The word “blockchain” has been tossed around as if all blockchains are the same. Real-time access to information, increased transparency and encryption are standard benefits of any blockchain. However, there are two different types of blockchains: public and private, both of which are important for CPAs to understand so you can decide which option is better for your organization or firm.
The idea of a public blockchain is what most people think is, and what technology purists would consider, the “real blockchain.” Completely decentralized and open to any individual or institution to join (known as members in blockchain parlance), the most well-known example of a public blockchain is the one that runs Bitcoin.
While a purely public option does include many of the benefits associated with blockchain technology, these same attributes can make implementing a blockchain less than ideal for business purposes. By allowing anyone and everyone to join a public blockchain, the approval and consensus process can take too long for it to be it useful for the volume of daily transactions. And depending on how data is approved, the electrical cost can be too expensive for practical use, considering the sheer volume of information processed by most organizations.