London fintech startup Curve raises £2 million
Accenture is challenging a defining feature of blockchain, its immutability, by patenting a system that will allow data processed and stored using the technology to be edited.
The consultancy said on Tuesday data would only be edited under “extraordinary circumstances”, in order to resolve fat-finger-type human errors as well as to meet legal and regulatory requirements and address wrongdoing.
Blockchain users were quick to criticize Accenture’s move, which is the latest investment by the financial services industry in the nascent technology, which promises to cut costs, reduce settlement times and increase transparency.
The original blockchain underpinning digital currency bitcoin is kept secure by data being shared across a global network of computers, which are incentivized by competing to win new bitcoins in a system know as “mining”.
But while there have been worries about its irreversibility, some technologists argue that it is a feature that makes blockchain unique and that without it, the term becomes meaningless.
“An editable blockchain is just a database. The whole thing about blockchain is that it’s immutable, so this just defeats the object.”” Gary Nuttall, founder of blockchain consultancy Dislytics, told Reuters at a blockchain conference.
Because so-called “permissionless” blockchains like bitcoin’s have no centralized authority, it is essential that transactions cannot be tampered with.
But Accenture said its prototype would be for the private “permissioned blockchains” favored by banks, which would have designated administrators who manage the network under agreed governance rules.
“For financial services institutions faced with a myriad of risk and regulatory requirements, absolute immutability is a potential roadblock,” said Richard Lumb, Accenture’s group chief executive for financial services.
Under the new system, data would not be editable by all users of the system, just by designated administrators.
“We can preserve the strength of the original blockchain while making it even more useful,” said Giuseppe Ateniese, a leading cryptographer and professor of computer science at The Stevens Institute of Technology, who filed for the new patents with Accenture.
“Unlike a traditional database, our solution is compatible with current blockchain frameworks and works in a decentralized and accountable environment,” he added.