Permissioned vs. Permissionless Blockchains: Which is Best for Your Business?

Permissioned vs. Permissionless Blockchains: Which is Best for Your Business?


Permissioned vs. permissionless blockchains have been a big debate over the years, especially for enterprise needs. On Day 2 of the London Blockchain Conference, Billon COO Robert Kaluza and Rad NFTV CEO Tony Mugavero discussed the benefits and trade-offs and why they decided on the solutions they use in their businesses.

Billon Group operates a permissioned blockchain network aimed at businesses for data exchange, tokenization and identity, Kaluza told the audience. With most of its operations in Europe, it has worked with the likes of Microsoft (NASDAQ: MSFT ), Phillip Morris and more.

Regulatory compliance is one of the main reasons the company settled on the permissioned blockchain (although it’s worth noting that the BSV blockchain was built with compliance in mind).

“If you want to identify your users, where they’re sending assets, who’s producing those assets, permission is the way to go,” Kaluza noted.

Allowed vs.  permissionless blockchains - Robert Kaluza

Digital assets today are mostly traded on centralized exchanges controlled by a single entity. “The majority of users are already used to this permission structure,” Kaluza added.

Mugavero countered that permissionless blockchains like the BSV blockchain provide users with a censorship-resistant network and real ownership of their assets.

“We’re a big believer in making the underlying protocol permissionless and then layering the permissions as a Layer 2 application,” he said.

Even with centralized exchanges, users have the choice to withdraw their digital assets to another platform, since their bitcoin is on a permissionless network where no central entity can take away access.

The two panelists agreed that users must have ownership and control over their data, regardless of the permission structure of a network.

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Permissioned vs. Permissionless Blockchains: What You Should Consider

Capital is a key factor for businesses as they consider what kind of blockchain permission structure they want to integrate. Public blockchains are battle-tested; they have faced attacks and fended them off, with thousands of nodes, are as strong as they can be, according to Mugavero. There are also hundreds of tools that make it seamless to integrate these networks into business systems. Permissioned blockchains lack this and require much more capital to integrate.

Security is also critical. Public blockchains like BSV blockchains are almost impossible to hack. However, smaller private blockchains are more prone to having a single point of failure.

Permissioned vs permissionless blockchains Panellists

Energy efficiency has become an important factor as the world becomes more environmentally conscious. Allowed networks come out on top in this calculation, according to Kaluza, who noted that Billon’s network could even run on cellphones. He believes that BTC’s massive energy consumption has damaged the image of public blockchains, including the more energy efficient networks.

However, Mugavero noted that the BSV blockchain has proven that public networks can be efficient by putting hundreds of thousands of transactions into a single block. He also believes it will improve – “I’m sure the first gas-powered car was nowhere near as efficient as a Tesla.”

Allowed vs.  permissionless blockchains - Tony Mugavero

Scaling emerges as the best energy consumption solution for blockchain networks. Those that fail (or refuse) to scale like BTC continue to burn through enough energy to power a mid-sized country, just to process half a million transactions a day.

By scaling massively, BSV has proven that they can process millions of transactions a day. It recently set a new world record by reaching 86 million transactions in 24 hours; this translated to 560,000 transactions per block and over 800 per second. Fees remained stable at $0.000009 despite the rapid increase in transactions.

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See: Highlights from London Blockchain Conference Day 2

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