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What is the Difference Between Public and Permissioned Blockchains?

What is the Difference Between Public and Permissioned Blockchains?

Blockchain technology does not always have to be implemented in a public peer-to-peer system.

Blockchains rely on a network of computers, representing nodes, that collaborate and distribute the information required for the blockchain to function. The nodes in some blockchains can be established by any computer willing to run the client software for the network.

Bitcoin and most cryptocurrencies are intended to function this way: as a public, open-source, permission-less, and trust less network. The nodes are used indiscriminately by the rest of the network as long as the node is performing the functions required of nodes, and this is called a proof-of-work system.  When Satoshi Nakamoto coded the first blockchain, his intention was to keep the network functioning with only one tier: “one CPU, one vote.”  That vision has encountered obstacles in the form of ASIC mining and other unforeseen circumstances that have empowered some nodes and groups of users over others.

Other blockchains are designed with a hierarchy of users/nodes, where the ability to perform certain functions in the blockchain must be expressly given by a system of permissions.

 
Keywords: blockchain technology, blockchain mining, nodes, cryptocurrencies, proof-of-work, Satoshi Nakamoto, ASIC mining,