Unpermissioned Ledger Definition
An unpermissioned ledger, also known as a public blockchain, is a type of digital ledger that is open to the public without requiring permission to participate in its network. This means that any individual or entity can contribute to the data of the ledger and participate in the consensus process to validate new entries and verify existing ones.
Unpermissioned Ledger Key Points
- It is a type of public blockchain in which anyone can participate without needing authorization.
- Anybody can validate transactions, contribute data, and participate in the consensus process.
- Every participant can view all previous transactions.
- It is decentralized and does not have a single governing entity.
- Bitcoin and Ethereum are examples of unpermissioned ledgers.
What is an Unpermissioned Ledger?
An unpermissioned ledger is a blockchain technology in which anyone can join the network, validate transactions and participate in the consensus protocol. It advocates for decentralized systems and transparency. Its open, decentralized nature means that it is not controlled by any single entity or authority.
Why Use an Unpermissioned Ledger?
The decision to use an unpermissioned ledger depends on the degree of transparency, decentralization and security desired. Since all transactions are transparent and can be viewed by all participants, this can provide a high level of trust and accountability. Moreover, public blockchains tend to have more security measures due to their vast number of validators.
Where is an Unpermissioned Ledger Used?
Unpermissioned ledgers are commonly used in cryptocurrency networks like Bitcoin and Ethereum. Other sectors that employ unpermissioned ledgers include supply chain management, voting systems, energy trading, and any field that can benefit from a transparent and secure system of documenting transactions.
Who Can Use an Unpermissioned Ledger?
Being an open system, any individual, organization, or piece of software can use an unpermissioned ledger. This includes developers writing smart contracts, miners validating transactions, or users simply making transactions.
When Can You Use an Unpermissioned Ledger?
You can use an unpermissioned ledger anytime you desire a transparent, decentralised and secure system of recording transactions. This could be for creating a digital currency, tokenizing assets, building a decentralized application (Dapp), or implementing a supply chain solution.
How Does an Unpermissioned Ledger Works?
In an unpermissioned ledger, anyone is free to read, write and participate in its processes. When a new transaction or data entry happens, it gets disseminated to the whole network. Nodes then compete to solve a mathematical problem (proof-of-work) or have their stake in the network chosen (proof-of-stake) to validate and record the transaction on the ledger. Once validated, the transaction is added as a new block to the blockchain. The ledger updates in real time and each participant has a copy of the complete transaction history.
