2.2.2. Permission Mechanisms

Over the years the private institutions that realized the potential of the systems behind DLT, started to evaluate the integration of such systems with their businesses. However, some key components rendered the public chain unsuitable for many institutional and enterprise solution requirements, so they started to investigate new systems that address the issues regarding the governance and the permissions of the system. Firstly, in an enterprise solution, the participants need to be known and vetted before given access. Such a decision has a grea<sup>t</sup> impact on the system, even in terms of security and consensus. Since the participants are known, thus can be held accountable for their actions, the need for a high energy-consuming algorithm like Proof-of-Work is no longer justified. Therefore, there is a strong relationship between the requirements regarding access rights and the consensus algorithms suitable for a specific business.

The difference between public, private, permissionless, and permissioned DLT/ blockchain is given mainly by the rights of the users in the system. Based on the classification presented in Table 5, the difference between private and public chains is established according to the target audience that has access (reading rights) to the chain. Restricting the access of a group to the chain renders the chain private. According to the group of people accessing the chain, it can be a consortium or an enterprise solution, where the consortium solution operates under the leadership of a group of companies, and the enterprise solution is under the operation of a single entity.


**Table 5.** Public vs Private Blockchain permissions.

In public DLTs, some restrictions can also be imposed regarding the users' access and permissions. In a permissioned ecosystem, the validators are known and accountable for their actions, thus a certain level of trust between the nodes can be considered. In a permission-less system, on the other hand, any user can perform any type of action (transactions of an asset, as well as commits of new blocks to the chain). Consequently, permission-less DLTs require Byzantine Fault Tolerant consensus algorithms, since the openness of the system allows even malicious nodes to join, making the network susceptible to a larger range of attacks.
