Accenture Makes the Case for an Editable Blockchain

The hype around blockchain has been significant. Most major banks have some sort of project in the works for the technology and vendors of all stripes have attached their names to the buzzword. Add to that a sizable amount of venture and consortium funding, and it's easy to see why the hype cycle has exploded.

But as with any new and potentially revolutionary technology, the definition tends to get warped and some firms use the buzzword as a marketing scheme. That has been the knock against Accenture's controversial editable blockchain.

But Accenture believes that it's offering is an important innovation so blockchain technology can be used by a larger set of industries. Accenture's blockchain has three components:

1. The Chameleon hash, unlike the traditional hash, allows you to modify blocks in a blockchain without breaking the rest of the chain. When data in a traditional blockchain is changed, the traditional hash breaks and the subsequent chain of data is lost; the Chameleon hash preserves the linkages so subsequent blocks are not lost and don't have to be reconstructed.

2. The "key" to the Chameleon hash is split into pieces and shared among the designated permissioned blockchain administrators (it is not shared among all users or parties) and it must be put together through unanimous agreement (not consensus) in order to open the chain and make edits. 

"That would nullify my definition of a blockchain because if it's editable then it's a read/write database. While I'm being somewhat dismissive of it, Accenture is a smart organization. I need to see what implementations they're going to use it for and why specifically is it a blockchain."

3. Accenture's solution employs a traditional hash side-by-side with a Chameleon hash to link the blocks in a blockchain. When an edit is made, the traditional hash link breaks, leaving a permanent "scar" that a change has been made that is visible to both administrators and users/parties. 

The ability to edit the chain, the consultancy firm says, allows clients in the financial sector and even the medical field to meet many regulations that require careful disclosure or erasure of information.

David Treat, managing director and global head of Accenture's capital markets blockchain practice, tells WatersTechnology the technology it developed for the editable blockchain expands its reach to many industries that are wary of it.

"This is for that rare ‘break the glass' moment for companies that have to work within an existing governance model," he says. "They need to know that when something goes wrong they can do something about it."

New Regs, New Needs

Treat mentions laws like the European Union's Right to Be Forgotten rule and a myriad of requirements around protecting sensitive medical information as regulations that do not jive with blockchain's traditional immutability. Having the ability to edit the chain then, Treat says, lets firms adhere to these and other regulatory requirements. Another possible use for an editable blockchain is the protection of data so that if one of the parties gets hacked, information can be deleted so it does not go out into the open.

Normally, a blockchain is a collection of databases that can be considered a golden record of everything that transpired in a transaction and, as such, nothing can be deleted in that chain. This comes from the cryptocurrency world where Bitcoin and the likes are run over immutable distributed ledgers.

What makes Accenture's version so controversial is its ability to be edited. Many blockchain proponents are adamant a blockchain should be immutable, meaning whatever information is encoded in the chain is sacrosanct. For this crowd, an editable blockchain is not a blockchain but rather a glorified database, so why pay extra for the service or put energy into investing it?

Christopher Burniske, blockchain lead of Ark Invest, an active manager of thematic exchange-traded funds (ETFs), said during the recent Buy-Side Technology North American Summit that the idea of an editable blockchain doesn't meet the definition of what he believes a blockchain is and can be.

"That would nullify my definition of a blockchain because if it's editable then it's a read/write database," he said. "While I'm being somewhat dismissive of it, Accenture is a smart organization. I need to see what implementations they're going to use it for and why specifically it is a blockchain."

Rares Patineau, director of GreenBank Capital, a software vendor that has developed a crypto currency that requires users to be identified, said: "I think it's a blatant marketing ploy; I've seen that happen with every single buzzword."

Accenture counters that the offering does not change the key characteristics of a blockchain solution. It remains ‘tamper evident' via a ‘scar' and is auditable in that the administrators retain the history of the chain.

"Our invention provides a necessary failsafe for those ‘break-glass' moments, while keeping the key characteristics of a blockchain," he says.

An Evolution

Treat says the editable blockchain is just the newest innovation for blockchain, a way to address many of the issues Accenture's clients who are interested in blockchain may have. For him, the reluctance of many blockchain proponents to accept the solution stems from the fact that past breakthroughs for the technology rarely involved having to address existing regulations.

Accenture and other groups that work with them believe the detractors of its blockchain are also used to a specific definition of blockchain—that it is basically a golden record of transactions with all the information preserved and unable to be changed. Hyperledger executive director Brian Behlendorf says blockchain has evolved to mean many different things so one definition of what the technology is supposed to be may not necessarily be right.

"The term blockchain has vastly moved away from its origin," he says. "It can now encompass anything from distributed ledger to smart contracts."

Accenture has not yet formally placed the chameleon hash on the Hyperledger chain, according to Behlendorf, though the consortium welcomes it.

"It's a mistake to write this off," Behlendorf says.

The Bottom Line 
• Accenture's blockchain needs unanimity amongst "key holders" to edit the chain.
• The consulting firm believes the ability to edit is the best way to meet regulatory requirements and attract more potential users to the technology.
• Others in the industry believe it is simply a read/write database ─ which Accenture says is not true ─ so why pay extra simply because it has a new name attached to it?