Exploring the Business Benefits of Permissioned Blockchains: Efficiency, Security, and Collaboration

chirag December 1, 2023
permissioned blockchain

In the tapestry of modern businesses, enterprises face a pressing problem: how to adapt and thrive in a landscape of relentless changes? Well, the solution lies in the exploration of cutting-edge technologies that transcend mundane processes and set the stage for a new era of efficiency, security, and collaboration.

At the forefront of this technological renaissance, permissioned blockchain emerges as a revolutionary approach. The benefits of permissioned blockchains lie not just in the promise of efficient operations and heightened security but also in the transformative shift toward a collaborative ecosystem.

Imagine a digital scenario where trust is not just earned but ingrained, where security is not just an application but a proactive shield, and where collaboration is not a lofty goal but an inherent advantage. Permissioned blockchains emerge as the architects of this vision, reshaping how enterprises conduct their affairs in an ever-evolving and digitally charged world.

Let’s delve deeper to understand the multifarious benefits of permissioned blockchains for businesses. Before we embark on the journey through the advantages, let’s first understand what is permissioned blockchain.

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Understanding Permissioned Blockchains

Permissioned blockchain, a subset of blockchain, is a distributed ledger technology (DLC) that is not open to the public and needs ‘permission’ to access. The heightened level of security and access control ensures that only users with permission can execute specified actions.

Additionally, participants are required to digitally identify themselves or provide certificates. This meticulous control mechanism allows the blockchain to record and maintain a comprehensive ledger of all individuals involved in the transactions transpiring on the network.

This controlled access, governed by predefined rules, imparts a level of security and privacy that makes permissioned blockchains highly valuable for modern enterprises.

Permissioned Blockchains

In this blockchain, a group of trusted individuals works together to maintain and validate the transactions. This collaborative effort involves deciding the network’s rules and governance, encompassing crucial aspects like member selection, transaction verification, and the execution of smart contracts. Consequently, permissioned blockchains provide heightened privacy, enhanced efficiency, and increased scalability.

Private vs. Permissioned vs. Permissionless Blockchains

As we dig deeper to explore the advantages and challenges of permissioned blockchains for businesses, it is essential to know the key attributes of permissioned blockchains that set them apart from their permissionless counterparts and private blockchains.

Permissioned vs Permissionless

Here’s a concise table highlighting the differences between private, permissioned, and permissionless blockchains.

CharacteristicPrivate BlockchainPermissioned BlockchainPermissionless Blockchain
Access ControlRestricted access to select entitiesControlled access with defined rolesOpen access to anyone
GovernanceCentralized or consortium governanceFully centralized, partially decentralized, Consortium, or rule-based governanceDecentralized governance
Development OriginPrivate entities for specific use casesPrivate or public entities, open-source developmentDecentralized community, open-source development
Transaction Speed/ScalabilityFaster transaction speed, scalableBalanced speed and decentralizationSlower transaction speed, less scalable
Cost Effectiveness/Energy EfficiencyCost-effective and energy-efficientBalanced cost and energy considerationsLess cost-effective, higher energy consumption
Use CasesEnterprise applications with a closed group of participantsCollaborative business networks with known participantsCryptocurrencies and open applications with a global user base

Why Permissioned Blockchains are Ideal for Business Applications

Permissioned blockchains offer several benefits that make them highly preferable for various business and enterprise applications. To help you gain a better understanding of its endless advantages, we have categorized them under three core sections: efficiency, security, and collaboration. Let’s explore each category of advantages in detail:

Business Benefits of Permissioned Blockchains

Efficiency in Business Operations

Reduced Transaction Costs

One of the most remarkable benefits of permissioned blockchain, enticing businesses across industries, is the promise of reduced transaction costs. By eliminating intermediaries, these blockchains pave the way for more direct, cost-effective transactions. The automation of processes further streamlines operations, offering a glimpse into a future where business transactions are secure and swift.

Faster Transaction Processing

Real-time settlement becomes a reality with permissioned blockchains. It eliminates traditional delays associated with intermediary verifications, allowing seamless, instantaneous transaction processing. This advances operational processes and positions businesses to respond quickly to changing market needs.

Custom Governance Structure

Permissioned blockchains are characterized by a well-defined governance structure, ensuring a more organized system. It allows organizations to choose consensus mechanisms that align with their specific needs, balancing decentralization and control.

Enhanced Security Measures

Access Control and Identity Management

Security is at the heart of permissioned blockchains. With heightened access control mechanisms and identity management protocols, this subset of blockchain ensures that only authorized members can access and act in the network. Role-based permissions and multi-level authentication add additional layers of security, preventing potential threats.

