Go back to all Articles

Why do companies choose Private Blockchain?

Trust, security, accountability, and transparency have essentially become synonymous to blockchain these days. Especially when it comes to private blockchain, which, as we discussed in a previous article (https://inmost.pro/blog/private-blockchain/), allows you to create versatile business applications with high scalability in a trusted environment, though sacrificing decentralization.

Most companies that have already implemented blockchain technology do not consider this fact to be a disadvantage. On the contrary, allowing only authorized users access the network provides the highest level of security while taking full advantage of all the other benefits of blockchain. Private blockchains are for the businesses that want more privacy and more control over data. 

Among the companies that are already actively taking advantage of the blockchain integration are Shell, Walmart, Mastercard, De Beers, Oracle, and many others.

Let's explore some use cases for private blockchain:



As the world of e-commerce is growing rapidly, numerous parties are involved in the operational processes, including consumers and companies buying goods or services, suppliers and delivery networks, and finally e-commerce platforms. 

As a rule, participants in this complex ecosystem are located in different countries and jurisdictions and transact in different national currencies, which lead to a truly complicated transaction process. Using third-party services usually involves problems such as high costs and fees, transaction duration taking up to several days, non-transparent payment processes, and unpredictable exchange rates. 

At the same time, customers demand that purchases be processed quickly and without hidden fees. They want to rely on the security of their personal data and, of course, have a guarantee of the brand authenticity.

The integration of private blockchain technology can solve all the above problems for both e-commerce platforms and consumers. Blockchain allows companies to track products through the entire logistics chain, from manufacturing to delivery. It provides a secure, tamper-proof method of recording transactions and allows businesses to verify the identity of customers and suppliers to prevent fraudulent activity and counterfeit goods. Blockchain eliminates the need for intermediaries by providing real-time transaction speed, reducing costs for third-party services and real-time exchange rates. 


Internet of Things

The tremendous growth in the use of IoT technology has a snowball effect these days. Smart devices, smart homes and, subsequently, smart cities have already become a reality. 

The IoT infrastructure consists of sophisticated chips and sensors embedded in physical objects and transmitting data to the network. This network provides data transactions on multiple devices operated and owned by different organizations, making it difficult to determine the source of data leaks in case of a cyber attack. 

Moreover, the IoT generates immense volumes of data with multiple interested parties involved, and the ownership of that data is not always obvious.

Blockchain technology can solve these problems by making IoT devices more safe and efficient. Private blockchain can provide much faster data processing among billions of connected devices, as well as create an additional layer of security for IoT networks. Blockchain enables a much higher level of encryption, making it virtually impossible to overwrite existing data records and due to smart contracts sensors can transmit data without any need for a trusted third party.



Sensitive medical records demand the highest level of protection, as their unauthorized usage leads to significant risks to fundamental patients rights. Improving data processing and storage processes, as well as optimizing workflows, is a top priority for the healthcare industry.

In 2016, Johns Hopkins University published a study showing that the third leading cause of death in the United States was medical errors caused by uncoordinated care, such as planned procedures that are not performed as intended or errors in patient records. Blockchain-enabled solutions can help enhance trust in sharing data while eliminating problems with data transparency and interoperability. 

For example, a blockchain-based electronic record system that acts as a comprehensive single view of the patient's medical history, in which every doctor's note, prescription, or test result cannot be falsified or altered. Such a complete, single source of medical record information creates a better experience for patients and healthcare providers and helps clinics significantly reduce the legal and operational costs. 

Private blockchain technology also meets high security standards in terms of data privacy, sensitivity and the control of access.



The scope of insurance services and things that can be insured continues to expand and adapt to the current reality - for example, recently the number of insurance services related to the pandemic has increased significantly. You can insure not only a house or a car, but also any piece of furniture, a beloved pet, there are a large number of exotic cases, such as insurance against unrequited love. Meanwhile, insurance companies face constantly growing compliance, intense competition, fraud allegations and third-party fees.

However, plenty of them have already adopted blockchain technology to overcome these challenges. But the specific nature and sensitivity of the data, makes the use of public blockchain inappropriate here. Private blockchain, with its limited access to the network, smart contracts, immutable and trustworthy record and transactional power, is a perfect tool for streamlining processes, efficiently handling claims, automating risk modeling and audits.

Additionally, a private blockchain can significantly improve the approach to KYS (know-your-customer ) and AML (anti money laundering) compliance by creating a single blockchain-based database, allowing partner companies to use it to facilitate customer identification. 

In addition, blockchain can also streamline regulatory compliance and significantly reduce compliance costs. Insurers would not need to manually submit compliance reports, as regulators would be able to access all relevant information on the blockchain in real time.


Benefits of private blockchain

Therefore, taking a closer look at each of these industries, makes it is easy to identify the following common benefits that they receive from the implementation of private blockchain technology:

  • Higher level of data storage and transmission security: ability to monitor and control access and any changes;
  • Transparency: it can guarantee the quality of goods and serviсes and immutability of all transactions and terms of deals;
  • Cost-efficiency: smart contracts that clearly define all responsibilities of the parties and the conditions for transaction validation completely eliminate the need for the expensive intermediary services;
  • Higher transaction processing speed: a private blockchain uses as many resources as necessary to process transactions, which allows for faster and more efficient transaction speeds.


Of course, any company from any industry would only benefit from such advantages. This means that the list of use cases for private blockchain can be much wider. In the long term, blockchain will merge the currently separate ecosystems into a fundamentally new business environment with different customer-centric approaches and products.

And the question every entrepreneur should be thinking about now: Is my company ready for such a transformation?


Request high-level consultation in one click
Contact us