Permissioned vs. Permissionless: Who’s Really in Charge?

Hello friends!

Did you know that not all blockchains are created equal? Some let anyone participate, and some others keep it locked up! In today’s post we’re going to dive into permissioned and permissionless blockchains, and what they mean for governance.

So how are permissioned and permissionless blockchains different?

From a governance perspective, the core difference between permissioned and permissionless blockchains is who gets a say. Permissionless blockchains, such as Bitcoin, are open to everyone. Any person on Earth with a computer and internet can join the network, mine, and propose changes. On the other hand, permissioned blockchains, such as Hyperledger, only allow participation to approved entities, which makes the control concentrated in the hands of few.

What does this mean for governance?

Decentralization sounds great, only until you have to make decisions. For permissionless blockchains, the openness, aka decentralization, allows for a high level of creativity and censorship resistance, yet, it can make governance slow and chaotic. Imagine a network of tens of thousands of participants, getting tens of proposals every day! How will they know which proposals are worth their attention?? On the other hand, permissioned blockchains governance is more structured, as decisions are made by a known group, yet, arguably it’s less transparent and trustworthy compared to permissionless blockchains.

Who do you trust?

Blockchain governance isn’t just about technology, it’s about power. Permissionless blockchains offer transparency and decentralization but struggle to stay organized. Permissioned blockchains deliver structure and organization, but trust is in the hands of a few decision-makers.

In the end, the real question isn’t just how governance happens, it’s who you’re willing to trust to make the rules!

Until the next hash, Abed.