Permissionlessness in Crypto: Open vs. Permissioned Networks

When Bitcoin launched in 2009, it was a real-world proof of the “permissionless” principle. Anyone could join the network and start mining new blocks without asking for anyone’s approval. If miners refused to include your transaction, you were free to become a miner yourself, create a block, and add that transaction to the blockchain. Access was completely open: all you needed was to run mining software on your computer and compete with others in solving a cryptographic puzzle. No bank, no government, no administrator could stop you from moving your money. This openness became one of Bitcoin’s defining features and laid the foundation for the “no-permissions” ideology.

Today, however, many blockchains work differently. In a growing number of networks, an ordinary outsider cannot simply add their own block. To gain that ability you need permission from the developers or other entities controlling the network. A vivid example is Hyperliquid: the chain rose to popularity at a time when becoming a validator was impossible without the team’s approval. Only in April 2025 did the technical possibility open for anyone who could stake enough to enter the top-21 validators by stake.

I find myself wondering why the crypto community so easily embraces this permissioned model. Why use a cryptocurrency whose blockchain might block your transaction if validators decide to censor it? That’s exactly what we already have with banks and other traditional financial institutions. How is it that so few people paid attention to the permissioned nature of a popular blockchain — and many even called it “decentralized”?

How Permissioned Blockchains First Emerged

The first widely known cryptocurrency to take this approach was Ripple (XRP), launched in 2012. Unlike Bitcoin, Ripple doesn’t use Proof-of-Work. Its developers believed PoW slowed blockchains down and made scaling difficult. So, Ripple doesn’t require solving cryptographic puzzles to add a block — in theory, any node can propose one.

But that opens the door to malicious actors. What if someone tries to reverse transactions or rewrite blocks? Unlike Bitcoin, where such attacks require massive computational and energy costs, in Ripple they could be cheap and easy.

To solve this, Ripple introduced the concept of a Unique Node List (UNL) — a predefined set of trusted validators whose blocks are accepted by the network. In practice, only validators from this list can add blocks to the XRP Ledger. If your transaction is censored, you can technically include it in your own version of the chain — but no one else will see it. To maintain a shared history of transactions, everyone ends up trusting the same list of validators, typically recommended by Ripple Labs.

Ripple’s model was heavily criticized in the early days. The crypto community, still energized by Bitcoin’s ideals, initially rejected the project. Over time, though, Ripple found a niche in fast cross-border payments and partnerships with banks. The criticism faded — and today, few people question Ripple’s permissioned design.

Other examples followed. In 2014, we saw the rise of BitShares, a blockchain with Delegated Proof-of-Stake (DPoS). In this system, token holders vote for a limited number of delegates who are responsible for producing blocks. This speeds up block creation and propagation.

To be fair, BitShares doesn’t technically restrict anyone from becoming a validator. The set of validators is small, but open. Anyone can be replaced at any time. If you hold a large enough amount of BTS, you can vote for your own node and become a validator. Sure, it’s expensive — but not unlike the cost of acquiring ASICs and setting up a mining farm in Bitcoin. The protocol doesn’t prohibit anyone from participating.

In 2018 came EOS — a smart contract platform with just 21 block producers, chosen by token holder voting. Similar models exist in Tron (27 super representatives), Neo, and others. These networks require approval from token holders to become a validator, but no one is technically forbidden from staking heavily and voting for themselves.

Arguably the boldest experiment before 2023 was Facebook’s attempt to launch a cryptocurrency: Libra, later renamed Diem. Announced in 2019, Libra was explicitly permissioned — only the 100 founding members of the Libra Association would be allowed to run network nodes. That drew immediate backlash. Crypto libertarians saw it as a corporate club with full control over the chain — easily pressured by governments or regulators. Libra’s creators justified the design as a pragmatic trade-off: they needed scalability and speed for a user base in the billions. In the end, Diem never launched — but the precedent was set. Ever since Ripple, the idea of a permissioned blockchain was no longer unimaginable. And with Libra, it stopped being alien to the space entirely.

Why Did Permissioned Blockchains Catch On?

At first, permissioned blockchains faced heavy criticism from the crypto community. But over time, the industry began to recognize their advantages.

For one, a restricted set of validators makes more sense in corporate and government contexts, where trusted participants and tighter control are necessary. Hedera Hashgraph is a prime example: it’s governed by a council of major companies like Google and IBM, and only council members can run consensus nodes. This setup is marketed as more predictable and business-friendly.

