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ACCA Strategic Professional · Strategic Business Leader · Enabling success: disruptive technologies

Calder Bank is evaluating a private, permissioned blockchain for settling trades among a consortium of five banks rather than using a public blockchain. Which is the most valid reason for preferring the permissioned approach?

A permissioned blockchain limits participation to known, approved banks, which gives access control, faster validation and easier regulatory compliance. The trade-off is less decentralisation than a public blockchain, which is acceptable for a consortium needing governance and confidentiality.

  1. AKnown participants allow access control, faster validation and easier regulatory compliance, though with less decentralisationCorrect
  2. BIt allows anonymous parties anywhere to validate transactions without identity checks
  3. CIt removes the need for any agreement between the five banks
  4. DIt makes the ledger fully open to the general public

Explanation

Permissioned blockchains restrict participation to identified, approved parties, enabling access control, quicker consensus and easier regulatory oversight, at the cost of reduced decentralisation. Anonymous open validation and public visibility describe public blockchains.

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