Accenture Releases Patented Blockchain Editing Tool for Banks

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Accenture  has created a prototype of a new capability that enables Blockchain technology to be edited under extraordinary circumstances to resolve human errors, accommodate legal and regulatory requirements, and address mischief and other issues, while preserving key cryptographic features. The prototype represents a significant breakthrough for enterprise uses of Blockchain technology particularly in banking, insurance and capital markets.

The invention is designed for “permissioned” Blockchain systems, which are managed by designated administrators under agreed governance rules. The invention is not designed for “permissionless” systems, like the cryptocurrency system supporting Bitcoin, which is open and decentralized and where the absence of a single governing authority makes absolutely permanent, or “immutable,” recordkeeping vital.

“As we focus on new uses for Blockchain technology beyond the realm of cryptocurrency, absolute immutability will become both a virtue and a vice,” said Richard Lumb, group chief executive – Financial Services at Accenture. “For decentralized cryptocurrency systems, such permanent accounting has been crucial in building trust and faith among participants. But for financial services institutions faced with a myriad of risk and regulatory requirements, absolute immutability is a potential roadblock. Our invention strikes a balance for enterprise use that preserves the fundamental value of the technology while enabling enterprise adoption.”

How the Editable Blockchain Works

The invention provides an alternative to existing Blockchain technology. Blockchains are immutable to users of the system but, when necessary, designated administrators acting on agreed rules of governance can edit, rewrite or remove blocks of information without breaking the chain. It does this by using a new variation of what is known as the “chameleon” hash function, which can recreate algorithms that link two separate blocks through the use of secure private keys.

The invention also offers a capability where any edit made to a block leaves an immutable “scar” to indicate that the block was altered. Accenture and co-developer Dr. Giuseppe Ateniese have filed patent applications for the invention in the United States (US 15/253,997) and the European Union (EP 164 250 86.2).

Accenture will present the invention next week at Sibos 2016 (Booth C69) in Geneva, Switzerland.

Real-World Demand

The need for redaction capabilities in permissioned Blockchain systems recently surfaced when tens of millions of dollars were reported stolen from another digital currency system due to coding problems in a ‘smart contract’ – a software program that resides on Blockchains and automatically executes transactions when pre-agreed events take place.

“As Blockchain solutions gain momentum in financial services and other industries, more and more real-world situations will emerge where information on Blockchains simply needs to be modified or removed,” said David Treat, managing director of Accenture’s capital markets Blockchain practice. “Our solution makes it possible to deal with situations in a predictable fashion when things go wrong and to meet new and changing regulatory and legal requirements, like the ‘right to be forgotten’ and other data-privacy and retention rules. An editable form of Blockchain will make the technology more practical and useful for enterprise systems and accelerate its adoption. It combines the confidence that comes from immutability with the pragmatism required in an imperfect world.”

“The clever work of the bitcoin creators and leaps of progress in applied cryptographic research are opening the door to bold new uses of Blockchain,” said Dr. Giuseppe Ateniese, a leading cryptographer and professor of computer science at The Stevens Institute of Technology. “By modifying the traditional ‘chameleon hash’ function we can preserve the strength of the original Blockchain while making it even more useful. Unlike a traditional database, our solution is compatible with current Blockchain frameworks and works in a decentralized and accountable environment.”

Further detail on the need for an editable Blockchain is available in Accenture’s newly published report “Editing the Uneditable Blockchain: Why distributed ledger technology must adapt to an imperfect world.”

About Richard Kastelein

Founder, Publisher and Editor in Chief of industry leading online publication, Blockchain News and co-founder and director at Blockchain Partners in London/Amsterdam/NYC. Kastelein is also an advisor with a number Blockchain startups doing ICOs including Humaniq.co where hs is interim CMO, DECENT.ch, Inchain, Chronobank, eGaas and others. He is regarded as one of the top journalists by the Blockchain and fintech communities – as is evident by his entry in the Top 150 Fintech journalists online and in the top 10 of the Blockchain Top 100 List.

As a prominent keynote presenter, he has spoken on Blockchain at events in Gdansk, Amsterdam, Minsk, Dubai, Antwerp, Eindhoven, Bucharest, Nairobi, Tel Aviv, Manchester, Brussels, Barcelona etc, where he helped spread the cause for Blockchain technology and cryptocurrency and, consequently, has built a notable network in the scene.

He’s also a director of a Dutch foundation called The Hackitarians and has run innovation events in London, San Francisco, Berlin, Amsterdam and other cities around the world on topics such Blockchain, Health, Energy, Internet of Things, AI etc.

In 2013, the European Commission appointed him as an expert for overseeing financing for emerging startups as a part of the European Commission’s 90 billion euro Horizon 2020 project, created in Brussels to promote innovation as a driving force of job creation and business ventures across Europe. He has also worked as an external expert for Innovate UK since 2012, judging startups for the UK government.

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