Another advantage is performance. With just a dozen or so trusted nodes validating blocks, the network can process transactions faster and more cheaply. Binance Smart Chain, for example, achieved high throughput by starting with a centralized group of 21 validators handpicked by the team. Over time, BNB Chain shifted to a model similar to Tron or BitShares, where token holders vote on validator candidates — but the validator set remains small and structured.

Gradually, the crypto community adopted a more pragmatic view. Centralization began to be seen as a spectrum, not a fatal flaw. There’s now strong demand for projects that trade some decentralization for speed, energy efficiency, regulatory compliance, or bank integration. Many successful networks launched in the 2020s embrace these kinds of trade-offs.

Some chains even started out as permissioned and later opened up. Besides BNB Chain, dYdX Chain followed a similar path — eventually allowing broader participation in validation.

Perhaps that’s why the crypto world gave Hyperliquid a pass early on. Although validators initially had to be approved by the core team, the community may have expected that to change over time. And technically, it did: since April 2025, anyone can become a validator — if they make it into the top 21 by stake.

But this raises concerns. A large share of the HYPE token supply was allocated to the team and insiders. And thanks to ongoing buybacks, many tokens end up in the Assistance Fund, where they’re no longer available on the open market — but still controlled by the team. That gives the team lasting influence over validator elections.

So while the system may look permissionless on paper, in practice, becoming a validator still requires the team’s blessing. Hyperliquid remains a de facto permissioned blockchain — and the team doesn’t really deny it.

Permissionless Blockchains: Open Access Still Thrives

Many of today’s leading crypto networks continue to uphold the principle of open access first introduced by Bitcoin. In these systems, anyone can become a miner or validator — no special permission required. All it takes is meeting the publicly known technical criteria, such as owning the necessary hardware or staking a required amount of tokens.

Some of the most prominent permissionless blockchains include:

• Bitcoin
• Ethereum
• Litecoin
• Dogecoin
• Monero
• Bitcoin Cash
• Cardano
• Polkadot
• Solana
• Avalanche

Each of these networks proves that the “code is law” approach still works in practice. The rules of participation are the same for everyone. There’s no central authority that can grant or revoke special privileges.

Despite the rise of more “closed” blockchain designs, permissionless networks remain the cornerstone of the crypto ecosystem. They provide the strongest guarantees of censorship resistance and transactional freedom — ensuring that anyone, anywhere, can help secure the network and participate on equal terms.

Permissioned Blockchains: Limited Access to Block Creation

Alongside the growth of open networks, many blockchain projects have adopted a permissioned model — where users cannot freely begin producing blocks. In addition to previously discussed networks like Ripple, Hedera, and Hyperliquid, here are several more examples:

• VeChain: Built on a Proof-of-Authority (PoA) consensus model, VeChain relies on a fixed set of 101 Authority Masternodes, each of which must be approved by the VeChain Foundation.
• XDC Network: Uses a delegated Proof-of-Stake variant (XDPoS) with a cap of 108 masternodes. Candidates must undergo identity verification — and may be rejected if they don’t meet certain criteria.
• Internet Computer: Nodes can only be run by data centers that are officially approved by the network’s governing body — the Network Nervous System (NNS).
• Klaytn: Block production is handled by a Governing Council composed of 30 organizations, who collectively approve new validator candidates.
• Flow: Initially launched with blocks confirmed exclusively by trusted nodes from Dapper Labs. To this day, every validator application must be reviewed and approved by the Flow Foundation.
• Cronos: Based on Proof-of-Authority, where validators are added by invitation only. Open applications are not accepted.
• WEMIX: The validator set is limited to 40 selected participants, all approved by the project team.

Conclusion

The world of cryptocurrencies today is highly diverse. There are fully open networks that continue the spirit of Bitcoin, as well as partially or fully closed ones that rely on a restricted set of validators. The first model provides freedom and complete control over your assets. The second offers speed, scalability, and oversight from regulators or developers.

The coexistence of both models shows that the crypto space has room for both freedom and regulation — for self-custody and for trust in third parties. The choice between an open or closed architecture depends on the project’s goals, and the industry has clearly found use cases for both.

But what’s important is not to mislead yourself or others. When developers retain control over user funds, it should not be called “a decentralized, community-governed project.” And claiming that “no permission is needed” when it clearly is — that’s, in my view, blatant disrespect for users.

If this article has helped you realize that the cryptocurrency you’re using doesn’t provide the level of transactional freedom you expect, take a closer look at the permissionless blockchains listed here. All of them are available for exchange at the best rates on rabbit.io.