The difference between permissionless and permissioned networks

Netis Group
May 30, 2018 · 2 min read

Blockchain network enables their members to participate in the process of block verification to create consensus. It also enables them to create smart contracts and rules of transactions.

On the account of permissions there are two kinds of blockchain networks.

First is so called permissionless networks. Here everyone can join and starts verifying. Most known examples are Bitcoin and Ethereum networks.

The other one is permissioned network. In this case the network owner decides who can join the network and only few members are allowed to verify blocks. The consensus mechanisms can be the same as in permissionless network or can be completely uniquely designed (e.g. authority based).

These two networks are also called public and private networks. They share some common features, like immutability, but they also possess some unique features.

With NXXTECH, we build a permissioned ledger in order to achieve significantly more performance and make blockchain more appealing to businesses. The permissioned ledger consists of authorized nodes, meaning it allows only selected entry of verified participants.

NXXTECH uses Proof of Authority (PoA) consensus protocol in which only authorized nodes participate. In that process, users voluntarily disclose their identity in exchange for the right to validate. Nodes elect a leader, which has the role of validating transactions and extending the ledger.

This network is an optimal solution for all organizations, where there is a need for more privacy and access management, with greater scalability and high performance optimization.

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Private permissioned blockchain network has many advantages over (public or) permissionless networks, including
- more customizability and adaptation options,
- security, privacy and authorized access, control over which data is public and private,
- efficiency and high performance (fast transaction confirmation and low latency),
- scalability,
- compatibility,
- custom (could be zero) transaction fee

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