March 25, 2024

All You Should Know About Permissioned Blockchain.

It's not always easy to track the provenance of materials, items, or rights. As a result, industries have long been targets for fraud, with offenders able to exploit chain gaps and vulnerabilities in the system to their benefit while leaving others at risk of ruin.

All You Should Know About Permissioned Blockchain.: eAskme
All You Should Know About Permissioned Blockchain.: eAskme

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Permissioned Blockchain:

A permissioned blockchain is a network that doesn't allow anyone outside of specific permissioned hubs to join or see what's happening inside the network.

This aspect makes it especially useful for supply chains where sensitive information like financial records and trade secrets needs protecting from prying eyes.

Companies in financial and tech industries that want to use blockchain technology to enhance their supply chains or provide better services or products to their customers are interested in permissioned blockchains.

The use case for permissioned blockchains is based on a shared ledger controlled by the participants in the system. It can run on private or public blockchains.

Permissioned blockchains are labeled a well-suited blockchain solution for use cases in finance and tech industries requiring confidentiality and integrity assurance.

The six main advantages of permissioned blockchains provide some reason for companies to consider using permissioned blockchain solutions instead of public ones when building their supply chains or integrating solutions to track goods and assets in the supply chain.

First, let's compare the three significant types of blockchain and their capabilities.  

Public vs. Private vs. Permissioned Blockchain:

Permissioned blockchains are NOT private networks.

They are often public blockchains controlled by entities that want to agree on the rules and datasets related to their business purposes.

The "permissioned" part is how members decide who can inherit this dataset.

The participants in the network should have a clear purpose, role, and requisite permissions to make changes to the initial shared data set.

Public blockchain networks are open to all without membership or permission. Anyone can participate or join at any time and see what everyone else is doing on the system with total transparency.

The downside of public networks is that if a bad actor joins the network, they can infect the system with viruses or malware or disrupt the integrity of the shared data set by modifying it without permission.

Blockchain networks have private ownership and access to information available to participants.

Participants on private blockchains are not anonymous and cannot join at will. Private blockchains are usually used for commercial purposes where confidentiality matters more than total access to all parties involved in a business transaction.

Permissioned blockchain networks are controlled by a trusted group (or groups) for specific purposes like tracking materials and assets in supply chains or generating shareholder records for shares held by mutual funds or trusts.

Six Advantages of the Permissioned blockchain:

Permissioned blockchain use cases can have the following advantages in supply chains:

  1. Accurate and timely information on asset location and status.
  2. Reliability of information provided by participants concerning the original data set.
  3. Sensitive information is secured from unauthorized access.
  4. Ability to make changes to the dataset only by using a pre-authorized subset of participants who are deemed trustworthy based on prior experience with a given individual's actions or from common sense practices like following up a delivery date on one asset by checking another against the purchase order related to that specific product item.
  5. All parties involved in the supply chain can share standard data sets, with no one gaining access or having an unfair advantage over others.
  6. Real-time access to supply chain information from anywhere in the world.

Companies in the financial and technology industries are starting to explore permissioned blockchains to enhance customer services and products.

Projects are already underway with permissioned blockchains in use.

In financial services, a company recently announced partnering with Microsoft, NEM Foundation, and ConsenSys to use the Ethereum blockchain platform for its global supply chain management system.

The oil company wanted to improve its existing supply chain management system by providing a more transparent and real-time tracking of oil assets from their origin to the end customer.

Applications of Permissioned Blockchain:

Every party in the chain can trace assets at will, without time delays or conflicting information.

In addition, permissioned blockchains enable network participants to add "trusted" nodes to the blockchain network and invite new members based on standard criteria essential for particular business transactions.

Because permissioned blockchains incur private entities as well, this process can be much more straightforward than joining a public blockchain, where anyone can freely join the network and access whatever information they desire.

As a result, permissioned blockchain networks are suitable for use cases like financial transaction tracking, supply chain management, and legal document creation.

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