Permissionless Vs Permissioned Blockchain

Through this article, we are going to cover what is a permissioned and permissionless blockchain and what are the key differences between them with respect to certain technical parameters.

Permissionless Vs Permissioned Blockchain

In the Bitcoin network, anyone can participate in the network. You can be a miner who mines the transactions from the pool. You can join and leave the network whenever you wish to and you would receive the rewards in terms of Bitcoin for the transaction you have verified.

In other terms, anyone can be a valid node in the network with free entry and free exit of the nodes. This is a public network where the participants can freely join the network and exit whenever they wish to do so.

Here basically anyone can join the network, read the chain and anyone on the network can make any legitimate changes in the Blockchain and write a new block and add it to the existing chain as long as they are following the consensus (rules) maintained by the network.

On the other hand, Blockchains can also be created in a different way. It can be built in a way where in order to read, write, verify and modify the Blockchain one would need a permit. This type of Blockchain limits the parties who can transact on the Blockchain and the block validators on the network (miners).

For example, Ripple runs a permissioned blockchain. The startup determines who may act as transaction validator on their network, and it has included CGI, MIT, and Microsoft as transaction validators, while also building its own nodes in different locations around the world.

A blockchain developer may choose to make the system of record available for everyone to read, but they may not wish to allow anyone to be a node, serving the network’s security, transaction verification or mining. It’s a mix-and-match situation that is reflected in the various ways entrepreneurs are experimenting with the technology.

Below is a complete table that has been formulated by us giving a comparison between the different Blockchain Protocols including both public and permissioned (private) Blockchain.

PlatformsIndustry FocusGovernance
Ledger Type
Smart Contract
Consensus Algorithm
Which Languages are being Used For Development
Daaps, Projects and Services built on the platformLaunch Date(When it was ready)

Cross-IndustryEthereum DevelopersPermissionlessYesProof-of-Work (PoW)ECDSAGo, C++, Rust,SolidityCrypto-Kitties, Ether-Bots,EthLend30 July 2015
HyperLedger FabricCross-IndustryLinux FoundationPermissionedYesPluggable FrameworkECDSAGo,LevelDB for storing contracts, CouchDB support in Beta, Java support in BetaFabcar(platform whereHyperLedger's Apps and Smart Contract are written)11 July 2017
EOSCross-IndustryEOS DevelopersPermissionlessYesDelegated Proof of Stake(DPOS)ECDSAC++, Rust compatible, SolidityTokenika,OracleChain,Everipedia, EOS Commander3 June 2018
HashgraphFinancial ServicesHashgraph DevelopersPermissionedYesByzantine Fault Tolerance(BFT)ECDSAJava, PythonKittenCatch,Fair Auction Ledger,Ground Zero13 March 2018
R3Financial ServicesR3 ConsortiumPermissionedYesPluggable FrameworkECDSAKotlin, JavaTradeX(Distributed Ledger Patform), Voltron30 Nov 2016
RippleFinancial ServicesRipple LabsPermissionedNoProbabilistic VotingECDSAJavaX Current, X Rapid, X Viva 2012(initial release)
QuorumFinancial ServicesEthereum Developers & JP Morgan ChasePermissionedYesMajority VotingECDSAJava, GitSolutions in Develeopment StageApril 2018(Effective release)
IOTA(Tangle)Internet-of-ThingsIOTA Tangle DevelopersPermissionlessNo(Currently working as a layer on top of the platform)Markov Chain Monte Carlo(MCMC)PKI X.509Java,C++, Rust, GoMatchX5th May 2017
LiskCross-IndustryLisk FoundationPermissionlessYesDelegated Proof of Stake(DPOS)EdDSAJavaMoosecoin.io24 May 2016
AeternityCross-IndustryNEO Governance AdminPermissionlessYesHybrid Proof-of-Work (PoW) and Proof-of-Stake (PoS) algorithmECDSAJava, (HTML was used for developing Aeternity), C++, PythonAeon30 June 2018
Stellar Cross-IndustryZcash FoundationPermissionlessYesThe Stellar Consensus Protocol EdDSA (Ed25519)Java, C++P2P Lending, MicroInsurance, conditional cash transfers, time banks (these are some of the products and services developed)2014(Initial Release)
CardanoCross-IndustryIOHK FoundationPermissionlessYesOuroborosEdDSAJava, PlutusXyo NetworkSep 29 2017
NEOCross-IndustryNEO FoundationPermissionlessYesDelegated Byzantine Fault Tolerance(DBFT)ECDSAJava,Kotlin,Go, PythonAntshares ICO(now known as NEO)Feb 2014

Technical difference between Permissionless and Permissioned Blockchain

There is one fundamental and important point that makes a public and permissioned Blockchain different. The security of Bitcoin comes from the Proof of Work which requires huge computing power in order to validate the transactions in a transaction pool.

This security feature makes it almost impossible to reverse any transaction that has already been added to the Blockchain.

However, in the permissioned Blockchain, the security would totally depend upon the parties that validate the transaction. They may choose to go for a particular consensus mechanism like Proof of Work in Bitcoin.

But in a permissioned Blockchain, the underlying decision of adding a transaction to the Blockchain depends on the entities or the parties validating the transaction.

Since the network is closed and there is a restricted entry, this makes thePermissioned Blockchain a lot centralized, so there is no mathematical guarantee behind the irreversibility of the transactions in a permission Blockchain.

Permissioned Blockchains have value, but the value addition the Blockchain would provide is by bringing marginal improvements to the existing system. Public Blockchains provide a lot more security as it follows a consensus mechanism that is not required to govern by any centralized authority.

This doesn’t mean that Permissioned Blockchain has no future. These private chains are catering to a large segment of institutional investors who are open to private chains and not public because of their tailor-made requirements.

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Disclaimer: The opinions presented here are of the Authors. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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