Blockchain facilitates decentralized networks and platforms without the need for a central authority. However, unregulated blockchain platforms that use a permissionless blockchain access model can lead to users joining public blockchain platforms just to scam other users.
The blockchain access model uses a decentralized and governance structure that helps prevent that. Users need to be authorized to join the blockchain platform. This model is called permissioned blockchain or private blockchain.
They have their own use cases and are suitable in different contexts, even if permissionless blockchain at first glance seems like a potential security risk.
Permissionless blockchain platforms are very popular and have more support from the open source community, for example Ethereum and Bitcoin. However, this model is not good for organizations and communities that want hierarchical privileges and strict access.
What is Permissioned blockchain?
The permissioned blockchain access model has administrators adjusting and deploying the blockchain platform regularly. It has a management structure where different members have different roles and powers. Unlike permissionless blockchain, a person needs permission to access and use permissioned blockchain.
Quorum and Corda are examples of permissioned blockchains. Quorum provides permissioned DeFi services to financial institutions and enterprises, while Corda is a blockchain project that allows individuals and companies to build blockchain networks that can interact, communicate, and execute. Direct transactions with other businesses.
Permissioned blockchain requires identity verification (KYC) before access is granted to prevent fraud and corruption.
Because anyone who wants to participate in a permissioned blockchain platform needs access, its network is very fast because very few users will have access. Additionally, administrators can control the number of users accessing the platform or specific features. User traffic can be regulated, meaning the blockchain will be easy to maintain.
It's easy to moderate a community built on a permissioned blockchain because you can deactivate malicious members. It is also easy to track changes and delegate authority to highly engaged members.
Permissioned blockchains are not 100% transparent because the platform owner or administrator can decide how much information needs to be shared on the blockchain platform. Normal members will not be able to detect any errors or track certain data.
To improve transparency and privacy, administrators can use permissioned blockchain and permissionless blockchain at the same time. When these two models are used together, it leads to a new blockchain model called hybrid blockchain, in which a certain part of services, features and processes is kept private while another part is kept private. of the blockchain remains public.
What is Permissionless blockchain?
Permissionless blockchain has no central governing authority. Members do not need access to join the platform or community. Users can remain anonymous when using.
Ethereum and Bitcoin are some of the first permissionless blockchain platforms. These platforms are open source and use consensus algorithms to validate blocks and incentivize their validators (or miners).
This model allows every user to view all transactions taking place on the blockchain platform. For example, Etherscan, a platform that records and displays Ethereum transaction activities.
Since a permissionless blockchain has no governing body or owner, this model uses a consensus algorithm to facilitate all transactions and activities that take place on the platform.
Permissionless blockchains use different consensus algorithms such as:
Proof of Work (POW)
Proof of Stake (POS)
Efficient Proof of Stake (ePOS)
These consensus algorithms determine how miners who confirm blocks are given tokens as a reward. Consensus models promote security, because miners validate blocks and can revoke any malicious blocks. Ironically, this makes permissionless blockchain safer and more secure than permissioned blockchain.