Private Blockchain

A permissioned blockchain is a key component of blockchain technology, offering a secure and decentralized network that is accessible only to users with permissions. It provides organizations with the ability to control access and maintain privacy while still benefiting from the advantages of blockchain technology.

Unlike public or permissionless blockchains, a permissioned blockchain restricts access to designated entities, ensuring confidential and validated transactions. It operates as a digital ledger, enabling organizations to record and verify transactions in a tamper-evident manner.

Permissioned blockchains find applications in various industries, including finance, supply chain management, and identity validation. They ensure privacy and security while enabling organizations to streamline their operations and enhance trust among stakeholders.

Key Takeaways:

  • Permissioned blockchains offer controlled access, allowing organizations to maintain privacy while leveraging the benefits of blockchain technology.
  • They provide validated and confidential transactions, ensuring transparency, security, and tamper-evident records.
  • Permissioned blockchains find applications in finance, supply chain monitoring, and identity verification.
  • They offer advantages such as granular control over permissions, verifiable chain of custody, and scalability.
  • However, they also have limitations, including limited decentralization and potential energy inefficiency.

The Difference Between Permissioned and Permissionless Blockchains

When it comes to blockchain technology, there are two main types: permissioned and permissionless blockchains. Understanding the differences between these two types is crucial for businesses and organizations looking to implement blockchain solutions.

Permissioned Blockchain

A permissioned blockchain is a closed network that requires users to have specific permissions in order to access and participate in the network. This type of blockchain offers limited decentralization, meaning that there are designated entities or organizations that control the network. Access to the blockchain is controlled through an additional access control layer, ensuring that only authorized users can interact with the network.

One key advantage of permissioned blockchains is the controlled transparency they provide. Organizations can choose who has access to the blockchain and what information is visible to each participant. This allows for greater privacy based on governance decisions and ensures that sensitive information remains secure.

Another advantage of permissioned blockchains is that they are typically developed by private entities. This means that the development process is often more structured and controlled, leading to greater efficiency and accountability.

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Permissionless Blockchain

In contrast, permissionless blockchains are open and decentralized networks that do not require specific permissions to access. Anyone can join and participate in the network, making it a truly public and inclusive platform. Consensus validation is achieved through a universal agreement mechanism, ensuring that transactions are verified by multiple participants.

Permissionless blockchains provide full transparency, as the entire transaction history and network activities are visible to all participants. Development of permissionless blockchains is typically open source, allowing for community contributions and collaboration. Privacy in permissionless blockchains is mostly anonymous, as participants are identified by cryptographic addresses rather than real-world identities.

Choosing between permissioned and permissionless blockchains depends on the specific needs and goals of the participating entities. Permissioned blockchains are often preferred for applications that require controlled access, privacy, and accountability. On the other hand, permissionless blockchains are more suitable for applications that prioritize transparency, inclusivity, and a trustless environment.

Trustless blockchain

Permissioned Blockchain Permissionless Blockchain
Requires specific permissions to access Open to anyone without specific permissions
Controlled transparency Full transparency
Development by private entities Open source development
Privacy based on governance decisions Mostly anonymous privacy
Limited decentralization Decentralized network

Advantages and Disadvantages of Permissioned Blockchain

Permissioned blockchains offer numerous advantages that make them a compelling choice for organizations seeking to leverage blockchain technology. The key advantages include:

  • High Privacy and Security: Permissioned blockchains provide a heightened level of privacy and security compared to public blockchains. By controlling access to the network, organizations can ensure that only authorized parties can participate, reducing the risk of unauthorized transactions or data breaches.
  • Incremental Decentralization: Unlike fully decentralized networks, permissioned blockchains offer incremental decentralization. This means that while the network may have designated entities and controlled transparency, it still maintains some of the benefits of decentralization such as immutability and distributed consensus.
  • Customizability: Organizations can customize permissioned blockchains to suit their specific needs and requirements. They have the freedom to define the rules, consensus mechanisms, and governance models, making the blockchain tailored to their unique business processes.
  • Scalability and High Performance: Permissioned blockchains can handle a high volume of transactions and provide fast processing speeds. This scalability and high performance make them suitable for applications that require quick and efficient transaction processing, such as supply chain management or payment verification.

