Blockchains can be categorized as permissionless (Public) blockchains and permissioned (Open and Closed) blockchains. But not all of them are real blo

Private Blockchains vs Real Blockchains

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2021-05-28 12:00:07

Blockchains can be categorized as permissionless (Public) blockchains and permissioned (Open and Closed) blockchains. But not all of them are real blockchains.

Permissionless blockchains do not enforce any restrictions on its nodes; anyone can openly read data, inspect data, and participate in validation and writing of the data in accordance with the consensus protocol of the particular blockchain. They are also referred as public blockchains. Bitcoin, Ethereum and many other cryptocurrencies run on permissionless blockchains. These blockchains are considered fully decentralized and secured using advanced cryptography, whereas economic incentives are provided for users who work to keep the integrity of the network. The transactions are completely irreversible on a permissionless blockchain by its design, meaning once confirmed by its nodes the blockchain transactions cannot be reversed. Due to the security considerations and strict restrictions, transaction throughput of a permissionless blockchain is comparatively lesser than one of a permissioned blockchain. Permissionless blockchains are fully decentralized and transparent.

Permissioned blockchains restrict the writing access for a limited set of participants, and a consensus mechanism is used to validate the writing of data among its privileged participants. They are also referred as private blockchains. Read access could either be open to anyone or closed to the public based on the requirement of the permissioned blockchain. This type of blockchains has evolved as an alternative to initial permissionless blockchains, to address the requirement for running blockchain technology among a set of known and identifiable participants that have to be explicitly responsible to the blockchain network, while participants need not be fully trusting each other. The permissioned blockchains are mainly useful for business and social applications, which requires blockchain distributed ledger technology without the need of a incentifying cryptocurrency. Based on the read access mentioned, permissioned blockchains are further divided as open and closed—open permissioned blockchains are partially decentralized, anyone can read its data, whereas closed permissioned blockchains are fully centralized, data is visible only to the participants.