Data Encryption and Privacy

The secure transmission of data and protection against unauthorized access are the prime concerns for businesses in the digital age. Permissioned blockchains address these concerns through robust data encryption, protecting sensitive information against cyber threats or data breaches. The result is a private and trusted environment for secure business transactions.

Immutability and Auditability

Tamper-resistant record-keeping is one of the most significant benefits of permissioned blockchain for businesses. It means no one can alter, edit, or delete the data or transaction records stored in these blockchains. The immutability of transactions ensures an invulnerable audit trail, promoting transparency and accountability.

Collaboration and Interoperability

Fortified Partnerships

Permissioned blockchain is a promising solution for lasting collaboration and partnerships, providing a trusted, transparent, and secure way for numerous parties to interact and transact securely without any intermediaries.

Facilitating Trust Among Participants

Trust is the cornerstone of successful business partnerships, and permissioned blockchains provide a technological framework that fosters just that. By establishing a secure and transparent environment, these blockchains facilitate trust among participants, paving the way for collaborative ventures.

Interoperability with Existing Systems

The integration of permissioned blockchains with existing systems is a testament to their adaptability. Businesses need not overhaul their existing infrastructure as these blockchains can seamlessly integrate with legacy systems, ensuring a smooth data exchange between partners.

Also Read: What is Blockchain-as-a-Service & its Business Benefits?

Challenges in Adopting Permissioned Blockchains

While the business benefits of permissioned blockchains are compelling, they also have some drawbacks. Here is a list of permissioned blockchain challenges businesses may encounter on this transformative journey.

Permissioned Blockchain Considerations

Security Considerations

When it comes to data security, both public and private blockchains provide better protection as all the participating nodes work together to agree on what’s recorded on the blockchain. The security of permissioned blockchains largely depends on its members’ integrity. This suggests that even a small group of authorized users could collaborate to alter stored data, risking the integrity of the system.

To avoid this, it is crucial to set up the system in a way that stops any bad factors from teaming up and causing trouble.

Regulatory Challenges

Understanding and complying with industry regulations is already a complex endeavor for businesses, and when it comes to using permissioned blockchains, things become even more challenging.

Hence, businesses must match their adoption of permissioned blockchains with the ever-changing rules and guidelines set by regulators. This careful approach is crucial to ensure the seamless integration of these blockchains into the operations.

Scalability Concerns

As businesses grow and transaction volumes increase, scalability becomes a critical consideration. To resolve it, businesses must ensure that the infrastructure can support the expanding needs of the network to succeed in the long run.

You may like reading: 10 Ways to Embrace Blockchain for Business Transformation

Examples of Permissioned Blockchain Platforms

Quorum, Corda, and  Hyperledger Fabric are some of the most common examples of private permissioned blockchain platforms. Each of these platforms has its own characteristics, tailored to suit the specific business requirements. Let’s look briefly into each of these platforms:


Quorum is an open-source enterprise blockchain platform developed by JPMorgan Chase. It is built on the Ethereum blockchain but includes modifications to address the specific needs of businesses, particularly in the finance sector.


Corda is an open-source blockchain platform developed by R3. It is specifically designed to be used in finance and other industries where privacy, scalability, and interoperability are essential.

Hyperledger Fabric

Hyperledger Fabric is a modular, permissioned blockchain platform hosted by the Linux Foundation. It is a part of the Hyperledger project and is designed for developing enterprise-grade applications in various industries.

Permissioned blockchains for better business

Characteristics of Permissioned Blockchains

Permissioned blockchains, sometimes also referred to as private or consortium blockchains, possess distinct characteristics that differentiate them from permissionless blockchains. Here are the key features of permissioned blockchains:

Key Attributes of Permissioned Blockchains

Access Control

Participation in the network is limited to the users with permission. Users often need to meet certain criteria or authentication processes to join the network, ensuring a controlled and trusted environment.

Centralized Governance

In permissioned blockchain platforms, private entities or organizations control decision-making processes. This centralization allows for faster consensus and development.

Identity Management

Users who participate in the network must have verified identities. It ensures that only known and trusted entities can act in the consensus and validation processes.

Data Privacy

Permissioned blockchains allow for selective data visibility, ensuring that the information is only accessible to only authorized participants. This feature is highly valuable in healthcare and finance industries, where data privacy is paramount.


Permissioned blockchains maintain the immutability of records. Once a block is added to the chain, it is nearly impossible to alter previous transactions, enabling easy traceability of transactions.

