Why 'Permissioned' and 'Private' are not Blockchains
14 Pages Posted: 17 Dec 2019 Last revised: 8 Feb 2021
Date Written: November 29, 2019
Abstract
This analysis shows that permissioned and private ledgers form a subclass of Distributed Ledger Technologies (DLT), which are distinguished from the original blockchain. DLTs operate with databases known as "ledgers," copies of which are distributed among multiple nodes, but not anyone can create and validate new blocks of data in such a ledger; they are not decentralized. On the contrary, blockchain was designed as a decentralized, open, and competitive peer-to-peer system. The widespread misconception is to call any technology "blockchain" when it has some chunks of data connected through cryptographic hashes. The technology of creating a sequence of timestamped records connected with hashes is not new, it was designed in the early 90s, but nobody has ever called it "blockchain," as it has never dealt with decentralized consensus protocols and did not operate in a distributed network. Hence, not every chain of blocks is the blockchain. The paper dives into the details of various of DLTs and blockchains. It aims to bring rigor into terminology and academic discourse. It also raises the alarm on false expectations that may appear across industries and the public about a decentralization effect that some DLTs might not bring.
Keywords: blockchain, distributed ledger technology, decentralization
Suggested Citation: Suggested Citation