Private Blockchain: Enhanced Security for Businesses


Swati Kumari

Nov 29, 2023

In 2009, when the blockchain hit the world, with the release of its first Bitcoin cryptocurrency application, it was tough in the earlier days for PC hackers. They used a decentralized, P2P architecture that let anyone participate, making it too risky for business use.

With time blockchain technology has undergone a rapid evolution in its functionalities and applications since the advent of Bitcoin. In a world where finance and technology influence the whole environment, digital investments have emerged as a fascinating choice.

In 2016, a burgeoning open-source community developed a complete enterprise private blockchain platform that includes the Ethereum programmable blockchain.

In recent days, Ethereum and Bitcoin have given rise to a new era of financial possibilities with an incredible return and thrown the traditional markets into confusion. The demand for blockchain technology has rapidly grown in many new areas. Companies are increasingly exploring blockchain’s many applications and how they can solve their business problems.

If we compare the three blockchains, private ones are increasingly used for dapp implementation. While we take into consideration that public blockchains offer many advantages over other types of blockchains.

What is a Private Blockchain?

Private blockchains, also known as managed blockchains, are authorized blockchains operated by a single entity. They are exclusively accessible to a small number of users instead of the general public.

They follow and contain all compliance standards in their ecosystem to make transactions simple and smooth.

Now talking about the definition of blockchain, they are based on distributed ledgers, which have existed at the enterprise level for many years to manage user data by using many private blockchain platforms. Among the public, blockchain became more popular because of the rise in interest in cryptocurrency.

Explained Private Blockchain | What is the private blockchain | Arramton

When it comes to network sharing, businesses need greater levels of privacy due to confidential data. For this concern, a private blockchain is the ultimate solution.

It includes Ripple (XRP), a business-to-business virtual currency exchange network i.e., currency like bitcoins, and hyperledger development services.

Usually, business organizations use private blockchains to communicate data and information to a targeted audience while building network control. The reason behind this is private blockchains are not open to the public, only specific and authorized participants can access them.

They are primarily divided into three categories- public, private, and permissioned blockchains. Public blockchains allow anyone to access them, private blockchains are closed to only selected users.

When we talk about permissioned blockchains are a hybrid of public and private blockchains where anyone can access them as long as they have permission from the administrators.

Before diving into the topic, we need to understand how private blockchain actually works and what is the best example of private blockchain.

Private Blockchain Technology For Business | Arramton

How does Blockchain Work?

Blockchain is a database technology with certain features that are actually not unique but at the same time it collectively produces a technological breakthrough in how digital information is stored, verified, and exchanged or transformed.

How does Blockchain Work? | Arramton

One should keep certain points in mind before considering how private blockchains operate:

» Private blockchain always needs permission from authorized users, who can join the network and participate in transactions.

» Every transaction on a private blockchain is verified and then added to the ledger with the support of a consensus mechanism. By doing this it ensures that all users in the private blockchain agree on the status of the blockchain.

» The mechanism used by private blockchains varies and depends on private blockchain platforms and the business requirements too.

» It also offers greater flexibility, customization, and control over the networks’ rules and operations than public blockchains. And it makes them more versatile and adaptable for businesses.

In general, private blockchain platforms are secure and customizable ways for many businesses to share data and information among specific categories of people while maintaining control over the network at the same time.

Benefits of Blockchain for Businesses

A private blockchain can help businesses to build trust across their networks. Let’s have a look at the benefits of private blockchain for businesses:


When it comes to businesses, their first priority is to protect sensitive information related to their customers and businesses as well. A private blockchain is called one of the most secure technologies as it ensures that data is tamper-proof, traceable, and trustworthy.

Businesses that set up private blockchains for setting up permissioned networks and restrict the visibility for other participants of the users of the network. Anything that is recorded can never be deleted, which later helps the businesses and ensures data safety.

The feature of restricting access for limited participants reduces the likelihood of outsider attacks on the data.

