Dealing with Ethical Boundaries of Blockchain Immutability
How strong does immutability need to be?
The conversation on governance continues. Blog posts shared last week covered: (a) governance 101 for already launched blockchains (more specifically Ethereum); and (b) the path to decentralization for yet to be launched blockchains. Whilst we took a look at the latter, a debate on the former picked up on Twitter and has now graduated to Medium:
- My Intentions for Blockchain Governance by Vlad Zamfir
- Why I disagree with your anti-immutability position by Vitalik Buterin
Ethereum was created as a way to scale experimentation of Bitcoin concepts applied elsewhere:
“Each individual project was attempting to implement its own blockchain or meta-layer on top of Bitcoin, and considerable effort was being duplicated and interoperability lost as a result. Eventually, I realized that the key to solving the problem once and for all was a simple insight: … create a Turing-complete programming language.” [Ethereum: Now Going Public announcement, 2014]
Now one of Bitcoin’s the key properties applied to Ethereum is getting questioned: How strong does immutability need to be?
Note: The governance debate is specifically about changing data already written to the blockchain and less about how to evolve and improve a protocol.
In the case of Bitcoin immutability is strong because that’s what makes the cryptocurrency censorship resistant. The code is law and the power to implement changes is divided amongst different stakeholders with no formal process to manage change. Acceptable protocol modifications are generally for cases that protect the network’s integrity e.g. to address bugs or increase security. Lost or stolen coins are not for the network to solve.
The need for immutability on Ethereum isn’t as obvious because the platform is designed to be a jack of all trades with no clear use-case to date. Vlad argues that “code is law” approach is too extreme and that Ethereum-like platforms should have a governance process in place to address ethical issues such as thefts or criminal organization activities.
There are several challenges with Vlad’s proposal:
- People are subject to bias, bribe, and more. Handing over decision power to a group of people (even if that power is equally divided) exposes the platform to manipulation, corruption, and other risks. Suffice to look at the world politics today.
- Having the power to take a decision doesn’t mean that the community governing the platform will want to take a stance on how the platform should be used. Google, Facebook, Twitter, and Apple are a perfect example of this. In addition, the definition of “ethically wrong” is subjective and culturally dependent, which is challenging for a global technology.
- It defeats the purpose of proof of work (POW): the POW consensus mechanism is designed to make changes to history expensive, so if governance can override immutability, what’s the point of having POW?
To conclude, I tend to side with Vitalik. Addressing past missteps and malicious use of blockchains should be addressed at Layer 2. Only extreme cases where the network’s survival is in question should changes be made at Layer 1. If Ethereum can’t find use cases that require immutability, then the overhead of running a decentralized network isn’t worth it. Having said this, I do believe that cryptonetworks have a role to play in digitizing high value sensitive markets where trust and security are critical (e.g. finance and healthcare).
What do you think?
From around the web
‘Blockchain’ is a semantic wasteland (Medium) by Nic Carter — Argues that the term “blockchain” is misused and abused of. Anyone using the term for something else than for which it was originally developed should be using other more semantically correct words (e.g. “database”).
Bitcoin’s Distribution Was Fair (Medium) by Dan Held — Explains why Bitcoin is fairly distributed and isn’t a Ponzi scheme as some may suggest.
Videos from Baltic Honeybadger 2018 (Reddit) — Loads of videos. Haven’t watched them yet but heard there are some good ones.
Is (just) some privacy worth anything? (Tony Sheng blog) — Explains why privacy is important and why it applies to all of us not just some of us. Tony worries that the industry is taking too many half-measured approaches.
Cryptonetworks and the Theory of the Firm (Medium) by Qiao Wang — Explores the Nobel prize winner’s question “if markets are so good at allocating resources, why do firms exist?” for cryptonetworks.
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The views expressed are my own and do not necessarily represent the views of my employer.
