Bob Wolinsky is senior managing director of Genesis Project, where he leads a blockchain research and technology company focused on the commercialization of private blockchains.
In this opinion piece, Wolinsky – and colleagues Jonathan Wolinsky and Paul Sztorc – take aim at prevailing permissioned blockchain designs and what they argue is their inability to deliver immutable recordkeeping. Today, the blockchain technology sector is awash in salesmen selling every kind of workaround to the one thing they can’t deliver to a private blockchain: the efficiency, bulletproof security and mathematical certainty of the proof-of-work protocol.
There’s a growing trend that finds people believing that an equivalent alternative to proof-of-work efficiency exists, that traditional countermeasures can be employed to secure the fidelity of a private blockchain’s historical record, or that ‘regulated’ or ‘trusted’ parties will not collude to alter the historical record simply because they are regulated.
Nothing can be further from the truth.
With the desire to commercialize blockchain technology, two schools of thought have emerged regarding mechanisms to secure the provenance of the historical record of a distributed-ledger blockchain system: (1) proof-of-work and rules, and (2) trust or permissioning and rules.
Many would argue that proof-of-stake and its derivatives are a third security mechanism. However, upon detailed inspection of the underlying mathematics and rules you will find that proof-of-stake is merely an exotic form of permissioning, so we lump it in with trust.
Our colleague Paul Sztorc has written extensively on the economics and security regarding proof-of-stake. Suffice it to say, proof-of-stake is less efficient, untested and potentially less secure than proof-of-work.
Others talk about blockchain node ’round robins’, ‘token rings’ and the like. However, these mechanisms ultimately rely on trust as well. Does trust work? Many have used very colorful arguments in support of trust-based blockchain systems including rationales that ‘rules’ govern the interactions […]
