What Is Blockchain Immutability?

Immutability is the nature of decentralized and distributed public networks of transactions which makes data stored on these networks remain forever. Unlike databases, data stored on the blockchain do not change with time, cannot be erased, and have an indelible history. All blockchains also contain a complete and permanent time-ordered history of transactions. Hashing is creating a block that can be published on the network. Forming such blocks involves a one-way process where some readable inputs are passed through a hash function to get an output known as a hash value. The hash value is a random hexadecimal or base 16 digit that exactly matches the inputs. The inputs include transaction data for the current block and the previous block hash. Passing this data through a hash function like SHA 256 used on the Bitcoin blockchain or Ethhash on Ethereum results in an output that begins with four zeroes. The algorithm is part of the parameters that connect all blocks on the network, making the network cryptographically secured and modification impossible. If anyone tries to modify the input or the data on the block, the current block will be disconnected from all the previous blocks and invalidated. Therefore, a malicious user or attacker who intends to modify blockchain data must change all the blocks before the current block, which is harder.

The only possible thing with blockchains is hard forks which are modifications to the codebase or rules of the blockchain rather than changes to stored data. Nodes on the original network need to decide which version of the blockchain rules they agree with. Since the fork is a part of the original blockchain, all transactions on the blockchain remain valid on the fork. Hence holders of tokens get the same amount on the forked chain. Nodes then continue to add tokens to add blocks to the forked chain, and the chain's success depends on the number of nodes and network support.

Summary of Important Points

  • Immutability is the nature of blockchains that makes data stored permanently.
  • Blockchain maintains immutability through the interconnection of blocks using a special branch of mathematics known as cryptography.
  • A blockchain can use various algorithms to hash inputs to get a hash value or digital signature, also called a checksum.
  • Hashing involves passing input through a cryptographic algorithm to get an output.
  • All blocks on the blockchain are connected through the hashing process and bound cryptographically.
  • The only way to break the rule on a standard public blockchain like Bitcoin is through a hard fork which creates a new chain incompatible with the old one.
  • Hashing cannot be reversed engineered.

How Is Blockchain Immutability Achieved?

Transactions on decentralized networks go to a memepool. To verify these transactions, miners or nodes on the network take the block header from transactions on the memepool, and run it through a hashing algorithm twice. They do this by incrementing the nonce of that block to get a value that is less than the target value, which typically starts with four zeroes. The block headers for Bitcoin transactions are 80 bytes and consist of the bitcoin version number, the previous block hash, the Merkle root, the timestamp, the target difficulty, and the nonce.

The algorithm used for hashing the transactions is SHA256, a version of SHA2 originally developed by NASA. The content of the block header resembles strings of random numbers and letters. The previous hash, for example, is usually 32 bytes representing four sets of 8 bits characters that can give you back the original 256 bits if you divide 256 by 32. The Merkle root is the fundamental part of the data structure that shows that transactions have not been modified on the network. It is a summary of all the transactions. The timestamp indicates when the transaction was spent and orders transactions chronologically as part of the broader double-spend prevention mechanisms. The nonce is the number incremented during hashing to solve the block. It is a set of decimal numbers.

The difficulty target determines the value that must be reached before a block is solved. It is crucial in hashing or mining and is often increased when the target value is extremely low and decreased when the target is high to maintain the block time of 10 minutes in the case of Bitcoin. While this may seem a bit hard, the simple hashing process involves several computers or nodes on the network guessing until a value less than the target is reached. When this is done, the block is considered solved, and the first node to solve the block publishes it on the network. Solving the block links the current block to all the blocks before it, creating a historically immutable ledger.

Advantages of Immutability

Easy Reconciliation

The immutable nature of blockchain transactions makes extra auditing unnecessary. It serves as proof to participants that transactions on the network have not been tampered with.

Integrity

Blockchains, by nature, do not require trust. If anyone tries to modify the data, the block is broken and cannot be a part of the chain; hence the integrity of data stored on the blockchain remains. Validation is a continuous process, and invalid blocks cannot become a part of the chain.

Time-Saving

Transaction time on blockchains like Bitcoin is 10 minutes, and there are newer blockchains like Solana with a block time of less than a second. Traditional ledgers and settlement systems are slow and similar transactions can take days to get updated.

Security

Immutability makes blockchain transactions secure, and the data is less prone to hacking. Even though hacking in cryptocurrency has been common lately, the target has been chiefly smart contracts built on top of blockchains, and there are blockchains like Cardano that have no reported case of a fork or a hack.

Source of Truth

Several industries like pharmaceutical, agriculture, and food industries are capitalizing on the immutable leger made possible by blockchain to prevent adulteration and be sure that what is received is from the right source and that the process of sourcing raw materials is less exploitative.

Disadvantages of Immutability

Irreversible Nature of Data

Transactions hashed and stored on the blockchain remain so forever. What if I erroneously sent a transaction to the network. It also remains immutable. Solutions such as multiple layers of confirmation may also add to regular transaction time.

Opportunity Cost of Proof-Of-Work

Proof-of-work is required to make the blockchain immutable, although there are better algorithms like proof-of-stake and DAG. The hardware and computational resources and electricity used in proof-of-work make it less environmentally friendly. Arguments against this include clean, renewable energy and natural sources like volcanoes for mining.

Privacy

As part of the mechanism that ensures immutability, everyone can see everyone else’s transactions. Such exposure can make specific owners of addresses doxxed and targets malicious attacks as funds move through hot wallets.

Keep in mind that the attack here does not break the blockchain or alter the data. It only gives attackers access to the private key of the original owner of the funds. The original identity can be stolen through social engineering or KYC.

Is All Data on Blockchain Perfect?

Think about the blockchain as an immutable ledger and custodian of agreed truths. Perfection in the real sense is a myth. The blockchain takes the data you intend to add and ensures that it corresponds with the history of all data before adding it. It can store erroneous data such as an accidental transaction or a fake NFT on the blockchain. However, the latter will take a unique identity. Blockchain ensures that data will never be altered, which is not the same as a guarantee for perfection. Blockchain transactions must agree with the saved history and current state. There must be transactions pointing to your receipt of an equivalent or higher amount of Bitcoins to send Bitcoins to someone else. What if there were previously accidental transactions in which you received such Bitcoins. The blockchain will not reject your transaction.