How Does a Public Blockchain Work

3 min readMay 20, 2022

What is Public Blockchain?

Public blockchains are open, decentralized networks of computers accessible to anyone wanting to request or validate a transaction (check for accuracy). Those (miners) who validate transactions receive rewards.

Public blockchains use proof-of-work or proof-of-stake consensus mechanisms (discussed later). Two common examples of public blockchains include the Bitcoin and Ethereum (ETH) blockchains.

Purpose of Public Blockchain

As a society, companies have created ledgers to store information-and they have a wide variety of uses. For example, use a real estate ledger to keep a record of your home. If changes are made or the house is sold, people also use the ledger in accounting to record all transactions for your company.

Problems of the traditional ledger

Bookkeeping often is predicated on double-access accounting to keep transactions. Although that is a step-up from single-access accounting that lacks transparency and accountability, double-access accounting additionally has its pitfalls: Entries are accounted for separately, making it hard for one counterparty to affirm the other`s records.

Records saved by the use of conventional ledgers also are clean to tamper with, which means you may without difficulty edit, remove, or upload a record. As a result, you`re much less likely to believe that the statistics are accurate.

What Public Blockchain could do to reduce problems?

Public blockchains solve both these problems — and the way we trust — by evolving the traditional bookkeeping model to triple-entry bookkeeping: transactions on a blockchain are cryptographically sealed by a third entry. This creates a tamper-proof record of transactions stored in blocks and verified by a distributed consensus mechanism.

These consensus mechanisms also ensure new blocks get added to any blockchain. An example of a consensus mechanism is proof-of-work (PoW), often referred to as “mining.”

Mining isn’t universal to all blockchains; it’s just one type of consensus mechanism currently used by Bitcoin and Ethereum, though Ethereum plans to move to another — proof-of-stake (PoS) — by 2022.

How Does a Public Blockchain Work?

Public blockchains solve problems by building around three core properties.

Decentralization: Decentralization means there’s no central point of control. Instead, decisions are made via consensus over a distributed network of computers.There is, however, one significant tradeoff: speed. Sending transactions takes longer because multiple confirmations are required to validate a transaction. Hence why Bitcoin is slow.
Scalability: Scalability is the ability of the system to cope with a growing number of transactions. Scalability is crucial for mass adoption because any system needs to operate efficiently as more people use it.
Security: Security is the ability of a blockchain to be protected from attacks. Unfortunately, exchanges and source code have been hacked on many occasions, suggesting that many developers focus on scalability and decentralization at the expense of security.