While permissioned blockchains offer several advantages, they also have some limitations that organizations need to consider:

  • Limited Decentralization: Unlike permissionless blockchains, permissioned blockchains have a limited number of participants and designated entities. This limited decentralization may raise concerns about centralization of power and control, especially for those who value the trustless nature of blockchain technology.
  • Override Risk: In permissioned blockchains, designated entities have the authority to override certain transactions or modify the rules. While this level of control can provide efficiency and flexibility, it also introduces the risk of potential abuse or manipulation of the blockchain.
  • Less Transparency: Compared to public blockchains, permissioned blockchains offer less transparency as only authorized parties can access the network and view the transactions. This can be a disadvantage in applications where transparency and openness are essential, such as public governance or financial systems.
  • Potential Energy Inefficiency: Permissioned blockchains that rely on consensus mechanisms like Proof of Work (PoW) may consume a significant amount of energy. While this may not be a concern for private organizations, it can be a drawback in terms of sustainability and environmental impact.

Despite these limitations, organizations can mitigate the disadvantages of permissioned blockchains through proper provisioning and governance. By carefully designing the network, establishing clear rules and procedures, and regularly auditing the blockchain, organizations can maximize the benefits while minimizing the drawbacks.

Advantages and Disadvantages of Permissioned Blockchain

Advantages Disadvantages
High Privacy and Security Limited Decentralization
Incremental Decentralization Override Risk
Customizability Less Transparency
Scalability and High Performance Potential Energy Inefficiency

Business Applications of Permissioned Blockchain

Permissioned blockchains have proven to be highly valuable in various business applications. They offer secure and efficient solutions for a wide range of transactions, enhancing transparency, trust, and automation. Let’s explore some of the key use cases where permissioned blockchains are revolutionizing the way businesses operate:

  1. Supply Chain Tracking: Permissioned blockchains enable efficient tracking and tracing of goods along the supply chain. By recording every transaction and movement securely and transparently, businesses can ensure the authenticity and integrity of their products. This helps in combating counterfeiting and fraud while providing customers with accurate and real-time information about their purchases.
  2. Secure Contract Creation: Permissioned blockchains facilitate the creation and management of secure contracts. Smart contracts, powered by blockchain technology, ensure that all parties involved in a contract adhere to the agreed-upon terms and conditions. This eliminates the need for intermediaries and reduces the risk of fraud, ensuring transparency and efficiency throughout the contract lifecycle.
  3. Reliable Payment Verification: Permissioned blockchains offer a reliable and tamper-proof platform for payment verification. By recording and validating every transaction in real-time, businesses can eliminate the need for traditional intermediaries, reduce transaction costs, and streamline payment processes. This enhances the speed, security, and traceability of payments.
  4. Trusted Identity Verification: Permissioned blockchains provide a trusted framework for identity verification. By securely storing and validating personal information on the blockchain, businesses can ensure the integrity and privacy of identity data. This enables organizations to streamline customer onboarding processes, enhance data security, and prevent identity theft.

supply chain tracking image

Permissioned blockchains offer businesses numerous advantages, including:

  • Increased Velocity: Streamlined processes and automated workflows on permissioned blockchains enable faster and more efficient transactions.
  • Reduced Costs and Risks: By eliminating intermediaries and enhancing transparency, permissioned blockchains reduce transaction costs and minimize the risk of fraud.
  • Improved Data Quality: The immutability and transparency of permissioned blockchains ensure the integrity and accuracy of data, enhancing overall data quality.
  • Auditability: Every transaction recorded on a permissioned blockchain can be audited, providing businesses with a reliable audit trail and ensuring compliance with regulatory requirements.
  • Trust: Permissioned blockchains establish trust among participants by providing a secure and transparent platform for transactions.

As businesses continue to embrace blockchain technology, permissioned blockchains offer a multitude of opportunities for improving efficiency, security, and trust in various industries.

Oracle Blockchain Platform and the Extension of Permissioned Blockchain

The Oracle Blockchain Platform is a tokenless managed blockchain service that enhances the security, scalability, and performance of permissioned blockchain implementations. With this platform, organizations can leverage the benefits of blockchain technology without the need for tokens or digital assets. It offers a secure and efficient infrastructure for businesses to extend their permissioned blockchains and seamlessly integrate them into their existing systems and processes.

