Permissioned Blockchains: Beyond Efficiency and Innovation

• Blockchain stands tall as a revolutionary technology.
• The ‘permissioned blockchain’ offers a practical solution, balancing blockchain’s potential with the real-world needs of businesses and regulators.
• A permissioned blockchain is a secured variant of traditional blockchain, allowing only authorized participants with access control to perform tasks on the platform.

In the modern parallels of the digital era, Blockchain stands tall as a revolutionary technology. Originally conceived as the underlying technology for Bitcoin, Blockchain today has evolved far beyond its initial use case, int the form of permissioned and non-permissioned blockchains, presenting itself as a transformative force across various industries. This distributed ledger technology stands tall as a ground-breaking technology, promising to redefine how we conduct transactions, secure data, and build trust in a digital age.

Blockchain as a technology, has two types, which serve two different purposes – the permissionless and the permissioned. While there is some form of exposure to the concept of the ‘permissionless Blockchain’ in India thanks to the rise of Bitcoin, and Ethereum, the concept of ‘permissioned Blockchain’ is foreign to many.

The ‘permissioned Blockchain’ represent a pragmatic approach to harnessing the power of Blockchain while addressing the practical needs and challenges faced by businesses and regulatory bodies. With the market projected to expand at a compound annual growth rate (CAGR) of around 40-45%, driven by increased adoption across various sectors including finance, healthcare, supply chain, and public administration, ‘permissioned Blockchain’ could very well be the answer to enhance trust, innovation, and efficient governance.

A Deloitte report also highlights how amid all the talks of data protection and a key challenge for those using blockchain, while the permissioned blockchain allows the superuser as a data controller, in a permissionless blockchain it would potentially be every member of the network. As a result, permissioned blockchain is ideal, especially for enterprises, which hold data at a premium.

So, what makes ‘permissioned Blockchain’ secure?

A ‘permissioned Blockchain’ as a variant of the traditional Blockchain technology is closed or has an access control layer and as a result, only participants with an additional layer of security, and authorization can perform tasks on such a platform. This type of Blockchain forms an ideal solution for businesses and organizations, especially considering the amount of data leaks at a stage where data leaks and privacy have become a big issue.

What ‘permissioned Blockchains bring to the table is a high level of privacy and security. Without having been verified or granted permission, nodes don’t have a chance to access or alter transaction information. At the same time, it brings more flexibility to decentralization. Often in a decentralization, lack of flexibility is seen as a backdrop. But having an incremental or fully centralized ecosystem this problem is resolved. This allows businesses to operate with more freedom without having to worry about the risks associated with a highly centralized network.

The ‘permissioned Blockchain’ are also highly customizable and can accommodate configurations and integrations based on an organization’s needs. Therefore, its scalability is not an issue. They can efficiently work even with the limited number of nodes needing to manage the transaction verifications.

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This would mean that adherence to regulatory standards ‘permissioned blockchains’ are designed in a manner to incorporate regulatory controls. They allow for the implementation of know-your-customer (KYC) protocols, anti-money laundering (AML) measures, and other compliance mechanisms directly into the blockchain architecture. This alignment with regulatory frameworks makes ‘permissioned Blockchains’ a preferred choice for sectors such as banking, insurance, and government services.

Permissioned Blockchain can reduce reliance on middlemen

Being permissioned in nature, it can reduce reliance on intermediaries, permissioned blockchains make transactions faster, more secure, and cost-effective in finance institutions. At the same time, they can contribute to real-time settlement and reconciliation, improving efficiency and reducing risks. Healthcare is another sector in which permissioned Blockchain can be effectively used. Healthcare providers can leverage permissioned blockchains to securely share patient data, ensuring privacy and compliance with regulations like HIPAA.

Not just the private sector, but even governments can deploy permissioned blockchains to improve the efficiency and transparency of public services. Blockchain technology can streamline processes such as land registry, identity verification, and voting systems. By providing a secure and immutable record of transactions, blockchain enhances trust in public administration and reduces the risk of corruption.

In fact, according to a 2019 Ernst and Young study,, most of the respondents of the study felt that blockchain projects were comfortable with the permissioned blockchains. But despite this, only most of the permissioned or private blockchain projects are still largely in their planning stages. The study states while 66% are planning to implement it, only 24% have managed to implement it.

Of these respondents, about two-thirds say their firms have chosen to start their own networks rather than participate in networks that already exist.

As the market continues to grow, it’s time that ‘permissioned Blockchains’ could well be the answer to streamlining business operations across sectors. Through the power of Distributed Ledger Technology (DLT), these offer the advantages of transparency, immutability, and traceability, while effectively addressing scalability and privacy concerns often associated with permissionless blockchains. As DLT continues to advance, there is significant scope for ‘permissioned blockchains to transform industries that require secure, controlled, and efficient data management.