One of the overriding ideals of cryptocurrency is decentralization, which makes how to govern a blockchain an important topic: who can make transactions on the blockchain, who can see those transactions, and who gets to decide? There are any number of different methods of governance, but they all fall into two categories: public and permissioned.
A public blockchain is open to anyone. On a public blockchain, anyone has access and can make transactions. Anyone can publish smart contracts. Anyone can run a node, and everyone can see the transactions on the ledger. Public blockchains are preferable for peer-to-peer networks to give security to the money and personal information of people transacting on them. The most famous example of a public blockchain is Bitcoin.
A permissioned blockchain is controlled by a central entity or group of people. On a permissioned blockchain, the governing body decides who is allowed to access the blockchain and which transactions are verified, also which parties can verify transactions. Permissioned blockchains are preferable for ledgers that require the immutability of the blockchain while restricting access to the blockchain to vetted parties. The most notable permissioned blockchain is Facebook’s Libra coin.
Depending on the purpose of the blockchain, the creators will choose either public or permissioned. Now that you understand the difference between the styles of governance, you should have a solid understanding of blockchains in general. In the next lesson, we’ll focus specifically on Bitcoin. Most people in the cryptocurrency space tend to see Bitcoin as the most important, not only because it is was the first, but also because of its robust nature and how, in terms of size, it dominates the space.