Chapter 5: Public Blockchains and Applications

Public blockchains are permissionless blockchains, allowing universal access to read, write, and validate information stored in the network. More specifically, public access grants the ability to access relevant information stored in the blockchain; create user handles (e.g., accounts, addresses, contracts, or private-public key combinations) and interact with the blockchain by receiving, retrieving, transforming, and posting information; and participate in the information storage and validation process. Private blockchains, also referred to as permissioned blockchains, incorporate mechanisms to restrict some or all these three key functions ‒ read, write, and validate.

To ensure their permissionless nature, public blockchains lack a central coordinating authority by design. Sets of rules and incentive mechanisms that aim to generate a self-governing ecosystem replace the authority figure. Rules are explicitly embedded in the software protocols to guarantee the correctness of stored information (i.e., previous blocks), correctness of new information to be included in the blockchain and correctness of the process followed to write each block on the blockchain (i.e., consensus process). These rules provide incentives for users to interact and participate in the storage and validation of individual data, block data, and the complete blockchain as well as to reduce the incentives to engage in adversarial behavior.