Why a private blockchain?
Private blockchains implement business processes with an up-front set of stakeholders (possibly coming from different companies) wishing to cooperate as one consortium. Goals of a private blockchain are: clear and maintainable agreements between stakeholders, efficient processes, reduction of errors, and low operating costs. The main difference with public blockchains (like Bitcoin and Ethereum) is that only an initially defined, select group of stakeholders are allowed to be involved in the blockchain. This makes operating and maintaining the blockchain much easier, with no burdens like Proof of Work or Proof of Stake to achieve consensus on correctly executed transactions to be placed on the chain. In private blockchains (like Corda) the business process is defined as the execution of a sequence of “smart contracts”. A smart contract first checks whether all pre-conditions are indeed met before the corresponding transaction can be (automatically) executed (using “smart rules”). Private blockchains are completely transparent (all parties involved in a transaction are fully informed about any pre-conditions and execution rules of that transaction), traceable (the whole history of executed transactions is logged on the chain), safe (only authenticated and authorized users our allowed), and non-mutable (it is impossible to change or delete any logged entry in the chain). This makes a private blockchain a safe and reliable technology in any organization, starting from an internal process of a small company, up to blockchains for international consortia of cooperating businesses.