What is the Difference Between Public and Permissioned Blockchains?

What is the Difference Between Public and Permissioned Blockchains?

Blockchain technology is a revolutionary technology that has the potential to significantly improve existing processes and create entirely new types of businesses. However, there are two main types of blockchain networks: public and permissioned. By understanding the differences between these two types of blockchains, businesses can make the best choice for their particular use case.

Public Blockchains

Public blockchains are open and permissionless, meaning that anyone can join the network without needing special permission or access. These networks also tend to be open source, meaning that the code is freely available to anyone who wants to view or modify it. The most popular public blockchain is Bitcoin, which is an open ledger that tracks financial transactions in a decentralized manner.

The main advantage of public blockchains is that they are highly secure and trustworthy due to their decentralization and robust consensus mechanisms. They are also resistant to manipulation as every node on the network must agree before a transaction is added.

Permissioned Blockchains

Permissioned blockchains have a much higher level of control, as only certain groups or individuals are allowed access to the network. Permissioned networks also tend to have specific structures in place such as transaction rules, nodes, and consensus mechanisms. An example of a permissioned blockchain is Ripple, which is used by banks and other large institutions to facilitate secure global payments.

The main advantage of permissioned blockchains is that they provide more control over security and the type of data that is stored on the network. This makes them a great option for businesses that need more control over their operations, such as financial organizations. Additionally, they are faster than public blockchains as only trusted nodes participate in the consensus process.

Conclusion

Public and permissioned blockchains have their own advantages and disadvantages depending on the use case. For example, public blockchains are ideal for applications that need to be highly secure and resistant to manipulation, while permissioned blockchains are better suited for applications with more control over their operations. It is important to understand the differences between these two types of blockchains before choosing one for your application.