The Major Challenges Of Permissioned Blockchain In The Blockchain Community

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The permissioned block chain is a variant of block chain technology that runs and operates with restricted access and control it is often managed and requires a central authority or combination or coming together of the participants.

Although the permissioned block chain offers and bears certain advantages and benefits such as enhanced privacy and scalability, it also offers and comes with several disadvantages that warrant the careful consideration of it's participants.

In this post of mine I will be delving into and considering several key and significant disadvantages of the permissioned block chain, explaining and discussing how it can lead to centralization, reduced transparency, restricted innovation, regulatory concerns, and security vulnerabilities.

• Security Vulnerabilities

One of the key disadvantage of the permissioned block chain is the fact that it is not immune to security vulnerabilities and attack vectors seeing as they still rely on cryptographic protocols and network infrastructure susceptible to malicious threats and exploitation.

Having and requiring a centralized control and access permissions in the permissioned block chains will most likely create single points of failure and attack surfaces for malicious actors and as a result increasing the risk of data breaches, and network compromises.

Additionally, the permissioned block chain may lack the robustness, complexity and resilience of permissionless block chain seeing as they rely on designated and centralized authorities or consortium of its members to maintain network security and integrity.

• Restricted Innovation

The permissioned block chain is also prone to and tend to show stiffness in terms of innovation and also restricts participation compared to the permissionless block chain where anyone can join and contribute to the network and as a result fostering innovation and developments.

By creating and imposing access restrictions and implementing a centralized control the permissioned block chain inhibits and deter grassroots and basic innovation and close opportunities for collaboration and as a result limiting the diversity of ideas, talent, and perspectives within the ecosystem.

Additionally, the permissioned block chain may deter and inhibit potential developers and entrepreneurs from building decentralized applications (DApps) and exploring novel use cases, as they face setbacks and barriers to entry and regulatory compliance requirements imposed and created by centralized authorities.

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• Risk Of Centralization

Another and one of the primary key disadvantages of the permissioned block chain is the possible risk of centralization it poses on a the block chain seeing as it is particularly managed by a central authority or consortium of participants.

Centralization is a risk, a key disadvantage owing to the fact that it undermines the decentralized and trustless nature of the block chain technology, as it concentrates control and decision making power in the hands of a few parties.

Centralization to the block chain network poses risks to network security, censorship resistance, and immutability owing to the fact that a centralized authority will most likely abuse their power or act in self interest and as a result compromising the integrity and neutrality of the block chain network.

• DECREASED TRANSPARENCY

Another disadvantage of the Permissioned block chain is the tendency for it to often sacrifice transparency in favor of privacy and confidentiality seeing as the permissioned block chain allows access permissions and data visibility to be controlled by designated or centralized authorities.

And while the permissioned block chain tends to offer greater privacy and protections for sensitive information and data, they also limit and decrease transparency and as a result the external parties and participants may be unable to verify transactions or validate the integrity of the block chain ledger.

Finally reduced transparency undermines and diminishes the trustworthiness and accountability of the permissioned block chain networks seeing as the participants and stakeholders may lack visibility and unrestricted access into network operations and the decision making processes.

• REGULATORY CONCERNS

Another key disadvantage of the permissioned block chain is the fact that it is most likely to face regulatory concerns and compliance challenges, particularly in industries and sectors subject to strict regulatory oversight, such as finance sector healthcare industry, and government.

Centralized and designated control as well as access restrictions in the permissioned block chain is most likely to raise concerns and regulatory red flags seeing as it deviates from the principles of decentralization and transparency which is favored by the regulatory bodies.

Additionally, the permissioned block chain will most likely struggle to meet up with regulatory requirements related to data privacy, security seeing as centralized authorities bear responsibility for ensuring compliance with the different regulatory standards.

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Conclusively, while the permissioned block chain might offer certain advantages such as enhanced privacy and scalability, they also offer and come with several disadvantages that must be carefully considered.

Centralization, reduced transparency, limited innovation, trust dependency, regulatory concerns, and potential security vulnerabilities are among the key setbacks and disadvantages of the permissioned block chain.

Addressing these disadvantages and providing solutions requires careful design, governance, and oversight to make sure and ensure that permissioned block chain solutions meet the needs and requirements of users while preserving the core principles of the block chain technology.