As investors demand more access to alternative investments, blockchain & DLT (distributed ledger technology) offers an innovative way to solve for the industry’s current operational inefficiencies. Here is a look at the differences between public/open & private/permissioned blockchain.
Private/Permissioned Blockchain
Public/Open Blockchain
Private/Permissioned Blockchain
Closed
Permissioned Blockchains are dedicated networks where only designated & trusted parties can participate. In simple terms, you need PERMISSION to access the system.
Public/Open Blockchain
Open
Public/Open Blockchain – anyone is free to join and participate in the core activities of the blockchain network. In simple terms, you DO NOT need PERMISSION to access the system.
Closed
Permissioned Blockchains are dedicated networks where only designated & trusted parties can participate. In simple terms, you need PERMISSION to access the system.
Open
Public/Open Blockchain – anyone is free to join and participate in the core activities of the blockchain network. In simple terms, you DO NOT need PERMISSION to access the system.
Strong Privacy
Permissioned Blockchain offers strong privacy protection & security as participants need permission to access any transaction data or other records. An outsider cannot access or enter transaction information without being verified or granted permission.
Transparent
Less privacy & security due to the open nature. Transactions are transparent & transaction execution can be viewed by literally anyone with the software to read the ledger.
Low Energy Consumption
Due to limited users, the networks require less computational power hence consume less energy.
Transparent
Less privacy & security due to the open nature. Transactions are transparent & transaction execution can be viewed by literally anyone with the software to read the ledger.
Digital Asset Securities
Traditional securities are converted to digital asset securities and recorded on the distributed ledger when applied to alternatives.
Records of all transactions are held with the issuer & shared with transfer agents, custodians, advisors, and investors who have been granted permission to transact on the Blockchain. No private key is needed as the network operates using accounts vs. wallets. Hence, if investors lose access to the account/network, the record of transaction/ownership will still remain with the asset manager & all other parties on the network.
Tokens
When applied to alternatives, open blockchain networks issue tokens representing ownership of a security that functions like bearer form instruments. Investors access their wallets with the use of a private key. Loss of private key could lead to loss of the asset.
Categories
Recent Posts
- 3 Similarities between Private/Permissioned and Public/Open Blockchain
- Key Differences between Private/Permissioned Vs Public/Open Blockchain
- ARTBNK COMPLETES GÜNTHER FÖRG’S OHNE TITEL FRACTIONALIZATION SALE USING IOWNIT’S BLOCKCHAIN PLATFORM
- Our Top 3 takeaways from McKinsey & Company’s latest report ‘Private Markets Rally To New Heights’
- ARTBnk AND iownit ANNOUNCE PARTNERSHIP TO ENABLE BLOCKCHAIN-BASED FRACTIONAL INVESTING IN ART & COLLECTIBLES