Permissioned Ledger Definition
A permissioned ledger is a type of blockchain ledger where the network’s participants are carefully selected and granted the exclusive right to validate and manage transactions. This type of ledger establishes restrictions on who can participate in the blockchain network and what actions they are allowed to perform.
Permissioned Ledger Key Points
- It operates within the context of a blockchain network where participants need permission to engage in activities.
- The control over the blockchain’s functionalities is maintained by the selected participants.
- Permissioned ledgers offer more security and privacy than permissionless ones.
- They are commonly used in corporate settings where maintaining confidentiality is essential.
What is a Permissioned Ledger?
A permissioned ledger is a variant of a larger concept – the blockchain. The blockchain is a distributed ledger technology that securely records all transactions happening across it. But in a permissioned ledger, a selected network of nodes holds the authority to manage transactions. Admission to this network requires pre-verification and permission.
Who utilizes Permissioned Ledger?
Permissioned blockchains are significantly used in business and corporate environments where the participants can’t be anonymous, and there’s a need for a pre-established network of known and reliable participants. Financial institutions, supply chains, and interbank transactions frequently use permissioned ledger due to the high security, privacy, and control it offers.
Where is the Permissioned Ledger used?
Permissioned ledgers are often used in highly-secured and confidential scenarios. In finance, companies use them for sensitive transactions that require both security and transparency. They’re also seen in healthcare for storing private medical records, and in supply chain management for tracking the movement of goods.
Why is a Permissioned Ledger important?
The significance of permissioned ledgers lies in their ability to provide more control, security, and privacy over the blockchain network. While maintaining the transparency benefits inherent to blockchain technology, these ledgers add an extra layer of control and security, making them better suited for organizations dealing with highly sensitive information.
How do Permissioned Ledgers work?
Similar to other types of blockchain, transactions made on a permissioned blockchain are recorded into blocks. Each block is then linked—or chained—to the previous one. However, in permissioned blockchains, only predetermined, verified nodes can add and validate blocks. As such, this type of ledger can streamline processes by ensuring only known and reliable participants have transaction authority, ultimately providing increased efficiency along with enhanced security and control.