Flexibility and Scalability

Permissioned blockchains can be customized to suit specific business needs. This flexibility allows organizations to design blockchain solutions that align with their particular requirements.

Use Cases of Permissioned Blockchains across Industries

Based on the features and characteristics of permissioned blockchains, there are several industry use cases that make them preferable for businesses of all sizes.

Industrywide Applications of Permissioned Blockchains

Finance and Banking

In the financial sector, where security and efficiency are paramount, the use cases of permissioned blockchains are paramount. From streamlined cross-border transactions to secure trade settlements, financial institutions leverage the security benefits of permissioned blockchains to fortify their operations.

Related Article: Blockchain in Fintech: A Catalyst for Disruption in Finance World


Healthcare is witnessing the transformative power of permissioned blockchains, especially in the context of compliance with regulations such as HIPAA (Health Insurance Portability and Accountability Act). This innovation is instrumental in building robust Electronic Health Record (EHR) platforms, securing sensitive patient data, and navigating the complexities of the healthcare ecosystem. The features of data integrity, secure patient records, tractility, and interoperability have emerged as a game changer for medical and pharmaceutical companies.

Related Article: Will Blockchain Revolutionize Healthcare? The Truth or A Hype

Supply Chain Management

Supply chains, with their intricate processes and various stakeholders, embrace permissioned blockchains to optimize operations. They help automate processes, manage inventory levels, and enhance supply chain visibility. From tracing the location of goods to reducing the risk of fraud, the potential of these blockchains is reshaping the future of supply chain management, ensuring authenticity and compliance with regulations.

Get an in-depth view of How is Blockchain Disrupting Supply Chain Management

Government Sector

One of the most significant applications of permissioned blockchains is the creation of secure and transparent electronic voting systems, thereby minimizing the risk of fraud. Furthermore, governments can harness blockchains for identity verification, elevating security measures in the issuance of passports and control areas at national borders.


Educational institutions find permissioned blockchains highly valuable to verify and share academic credentials. This application helps mitigate fraud in the hiring process, providing a reliable and transparent medium for validating individuals’ educational qualifications.

To leverage the maximum potential of permissioned blockchain in education, read its top use cases and potential pitfalls

The Future of Permissioned Blockchains

The future of permissioned blockchains for businesses is highly promising and holds immense possibilities. As businesses embrace the era of digital transformation, the integration of permissioned blockchains with other emerging technologies like artificial intelligence (AI) and the Internet of Things (IoT) will become a strategic imperative.

This synergy of technologies will unlock new trends, promising a future where smart contracts, decentralized applications, and enhanced automation will be on the horizon. It will shape a future where businesses can harness the full potential of a connected, secure, and intelligent ecosystem.

Enter the World of Permissioned Blockchain with Appinventiv

As we enter the dynamic landscape of blockchain, exploring the realms of permissioned blockchains has been rewarding. In this exciting journey, Appinventiv stands by your side as a trusted tech partner, widening the scope of possibilities.

With a wealth of experience in blockchain, we don’t just understand the pulse of innovations but also provide technical solutions, bridging the gap between idea and implementation.

Our team of 1200+ tech evangelists has delivered 3000+ successful projects for businesses across industries, empowering them to adapt and thrive in the evolving digital age.

Partner with us to leverage our next-gen permissioned blockchain software development services and see your business thrive in the digital paradigms.


Q. What are the different types of blockchains?

A. There are primarily three types of blockchains: public blockchains, private blockchains, and consortium/permissioned blockchains. Each type serves different purposes and caters to distinct use cases.

Q. What are permissioned blockchains?

A. Permissioned blockchains are the most preferred type of blockchain for businesses looking to add an additional layer of security, permission management features, and identity maintenance. While they are not as popular as private or public blockchains, they are often the middle way between private and public infrastructure.

Q. What is Ethereum permissioned blockchain?

A. Ethereum is traditionally known for its public and permissionless blockchain, where anyone can participate, validate transactions, and deploy smart contracts. However, there have been efforts to adapt Ethereum for permissioned use cases, leading to the development of frameworks and solutions that incorporate permissioned features. One notable example of an Ethereum-permitted blockchain is Quorum, which is an open-source blockchain platform.

So, Ethereum permissioned blockchains bring the familiarity and robustness of the Ethereum platform to enterprise settings. These solutions help bridge the gap between the decentralized nature of public blockchains and the specific requirements of businesses operating in a permissioned environment.

Blockchain Evangelist
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