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Types of Blockchain: Permissioned & Permissionless

Tushar Verma
Types of Blockchain: Permissioned & Permissionless

This modern database can be used for a variety of purposes, including finance, technology, trade, authentication, and much more.

Different types of blockchains are used for different purposes and by different types of organizations. This article primarily describes the significance, function, and difference between Permissioned and Permissionless blockchains, which can be used for a variety of operations.

What is Permissionless Blockchain?

A permissionless blockchain is also referred to as a "public blockchain." In this type of blockchain, there are no restrictions on participation. Anyone can participate in the consensus and validate the data (transactions) on the blockchain. It can be viewed as a completely decentralized blockchain platform that connects unknown parties.

There is no administration or control over public blockchains. Thus, there are no administrators who allow users to participate or grant them the authority and rights to make changes. Anyone in the network can become a node or validator by simply performing tasks based on the consensus chosen by the blockchain. 

Proof-of-Work (POW) and Proof-of-Stake (POS) consensus mechanisms are commonly used in these types of networks. With these mechanisms in place, honest nodes are generally incentivized with native tokens. Examples of permissionless networks are Bitcoin and Ethereum.

Features of Permissionless Blockchain

  • Decentralized: Permissionless blockchain is fully decentralized. A single authority or cooperation alone cannot be changed the ledger protocols. A majority of its users must typically agree on such a consensus to make any kind of changes.
  • Transparency: Because Permissionless blockchain has no restrictions for users to join through an open network, users have complete transparency of transactions. This means that users or public nodes can see all the transactions, making the network transparent.
  • Open-source Development: The platform is a completely open-source development, which means that it is developed by a community and can be changed and used by anyone.
  • Anonymity: Permissionless Blockchain offers anonymity to its users. Anyone who joins the network can remain anonymous because no KYC is required to join or navigate the network. However, this does not imply complete anonymity; most of the time, blockchains' identities are pseudonymous.
  • Trustless: Because it is accessible to anyone, permissionless blockchain lacks a central authority such as a cooperation or a bank. Strangers validate and authenticate each other's transactions on the network.

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Tushar Verma
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