This consulting firm has created an “editable” blockchain and people are puzzled
Blockchain, heralded in part for keeping an immutable record of transactions, could soon become editable.
Accenture has patented a prototype for making changes to it in "exceptional circumstances" to take into account errors recorded such as so-called fat finger moments, or, human error.
“As we focus on new uses for blockchain technology beyond the realm of cryptocurrency, absolute immutability will become both a virtue and a vice,” said group chief executive of financial service at the professional services firm Richard Lumb.
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“For decentralised cryptocurrency systems, such permanent accounting has been crucial in building trust and faith among participants. But for financial services institutions faced with a myriad of risk and regulatory requirements, absolute immutability is a potential roadblock. Our invention strikes a balance for enterprise use that preserves the fundamental value of the technology while enabling enterprise adoption.”
Banks are moving toward permissioned blockchains – ledgers distributed only among those who are approved to be part of it rather than public like the blockchain upon which bitcoin is built – to ensure security and privacy of the information and data that it is likely to hold.
The move to create an editable blockchain follows the high profile hack of the DAO, a crowdsourced fund built on Ethereum which raised millions of dollars. The public Ethereum blockchain was forked, essentially rolling it back to a point before the hack took place – a decision taken by its developer community.
Accenture believes that with the rise of blockchain which is likely to underpin significant and high value transactions, businesses will want assurances that errors can be corrected.
“As blockchain solutions gain momentum in financial services and other industries, more and more real-world situations will emerge where information on blockchains simply needs to be modified or removed,” said managing director of Accenture's capital markets blockchain practice.
While the editable blockchain prototype has drawn the ire of hardcore bitcoin blockchain supporters, the necessity of such a function has also been questioned by those working on the technology in the finance industry.
"What they've done is interesting cryptography. But it reminds me of the old Henry Ford saying 'if I had asked my customers what they want they would say a faster horse'," said Simon Taylor, co-founder of blockchain consultancy 11:FS and former head of blockchain at Barclays.
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"An editable blockchain isn't the solution to fat finger errors. The value in distributed ledger is the audit trail. You can have this and do an equal and opposite transaction quite easily. Whilst you can't 'edit' a blockchain you can reverse transactions easily."
He added: "They've fixed something that didn't need fixing unless I've missed something here.
"Also if you want an editable record, then use a regular database. Having an uneditable record is far better for reconciliation and reporting."
Alessandro Hatami, a digital startup founder and former digital payment and innovation director at Lloyds banking group tweeted: "Isn't an edited blockchain just a shared corporate database?"