Blockchain applications are used in different operations these days, and because there are different types of blockchain, each one of them has their own purpose and are unique in their own way, which is why it is important to know how each one of them is different if you’re trying to understand how they work.
In this article, we are going to talk about the main differences between Permissioned and Permissionless Blockchains.
What Is Permissioned Blockchain?
Before we talk about anything else, it is important to understand what permissioned blockchain is.
When it comes to carrying out secure operations on a blockchain ledger, which by the way can only be done by certain authorized people, a permission ledger is used. This means that the distributed ledger is only accessed by a number of people, who are allowed to carry out certain tasks after being allowed by the administrator of a network..
All the users that are allowed to carry out secure operations on a blockchain ledger are given different types of privileges, which allows them to carry out certain actions securely, however anyone that is not allowed to be within the network by the administrator, they are not allowed to even look at anything or even make changes.
This allows the operation to be accessed in a limited way, making it very secure and exclusive, and anyone that tries to make changes on a secure or permissioned blockchain ledger can be easily tracked or identified.
Another thing with permissioned blockchain is that users are allowed to be added and removed with the help of digital verifications and certificates, which would allow them to access the data on a blockchain ledger and since the access will be restricted, it becomes the exact opposite of the more regular blockchain, which is also known as the public blockchain.
This one also has an additional layer of security, which makes it an amazing option for those that are planning to use blockchain and only giving access to the data each ledger has to a certain number of individuals.
Lastly, because it brings a lot of security and privacy to the blockchain, the Permissioned Blockchain is mainly used by companies that are trying to maximize data security.
Mainly the permissioned blockchain is used by developers in verifying payments, supply chains, contract creation and in keeping personal or public data safe.
4 Benefits Of Permissioned Blockchain
Because of the security features and other important operations that it offers, there are a lot of benefits that the permissioned blockchain can offer.
Here are 4 of the many benefits of permissioned blockchain:
Transparency
The thing with permissioned blockchain is that it provides more transparency.
it allows only certain people to view it and every time an authorized or unauthorized user tries to make changes to it or makes changes, every move gets registered. Not only that, but every action that is taken by anyone on the blockchain, the user can be tracked down and could be identified.
Handle Data In A Very Secure Way
Another thing with the Permissioned Blockchain technology is that it allows administrators to handle data in a very secure way as this technology gives complete control over someone who has access to it and someone who has permission to make the changes on the platform.
The Administrator Is Aware Of Everything
The administrator with the Permissioned Blockchain is 100 percent aware of all the changes that are made, who made them and when they were made. This allows them to have control over everything that is done to the data that is being stored in the blockchain.
No Single Decision
Because the Permissioned Blockchain does not have a central authority, it allows a group of private administrators to authorize decisions, making it safe and 100 percent accurate.
The Pros and Cons Of Permissioned Blockchain
There are multiple pros and cons of using the permissioned blockchain operation, and here
is a list of all the pros and cons of the permissioned blockchain:
Pros with the Permissioned Blockchain
- There is no need to deal with centralized models a sall permissioned blockchains are decentralized.
- Permissioned blockchains offer 100 percent privacy to those that are getting or using it for transactions.
- Users can have hybrid integrations or modular components with permissioned blockchain.
- Permission Blockchain can be customized with configurations as per the needs of the company.
- The access is very limited with Permission Blockchain which increases privacy and tracking.
Cons with the Permissioned Blockchain
- Because there are very few participants in a permissioned blockchain, there is a bigger chance that a collusion or corruption of data can happen.
- Because there are very few participants in a permissioned blockchain, there is less transparency outside.
- The rules of a consensus in a permissioned blockchain can be changed by the operator at any point of time.
Use Cases of Permissioned Blockchain
Here are some of the most common use-cases of the permissioned blockchain:
- Research
- Tracking
- Banking
- Payments
- Asset Ownership
- Internal Voting
- Supply Chain Management
These are just some of the many use cases of the permissioned blockchain.
What Is A Permissionless Blockchain?
Now, let us explain what a permissionless blockchain is.
Like the name itself, the Permissionless Blockchain is the exact complete opposite of a Permissioned Blockchain.