By leveraging the Oracle Blockchain Platform, businesses can unlock new opportunities and capabilities. They can extend their permissioned blockchains to include additional participants and stakeholders, enabling greater collaboration and transparency within their networks. The platform facilitates seamless integration with external applications, data sources, and systems, enabling real-time data exchange and workflow automation.

Furthermore, the Oracle Blockchain Platform provides organizations with the tools and features necessary to manage and govern their extended permissioned blockchains effectively. It offers comprehensive monitoring, auditing, and reporting capabilities, ensuring compliance with regulatory requirements and internal policies. The platform also enables organizations to define and enforce access controls, ensuring that only authorized participants can access and interact with the blockchain network.

Benefits of the Oracle Blockchain Platform:

  • Enhanced security and scalability for permissioned blockchains
  • Efficient infrastructure for extending permissioned blockchains
  • Seamless integration with existing systems and processes
  • Comprehensive monitoring, auditing, and reporting capabilities
  • Effective access controls for authorized blockchain network participants

The Oracle Blockchain Platform empowers organizations to harness the full potential of permissioned blockchain technology. It enables them to extend their networks, collaborate securely with partners and customers, and optimize their business processes. By leveraging this tokenless managed blockchain service, organizations can drive innovation, enhance efficiency, and achieve new levels of trust and transparency in their operations.


Permissioned blockchains provide businesses with a secure and efficient solution to harness the benefits of blockchain technology. With controlled transparency, privacy, and trust, permissioned blockchains are well-suited for a wide range of applications including supply chain management, contract creation, and payment verification. By leveraging platforms like the Oracle Blockchain Platform, organizations can extend their permissioned blockchains and seamlessly integrate them into their existing systems, achieving even greater efficiency and security.

As decentralized ledger technology continues to evolve, permissioned blockchains will play a pivotal role in revolutionizing various industries. Their ability to offer granular control over permissions and data access, coupled with their tamper-evident ledgers, ensures transparency, auditability, and trust in business transactions. By utilizing permissioned blockchains, organizations can streamline their operations, automate multi-party processes, reduce costs and risks, and improve data quality.

The future of permissioned blockchains is bright, as they continue to enhance not only the efficiency but also the security of business operations. Leveraging the advancements in decentralized ledger technology, businesses can stay ahead of the curve and unlock the potential of blockchain applications. By embracing permissioned blockchains, organizations can pave the way for a more transparent, secure, and trustworthy future.


What is a permissioned blockchain?

A permissioned blockchain is a secure and decentralized network that is accessible only to users with permissions. It allows organizations to control access and maintain privacy while still benefiting from the advantages of blockchain technology.

What is the difference between permissioned and permissionless blockchains?

Permissioned blockchains are closed networks with limited decentralization and an additional access control layer. In contrast, permissionless blockchains are open and decentralized networks with universal consensus validation. Permissioned blockchains offer controlled transparency and privacy based on governance decisions, while permissionless blockchains provide full transparency and mostly anonymous privacy.

What are the advantages and disadvantages of permissioned blockchains?

Permissioned blockchains offer high privacy and security, incremental decentralization, customizability, scalability, and high performance. They provide granular control over permissions and data access. However, they also have limitations such as limited decentralization, less transparency, and potential energy inefficiency.

What are the business applications of permissioned blockchains?

Permissioned blockchains are commonly used in B2B and B2C transactions, supply chain tracking, contract creation, payment verification, and identity verification. They enable efficient processes, reduced costs and risks, improved data quality, auditability, and trust.

How does the Oracle Blockchain Platform extend permissioned blockchains?

The Oracle Blockchain Platform is a tokenless managed blockchain service that enhances the security, scalability, and performance of permissioned blockchain implementations. It provides a secure and efficient infrastructure for businesses to integrate their permissioned blockchains into their existing systems and processes.

What is the role of permissioned blockchains in revolutionizing industries?

Permissioned blockchains offer a secure and efficient solution for businesses to leverage the advantages of blockchain technology. They provide controlled transparency, privacy, and trust, making them suitable for various applications. As decentralized ledger technology continues to evolve, permissioned blockchains will play a crucial role in revolutionizing industries.

By Eric

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