more transparent supply chain has been achieved.

Blockchains therefore make it possible to meet the need to share data and information within a community of identified partners. Blockchains make it possible to reconcile the sharing of information with the confidentiality of commercial transactions.

Software publishers such as Oracle and IBM now offer BaaS or Blockchain as a Service solutions, enabling companies in the agri-food, automotive and logistics sectors to rapidly deploy solutions for tracing their products using a private blockchain.


Private blockchains optimize information sharing


Within an industry, blockchain enables information to be shared. The immediate benefit is that all the information sought is immediately available, without the need to query the information systems of each actor in the chain. This information is certified as conforming to the initial information. Blockchains do not allow deletions or modifications.

In this sense, blockchains meet the need for information and transparency between business partners. They enable information to be pooled and speed up decision-making times within an industry.


To the question “Can a private blockchain become a trusted third party?”

Today, only the legislator is in a position to provide legitimacy to blockchain technology. Blockchain technology only guarantees access to unaltered information.

If you’re interested in blockchain, take a look at this excellent article on EDI and blockchain. Tenor has been helping its customers implement data management systems for over thirty years. Find out more about our range of services and support.