Permissioned Ledger

Understanding Permissioned Ledgers

A permissioned ledger is a closed-source distributed ledger technology (DLT) that requires participants to be known and authorized before they can use or validate activities on the network. This distinguishes them from public networks like Bitcoin and Ethereum blockchains, which are open to everyone and do not require prior authorization. Permissioned ledgers are particularly suitable for organizations or consortiums that handle privileged private information that should not be accessible to the public.

One important difference between a permissioned ledger and a centralized database is that a permissioned ledger involves diverse participants and does not have a single point of failure. Unlike centralized databases, all data on a permissioned ledger can be verified using secure cryptography and digitally-verifiable signatures. While permissioned ledgers can be based on public networks, they have unique designs and execution methods.

Despite not having tokens, permissioned ledgers offer high performance. They enable business entities and corporations to securely share sensitive information while ensuring cost-effectiveness and confidentiality. Both permissioned and public ledgers share the characteristic of immutability, although public ledgers tend to be more robust in this aspect.

The governance mechanism of permissioned ledgers is semi-centralized, requiring agreement from all authorized parties involved. These systems can vary in terms of decentralization, transparency, anonymity, security, and censorship-resistance. Additionally, permissioned ledgers enjoy advantages in legal and regulatory matters compared to their permissionless counterparts. Some well-known examples of permissioned ledgers include R3, B3i, and Hyperledger.