Now we all know what the bitcoin blockchain is, don’t we? It’s just one particular version of the general class of blockchains, which share the characteristics that data is stored in blocks and because of some cryptographic jiggery-pokery the blocks are chained together, so that you can’t go back and change the contents of a block without having to then change the contents of every subsequent block. And depending on the consensus protocol that is used, you can’t change the blocks without everyone else agreeing to let you do it. Thus it is, as my former colleague Salome Parulava describes it, “mutable by consensus”.
The reason that this kind of structure is called immutable, even though it is mutable by consensus, is that it is computationally infeasible to go back post-consensus and make a change. Even if you obtain consensus and co-ordinate more than half of the “hashing power” in the case of bitcoin, and could in theory go back to the very first block, change it to send the bitcoins in it to yourself, and then go forward rewriting all of the subsequent blocks, it would take years and years of massive computing power. Someone could, in theory, treat all of the bitcoin transactions from the last checkpoint up until now as the wrong side of a fork. (For all we know, secret mining pools are As my good friend Gideon Greenspan pointed out to me, just because you could see that corrupt agents were rewriting history in this way it doesn’t mean that you could stop them. But it’s not a realistic attack. We can live with the description “immutable” to mean “theoretically mutable but not mutable under any practical circumstances that we can envisage”.
Accenture has been awarded a patent tied to its work on an "editable blockchain."
From Accenture Awarded Patent for 'Editable Blockchain' Tech - CoinDesk
If you had a different kind of blockchain, however, you could design it work in a different way. It could be mutable by consensus, or mutable by a dictator, and it could be mutable in a computationally feasible way. This is what some researchers in the US and Italy put forward in the paper “Redactable Blockchain, or Rewriting History in Bitcoin and Friends” (5th August 2016) describing the idea that has now been patented by the outsourcing company Accenture. In this paper, the researchers (Giuseppe Ateniese, Bernado Magri, Daniele Venturi and Ewerton Andrade) said there are several reasons to prefer an editable blockchain, spanning from the necessity to remove improper content and the possibility to support applications requiring re-writable storage, to “the right to be forgotten” but the patent filing was met with widespread derision on social media, and I can understand why. One of the key reasons for considering a blockchain to implement certain kinds of financial services is that the state of the blockchain, the shared world view, is locked down and the end of each block. If the shared world view can be changed, it wouldn’t be useful for these services any more. Now, I can see why some people might want an accounting system that works this way (see, for example, the case of Kingfisher Airlines in India) but I wouldn’t have thought that society wants accounting systems that work this way at all.
Why would you want a ledger that can be edited either by some group or subgroup of the consensus forming stakeholders or by some central authority? I can think of a few reasons, but none of them make any sense. The New York Times reported on this saying that “some things simply need to be struck from the records”. Records maybe. Ledgers? Never. If a bank makes a mistake — let’s say it accidentally opens a couple of million bogus accounts — then it can’t just go back and scrub the backup tapes and pretend it never happened. David Treat, MD in Accenture’s blockchain practice, said that the work “[focused] on the challenge of how to ‘fix things when they go wrong’”. . This issue was also raised by Richard Lumb, global head of financial services at Accenture, told the Financial Times last year that financial institutions and regulators would need a means to quickly correct errors on the blockchain before using it in securities markets. He gave the example of a “fat finger” trading error, or a trade assigned to the wrong counterparty, but that’s not how you correct errors, by just rubbing out mistakes. These are regulated financial institutions, not the mafia. No-one is going to build a financial services market on top of a mutable blockchain. Since the invention of double-entry bookkeeping, the whole point of keeping a ledger has been that you have a record of all of the credits and debits that contribute to the current world view. Companies do not delete old transactions every few months to save space or provide immunity from prosecution. In fact the law requires them to maintain the transaction records for years.
(Here’s one example: in the UK, the “direct debit guarantee” has no time limit at all, so all records relating to direct debits need to be kept forever. If there is something about this use case that I haven’t understood, I would be genuinely interested to be corrected.)
If I have misunderstood the benefits of this new technology then I apologise and I would genuinely curious to hear about viable use cases.
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