What is a Permissioned Blockchain? Benefits and Drawbacks

What is a Permissioned Blockchain? Benefits and Drawbacks


Blockchain technology was introduced in the crypto space a few years back. With technological advancements, the crypto industry is attracting the interest of more users and investors. People are now learning the difference between blockchain networks and crypto assets.

This guide article will explain permissioned blockchain networks, their pros and cons, and their usage in the crypto space.

Understanding Blockchain Networks

Blockchains are used for recording any transactions carried out over a network. Blockchain networks can be used to record and trade any valuable asset virtually. This decreases the manipulation risk and costs required for trade.

It is a technical system that allows users to access the smart contracts and public ledger. Moreover, blockchain networks allow users to access accounts, orders, transactions, and productions. This provides confidence and additional opportunities to the users over the network.

Understanding Permissioned Blockchains

Users need to get permission on specific blockchain networks to access the data. A permissioned blockchain is usually set up by private blockchain networks. It limits the transactions on the network and the number of people who can access it.

However, public blockchains can be permissioned, too. It ensures the data cannot be manipulated and stored in a central point.

Permissioned blockchain networks are transparent, and the data is visible to everyone. The users only have to provide their computing power or join any mathematical problem to get access to the system.

Difference Between Permissioned and Permissionless Blockchains

Permissioned blockchain networks and permissionless are usually the same; the only difference lies in the identification process. There are certain adjustments required in permissioned blockchains.

Need of Permissioned Blockchains in the Crypto Markets

There are several studies explaining the usage and importance of permissioned blockchain networks. Private blockchain networks are highly appreciated by companies and organizations. A permissioned blockchain can be obtained if a system has an access management system. The administrators decide who can get access and how people can handle the network.

The roles of people differ in the blockchain network according to their seniority levels. Not everyone should be given the access to manipulate the information. Therefore, it makes the permissioned blockchain a real need.

Benefits of Permissioned Blockchains

Permissioned blockchain networks require authorization to get access to any transaction information. It allows a more significant number of companies to participate in the network, eliminating the risks associated with centralized networks.

The permissioned blockchain networks can be customized according to the requisites and demands of the customers. These networks have better scalability and transaction speeds due to fewer nodes.

Drawbacks of Permissioned Blockchains

The permissioned blockchain networks have limited access; however, there should be a better transparency level, allowing everyone access to the data and information.

In addition, the ones with access to information can easily change the rules and consensus mechanism. The number of participants should also be kept in mind to properly manage the network and maintain the privacy setting of the system.

How to Choose a Suitable Blockchain

The blockchain network to be chosen depends on the strategic goal. It is essential to look for the function and working of any organization before initiating.

The users should look for the applications and usages of the network in a broader sense to check its reliability. Therefore, setting proper goals and aims is essential before choosing a blockchain network.

Stakeholders should check their rewards and interests and look for a suitable blockchain network. Beginners with no experience can seek expert advice to avoid choosing the wrong platform or any significant losses in the networks.

Most users usually do not have any experience in the network and depend on the management to look for the proper platforms.


The permissioned blockchain networks have a more significant impact on the outlook of any economy. They provide the users with the perks of a blockchain network staying within a closed system. The efficient performance and competent governance attract more users towards permissioned blockchain, making them reliable in the industry.

Richard Dodson
About Author

Richard Dodson

Richard Dodson, a titan in crypto journalism, delves deep into the blockchain ecosystem with clarity and precision. With an innate ability to simplify intricate details, Richard's articles demystify the world of digital assets. His authoritative voice and profound insights make him a go-to expert in cryptocurrency discourse.

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