Why Accenture's plan to edit blockchain is getting a lot of attention

Baozou Comment : A few days ago, Accenture proposed to study the editing function of blockchain and planned to apply for relevant patents. Therefore, the community is hotly discussing. Although supporters and opponents each have their own positions, we cannot be sure what results and impacts this project will present. But at present, the financial industry, as the main force of blockchain applications, welcomes this idea. And Accenture's plan has at least attracted the attention of all parties again, promoting the growth of banking industry's interest in this technology.

Translation: Annie_Xu

Blockchain isn’t just about money, it’s about ideas, too. That’s why Accenture’s plans to edit blockchain have raised eyebrows among fintech purists, who see it as a betrayal of the technology’s original purpose.

A closer look at Accenture’s news shows how their innovative project has attracted attention not because of the philosophical debate over whether it is the right move, but because it means that blockchain will become part of the mainstream banking system.

What Accenture is doing with blockchain

You can read the technical text about the project, but first you should understand what blockchain means. Try to think of it as a series of independent computer networks running software that can generate a permanent transaction ledger that cannot be tampered with by anyone. The most famous blockchain project at present is the cryptocurrency Bitcoin; any Bitcoin transaction activity relies on blocks provided by strangers' computers to permanently store transaction records.

Take Bitcoin as an example. Anyone can see the generated blocks, but they cannot modify them. This is the charm of this system. It is decentralized, and the way transactions are recorded is determined by software, not regulators or bankers.

Accenture’s development of a blockchain editing method has therefore caused some controversy. Some people on Twitter said that the idea of ​​having Accenture’s trusted administrator rewrite transactions was a deviation from the main purpose.

"The core of blockchain is that it cannot be tampered with. I doubt Accenture participated in the guidance meeting."

“Editable blockchain! Is that an oxymoron?”

There is some truth to this plan in two ways. First, the concept of blockchain immutability will no longer exist. Once the majority of blockchain users want to change the rules, they can agree to do so. In the Bitcoin system, if half of the computers in the network agree to modify the transaction record, they can do so (but because the network is decentralized, this is impossible. But this does not mean that blockchain immutability is a Platonic principle).

Another reason Accenture’s plan isn’t heresy is that there are many blockchains out there. For example, the bitcoin blockchain is permissionless, and anyone can participate in recording and verifying the ledger. But others are more like private clubs, with trusted members following rules for recording and verifying transactions. Dozens of banks participating in the R3 blockchain consortium have been testing private chains for months, even offering new features that hide sensitive transaction information.

In a private blockchain, members can reverse transactions if there is a dispute or error. Technically, this is a blockchain edit, but instead of modifying existing transactions, it rewrites them.

Accenture's plan is to edit and modify transaction blocks without affecting the authenticity of the entire blockchain. This process relies on the "chameleon hash function" to disrupt the original code of the feature block and rebuild the entire blockchain with an adaptive algorithm; that is, other computers on the chain will not detect any abnormalities.

Accenture's slides show part of the process.

Richard Lumb, an executive at Accenture Financial Services, said that the blockchain group will authorize some people to use the editing function. However, in order to ensure security, users must divide the editing "key" into three and send it to three different people. Only when the three keys are used at the same time can the editing function be activated.

Why Accenture's Editorial Initiative is so important

The plan may upset many crypto purists, but the financial industry, which is watching blockchain closely, is not concerned about the philosophical issues. Banks are likely to welcome the concept, offering security features.

After the Ethereum fork, security features became a focus as controversy escalated. Hackers stole $60 million by exploiting a vulnerability in Ethereum's code, and some participants reversed some transactions and recovered their funds. The Ethereum community eventually passed this test, but bankers and investors became wary of blockchain technology, which they did not know much about in the first place.

Therefore, Accenture's plan may help restore the financial industry's confidence in blockchain.

“It’s true that Accenture’s editable blockchain goes beyond the original definition, but if banks are willing to buy it, who cares.”

Banks hope that blockchain can help them reduce billions of dollars in accounting and system compatibility costs, so confidence in the technology is important. Last year, the banking industry invested a lot of money in blockchain companies such as Ripple, with Standard Chartered Bank and Accenture participating in the investment. At the same time, established technology companies such as IBM firmly believe that blockchain technology can provide profitable corporate service projects.

Accenture also said it is applying for a patent for the editing feature, but company executives said the patent will not be used exclusively for the editing feature but will be used to serve banking customers.

In any case, at least Accenture’s announcement about the plan adds to the technology stack surrounding blockchain and can at least serve as a marketing tool to encourage banks to embrace blockchain technology.

Not everyone is enthusiastic about Accenture’s plans, however. Ryan Selkis, a veteran bitcoin entrepreneur, is skeptical of the financial industry’s ability to innovate with more blockchains, except perhaps Ripple.

“In theory, all permissioned blockchains should have the same administrator features, so we don’t know what unique technical features this initiative has. Of course, banks like the idea, so nothing interesting will happen in the banking and blockchain space in the next 10 years.”