When it comes to the Permissionless Blockchain, which is also known as the public blockchain, there are no restrictions and all the participants are not controlled by a single administrator or multiple administrators.
With the Permissionless Blockchain, anyone is allowed to participate in the consensus or could validate certain datas because there are no administrators, which would be limiting their actions.
This one allows the technology to be widely available for everyone, mainly used in public transactions or in voting and many more aspects.
6 Benefits Of Permissionless Blockchain
Just like the permissioned blockchain, the permissionless blockchain also offers a number of benefits. Here are some of the many benefits of the permissionless blockchain:
- Because permissionless blockchains do not have any type of restrictions for users to join the network, there is 100 percent transparency in the transactions that have access to a certain network.
- The platform under the permissionless blockchain is 100 percent open-source, which means users can easily access it
- Because permissionless blockchains are open source, users can make all changes in the network.
- With the permissionless blockchain, the clause of anonymity exists, which means that it does not provide anonymous changing features.
- It is open to all users.
- It offers heavy usage of the tokens and digital assets as an incentive to participate, which means it is efficient and effective.
Pros and Cons Of The Permissionless Blockchain
There are multiple pros and cons of using the permissionless blockchain operation, and here
is a list of all the pros and cons of the permissionless blockchain:
Pros Of The Permissionless Blockchain
- Because the permissionless blockchain has no restrictions, you can consider it is a decentralized platform, which means that there are going to be more participants through the network.
- It has a very high level of transparency.
- Because it is transparent, it speeds up the reconciliation process.
- It is resistant to censorship because of the large amount of participants it has
- It is impossible to repository because 51 percent of the network is required to be corrupt and corrupting that amount of data is almost or near to impossible.
Cons Of The Permissionless Blockchain
- It offers less privacy when compared to permissioned blockchain.
- It uses a lot of resources at the same time.
- The permissionless blockchain is not energy efficient.
- It offers low performance and scalability.
- It puts more pressure on the computing resources because there are no restrictions.
Use Cases Of Permissionless Blockchain
There are multiple use case of the permissionless blockchain, which includes:
- Digital Identity
- Fundraising
- Voting
- Open Studies
- Crowd Consensus
These are just some of the many use cases of the permissionless blockchain.
Differences Between Permissionless Blockchain And Permissioned Blockchain
Here is table that would help you know the differences between permissionless blockchain and permissioned blockchain:
| Permissionless Blockchain | Permissioned Blockchain |
| The Permissionless Blockchain is an open network that allows everyone to interact within the network. | The Permissioned Blockchain, which is also known as the Closed Network, is the complete opposite of its counterpart. With this one, administrators can give access to users and limit their interactions within the network. |
| Other Names for the Permissionless Blockchain is the Trustless or the Public Blockchain | The Permissioned Blockchain is also known as the Private Blockchain and the Permissioned Sandbox. |
| The permissionless blockchain is known for offering full transparency, can be developed in open source, involves digital assets, and has no control authority. | The permissioned blockchain is controlled, does not offer 100 percent transparency, not anonymous, no single authority, does not require to have digital assets, and is privacy based on the governance decision. |
| The permissionless blockchain is highly transparent, is censorship resistant and is decentralized. | The permissioned blockchain offers incremental decentralization, offers strong privacy, is customizable and is faster along with scalability. |
| The downside of the permissionless blockchain includes that they are slow, they are difficult to scale, do not offer user privacy and are very less energy efficient. | The downside with the permissioned blockchain is limited decentralization, override risk and they are not transparent. |
Most of the time, Permissionless blockchain are used in:
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Most of the time, Permissioned blockchain is used in:
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Summary
With the permissionless blockchains, which are also known as public blockchains, they are open, which means that anyone can join them, and the thing with them is that they are required to use a consensus algorithm, which can validate the transactions or help write all the data on the ledger. When it comes to the permissioned blockchain, it is a distributed ledger that is not accessible by anyone in the public, which means that it can only be accessed by users that have permissions for such actions. The users authorized to access them are allowed to perform specific actions that are granted to them by the ledger administrators, which are required to identify themselves through certificates or other digital means.