Is immutability overrated (or, things that are actually mutable on a blockchain)?

by Kevin Koo

Introduction

Blockchains were designed to be immutable. But not all things related to Blockchains are immutable. Some things (or, services) expire on a blockchain. So, that means some things are mutable. That’s blockchain mutability.

The blockchain was originally described as a way for verifying and preserving information. Part of the secret sauce was to create a network, where users would be incentivized to remain honest. Nobody could game the system, because everyone would have the same records. It would be more rewarding to be part of the system, than to work against it.

If you take a peek into the Bitcoin blockchain, you can see the very first block, a.k.a. the Genesis block. In it, you would find a message from 2009, about the collapse of the banking system.

Blockchains forked from Bitcoin adopt every single record from the Genesis Block up to the date of their fork. The records are permanent and unalterable. This is why blockchains are often described as immutable.

Immutability is attractive when you’re pitching a service that stores data until the end of time. Immutable, is an unbeatable value. You can see this value proposition pitched in blockchain projects for Wills. “Our blockchain will remain until the end of time,” they say, “and your will is safe on our blockchain.”

But There is a Need for Blockchain Mutability

Over time, blockchains can become quite costly to maintain. The storage requirements of a blockchain can be tremendous. With many PoW blockchains, a user would need to download the entire blockchain before he can start syncing (aka mining). The size of the Ethereum blockchain now exceeds 1TB. The Bitcoin blockchain, for comparison, is about 200 GB.

Another part of the problem is the amount of traffic on blockchains. Too many transactions on a blockchain, can lead to traffic congestion. This causes delay, which, can cause unresolved transactions. (But, this can be easily resolved by paying more gas or a higher transaction fee.)

In another example, when fancy domains or vanity addresses are involved, there can be domain squatting. In the case of TLD domains on the Internet, there is often an authority that can decide whether or not a name is being squatted on. But, not so on the blockchains.

So, part of the solution is to make certain things impermanent.

Instead, they would be “rented”, or “leased”. This prevents certain resources on a blockchain from being hogged, or squatted upon. That would help clean up garbage, while making it affordable for legitimate users to get the resources they need.

Examples of Things That Are Mutable on a Blockchain

Blockchain mutability can be seen in some of the following.

  • NEM namespaces and tokens / mosaics: The NEM blockchain requires that payment is made for a certain namespace to be created and rented. If a namespace is expired, all the mosaics and tokens made in pursuance thereof also expire. (I actually tweeted a thread about this on Twitter).
  • Token supply: When a token is created, there may be an option to make the token supply mutable or immutable. Basically, it means whether the amount of tokens can be increased or decreased after they are created.
  • IPFS (interplanetary file system): files on IPFS can disappear when the system executes its garbage collection. For a file to remain in the IPFS network, it needs to be “pinned”. This requires investment on the part of the “pinner”. This means a commitment from the IPFS pinner, even as more and more projects adopt IPFS as part of their technology stack.

These are just some examples, which, I am sure, are only a fraction of the many out there.

They illustrate the fact that when resources are scarce, certain features of blockchains are made available at a premium. This discourages wasteful behaviour on blockchains, and ensures that only genuine use cases see the light of day.

Here are Some Possible Legal issues with Blockchain Mutability

Bear in mind, I’m just thinking aloud here. These are hypothetical.

With Ethereum Name Service, it means that an .eth name (like kevinkoo.eth) is verified to be linked to a certain Ethereum account. It makes for easier payments, in apps like Cipher. But once an .eth name expires, and if the original .eth owner doesn’t renew the .eth name, it becomes possible for someone else to obtain it.

That might lead to a situation where people blindly pay money to someone which they think owns the .eth address, but the money gets sent to someone else who owns the .eth address. (Like www domains.)

With NEM mosaics, tokens can expire (and disappear) from your inventory. This might be a problem if you intend to use the NEM mosaic tokens for a future platform, and then forget to renew the namespace. When a namespace expires, all tokens created out of that namespace, also expire.

This might be a problem if, the mosaic tokens are in and of themselves the object of the sale. (To be used, for example, as tokens for a future platform.)

With mutable supply of tokens, a hypothetical situation would be if a token issuer covertly issued more tokens. This might be in breach of a token issuer’s representations in a token sale, in terms of how many tokens will be issued.

Finally, with IPFS, it might be a problem when some projects decide to leverage on IPFS, the distributed file storage system, but forget to “pin” the important files. This means that content will be disappearing from the app! This is certainly not a scenario that you would like to see in your EULA with the software provider.

The above scenarios have the potential to become issues. When that happens, you might be affected, and you might need a lawyer.

We might be able to help.

There is still one more possible aspect of mutability in blockchains that we have not mentioned. And that is, when the company or organisation running the blockchain decides to close down. There are a number of those out there, which you can find on a website like deadcoins.com.

Conclusion

Thanks for reading this article. We hope that you have enjoyed reading it. Please feel free to leave your feedback.

Note: This article is not legal advice, nor are we your lawyers (unless, we really are your lawyers and have been appointed as such). It has been prepared for informational purposes only. Kindly seek independent legal advice if you are uncertain.