Public blockchains have become a cornerstone of the rapidly evolving digital asset ecosystem. The rise of Ethereum's ecosystem, DeFi, GameFi, the metaverse, NFTs, and cross-chain interoperability has been staggering, but a significant portion of this innovation is built upon the foundation of public blockchains. This guide explains what a public blockchain is, differentiates it from other types, and explores several major cryptocurrencies and blockchain projects worthy of research.
What is a Blockchain?
Before we delve into public blockchains, it's essential to understand the underlying technology: blockchain itself.
The Origin of Blockchain
The concept of blockchain was first introduced by Satoshi Nakamoto in a 2008 whitepaper. Its core principle is decentralization, proposing a system that operates without reliance on a trusted central authority, like a bank.
This technology enables direct peer-to-peer transactions. Every transaction is recorded on a public, transparent, and immutable ledger, visible to all participants.
How Blockchain Operates
A blockchain is a distributed database that links groups of transactions (blocks) together in a chain using cryptography, mathematics, and complex algorithms. It creates a peer-to-peer network that forms a self-governing, decentralized system.
Bitcoin was the first application of this technology—a decentralized, transparent digital currency operating on a distributed ledger.
In the Bitcoin blockchain:
- A new transaction is broadcast to the network of nodes.
- Nodes collect unverified transactions into a new block.
- Nodes compete to validate this block using the Proof-of-Work (PoW) consensus mechanism, which requires significant computational power.
- The first node to successfully validate the block broadcasts its proof to others for confirmation.
- Once confirmed, the block is permanently added to the chain.
- The process repeats for the next set of transactions.
This ever-growing chain of blocks, stored on countless computers worldwide, forms the immutable and decentralized ledger.
Common Blockchain Consensus Mechanisms
While Bitcoin and the current version of Ethereum use PoW, its drawbacks—high energy consumption, inefficiency, and scalability issues—led to the development of Proof-of-Stake (PoS).
In a PoS system, validators are chosen to create new blocks based on the amount of cryptocurrency they "stake" or lock up as collateral. This method is far more energy-efficient and is the basis for most modern public blockchains. Ethereum itself is transitioning to a PoS consensus mechanism.
👉 Explore real-time blockchain analytics tools
What is a Public Blockchain?
A Public Blockchain (or Public Chain) is a permissionless and open-source decentralized network. Its data is transparent; anyone can use a wallet address to conduct transactions and view the entire transaction history.
On a public chain, anyone can participate as a node. These nodes work together, using a consensus mechanism, to validate transactions and secure the network. For example, to send Bitcoin, you don't need to create an account or get permission from a bank. You only need a wallet address, and the transaction is verified by the collective network.
This gives public blockchains two defining characteristics:
- Decentralization: No single entity can control or alter the network's rules or data.
- Security: The network's security and integrity are maintained by a distributed set of nodes.
Applications of Public Blockchains
The advent of Ethereum expanded the use of blockchains far beyond simple ledgers. By introducing smart contracts—self-executing contracts with the terms directly written into code—Ethereum enabled developers to build complex decentralized applications (dApps).
This innovation spurred an explosion of dApps, including DeFi protocols, NFT marketplaces, and play-to-earn games. However, this growth exposed Ethereum's limitations: network congestion, slow transaction speeds, poor scalability, and high gas fees.
These challenges created an opportunity for new public blockchains to emerge, often called "Ethereum killers," like Solana and Avalanche, which aimed to solve these problems while maintaining security and decentralization.
Public vs. Private vs. Consortium Blockchains
Blockchain technology can be configured in different ways to serve various purposes. The three primary types are:
Private Blockchain
A Private Blockchain is a restricted, permissioned network. It is typically used by a single company or organization where data privacy is paramount. Participation is invite-only, and a central authority controls the network. While it uses a distributed ledger, it is a centralized system. Examples include various internal enterprise solutions.
