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

Konashevych, Oleksii, Why 'Permissioned' and 'Private' are not Blockchains (November 29, 2019). Available at SSRN: https://ssrn.com/abstract=3496468 or http://dx.doi.org/10.2139/ssrn.3496468

Oleksii Konashevych (Contact Author)

Idependent researcher ( email )

Melbourne
Australia

HOME PAGE: http://oleksii.konashevych.com/

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