Data Protection

The blockchain owner can have access to the network as well as the participants’ visibility. Businesses relying on private blockchain adoption can make sure that they know who they’re dealing with and also ensure unauthorized users won’t access sensitive transaction data.

The blockchain owner can have access to the network as well as the participants’ visibility | Arramton

For security reasons, private blockchains keep the information for authorized participants only. It offers a high level of privacy for any business and this is one of the main reasons for businesses to implement blockchain technology.


Private blockchains are faster and can process a high number of transactions per second because they allow a limited number of participants in the private blockchain network.

rivate blockchains are faster and can process a high number of transactions per second | Arramton

Talking about Hyperledger Fabric is highly related to the smart contract design and the data model. The transactions are fixed with smart contracts that increase the efficiency and speed of the transactions every second.


While implementing new technology, the main concern is about scalability. The challenge faced in scalability is regarding transaction speed actually depends on the size of the ecosystem.

While implementing new technology, the main concern is about scalability | Arramton


Businesses most often choose Hyperledger Fabric as it is flexible and business-oriented. Some of the main features like a system of permissions, modularity, and unlimited possibilities of network configuration, as well as high performance with strong data consistency are designed specifically for business needs.

Example of Private Blockchain

There are many examples of private blockchains that are used by business organisations. As blockchain technology is growing many industries will explore and create a private blockchain in order to fulfil specific business needs and improve efficiency and security. It will enable businesses to improve data sharing and also improve the beliefs of the stakeholders.

Let’s have a look at some examples of private blockchain and their applications before talking about how to create a private blockchain:

Hyperledger Fabric

Hyperledger Fabric is one of the prominent examples of a private blockchain framework that is used as a foundation to develop blockchain-based applications or networks. They prioritize several key features like privacy, scalability, modularity, and channels as a part of their architecture.

Hyperledger Fabric is one of the prominent examples of a private blockchain framework | Arramton

For example, the IBM blockchain platform is a distribution of Hyperledger Fabric, which includes 24*7*365 support of open-source solutions with service-level agreements that can create a private blog.

It comes with an advanced set of productivity tools for building, governing, and operating blockchain solutions. The private blockchain platform enables trusted data transfer and exchange and workflow automation behind the limits of distributed ledger technology and blockchain.


Corda allows the building of interoperability blockchain networks that transact in restricted privacy. It also allows businesses to develop shared IT solutions using JVM-based technologies which is very secure.

Corda allows the building of interoperability blockchain networks that transact in restricted privacy | Arramton

It only distributes data to those who need it, i.e., authorized users instead of showcasing it globally. Corda provides transparent models where objects of only relevant transactions are shared with the users who need to know about the transaction.


The information on the financial sector is handled by more than one organisation which makes them suffer from a lack of transparency, information control, and security. Quorum is a system that provides private control on the blockchain through automation which can be personalised as per the needs.

Quorum is a system that provides private control on the blockchain | Arramton

This private blockchain platform is way faster than Bitcoin and Ethereum and it can carry more than 150 transactions per second. Many large businesses use quorum in order to eliminate transaction pricing, better privacy, and better asset management.

Private Blockchain Use Cases

As per the time, if we look at the various industrial sectors there are many examples that highlight the uses of private blockchains. If we focus on how to create a private blockchain, it is actually created in a way where it can be typically used by organisations that require a high degree of organisational control over their blockchain network and data.

With the growing risk of data breaches and theft of user data by hackers, organizations want to ensure that only authorized users or parties can participate in the network.  With this, let’s see some private blockchain use cases for better understanding.

Supply Chain Management

The blockchains are used to track the activity through a supply chain. It provides a secure and transparent record of each transaction. This helps in preventing fraud, increasing the efficiency of the organization, and improving the supply chain visibility.

Supply Chain Management | Arramton


Private blockchains are used for various businesses in the financial sectors, such as across-the-border payments, trade finance, and settlement systems. The blockchains offer faster transaction speeds, lower costs, and increased transparency compared to old financial systems.