Consortium Blockchain
A Consortium Blockchain (or Federated Blockchain) is a hybrid model. It is permissioned and governed by a group of organizations rather than a single entity. This B2B architecture allows for collaboration between businesses or governments, improving efficiency and reducing costs while maintaining a degree of decentralization. Examples include Hyperledger Fabric and R3 Corda.
Comparison Table
| Feature | Public Blockchain | Private Blockchain | Consortium Blockchain |
|---|---|---|---|
| Access | Permissionless | Permissioned | Permissioned |
| Decentralization | High | Low | Partial |
| Efficiency (Speed) | Slower | Faster | Faster |
| Transparency | Fully Transparent | Opaque | Customizable |
| Immutability | Full | Partial | Partial |
| Primary Use Case | Cryptocurrencies, dApps | Internal Auditing, Data Management | Inter-organizational Collaboration (B2B) |
| Examples | Bitcoin, Ethereum | Various Enterprise Chains | Hyperledger Fabric |
Major Public Blockchains and Their Cryptocurrencies
Here are some of the most prominent public blockchains and their native cryptocurrencies that are shaping the ecosystem.
Bitcoin (BTC)
The original blockchain, Bitcoin created the concept of a decentralized digital currency. It remains the largest cryptocurrency by market cap and is often referred to as "digital gold"—a store of value.
Ethereum (ETH)
Ethereum introduced smart contracts, launching the wave of dApps and DeFi. It is the foundation for most of the crypto ecosystem and is undergoing a major upgrade (Ethereum 2.0) to transition to PoS and improve scalability.
Binance Smart Chain (BSC) - BNB
Built by the crypto exchange Binance, BSC is compatible with the Ethereum Virtual Machine (EVM) but uses a PoS model for faster and cheaper transactions. Its native token, BNB, is used to pay for transaction fees.
Solana (SOL)
Solana is designed for high throughput, claiming to process tens of thousands of transactions per second with extremely low fees. It aims to solve the blockchain trilemma of achieving scalability, security, and decentralization simultaneously.
Avalanche (AVAX)
Avalanche is known for its incredibly fast transaction finality and high throughput. It consists of three integrated blockchains and uses a novel consensus protocol. Its native token is AVAX.
Polkadot (DOT)
Polkadot is a "blockchain of blockchains" (parachains) that enables different networks to interoperate and share security. Its goal is to create a fully decentralized web where users are in control.
Polygon (MATIC)
Polygon is a "layer-2" scaling solution for Ethereum. It provides faster and cheaper transactions by processing them on a sidechain before eventually settling them on the Ethereum mainnet, thus leveraging Ethereum's security.
Other significant projects include Cardano (ADA), Flow (FLOW), and Cosmos (ATOM), each with unique approaches to improving blockchain technology.
Frequently Asked Questions
What is the main advantage of a public blockchain?
The primary advantage is its trustless and transparent nature. It operates without a central authority, is open for anyone to use and verify, and is highly resistant to censorship and tampering.
Can public blockchains be hacked?
While the underlying cryptography of major blockchains like Bitcoin is extremely secure, surrounding ecosystems can be vulnerable. Smart contract bugs, exchange hacks, and phishing attacks are common risks, but the core blockchain networks themselves have proven to be very resilient.
What is the difference between a coin and a token?
A coin (like BTC or ETH) operates on its own native blockchain. A token is built on top of an existing blockchain (like ERC-20 tokens on Ethereum) and relies on its host chain's security and infrastructure.
Why are there so many different blockchains?
Different blockchains are designed with different trade-offs in mind. Some prioritize security and decentralization (Bitcoin), others prioritize scalability and speed (Solana), and some focus on specific use cases like NFTs (Flow). This competition drives innovation across the entire industry.
How do I choose which cryptocurrency to invest in?
Thorough research is essential. Understand the project's purpose, the team behind it, its technology, its use case, and its community. Never invest more than you can afford to lose, as the market is highly volatile.
What is the future of public blockchains?
The future likely points toward a multi-chain ecosystem where numerous blockchains specialize in different tasks but can seamlessly communicate and transfer value between one another through advanced cross-chain interoperability protocols.