Private blockchain (permissioned)

Private blockchains were introduced mostly to widen the scope of blockchain technology. The permissioned blockchain, as the name suggests, uses the opposite approach to that of the public blockchain. Private blockchains came about mainly to solve some of the issues we saw in public blockchains and to make blockchain technology scalable.

Permissioned blockchains introduce access control to provide specific access to the participants in a network. Each permissioned blockchain will have an administrator who assigns roles for the participants in the network. Permissioned blockchains ensure that bad actors are not a part of the validation or block-creation processes and thus eliminate any potential attacks on the blockchain. A network involving a permissioned blockchain is mostly a trusted network.

Private blockchains are suitable for organizations where a ledger only needs to be shared internally. Permissioned blockchains are often mutable or not strictly immutable, and their transactions can be modified with some effort; this is in stark contrast to public blockchains, where this is nearly impossible. Permissioned blockchains are still decentralized ledgers, but they will have some nodes with limited capability within the organization, whereas nodes in public blockchains are treated impartially.