Private blockchains can be used to store and transfer patient data with security, and those data will only be accessible to authorized persons. This will help in improving the quality of care of the patient along with the security and also reduce costs associated with redundant testing and treatments.


These private blockchains can be used by the government as well for various applications. Applications used for voting systems, and identity verification. The blockchain provides secure and tamper-proof records of the people or the citizens which cannot be manipulated by anyone.


The craze for games is increasing among the youngsters. Be it a 5-year-old kid, or a 25-year-old youngster, everyone is influenced by the games available on their devices. But what about the security of their data which they provide while verifying themselves for the application?

For this, you can rely on private blockchain platforms that can be used to create secure and transparent gaming platforms. Players or users can trust that the games are fair and the details filled by them are secure. Their winning will be paid out in a timely and secure manner.

Intellectual Property

Copyrights and patents are confidential data that need to be secured. Private blockchains play an important role in safeguarding these data and providing secure ownership and licensing management platforms at the same time.


Insurance companies like health insurance companies or vehicle insurance may collect some crucial data about the user. Private blockchains facilitate automated claims processing and also improve data accuracy with security and fraud detection.

Insurance companies like health insurance companies or vehicle insurance | Arramton

Real Estate

A private blockchain can enhance property transactions and ensure efficient property management securely.

How to Create a Blockchain Network From Scratch

Let’s focus on how to create a blockchain network. There are actually two ways to build a blockchain for creating a private blog:

» The easiest way to create a blockchain network is to use a pre-built blockchain from open source like Ethereum, Fabric, EOS Cardano, etc. Using these pre-built blockchains you don’t have to deal with a core engine that is difficult to implement.

» If using a pre-build blockchain also doesn’t fit your requirements, then you need to build the blockchain from scratch or you can even modify or improve the existing blockchain open-source code.

It’s time to create a first basic blockchain with us in a go. The following steps will help you to understand the concepts better. Let’s complete the process in a few steps itself:

Step 1: Identify a suitable private blockchain use case for your network

In the future, blockchain technology will transform the method of transactions. The aspiring private blockchain developers must be qualified and capable of comprehending it. So before creating your own private blockchain, you need to figure out a business use case in order to know your business motive.

Identify a suitable private blockchain use case for your network  | Arramton

There are 3 things that blockchains can do:

» Data Authentication and verification to create a private blog

The Blockchain networks store data and information in a format that includes fixed storage, digital signatures, and encryption. The private blockchain can be used to create and verify digital signatures.

» Smart Asset Management

In this retirement, exchange, escrow everything is included. Real-world assets like gold, silver, and oil are labeled.

» Smart Contracts

Smart contracts are used for executing digital agreements and eliminate the chance of losing the contracts.

Step 2: Pick out the most suitable agreement mechanism

Depending on your private blockchain use case, you should select the appropriate consensus mechanism.

In recent days, the distributed ledger systems include Proof of Stake, Deposit-based agreements, Proof of elapsed time, derived PBFT, and delegated proof of stake, among others.

Step 3: Know about the most appropriate private blockchain platforms

There are numerous distributed ledger systems available that are free and open source. You can opt for the most suitable blockchain platform based on the agreement algorithms and mechanism that you have selected in step 2.

How to choose best platform for private blockchain | Arramton

Step 4: Designing the Nodes

A land registration managed by the government, or permission-less, Bitcoin Blockchain, where the user can become a miner, and the blockchain systems can be permissioned.

The other thing is whether the nodes will run on the cloud or not. After which the hardware configuration issues like processors, memory, and disc space to considered. You must select the base operating systems that can be used as a foundation. These are usually Ubuntu, CentOS, Debain, or Windows.

