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September 29, 2016, 05:24:59 PM |
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"Bitcoin’s underlying technology, the blockchain or distributed ledger technology, has swept across the financial sector since early 2015 as major banks and financial institutions began to establish “blockchain labs” and “research centers” to exploit its potential in the traditional financial industry.
Hundreds of millions of dollars have been invested into the technology and startups that are utilizing the blockchain technology to improve banking services. Although the industry has not a single working demonstration to show, Accenture executive Richard Lumb believes that immutability must be eliminated in creating blockchain networks.
Technically, if immutability is taken away from a blockchain network, its features and capabilities replicate that of a traditional database. If a blockchain network is not open sourced, powered by miners globally, centralized, and not immutable, it does not serve a point in implementation since it is vulnerable to security breaches, alterable, and not resilient to external hacking attacks.
To understand the fundamental error in the development of private blockchains or “non-immutable” blockchain networks, it is important to understand the factor behind Bitcoin’s success. Bitcoin remains the world’s best performing currency due to its infrastructure that eliminates a central authority or network administrator. That means, not a single user in the Bitcoin network can control or manipulate its transactions. More importantly, its decentralized nature allows the network to become immutable to changes.
At first, banks and financial institutions aimed to implement the blockchain technology to settle transactions and assets more efficiently, in terms of costs and time. They also wanted to store their data in a more secure network, to prevent from being affected by cyber attacks and security breaches which they have failed to deal with over the past decade.
The pathway of banks and financial institutions’ development of blockchain networks has been:
Immutable ledger
Controllable ledger
Non-immutable smart contract ledger
Non-immutable smart contract private ledger that grants network administrators full control over the network.
Essentially, if anyone in the network gains control, it defeats the purpose of utilizing a blockchain network. For instance, Accenture’s new invention, called the editable blockchain, is technically identical to SQL database, in the sense that they are both:"
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