If there is the ability to retrospectively amend the
blockchain it gives the flexibility the industry needs to move forward but does
it open up the doors to fraud and abuse.
I've reproduced it here as it is a fascinating commentary on how something built on nothing more than trust can become an entire ecosystem in its own right.
Ovum view
With the arrival of an editable blockchain, the distributed
ledger has taken another step on its journey from being the mathematical
underpinning of cryptocurrencies such as Bitcoin toward becoming a useful
platform for new financial market infrastructures and applications.
An editable ledger
is just a way of putting the record straight
How much can you alter something before it becomes something
else? Philosophers call it Theseus's Paradox, after the Greek who asked whether
a ship that had been repaired over time until no original wood remained was
still the same ship. These days, it's also known as Trigger's Broom, after the
road-sweeper character in the long-running BBC sitcom Only Fools & Horses,
who wins an award for keeping the same broom for 20 years, with 17 new heads
and 14 new handles. Is it the same broom?
Much the same could be asked about blockchain. In the past
few years – at least as it is being used in financial services – it has been
separated from its cryptocurrency roots, it has had its universal access
characteristic replaced by permissioned network membership and new consensus
mechanisms that don't require all nodes on the network to validate each
transaction (or even have a copy of the blockchain), and implementations like
the Corda platform from R3 allow bipartisan validation of transactions.
So when Accenture announced in September that it has been
prototyping a mechanism for retrospectively editing blockchains in private,
permissioned networks, there was predictable outrage: remove the immutability
of the ledger, and it's not a blockchain.
So what? In truth, what the FS industry is trying to
implement hasn't been what purists call a blockchain for about two years now.
Each of the changes outlined above has taken it a little further away from that
and removed an obstacle to adoption. The editable blockchain removes another:
some mechanism for amending the record is going to be important in the future –
when a deal is retrospectively deemed invalid or fraudulent, perhaps, or when
the embedded code in a "smart" contract fails to execute as expected.
Does it matter if we still call it a blockchain? Not in the
slightest.