How to Designing the Nodes | Arramton

Step 5: Design the Blockchain

The blockchain platforms require carefully planned configuration for the elements like:

» Permissions

» Asset issuance

» Asset re-issuance

» Atomic exchanges

» Key management

» Numerous digital signatures

» Parameters

» Native assets

» Format of address

» Key Format

During the runtime, there are chances that other parameters may be updated.

Step 6: Building the APIs

Some private blockchain platforms have pre-build APIs, whereas others might not have one. The most common APIs that private blockchain developers need for the development of projects are:

» Creating addresses and pairs of key

» Acting in audit-related activities

» Verification of data using hashes and digital signatures

» Retrieval of data

» Smart asset lifecycle management

» Smart contracts

Some private blockchain platforms have pre-build APIs, whereas others might not have one | Arramton

Step 7: Format of the Admin and UI (User Interface)

You need to decide on the front end and languages for the programming at this step. At the same time, you need to choose external databases and servers which include Web Servers, FTP servers, and mail servers as well.

Format of the Admin and UI (User Interface) | Arramton

Step 8: Adding Future Tech

Keeping in mind future requirements, integrating AI, chatbots, biometrics, containers, data analytics, IoT services, and ML into a private blockchain system might increase its power.

future of blockchain technology | Arramton

When private blockchain technology is implemented correctly it will assist society in addressing a variety of pressing concerns. When they first appeared in the market, business people hailed it as a worldwide solution. Blockchain technology has the potential to improve almost all these fields.

private blockchain technology for your business | Arramton

Being tamper-proof due to private blockchain uses, the blockchain is most suitable for applications where it is required to have a “see-through source of truth”. Companies can use it to achieve data privacy and control over sharing crucial information while collaborating with external business partners.

The main outcome of blockchain is that it emphasises enabling trust between the user and the business. When a large number of parties are involved, private blockchain platforms work best.

Emphasising how to create a private blockchain, usually a private blockchain development company creates a community inside a business or sector that enlightens the possibilities that can help in building trust between businesses by allowing authorised persons involved to work out the standard and norms that explain the question of how to create a private blockchain.

Private blockchain is still a developing technology with no regulation. You can go for a private blockchain development company if you don’t want to learn everything and create a private blog.

Nowadays, private blockchain developers are professionals who build and develop software for the blockchain which is also called decentralised apps. Our skilled private blockchain developers can help you through the entire process of creating a private blockchain. By defining the aim and use case of deploying the platforms, you can get a user-centric approach to blockchain development.

Frequently Asked Questions

Q1. How to create a private blog?

Ans. The core logic behind creating a blockchain is as follows:

Step 1: Select the protocol. You need to select a blockchain framework.

Step 2: Build the core logic to create a private blog. You can modify the existing logic

Step 3: Hosting and developing the logic and finalizing the file storage for your blockchain.

Step 4: Testing, Once the DevOps phase i.e., Step 3 is over, you can launch your test network.

Step 5: Detect the issue, resolve it and you are set to launch the main network.

Step 6: Integrate your faucet, and block explorer, and you are ready to go with the private blockchain network.

Q2. How much does it cost to create a private blockchain platform?

Ans. It depends upon the blockchain app or platform type and as per the complexity, the cost to create a private blog may vary. It can cost up to $40,000 to $300,000 with a time frame from 3 to 9+ months.

Q3. Are private blockchains free?

Ans. In a public blockchain, anyone is free to join in the main functions and activities of the blockchain network. But private blockchain allows only selected and verified participants and it allows the operator to override, edit, or delete entries on the blockchain.

Q4. How can blockchain be used to improve security?

Ans. Private blockchain ledgers record each and every single transaction and data, and it makes sure that they cannot be changed or deleted by any participants except the user. It provides verifiable and tamper-proof data that prevents data breaches and cyber-attacks.

Q5. How safe is a private blockchain?

Ans. In comparison with public blockchains, private blockchains are less secure due to the limited number of nodes. The centralization is at the core of private blockchains which is among the most significant security risks.

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