# A Survey of Ledger Technology-Based Databases
## 2 Basic Concepts  
Blockchain has become something of a catchall in recent times, leading to many misconceptions and misunderstandings. Its unanimous association with crypto-currency disregards the fact that blockchain is most widely used in financial sectors. The most appropriate definition of blockchain is that of a Decentralised Ledger Technology (DLT), which uses peer-to-peer connections between nodes. As has been previously mentioned, the primary aim, and one of the most important characteristics, of this technology is the creation of a decentralised system, which can support the creation of a trustless system. In this technology, sensitive data are organised into a block, which then form chains. The basis of blockchain and its transaction processing is the consensus mechanism, which provides a transaction order between nodes. The new block, which is to be added to the chain, is determined by the consensus mechanism. In addition to the structure of the technology, there is an opportunity to examine and deconstruct blockchain networks into two types in regards to the accessibility of nodes. Blockchain can be permissioned or permissionless [22; 23], determined by the regulations regarding the joining of nodes into the network. Permissionless blockchains can be joined by any nodes and are public, whereas participation in permissioned blockchains are defined by given maintainers, usually private enterprises, and the blockchains are, therefore, private. As a result of networks being permissioned, Sybil attacks are not an issue. It is true for both these types that they provide a secure and tamper-resistant network in which malicious behavioursare quickly detected. Data are stored in the ledger, allowing for easy proof and validation. The very first block is referred to as the 'genesis block'. These key characteristics are also applicable to CLD, wherein the system is maintained by a trusted third party. Thus, with this approach the degree of centralisation is increased. Due to this increase, a consensus mechanism is not necessary or typical, in contrast with the decentralised structure. Often, these trusted third parties are enormous tech companies that provide Blockchain as a Service (BaaS) [24; 25]. This service allows smaller enterprises to integrate blockchain functions effortlessly into their systems. When the two types of blockchain are examined from a security perspective, permissionless blockchain proves to be more secure as a result of its architecture, which requires no identity assumption, as opposed to permissioned blockchain, where identity assumption is necessitated due to its public nature. Nonetheless, CLD proves to be more secure than even permissioned blockchain as a result of the trusted third party. The higher security of permissioned blockchain is noticeable even when comparing the differing types of consensus mechanisms that can be used in the two blockchains. Permissionless blockchains generally use probabilistic consensus mechanisms to reach agreement in the nodes regarding new blocks. Thus, they guarantee consistency in the ledger. However, in the use of probabilistic consensus mechanisms, there is a possibility that certain nodes have different states of the ledger--referred to as a ledger fork. In these cases, the transaction order is not globally agreed and defined. This possibility, a ledger fork, in a permissioned blockchain would cause inappropriate and uncertain results from an enterprise's perspective, as single enterprises would be using different states of the ledger in their blockchain network. As a result, permissioned blockchains generally use deterministic consensus mechanisms, which always have a globally agreed ledger state. Within blockchain-based databases globally agreed ledger states are an important criteria; thus, permissioned blockchains are most often considered when discussing blockchain-based databases generally. Smart contracts are a useful feature of blockchain technology; however, they are not necessary, nor are they implemented in every blockchain.