Permissionless vs. Permissioned Blockchains: Pros & Cons

Blockchain was developed to bring more security to our online activities. However, both safety and transparency levels may differ according to the needs of the users. That is how different options of this concept occurred. Here we are going to outline and compare permissionless vs. permissioned blockchains, their main features as well as their advantages and disadvantages.

What is permissionless blockchain?

This model is also called public and provides complete decentralization and a high level of anonymity for everyone. Here no one controls the participation and actions of users, so anyone can join it and perform any action that he wants. There are no special permissions or rights given by some third party.

The main features of this type are as follows:* all the actions are transparent

• it is an open technology where each user has access and the ability to change everything he wants
• the highest level of anonymity is guaranteed to the user
• there are no central authorities
• efficient work due to the usage of various assets

Actually, all the well-known cryptocurrencies work based on this technology. Thus, many users trust it and join the big game to earn profits. Moreover, that was the main idea of this technology and its introduction. Blockchain aimed to move from the centralized system and give the users ability to control the system by themselves.

As for the advantages, in this case, they are the following:* more users can join this system compared to the permissioned versions

• all the actions are transparent and quite fast
• high resistance to censorship due to a big number of users
• it is quite challenging to ruin or attack these systems due to the large data amount

However, these systems give less privacy and sometimes their productivity is also lower because of larger amount of users who are joining them at the same time. In addition, this model requires lots of energy that may seem counterproductive. Still, despite these drawbacks, it is still popular and widely used.

What is permissioned blockchain?

Those who wish to get more security in such a system rely on these versions that utilize the authorization of the participants. Here the administrator allows access only to some people. These users get some access level and the ability to perform some actions. Due to this approach, the number of participants can be limited and all changes can be tracked with the subsequent identification of a person who made it. That is the key to higher security. Therefore, when we compare blockchain permissioned vs permissionless, big companies and businesses who care about the safety of their transactions more often utilize the first one. They introduce digital verification and make this technology as safe as possible. In addition, there is a chance to select between two main types of permissioned blockchain. It can be controlled by one private company or by a consortium. This also influences the security and reliability of the system. When there is only one administrator, there can be more risks associated with an attack on his system. That is why consortiums seem to be a perfect decision for now.

The most common features of this type include:* it is easy to track the actions and those users who have done them inside these systems

• the level of security rises and the company can fully control it
• the anonymity of a separate user lowers compared to the previous version
• there is an authority center that makes this concept less decentralized

Therefore, such a system adds extra layers of protection and safety. That is the main reason why so many private entities prefer it and introduce it into their daily practice.

The main benefits of these systems are:* this model is still decentralized and retains all the pros of such systems

• strong privacy for the company and access to all the transactions and their details including the users who have done them
• easy customization according to the needs of the company
• higher scalability and quickness due to the lower total number of users

However, the users of this blockchain may still encounter some difficulties. Due to the lower number of participants, there are more cases of data corruption. The transparency is sometimes questionable and the presence of some authorities may complicate the utilization of the system. Altogether, each of the systems has its own advantages and disadvantages. The choice largely depends on the goal and needs of the users. Private users prefer systems without permissions where they can stay anonymous and rely on the existing security level. However, companies often require higher protection and wish to coordinate and control their transactions. In this case, the second model is a good choice that provides these possibilities.