A ledger designed with restrictions, such that only people or organizations requiring access have permission to access it.
What Is a Permissioned Ledger?
A permissioned ledger is a closed-source distributed ledger technology (DLT) variant where the participants are known and authorization is required before usage or activity validation on the network. This property differentiates them from public networks such as the Bitcoin and Ethereum blockchains, which are open to all and don’t require any prior authorization. Permissioned ledgers are more suitable for organizations or consortiums, which have the requirement of privileged private information, far away from public domain.
A permissioned ledger is distinguished from a centralized database in the sense its participants are diverse and it has no single point of failure. Unlike in centralized databases, all data is verifiable using secure cryptography and digitally-verifiable signatures. Permissioned ledgers can be based on other public networks, but are notably different in design and execution.
However, such ledgers are tokenless and offer high performance. Furthermore, they allow business entities and corporations to share sensitive information with security, cost-effectiveness and confidentiality. Permissioned and public ledgers share a similarity in terms of immutability, although the latter is generally a lot more robust in this aspect.
The governance mechanism of permissioned ledgers is semi-centralized, but requires the agreement of all the authorized parties involved. These systems also vary in degrees of decentralization, transparency, anonymity, security and censorship-resistance. They also enjoy advantages in legal and regulatory matters over their permissionless counterparts. Typical examples of permissioned ledgers are R3, B3i and Hyperledger.