Blockchain
Crypto has a bad reputation.
There are many other reasons why, but I think this bad reputation is often due to crypto being misunderstood, both by critics (haters?) and fans (cultists?).
These misunderstandings often stem from half-truths used as marketing collateral to promote the technology that ends up being fooled.
One such misconception is the idea that blockchains are “immutable”. I was recently at a conference where most of the attendees I spoke to were crypto skeptics. A fairly regular fallback I heard was that immutability was bad and because blockchains are immutable, this is not a good or useful technology.
But are blockchains really immutable?
No.
In fact, when it comes to immutability, blockchains are no different from the “real” world in that the past is the only thing that cannot be changed.
Why even blockchains?
You may wonder what the point of a blockchain is, if indeed any change can be reversed.
If a transaction recorded yesterday transferred some coins from X to Y, it is not possible to “rewrite” the transaction (almost without exception) to change the amount, recipient or sender of that particular transaction. However, it is possible to create another transaction from Y to X for the same amount to “restore” the balances.
Importantly, the same mechanism as above allows any “status” to be updated, not just balances, but also the code of smart contracts themselves in blockchains that support them, such as Ethereum.
Instead of focusing on the fake immutable state of blockchain, move your gaze to WHO can change the status to see what really matters. In the example above, only Y can always send a new transaction to X.
Bitcoin, only the owner of a private key can change the balance of the account corresponding to this private key.
And in the Ethereum world, each smart contract has its own logic for which a user is allowed to make any change. A currency contract (such as ERC-20) would probably only allow the owner of a coin to transfer it, but it could also have some special administrator user to make transfers (as, for example, the USDC contract does).
Likewise, if a contract is upgradeable, it probably can only be upgraded with one address. Interestingly, this particular address can itself be another contract, such as a multisig or a DAO, enabling supervisory checks.
This means that the really exciting consequence of blockchain is not immutability at all, but responsibility, i.e. anything that is executed or modified is only possible because it was previously specified. Of course, that doesn’t mean that code will never contain bugs that result in unintended behavior, but there is a degree of accountability where the code is out there for all to see.
This responsibility makes blockchains really useful for things that are widely shared and require “trust” that no one can change randomly. This applies to money, but also to many fundamental pieces of infrastructure that enable cooperation between people.
Accountability makes the concept of governance critical. With Accountability, groups of users can jointly determine the rules (if applicable!) that determine what can be changed in a contract, how, by whom, when…etc. And even on blockchains that don’t have a concept of smart contracts defining pre-defined rules – Bitcoin being the most prominent example – governance can take place.
The myth of immutability
Blockchains are huge networks of machines (nodes) that collectively agree on the status of a ledger. That agreement is in fact the protocol and each individual node can decide which “version” of the protocol to adhere to.
The state of the blockchain is determined by the version of most nodes. Even if there are no explicit rules around changes, if the majority of nodes decide to change, the blockchain will change. This happens with Bitcoin (Segwit, Taproot…), Ethereum and any other network.
That is why even the most repeated claims about the immutability of a blockchain, such as the durability of the supply of coins or the balances of certain accounts, can actually be changed…as long as enough of the actual members of that network support the change. want.
So the immutability of blockchains is depending on people working collectively.
When we use applications on these blockchains, we can be confident that history will remain unchanged – but not because of some of the intrinsic properties baked into the technology. It’s because the human actors running the blockchains decide that’s how it should be.
And it is this human coordination that allows applications to always perform the same certain actions in the same certain ways that couldn’t be more valuable.
Julien is the founder and CEO of Unlock, where he builds the web’s new business model by enabling brands and creators to connect directly with their audience through a decentralized access control system. He previously founded SuperFeedr, which became one of the leading real-time web APIs, received funding from Mark Cuban and Betaworks, and was later acquired by Medium. At Medium, Julien led the company’s SEO efforts and quadrupled the share of traffic Medium receives through search. He created his first company, Jobetudiant, while still in school. After almost 20 years, it is still one of the largest student job boards in France.