Permissioned blockchain networks have many advantages over permissionles networks, including authorized access and control over the shared data, and are a preffered choice of traditional enterprises entering the blockchain space.
Blockchain network enables their members to participate in the process of block verification to create consensus, smart contracts and rules of transactions. On the account of permissions there are two kinds of blockchain networks. They share some common features, like immutability, but they also possess some unique features.
1. First are so called permissionless networks. Here everyone can join and starts verifying. Most known examples are Bitcoin and Ethereum networks.
2. The other ones are permissioned networks. In this case the network owner decides who can join the network and only few members are allowed to verify blocks. The consensus mechanisms can be the same as in permissionless network or can be completely uniquely designed (e.g. authority based).
Permissioned blockchain network has many advantages over permissionless networks, including:
- more customizability and adaptation options,
- security, privacy and authorized access, control over which data is public and private,
- efficiency and high performance (fast transaction confirmation and low latency),
- custom (could be zero) transaction fee.
For all the reasons above, we belive permissioned ledger is an optimal solution for all the organizations where there is a need for more privacy and access management. Using permissioned ledger, Nxxtech enterprise-ready blockchain architecture enables any enterprise to bring their communication or transfer value off-chain, eliminating the necessity to use tokens or pay the gas fee.
To confirm transactions, Nxxtech uses Proof of Authority consensus, allowing only selected entry of verified users (or devices) to participate. In that process, users voluntarily disclose their identity in exchange for the right to validate. Nodes elect a leader, which has the role of validating transactions and extending the ledger.To learn more on how consensus algorithms validate trust on blockchain visit our blog post.