Permissioned Blockchain Meaning

Jul 26, 2023 | Updated Jul 26, 2023

A permissioned blockchain is a distributed ledger with limited accessibility. Only certain authorized individuals can access it.

What is a Permissioned Blockchain?

A permissioned blockchain is a blockchain with a closed or access control layer. This control ensures that only users who have permission can access the blockchain and perform certain tasks. The network owner permits users to view, read, and write information on the blockchain. The network owner can limit the information that a user has access to and the amount of their contribution to the network. Some permissioned blockchains use identity verification to allow users in, so that the network owner does not have to manually give access to everyone.

Permissioned blockchains are partially decentralized because they are distributed among known participants, unlike Bitcoin which is open to all and fully decentralized. They are best suited for organizations or corporations which have private information they would like to share with a small audience. Ripple is the leading blockchain with a permissioned blockchain setup. The network supports permission-based roles for participants on the blockchain.

What is the Difference Between Public and Permissioned Blockchains?

Permissionless and permissioned blockchains both use similar technology for their underlying infrastructure but they differ in their levels of decentralization, speed, transparency, and governance. The first key difference between permissioned and public blockchains is the level of decentralization between the two. Public blockchains like Bitcoin and Ethereum are open to all users and do not require permission for access, but permissioned blockchains have restrictions and limited accessibility.

The transactions on a permissioned blockchain are private while the ones executed on a public blockchain are accessible to everyone. This factor is important for transparency in permissionless blockchains which have a large user base.

The transaction speed on permissioned blockchains is higher because of the less complex computation and small user base, this makes it easier to reach consensus. The less complex computing power also uses significantly less electricity. In contrast, permissionless blockchains like Bitcoin have a vast network of nodes and computation and take a longer time to reach consensus.