Permissioned Versus Permissionless

Joshua Gans

Chapter Chapter 4 in The Economics of Blockchain Consensus, 2023, pp 51-67 from Springer

Abstract: Abstract This chapter examines the trade-offs between permissioned and permissionless blockchain networks. Permissionless networks, like Bitcoin, allow any node to join without prior authorisation but face greater security challenges. To maintain security and deter Sybil attacks, permissionless networks impose costs on nodes and offer rewards, such as block rewards and transaction fees. Comparing permissioned and permissionless systems resembles the trade-offs between monopoly and competition. Permissionless networks encourage diverse participation and potentially higher efficiency but may incur higher costs. The chapter highlights the importance of balancing security, participation, and efficiency in blockchain networks.

Keywords: Permissioned; Permissionless; Blockchain; Security; Consensus protocols (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-33083-4_4

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DOI: 10.1007/978-3-031-33083-4_4

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