You must have been reading all about blockchain and must have understood the concept of it. But today we will let you know about the concept of permissioned blockchain. Permissioned blockchain is an additional blockchain system, which is preferred by individuals who seek security and identity. This makes it different from public blockchains like Bitcoin and other cryptocurrencies. But mere defining permissioned blockchain will not fetch you complete information. For this, you need to know about its working method.
Working Of Permissioned Blockchain
If you have been following blockchain magazine, you will come to know the fact that there are multiple ways to build and access the blockchain. As the name suggests, permissioned blockchain is that blockchain concept which requires special permission for writing information, reading and accessing. The essential configuration of these blockchains has control over the transactions done by the participant. It defines the roles in which participants can contribute and access to the blockchain. In comparison to the private blockchain, where only known nodes are allowed for network participation, permissioned blockchain permits anyone to join the network, after their role and identity are defined.
Citing another example is Bitcoin, the most popular cryptocurrency blockchain. It provides the opportunity for every individual for network participation in the capacity of contributing miners. Here anybody can make legal changes to the blockchain with the addition of a new block and for maintaining the blockchain full copy. Such type of blockchains which provide open and equal rights comes under un-permissioned or public blockchains.
Permissioned blockchain too doesn’t lag behind the popularity, especially among the industrial businesses and enterprises where security and identity are of much importance. If a manufacturer is willing to producing a product, then he must refer permissioned blockchain because it controls supply chain management. There can also be transactions which involve vendors, who are dealing in the financing process.
A developer, creating a permissioned blockchain may prefer for some selected records, including the quantity and name of the product, which can make anyone accessible to read. But only the chosen participants can view the transaction price. It also includes selected participants acting as nodes on the network, which proves much helpful in enhancing the network’s security.
Advantages Of The Permissioned Blockchain
After understanding the concept of permissioned blockchain, now let us know its advantages.
It will be no wrong to say that permissioned blockchain is really very cost-effective.
When compared with public blockchains, permissioned blockchains are much better in providing satisfactory results. The reason behind this point is the platform having a limited number of nodes. It enables the elimination of computations which are not required at all, and thus make the overall performance much better. Besides this, permissioned networks consist of their own pre-determined nodes for transaction validation.
Proper Use Of Blockchain
If you have been abreast of Breaking Crypto news, then you will know that permissioned networks are favorable in the proper use of blockchain including its decentralized nature of data storing.
Permissioned networks come with an organized governance structure. There is another major difference between the permissioned blockchain and public blockchain. In permissioned blockchain, administrators need a very lesser time for updating the rules on the network, which is much speedier than public blockchain.
Public blockchain networks face consensus flaws as all the nodes don’t work at the same pace for the implementation of new updates. Whereas in permissioned blockchain, it is the opposite. All the nodes here run parallel together, leading to faster updates.
Disadvantage Of Permissioned Blockchain
Like every technology, which includes advantages and disadvantages, permissioned blockchain is also not free from its major drawbacks which are as follows.
Permissioned blockchain also comes with a disadvantage, and one of the factors is regulations. Although, regulations do come along with censorship to the network, making an authority putting restrictions on transactions or having authority from making it happen. It poses a threat for any organization or business who are preferring permissioned network.
In the advantages mentioned above, permissioned blockchain made an upper hand on the public blockchain, but when it comes to complete security, it lacks behind private and public blockchain. The reason for this is that public and private blockchain provide better security with the active participation of nodes in the consensus method. But if you expect the same with permissioned blockchain, then it might not be entirely true.
So this was all about permissioned blockchain, which sets it apart from public and private blockchain. It requires special permission for writing information, reading and accessing. But as it says, every technology comes with pros and cons. In this blog, we have covered those advantages of permissioned blockchain, which makes it an upper hand on the public blockchain, but when it comes to complete security, then it lags behind both public as well as private blockchain. But technically, permissioned blockchains consist of an access-control layer, which is built on the blockchain network. In that way, permissioned blockchain wins over public blockchain, which doesn’t have a control layer.