Private blockchains are distributed ledgers only available to those given express permission to have specific access levels or abilities on a blockchain."}},"@type": "Question","name": "Are There Any Permissioned Blockchains?","acceptedAnswer": "@type": "Answer","text": "Many companies have found utility and value in permissioned blockchains. For example, Walmart uses a custom version of Hyperledger Fabric, which was created as an open source project by IBM and the Linux Foundation for enterprise use, to track food origins much faster than it previously could.","@type": "Question","name": "What Is the Difference Between and Permissioned and Private Blockchain?","acceptedAnswer": "@type": "Answer","text": "A private blockchain is one in which only specific users have access and abilities and is generally used only by the entity it belongs to. A permissioned blockchain is a hybrid of public and private blockchains where multiple users are given permissions and abilities."]}]}] EducationGeneralDictionaryEconomicsCorporate FinanceRoth IRAStocksMutual FundsETFs401(k)Investing/TradingInvesting EssentialsFundamental AnalysisPortfolio ManagementTrading EssentialsTechnical AnalysisRisk ManagementNewsCompany NewsMarkets NewsCryptocurrency NewsPersonal Finance NewsEconomic NewsGovernment NewsSimulatorYour MoneyPersonal FinanceWealth ManagementBudgeting/SavingBankingCredit CardsHome OwnershipRetirement PlanningTaxesInsuranceReviews & RatingsBest Online BrokersBest Savings AccountsBest Home WarrantiesBest Credit CardsBest Personal LoansBest Student LoansBest Life InsuranceBest Auto InsuranceAdvisorsYour PracticePractice ManagementFinancial Advisor CareersInvestopedia 100Wealth ManagementPortfolio ConstructionFinancial PlanningAcademyPopular CoursesInvesting for BeginnersBecome a Day TraderTrading for BeginnersTechnical AnalysisCourses by TopicAll CoursesTrading CoursesInvesting CoursesFinancial Professional CoursesSubmitTable of ContentsExpandTable of ContentsPublic BlockchainPrivate BlockchainPermissioned BlockchainFrequently Asked QuestionsCryptocurrencyBlockchainPublic, Private, Permissioned Blockchains ComparedByShobhit SethUpdated July 28, 2022Reviewed byErika Rasure Reviewed byErika RasureFull BioErika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest.
Public blockchains can be secured with automatic validation methods and encryption that keep single entities from changing information in the chain (like cryptocurrency blockchains), or they can allow anyone to make changes.
Using Blockchain to Keep Public Data Public
A private blockchain is one in which only specific users have access and abilities and is generally used only by the entity it belongs to. A permissioned blockchain is a hybrid of public and private blockchains where multiple users are given permissions and abilities.
An important function of government is to maintain trusted information about individuals, organizations, assets, and activities. Local, regional, and national agencies are charged with maintaining records that include, for instance, birth and death dates or information about marital status, business licensing, property transfers, or criminal activity. Managing and using these data can be complicated, even for advanced governments. Some records exist only in paper form, and if changes need to be made in official registries, citizens often must appear in person to do so. Individual agencies tend to build their own silos of data and information-management protocols, which preclude other parts of the government from using them. And, of course, these data must be protected against unauthorized access or manipulation, with no room for error.
Tamperproof records. Users of a blockchain database could easily reconstruct when a change to the ledger occurred, what information was modified, and where in the network the change originated.
There are a number of blockchain tools and technologies that government agencies can implement today to protect critical data and improve the management of records associated with property ownership and incorporation. In the long term, as blockchain matures, governments may also use it to enable networked public services.
The Swedish government is piloting a blockchain database intended to significantly streamline real-estate transactions. The database would allow for trusted digital verification of purchasing contracts, bills of sale, mortgage deeds, and other critical documents. It could also shorten the time between the writing of a purchase contract and the final registration of the asset transfer from months to days, and, in some cases, hours, while also reducing the risk of errors and fraud.
The republic of Georgia has indicated that it will test a similar technology, allowing citizens and companies to use a smartphone application to acquire and transfer property titles within a short period of time and at limited cost. The current property-transfer process is manual; applicants can spend up to a day waiting in line at a public registry and pay between $50 and $200 to complete a transaction. According to our analysis of real-estate transactions across all countries in the Organisation for Economic Co-operation and Development, buyers pay at least $3.5 billion a year in administrative fees to register their purchases. Digital processing could significantly decrease the cost of this service to governments; in turn, agencies could pass the savings on to citizens.
An additional benefit of using blockchain to keep track of property ownership is that insiders, too, could be held in check; it would be that much harder for unauthorized government employees to manipulate information. This could lead to more secure property rights in parts of the world where the rule of lawis weak and abuse of power is high.
Agencies that provide social services typically have little or no direct access to information about interactions that a client may have had with other public authorities. And collecting such information can be a painstaking effort, requiring lots of time and legwork. In one Scandinavian country, for instance, civil servants who are responsible for planning rehabilitation programs for convicted criminals spend more than half of their workdays trying to get information about these individuals from different government agencies.
Emerging blockchain technology may support such a scenario (exhibit). Each person or organization would have all relevant data about them (basic personal information, for instance, or records of previous interactions with government agencies) stored in a dedicated ledger within an encrypted blockchain database. Individuals or companies could access these ledgers through the Internet. End users could then give government agencies the authority to read or change specificelements of their individual ledger using public- and private-key cryptography.
Once priorities have been set, the incubator team can explore partnerships with blockchain providers to create pilot programs. Through these relationships, technology companies have an opportunity to showcase and road-test products while public agencies accelerate their learning about blockchain without having to significantly add internal resources.
Each party on a blockchain has access to the entire database and its complete history. No single party controls the data or the information. Every party can verify the records of its transaction partners directly, without an intermediary.
Conceivably, companies would update their information to the blockchain, with secure mechanisms put in place to protect individual and corporate privacy, and the government would use this data, submitted in real time, to apply local laws to those companies, their employees or contractors, and consumers. The government agency responsible for overseeing the industry would then analyze data, such as consumer feedback ratings and other relevant information (for example, whether ride-sharing drivers take tourists on a longer route), to improve safety and better protect the rights of everyone involved. In other words, the government would use lightweight algorithmic regulation to protect local citizen rights and safety.
The public blockchain would fundamentally change the way we govern and do business. Rather than asking companies and consumers to downgrade their digital interactions in order to comply with the law, the government would create an adaptable system that would reduce the amount of paperwork and compliance for businesses and consumers. Rather than force emerging technologies and business models into legal gray areas, the government would use algorithmic regulation to create a level playing field for incumbent companies in their respective industries.
Blockchain technology produces a structure of data with inherent security qualities. It's based on principles of cryptography, decentralization and consensus, which ensure trust in transactions. In most blockchains or distributed ledger technologies (DLT), the data is structured into blocks and each block contains a transaction or bundle of transactions. Each new block connects to all the blocks before it in a cryptographic chain in such a way that it's nearly impossible to tamper with. All transactions within the blocks are validated and agreed upon by a consensus mechanism, ensuring that each transaction is true and correct.
Blockchain networks can differ in who can participate and who has access to the data. Networks are typically labeled as either public or private, which describes who is allowed to participate, and permissioned or permissionless, which describes how participants gain access to the network. 2ff7e9595c
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