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Quiz Entry - updated: 2026.08.26

Roughly how do permissionless blockchains, permissioned blockchains, and central databases compare on performance and structure?

Throughput and latency get better as you move from permissionless → permissioned → central DB; the blockchains' cost buys tolerance of untrusted writers, which the central DB has zero of.

Permissionless Permissioned Central DB
Throughput Low High Very high
Latency Slow Medium Fast
Untrusted writers tolerated High Low 0
Consensus Mainly Proof of Work (PoW), some Proof of Stake (PoS) Byzantine Fault Tolerance (BFT), e.g. Practical BFT (PBFT) None
Centrally managed No Yes Yes

The single idea behind the table: consensus is what costs you performance. A permissionless chain runs heavy consensus (Proof of Work) to tolerate many anonymous, untrusted writers, so it's slowest. A permissioned chain uses lighter Byzantine Fault Tolerance consensus among few known writers, so it's faster. A central DB does no consensus at all — fastest, but tolerates no untrusted writers because there's only one.

Byzantine Fault Tolerance (BFT) is the property of still agreeing on one correct answer while some participants are Byzantine — not merely crashed, but arbitrarily faulty: lying, sending different answers to different peers, colluding. (The name comes from the Byzantine Generals Problem, where generals besieging a city must agree on attack-or-retreat while some of them are traitors.) The classic algorithm, Practical BFT (PBFT), reaches agreement by having the known participants vote in rounds, and works as long as fewer than a third of them are malicious — cheap compared to Proof of Work, but it needs a known, fixed membership list, which is exactly why it fits permissioned chains and not permissionless ones.

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From Quiz: IOTHACK / Do You Need a Blockchain? | Updated: Aug 26, 2026