Blockchains are not immutable – Blockworks

Blockchains are not immutable – Blockworks


Crypto has a bad reputation.

There are many other reasons why, but I think this bad line often comes from crypto being misunderstood, both by its critics (haters?) and fans (cultists?).

These misconceptions often arise from half-truths used as marketing materials to promote the technology that end up being taken at face value.

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 common pushback 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?


When it comes to immutability, blockchains are actually no different from the “real” world in that the only thing that cannot be changed is the past.

Why even have blockchains?

You might wonder what the point of a blockchain even is, if any change can actually 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 specific transaction. However, it is possible to create another transaction from Y to X for the same amount to “restore” the balances.

Importantly, using the same mechanism as above, any “state” can be updated, not only balances, but also the code itself for smart contracts in blockchains that support them, such as Ethereum.

Instead of focusing on blockchain’s false immutable state, shift your gaze to WHO can change the state to see what actually matters. In the example above, just Y can send a new transaction to X at any time.

See also  Polygon is partnering with rollup vendor Eclipse to extend blockchain interoperability with Solana

In Bitcoin, just 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 which change. A currency contract (like ERC-20) will likely only allow the owner of any coin to transfer them, but it may also enable some special admin uses to perform transfers (as, for example, the USDC contract does).

Similarly, if a contract is upgradeable, it is likely to only be upgradeable with a single address. Interestingly, this specific address could itself be another contract such as a multisig or a DAO, opening up the possibility of regulatory controls.

This means that the really exciting consequence of blockchain is not immutability at all, but accountability, i.e. anything that is done or changed is only possible because it was previously specified. Of course, that doesn’t mean that code will never have bugs that result in unintended behavior, but there is a level of accountability with the code that is publicly visible to all.

This accountability is what makes blockchains really useful for things that are widely shared and require “trust” that no one can change arbitrarily. This applies to money, but also to many basic parts of infrastructure that enable cooperation between people.

Accountability makes the concept of governance critical. Accountability allows groups of users to collectively set the rules (if any!) that determine what can be changed in a contract, how, by whom, when…etc. And even on blockchains that have no concept of smart contracts predefining custom rules—Bitcoin is the most prominent example—governance can happen.

See also  The power of AgriTech and blockchain in the fight for the future of the planet

The myth of immutability

Blockchains are vast networks of machines (nodes) that collectively agree on the status of a ledger. That deal is actually the protocol, and each individual node can decide which “version” of the protocol it follows.

The state of the blockchain is determined by the version of the majority of nodes. Even when 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’s why even the most repeated claims of any blockchain’s immutability, like the duration of the coin supply or the balance of certain accounts, can in reality be changed…as long as enough of the actual members of that network want the change.

The immutability of blockchains is therefore subject to people working together.

When we use applications on these blockchains, we can trust that history will remain unchanged – but not because of any inherent properties baked into the technology. That is because the human actors who control the blockchains decide that it should be so.

And it is this human coordination that allows applications to always perform the same specific actions in the same specific ways that could not be more valuable.

Julien is the founder and CEO of Unlock, where he is building the web’s new business model by enabling brands and creators to connect directly with audiences 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 from search. He created his first company, Jobetudiant, while still at school. After almost 20 years, it is still one of the biggest job boards for students in France.

See also  Google Cloud adds Casper Labs to growing portfolio of Web3 partnerships

Get today’s best crypto news and insights delivered to your email every night. Subscribe to Blockworks’ free newsletter now.

Want alpha sent straight to your inbox? Get degen trading ideas, management updates, token performance, unmissable tweets and more from Blockworks Research’s Daily Debrief.

Can’t you wait? Get our news as soon as possible. Join us on Telegram and follow us on Google News.


You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *