Private Distributed Accounting Technology or Public Block?

Some people think that authoritative distributed accounting technology can work better if the blockchain is opened because it has been modified to address the latter issues. Such systems are also called “authorized blocks” because blockchain is a high-level concept and one of the variables is “allowed”. But this statement is controversial and from the bottom up, you understand why.

Is “authorized” decentralized?

There are many other options to choose from in DLT – Licensed, Private, Enterprise, Federal DLT, etc. and obviously, sometimes, it is not easy to distinguish between them. So, for this discussion stage, let’s just compare DLTs and blockchain.

The allowed DLT and the specified difference are not decentralized. There is nothing wrong with that, as it can be a killer for a project. Some opponents of this statement claim that decentralization may have a degree, but in fact unlicensed sanctions are more decentralized.

Let’s put it simply. If there is one person between two partners in a transaction, and you can’t do anything about it, he is central. Under a public ban, if an ordinary user does not want to rely on mining to include their transaction in the block, they can draft their transaction, and they are my own block. If the block is valid, the network will accept it. Of course, mining currently requires a lot of accounting resources, but there are no technical or formal barriers to it – you do not need to apply for a mining license. In DLT, network users have different roles and powers, and ordinary users cannot create and authenticate blocks. There is nothing wrong with having a central system; Just understand what they are holding.

Related: What is the difference between blockchain and DLT?

Authorized DLTs can be decentralized only in one view, that is, by creating a network of independent members (organizations, companies, etc.) with the sole authority to create blocks. The fact that a few related companies are controlled by one user does not mean decentralization.

And remember, any form of cooperation with independent members may be decentralized, but only for these members – It will always be central to everyone outside the association.

Is it a DLT cartel?

An association (private / licensed) DLT can be considered a cartel. Sooner or later, the anti-faith body may suspect this. A safe strategy ensures that the terms and conditions of the Union are built in compliance with anti-religious laws.

By the way, the whole central system is very secure. But the central system never achieves the same level of reliability and reliability that blockchains can do. It is as vulnerable as any other central system, and why it is here.

Central DLT is not static. The registry may be rewritten arbitrarily as a result of a supervisor or cyber attack. The records are reliable because they are open and competitive (mining, stepping, etc.) and any blockchain can be consistent. Thousands of independent units can guarantee unprecedented levels of resistance to any type of attack.

Usually, it comes after a discussion of immutability. How to correct mistakes? What if you need to change your contract? What if you lose your private key? You can’t do anything to turn it back on – it’s impossible to change in blockchain. Done is done. In this regard, DLT is often the opposite of a blockchain alternative. They feel that DLTs can be designed to verify transactions at the login and therefore pass unconstitutional transactions. But it is a mistake to think that censorship in the network eliminates all errors and unwanted transactions. There is always room for error. Then? Later change as a last resort? But if you can change history, you will weaken the whole idea of ​​blockchain. No other technology can guarantee the consistent level of data. It’s not one of the benefits of blockchain – it’s a special feature.

Related: Going back to the original purpose of the blockchain – making a time stamp

However, it is considered to be an obstacle to a consistent application of the law. Say, your circumstances have changed, and you need to change the smart contact. The answer to this is the correct design of the application that does not change the registry. The smart contract must be designed in such a way that the user can link to a new transaction to reflect the change from the previous one. Blocks are strictly timed and only the latest transaction reflects the current situation, all previous transactions will be a historical reference. You do not need to change history. The ban is public proof of what happened. There are various ways to design applications that deal with all possible legal issues: For example, this and that academic paper have suggested solutions to property rights in my blockchain records. These issues were discussed in a series of articles last year.

It is not an authorized ban

If anyone asks about your system, they will be right. Further discussion on why blockchain is not allowed can be found in this handbook, but briefly Not every block chain block. Linking the stamped databases to hash was invented in 1991 by Haber and Stornnet. But blockchain is just a block, and no one calls it “blockchain.” This is how these blocks are created and verified. Created blocks are the result of open, decentralized and uncontrolled competition. This is a translation of the block and this was developed by Satoshi Nakamoto. Therefore, any central (authorized, private, etc.) will not block anything.

