Understanding Permissionless Blockchain: Definition and Examples

9 Feb 2024

Permissionless is a term that many people in crypto and blockchain circles are acquainted with. Permissionless implies that you may join and utilize a blockchain network without first getting approval, permission, or authorization. 
Permissioned blockchains, as contrasted to permissionless blockchains, have gatekeepers who decide who may and may not access, utilize, and manage the blockchain. 
The permissionless blockchains offer several perks, including broader decentralization, a high degree of transparency, resistance to censorship, and robust security. The most popular permissionless blockchains are Bitcoin, Ethereum, BNB Smart Chain, and DOGE.

What is a permissionless blockchain?

Permissionless blockchains do not require any authorization to join or interact with. These are sometimes referred to as public blockchains. 
Firstly, a permissionless blockchain is appropriate for running and administering digital currency most of the time. Secondly, you can generate a personal address on these blockchains and then participate with the network by either helping the network validate transactions or just sending transactions to another user.

Thirdly, Bitcoin was the very first permissionless blockchain. It allowed individuals to trade digital currency with one another. You can also participate in the network by participating in the mining process. Additionally, it is a method that involves solving complex mathematical equations and then applying the results to validate transactions. Bitcoin utilizes Proof-of-Work (PoW) as a consensus algorithm.
Finally, several other prominent permissionless blockchains exist in the digital world, and Ethereum is quite popular. Ethereum utilizes Proof-of-Stake (PoS) as a consensus mechanism, and there are also several other new concepts introduced, such as smart contracts. 

Permissionless blockchain – Image via Freepik

How does permissionless blockchain work?

The main goal of a permissionless blockchain is to provide an environment in which there is no central authority, not even an administrator. You can access the entire blockchain, participate in the consensus, and independently check events there before they are widely accepted.

The secondary goal of these blockchains is to make it simple for people to reach a consensus. Everyone has a stake in what happens on the permissionless blockchain as everyone participates in it. The abundance of digital assets, like tokens and NFTs, along with “everyone pitching in,” makes the permissionless blockchain more efficient overall.
The permissionless blockchain’s transparency aims to incorporate as many participants as possible to make the public blockchain impervious to corruption. More than half of the permissionless blockchain would need to be corrupted to reset, and it’s tough to do so without anybody knowing.
Explore Ethereum 2.0 in great depth through this comprehensive guide.

 Characteristics of permissionless blockchain

Such blockchains offer several intriguing features. Let’s go through them one by one.

A permissionless network allows you to access information (except private keys). Transparency of transactions in a permissionless network is desirable since the fundamental purpose of a decentralized network is to avoid central authority entities.

The permissionless blockchains are typically decentralized; this means that a single entity cannot amend the ledger, shut down the network, or change its protocols on its own. However, this is mainly based on the consensus mechanism based on the majority’s sense of integrity. A majority of its users must generally agree on such a consensus.

In contrast to permissioned networks, these blockchains do not need users to provide identity or personal information when creating an address.

Tokens or digital assets can be used on these blockchains. Additionally, they are often used to lure customers to join the network. On the market, tokens and assets may gain or decrease in value over time.

Enhanced Security
Permissionless blockchains are safer, thanks to cryptography and other security factors.
Aside from all these features, another essential feature of these blockchains is that anybody can join the network. These blockchains are also highly effective at encouraging network users.
Check out the difference between Ethereum 1.0 and Ethereum 2.0 in this guide.

Advantages of permissionless blockchain

Blockchain – Image via Pixabay

Here are some perks of utilizing these blockchain

  • As it is open to anyone, there are no additional procedures for transaction validation or interaction between authorized intermediaries and users on the blockchain.
  • Because of its worldwide accessibility, the network is secure and resistant to censorship. 
  • There is no single repository to target, and to override the network’s consensus procedures; hackers would need to attack 51% of it.
  • It builds credibility and trust with all those entities that interact with it. 
  • With so many users, no one person or organization can exercise complete control over it, and smart contracts still offer another level of security.

Make sure to know how blockchain technology ensures data privacy through this guide.

Examples of permissionless blockchain

Here are a few prominent examples of these blockchains. Let’s discuss them individually:

Bitcoin, Litecoin, and Ethereum – Image via Pixabay


This is the world’s first cryptocurrency supported by permissionless blockchain technology. Proof-of-work (PoW) consensus secures Bitcoin and its ledger, which is the “mining” process that brings new bitcoins into the system.


Ethereum is a decentralized, permissionless blockchain platform that creates a peer-to-peer network for securely executing and verifying application code known as smart contracts. 
Smart contracts enable participants to interact with one another without the need for a trustworthy central authority. Transaction records are irreversible, verified, and securely distributed over the network, providing participants with complete ownership and visibility. 
User-created Ethereum accounts send and receive transactions. As a cost of executing transactions on the network, a sender must sign transactions and spend Ether, Ethereum’s native coin.


A fork in the Bitcoin permissionless blockchain led to the creation of Litecoin (LTC) in 2011. It was first created to satisfy the developer’s concerns that Bitcoin was becoming more centralized and to make it harder for large-scale mining companies to dominate the mining process. It is cheaper and faster than Bitcoin, as transactions are generally smaller in size. 

Permissionless vs. permissioned blockchain

Due to the two blockchain architectures have different uses, they are better suited to specific applications.
Blockchains, for instance, are better suited for use in financial applications. It is also very suited to situations that demand a lot of decentralization, like:

  • Donation and crowdfunding
  • Blockchain storage
  • Trading of digital assets 

Additionally, permissioned blockchains, meanwhile, are appropriate for uses that demand a high level of anonymity and security, such as:

  • Claims settlement
  • Identity verification
  • Supply-chain Management

However, as with everything, evaluating the benefits and drawbacks of both DLT paradigms before investing your funds in them is essential.

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