What is the Difference Between Public and Permissioned Blockchains?

TL;DR

Public and permissioned blockchains differ primarily in their access and governance models. Public blockchains are open to anyone, while permissioned blockchains restrict access to specific users.

Key Takeaways

Public Blockchains: Open to all, allowing anyone to participate and validate transactions.
Permissioned Blockchains: Access is restricted to certain users, often used by organizations for specific purposes.
Governance: Public blockchains rely on decentralized governance, while permissioned blockchains may have centralized control.
Use Cases: Public blockchains are ideal for cryptocurrencies, while permissioned blockchains suit enterprise applications.

Public blockchains, like Bitcoin and Ethereum, allow anyone to join the network, validate transactions, and participate in governance. This openness fosters transparency and decentralization, making them suitable for cryptocurrencies and decentralized applications.

What are Permissioned Blockchains?

Permissioned blockchains restrict access to a select group of participants. Organizations often use them for internal processes or consortiums, where control and privacy are essential. Examples include Hyperledger and R3 Corda.

Key Differences Between Public and Permissioned Blockchains

Access: Public blockchains are open; permissioned blockchains are closed.
Governance: Public blockchains are governed by consensus; permissioned blockchains may have a central authority.
Transparency: Public blockchains are transparent; permissioned blockchains can be private.

Conclusion

Understanding the differences between public and permissioned blockchains is crucial for choosing the right technology for specific needs. Each type serves distinct purposes and offers unique advantages.

Risk Note

When investing or participating in blockchain projects, consider the risks associated with both public and permissioned blockchains, including regulatory challenges and security vulnerabilities.