Unfortunately, there is no legal copyright or other legal protection for this term, so the word “block” is free to use for any technology you want. Proponents of DLT have tried hard to bridge the gap between these concepts. But it is only a matter of time before some self-profile DLTs high-level hacks show the real difference between DLT and Blockchain and dramatically change the situation. How many nodes ensure the security of the network, ie, there are only a handful of known nodes in the DLT network, or thousands and anonymous nodes around the blockchain network around the world.

We can argue at this level of theory, but when it comes to losing money due to vulnerabilities in the system, no one listens to enthusiastic talk about DLT. People start asking questions. If you are using “Private”, you should be prepared for this.

Related: Blockchain technology can change the world, and not just through crypto

If you still want permission

A safe strategy is to use the word “DLT” in all communications. It may not solve potential vulnerabilities, but then you can say, “We never knew it was a blockchain.” By the way, ENISA (European Cyber ​​Security Agency) always uses “distributed records” instead of blocking them in their reports. In contrast, colleagues at the National Institute of Standards and Technology in the United States have used “block” in their previous reports.

Want to create your own public blockchain network? It is not necessarily a good idea if you do not have reliable technology and a strong plan. the first, [permissionless] blockchain is not safe by default. To achieve consistency and resilience to attacks (hence, your credibility and high capital capitalization), you need thousands of independent units around the world. If you have enough resources to create your community on this difficult road, your network will survive and reap rewards. But what are the chances?

DLT Economy

If you are still thinking of creating your own private or authorized network, think about how to protect this infrastructure. If this is your network only, you may have a solution for this, as the repair may be covered by the commercial applications you have developed on it. But you have to understand – network maintenance is entirely on your shoulders.

If you have a union, how do you buy infrastructure? There is a method for this native in blockchain – cryptography. Neutral units compete with coins. This is how the entire infrastructure is created and maintained. People who develop apps on blockchain should be concerned about fees, not infrastructure.

But what about your DLT? Is your DLT for personal use only among network members? In this case, the end must be approved, so the reason why independent players in the market have created their own DLT network is to cover the cost of creating and supporting it.

See another story about DLT by members who develop a network for external users. It is inevitable that an appropriate economic model will be developed for network members. No one is wasting their resources or the resources are being misused – you are in for a common tragedy. One possible solution is to create a network native signal – hello to cryptocurrency.

Private DLT or blockchain?

Is a licensed / private DLT better than a blockchain? This is not a valid question. They are different and their use depends on what you are trying to achieve. However, it would be a mistake to match the blockchain characteristics to an authorized DLT.

Managing existing restrictions can provide you with a reliable infrastructure for implementation. The idea that a consistent blockchain is an obstacle is a misconception. On the contrary, it is of paramount importance that no other technology can provide such a level of reliability for records. There are a number of ways to create mature applications without compromising on a consistent account.

DLT, which is privately controlled, is central and therefore requires the same attention to cyber security as any other central technology. An association DLT is decentralized to its members, but will always be centralized to external users (of course, if the DLT is designed for public use). At the same time, the use of such DLT may be productive in a private application in a private application, but beware of objectives as it may be requested by anti-religious elements such as Cartel.

The views, opinions and opinions expressed herein are the sole property of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Oleksii Konashevych Is the author Blockchain-Protocol-Technology for Government Databases for Public Registration and Smart Laws. Oleksii is PhD. Joint international doctoral degree in law, science and technology program with EU funding. Olexisi has been collaborating with RMIT University Blockchain Innovation Hub for electronic management and e-democracy use of blockchain technology. It also deals with real estate titles, digital IDs, public registrations and e-voting. Oleksisi co-authored the E-Complaints Law in Ukraine, collaborated with the country’s presidential administration and served as the manager of a non-governmental e-democracy group from 2014 to 2016. And tax issues for crypto assets in Ukraine.