o Partially Decentralized- While permissioned blockchains are distributed across multiple

peers or nodes like other blockchains, the network participants are limited to approved
entities rather than anonymous nodes.
o Identity Verification- In permissioned blockchains, real-world identities can be associated
with user addresses and transactions through identity verification processes.
o Customized Permissions- Administrators in permissioned blockchains can define granular
access policies and permissions for different types of members and roles.
o Flexible Consensus Models- Permissioned blockchains can utilize faster and more
energy-efficient consensus models like PBFT and voting-based schemes rather than
resource-intensive proof-of-work.

Pros and Cons of Permissioned Blockchain

Pros
 Increased Privacy and Security
 Customizability
 Efficiency Gains
 Regulatory Compliance
 Centralized Governance
Cons
 Limited Transparency
 Higher Corruption Risks
 Censorship Potential
 Centralization Risks
Permissionless blockchain- are public blockchain networks that impose no restrictions on
access or participation. Some of the salient features of a permissionless blockchain include:
o Fully Open Access- In contrast to permissioned blockchains, anyone globally can join,
submit transactions, and participate in consensus mechanisms like mining in
permissionless blockchains without needing approval.
o Full Transparency- All transactions are publicly visible to every node in a default
permissionless blockchain like Bitcoin
o Pseudo-Anonymity- Users interact through cryptographic key pairs rather than real-world
identities.
o Censorship Resistance- With no central authority and distributed consensus mechanisms
like proof-of-work, no single entity can tamper with transaction histories or censor activity
on a permissionless blockchain like Bitcoin.
o Incentivized Participation- Tokens are used to incentivize nodes to verify transactions
and secure the network through mining and staking.

Pros and Cons of Permissionless Blockchain

Pros
 Censorship Resistance
 Transparency
 Security Resilience
 Immutable Records
 Accessibility
Cons
  Performance Limitations
 Energy Intensive
 Minimal Privacy
 Potential for Crime

I. CONSENSUS
All parties agree to network verifiable transactions.

Two Approaches of Consensus

o Centralized
o Decentralized

Consensus Mechanisms
o The process by which a group of peers – or nodes – on a network determine which
blockchain transactions are valid and which are not.
o Are used to verify transactions and maintain the security of the underlying blockchain.

Different types of Consensus Mechanisms

o Proof of Work (PoW)
- Miners essentially compete against one another to solve extremely complex
computational puzzles using high-powered computers.
o Proof of Stake (PoS)