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.
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