What makes a blockchain a blockchain?
The Bitfury Group is now weighing in with its definition of one of the more often-debated words in the FinTech sector.
As part of its recent shift toward enterprise blockchain services and consulting, Bitfury’s latest research paper, entitled ‘On Blockchain Accountability’, takes aim at this argument, aiming to parse out the underlying innovations that make bitcoin’s blockchain a “blockchain”, and by extension, the features that may be necessary to label code releases as such.
According to the paper, blockchain is best defined as the union of three distinct technologies (Byzantine fault-tolerant systems, digital time-stamping services and currency ledgers using cryptographic primitives), each of which it argues was “well studied” before the introduction of the bitcoin blockchain.
The paper reads:
“A blockchain is a replicated, autonomous, Byzantine fault-tolerant log with consensus based on blocks that permits external auditing and lightweight nodes, and provides non-repudiation of the log entries.”
Notably, Bitfury, one of the largest miners on the bitcoin blockchain, does not limit its definition to proof-of-work blockchains, arguing the properties of that underlie its definition could be satisfied by different means.
Bitfury, however, goes on to assert that, at their core, blockchains must provide auditing and accountability, and that public blockchains can assist in this function (even when privacy is desired by participants).
Another point of emphasis lies in the paper’s differentiation between a blockchain and a traditional replicated log, with the paper arguing that the former technology offering a solution to “blame ascription, retrospective audits and interaction with clients” through the use of data blocks.
Further delineation is made in new sub-definitions that aim to provide clarity and labeling to alternative blockchain designs that have emerged.
For example, permissioned or enterprise blockchains are defined as “(atomically) consistent…with the identifiable consensus nodes”, while blockchains that require a public ledger for security are called “anchor blockchains”.
The case for anchoring
Given Bitfury’s original market positioning in the public blockchain sector, its comments on the latter topic are perhaps the most noteworthy.
However, Bitfury appeals to scientific reasoning in its report. Using the example of a newspaper, the paper argues that print mediums have historically fulfilled some of the characteristics that can now be achieved with public blockchains.
For example, it labels the paper newspaper an “anchor” for the data included, one that is also “timestamped” and published periodically. This makes information in a newspaper, the paper contends, less susceptible to “attack” or corruption as the copies are publicly available, and cannot display “different values to different readers”.
“In order to retroactively modify the blockchain, the attacker would need to reprint all medium copies after the retroactive modification and destroy the existing ones. This could be practically infeasible or very costly for a comparatively popular printed media,” it reads.
In this light, Bitfury introduces the concept of “anchored blockchains”, or a blockchain that would require a “target blockchain”, like the bitcoin blockchain, to provided added security.
The paper also studies some alternatives that could be used, including trusted hardware and blockchain-as-a-service providers, though it said these might fall short in terms of providing auditability and accountability.
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