What is a Permissioned Blockchain?
A permissioned blockchain is a type of blockchain that has restrictions on who can join the network and perform transactions. This means that only authorized participants are allowed to participate in the network, and their identities are verified before they are granted access. In contrast, an unpermissioned or public blockchain allows anyone to join the network and participate in transactions without verification.
Features of Permissioned Blockchain
Permissioned blockchains have several features that make them different from other types of blockchains:
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Private Networks: Permissioned blockchains are typically used for private networks, where only a select group of participants is allowed to join. This ensures that the network is secure and efficient, as there is less congestion and fewer transactions to verify.
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Identity Verification: As mentioned earlier, permissioned blockchains require identity verification before granting access to the network. This helps to prevent fraud and unauthorized access to sensitive data.
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Faster Transactions: Since only authorized participants are allowed on a permissioned blockchain, transactions can be processed faster. This is because there is less data to verify, and the network is not as congested.
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Scalability: Permissioned blockchains can scale up or down depending on the needs of the network. This means that they can handle large volumes of transactions without compromising their performance.
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Confidentiality: Permissioned blockchains offer confidentiality to participants, as only authorized parties can view and access the data stored on the network.
Permissioned vs Public Blockchain
Now that we have discussed the features of permissioned blockchains, let’s compare them with public or unpermissioned blockchains:
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Accessibility: Public blockchains are open to anyone who wants to join, while permissioned blockchains require identity verification and approval before granting access.
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Security: Permissioned blockchains are typically more secure than public blockchains, as only authorized participants can join the network.
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Transactions: Public blockchains can process a higher volume of transactions per second than permissioned blockchains, but this comes at the cost of slower transaction times and higher fees.
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Privacy: Public blockchains offer less privacy to participants, as all transactions are visible on the network. In contrast, permissioned blockchains offer confidentiality to authorized parties.
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Regulatory Compliance: Permissioned blockchains can be more compliant with regulations than public blockchains, as only authorized participants can access sensitive data.
Real-Life Examples of Permissioned Blockchain
Now that we have discussed the features and differences between permissioned and public blockchains let’s take a look at some real-life examples:
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Ripple: Ripple is a popular payment protocol that uses a permissioned blockchain to facilitate cross-border payments. It allows banks and financial institutions to process transactions quickly and efficiently while maintaining regulatory compliance.
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IBM Food Trust: IBM Food Trust is a permissioned blockchain that enables food manufacturers, retailers, and suppliers to share data securely and transparently. This helps to improve supply chain management and traceability of food products.
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MediLedger Project: The MediLedger Project is a permissioned blockchain that enables the pharmaceutical industry to track and verify the authenticity of drugs. It uses a permissioned blockchain to prevent counterfeit drugs from entering the supply chain.
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Corda: Corda is a permissioned blockchain platform that enables financial institutions to create customized solutions for their needs. It allows for secure and efficient processing of transactions while maintaining regulatory compliance.
