Many Enterprises Choose To Use Permissioned Blockchain

In permissioned blockchains, all the participants are known because of which there is no necessity of making use of computing power which is done using mining so that the network reaches consensus. The algorithms that are used by this blockchain is RAFT or Paxos consensus algorithms. PBFT is another algorithm that can be used to help in reaching a consensus that does not require the use of PoW mining. You can read more about Crypto Code here

Reasons why almost all the enterprises are using the permissioned blockchain

  • A great deal of privacy: With the help of permissioned blockchain the participants who have the rights of viewing the transactions is given the permission to do so. On the other hand, if you use permissionless blockchain it will have a distributed ledger because of which everyone will be able to read and everyone can write in it. Suppose you are running a huge bank and it has a shared type of ledger where all the details of another corresponding bank within the association. In this case, the owner would not like to share the details of the number of transactions that are happening in their bank to be seen by their competitors.
  • Widely scalable: If permissioned blockchain wants to form a consensus it can a simple Proof of Stake model. By doing so there will be the prevention of Proof of Work because the computational sequence will be burnt. This will result is optimum scalability in comparison to Bitcoin’s network which makes use of public blockchain.
  • Access control: The permission blockchain makes use of a scheme known as ‘Fine-Grained Access Control’. The accessing of data that is present within the ledger is restricted.

There was an interview done with Andreas Antonopoulos who is a popular Bitcoin guru who gave a great answer to a question; “how are enterprise/private blockchains different from bitcoin’s blockchains?”

Answer: “The banks and the corporations say, “Oh, bitcoin’s awesome. We want that. Only without the open, decentralized, peer-to-peer, borderless, permissionless part. Could we instead have a closely controlled, tame, identity-laden permission version of that please?”.”

There was an interesting conversation where a comparison was done by Andreas, the Internet as compared to the Bitcoin network and the intranet that all the organizations use to provide security was compared to the private blockchain network. Everyone is waiting to see how these things will give a new shape to finance in future with technologies like bitcoin, blockchain and distributed ledger technology.