Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
Bring up the topic of blockchains and it wonât be long before the word âimmutableâ is dropped into the conversation. After all, a blockchainâs inability to be tampered with or modified is one of its biggest selling points. But, is it actually as immutable as they say it is? Once a transaction is recorded on a blockchain, does that mean itâs carved in stone?
âYesâ, ânoâ, and âsort ofâ seem to be the resounding responses. So why canât people agree on blockchain technologyâs most marketed feature?
âFirstly,â says TEDx speaker and founder of Mycryptopedia Bisade Asolo, âit would be useful if we first define the term immutable. Immutability can be defined as something that is unchangeable. When we apply this definition to the context of blockchain technology, immutability refers to the unalterable nature of all data that is included in a blockchain. For example, once a transaction and all its corresponding data has been recorded on a blockchain, it can no longer be changed.â
And since each blockchain is created by consensus between the chainâs participants, once a transaction has been subjected to sufficient validation checks, cryptography makes sure that it can never be reversed or tampered with â unlike ordinary databases that can be modified an unlimited number of times.
So, is a blockchain immutable, then? Yes. But thereâs a caveat. A couple, actually.
A 51% Attack
âDespite often providing institutional-level security, blockchain networks, just like any other technology, are still at risk of being compromised, says EverMarkets CTO and co-founder Craig Austin. The consensus mechanism of a blockchain can in fact be overpowered and its history altered in something known as a 51% attack.
In a 51% attack, blockchains would lose their ability to be immutable, as a bad actor (weâre not talking about Adam Sandler or Arnold Schwarzenegger here) could mine enough blocks to possess more than 50% of a networkâs mining hash rate. This would give them the consensus, and they could do pretty much as they pleased with the world of data within â from altering blocks to completely eradicating transactions.
The chance of this happening, however, is âvery unlikely,â says Cal Cook, Consumer Finance Investigator at Consumersafety.org, âbecause there would be no economic incentive to do so. A malicious user who overpowers a public blockchain network would, in doing so, devalue the currency, so even if they âstoleâ some coins they would very likely end up with less money in terms of fiat dollars than they had before.â
Forking
Forking is another powerful way to rewrite history and challenge blockchainsâ immutability. In fact, itâs already been done. âThe best example of this,â says Alan Majer, CEO of Good Robot, âis when Ethereum hard forked its entire chain to rewrite history after the DAO âhack.â The fork would keep the rest of the blockchain history intact but rewrite a single âtinyâ historical fact: it would take back the attackerâs funds and put them into a refund account, effectively making it look as if the attack on the DAO never even happened.â
Not everyone was in agreement with the practice of forking to rewrite a wrong, even if it did keep Ethereum afloat. Creating discord among purists who did not believe that history should be rewritten, a small minority continued to use the same chain and Ethereum Classic emerged, trading at a fraction of Ethereumâs price today. However, says Majer, âa hard fork (that people agree on) is one of the best ways to rewrite the âimmutableâ transactions in a blockchain.â
Man-in-the-Middle Attacks
âBlockchain technology is basically a form of cryptography â itâs nothing but mathematics that is robust and proven. But the problem is not in the math; itâs us, humans,â says Evgeny Chereshnev, CEO and founder of Biolink.Tech. âTechnology provides us with an unprecedented and truly decentralized consensus tool that in theory makes all commissions and exchange fees obsolete. But it turns out we are not ready⊠we just donât know what to do with this freedom, so we go back to good old medieval mechanisms of supervised trade: cryptocurrency exchange [platforms] take commission fees and transaction fees that are not required by the network.â And these secondary platforms are ripe for MITM (man-in-the-middle) attacks.
So Blockchains arenât Immutable at All, Then?
Um, well, not really. But you might want to consider this analogy. Pigs canât fly. This is an absolute truth that we all know and agree on. âBut,â says Loudon Owen, chair and CEO of DLT Labs, âgiven a phenomenally strong wind, pigs can fly.â He continues, âNothing digital â including blockchain â is entirely immutable. But blockchain is a massive, distributed digital ledger which is as good as it gets for electronic storage.â
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.