Private block chains, are they realistic?

[grabberfish]

I keep seeing more and more talk of private block chains. There was early today posted a news item about AlphaPoint being a competitor to Chain. Their claim is:

Alphapoint claims that this custom blockchain will provide breakthroughs in data integrity, performance, and efficiency, all while allowing firms complete control over their data.

For the sake of keeping things consistent, I'll paste my Reddit comment here:

So it's just another shared database?

The USP behind bitcoin is the scale of the network. To break the blockchain requires massive amounts of computing power that make it financially unrealistic to even attempt. When you make a private blockchain you are simply creating a storage environment that is inherently weak. And as the creator of what is in essence a near centralised database you are ultimately responsible for the integrity of the data. Surely a simpler and more cost effective solution is in using a different technology for this purpose.

Consider if your clients going to participate in your blockchain network. If not, it is a centralised network. If they are, do you have the 51% of power to attack your own network? If not, does someone else have the ability to get that 51%? If not, you're on a closed network and may just as well use a relational database with correct security policies.

Now, I will be the first to admit that I am no expert in bitcoin, but I really cannot see how using a private block chain holds any benefits over say a half-way decent transaction aware SQL database for this purpose. Can someone enlighten me on what I am not seeing and why private block chains are beneficial over bitcoin's own block chain in place of other existing technologies?

[LiteCoinGuy]

Iam sure that private blockchains can solve some problems and maybe they can help to safe some money / make things less painful etc. I compare it to the Internet and an Intranet.
Would you say that an Intranet has no value for a big company? i would say no, an intranet offers some value for the company.

and in the end the following could happen:

there will be alot private block chains which will be linked to The Blockchain


also check this out:

https://blog.ethereum.org/2015/08/07/on ... ockchains/

http://www.coindesk.com/research-examin ... ockchains/

[RufusYoakum]

Am no expert either but one thing I can think of. If a private blockchain replaces say the global Swift network for instance. There are roughly 10,000 participants in that space. How do you replicate an SQL database near real time across 10,000 instances. Maybe you can. I don't know.

[mrmadden]

Two questions to ask anyone promoting a "private blockchain":

1) How do you achieve consensus in your network? Proof of stake? Proof of work?
2) Has your consensus scheme been tested in a hostile environment, meaning, on the open internet, and has it performed safely?

If the answer to 2 isn't "yes x 2", they are better off using a shared database, like google spreadsheet. It's quite handy. Try it.

[LiteCoinGuy]

Private 'Distributed Ledgers' Miss the Point of a Blockchain

Bitcoin may have had the most successful marketing campaign of any web technology in recent years. But now there’s a new buzzword making waves throughout the financial industry: “distributed ledger.”

http://www.americanbanker.com/bankthink ... 435-1.html