Top Reasons Permissioned Blockchains Will Dominate | DecentralBuzz

Permissioned Blockchains are the complete opposite of unauthorized Blockchains. The biggest difference between Permissionless and Permissioned Blockchain is that not everyone can join the Blockchain. It needs special permission from the network administrator or owner to join the network.

So, why do we need authorized Blockchains? The sole purpose is to create a Blockchain network that is disconnected from the public. Not all Blockchains need to be public. And organizations cannot afford to make their actions or data public. Due to this, Permissioned Blockchain is very useful. Even it reduces the basic feature of the Blockchain, namely the decentralized switching space.

Banks, companies, or other entities may use Permissioned Blockchains. They need to keep their data secure and have no trouble complying with these regulations. A prime example of a Permissioned Blockchain is Ripple (XRP).

What are the Characteristics of Permissioned Blockchains

Permissioned Blockchains have many features, including:

Varying decentralization:

If you think decentralization can only happen in one way, you are wrong. You can achieve decentralization in various ways, such as maintaining the owner’s interest. But you have to ensure certain basic features that are similar to Blockchain technology.

Must Read: What is Decentralized Finance (DeFi)

We can think of it as a level of decentralization. In the case of a public network, we have a fully decentralized one because it matches the philosophy of the network itself.

Now, not every institution can fully decentralize and adapt to a lighter version of decentralization where a central authority approves who is involved and who is not. The decentralization used by Permissioned Blockchains is also more flexible.


Permissioned Blockchains are managed by the organization. They appoint members to the business network and ensure that most networks have decentralized nature with some central control. In Permissioned Blockchain, the organization may decide to add authentication nodes (s) to authenticate transactions.


Organizations can customize the network based on their needs.


Permissioned Blockchains are effective when it comes to transaction scalability and speed.

Anonymity and transparency:

Private Blockchains are known for their transparency and do not need to be one by definition. However, they can choose to be transparent by making sure that there is trust in the organization.

When it comes to privacy, everyone’s identity is protected by the use of encryption. Only the central person knows because they need to do a KYC when they join the network.

How a Permissioned Blockchain Works

A Blockchain can be created and accessed in many ways. Many Blockchains require special permissions to access and information. The internal configuration of such Blockchains controls participants’ transactions and defines their role in which each participant can contribute and access the Blockchain. If you would like to read about how Bitcoin transaction work, we have covered it in detail.

Well Permissioned Blockchains include maintaining the identity of each Blockchain participant in the network.

Permissioned Blockchains are also different from Private Blockchains, which allow only known nodes to participate in the network. For example, a bank may be running a Private Blockchain, possibly run through the bank’s internal numbers. In contrast, Permissioned Blockchains can allow anyone to join the network after identifying their roles.

What Are Reasons Why Permissioned Blockchains Will Dominate

Permissioned Blockchains have many reasons that make them better to use than Permissionless Blockchains. Let’s understand the top reasons for Permissioned Blockchains along with their benefits.

Permissioned Blockchain is fast because they can choose their consensus method, and not every node is needed for verification purposes.

Permissioned Blockchains are much more expandable.

For organizations, the Permissioned Blockchain can offer maximum customization.

Permissioned Blockchains can also follow the governance structure.

Efficient performance:

They perform better when we compare authorized Blockchains. The main reason behind this is the limited number of nodes on the platform. It removes unnecessary computers needed to reach consensus on the network and improves overall performance.

Proper governance structure:

Permission networks come with a proper governance structure. It means that they are organized. Administrators also need less time to update network rules, which is much faster than Public Blockchain.

The Public Blockchain network has a consensus issue because not all nodes work together to implement a new update. These nodes can transcend their interests beyond the needs of the Blockchain. In contrast, Permissioned Blockchain is not a problem, as the nodes work together to transfer updates faster.

Decentralized storage:

Permissioned Blockchains also make appropriate use of Blockchain, including using its decentralized nature for data storage.


There is no doubt that Permissioned Blockchains will cost more than Permissionless Blockchains.


Permissioned Blockchain has many beneficial reasons to dominate. These Blockchains can be viewed as an additional Blockchain security system. These Blockchains maintain an access control layer so that identifiable participants can only perform certain people. Because of this, these Blockchains are different from private and public Blockchains.

Allowed Blockchains provide an extra level of security on a typical Blockchain system, such as Bitcoins, as they require an access control layer.

These Blockchains favor those who need identity, security, and definition of role in the Blockchain.

Permissioned Blockchains are not as common as public Blockchains such as Bitcoins and other top Cryptocurrencies.

Originally published at on July 29, 2021.




DecentralBuzz is a latest blockchain and cryptocurrency news blog. We cover Bitcoin, Altcoins, ICO’s, Crypto updates and much more.

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Decentral Buzz

Decentral Buzz

DecentralBuzz is a latest blockchain and cryptocurrency news blog. We cover Bitcoin, Altcoins, ICO’s, Crypto updates and much more.

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