Some believe that authorized distributed ledger technology can work better than open blockchain because it has been modified to solve the problems of the latter. These systems are also referred to as “authorized blockchain”, as if blockchain is a high level concept and “authorized” is one of the variants. But this claim is controversial, and you can see why.
There are many other options in DLT: authorized, private, corporate, standard DLT and so on. And frankly, sometimes it’s not easy to separate them. So, for this level of discussion, let’s just compare DLT with blockchain.
The licensed DLT and the mentioned variety are decentralized. There should be no mistake in this, as it can be fatal to the project. Although some opponents of this claim may argue that decentralization may have some degree, blockchain is, of course, more decentralized without permission.
To put it simply. If someone is between two opposite sides of a transaction and you can not do anything about it, it is centralization. In a public blockchain, if the average user does not want a miner to have the transaction included in a block, they can create their own transaction by expanding the block themselves. If the block is valid, the network accepts it. Of course, mining currently requires enormous computational resources, but there are no technical or formal obstacles to this – you do not need to ask for permission to mine. In DLT, network users have different roles and permissions, and regular users cannot create and control blocks. There is nothing wrong with having a central system. It’s just understanding what you’re dealing with.
About the topic: What is the difference between blockchain and DLT?
Authorized DLTs can only be decentralized from one point of view, ie with the help of a consortium of independent participants (organizations, companies, etc.) Manage the network with exclusive authority to create blocks. Having multiple branches controlled by one receiver will not lead to decentralization.
And remember that any consortium structure with independent members can be decentralized, but only for these members – it will always be the center of all outside the union.
Is DLT a cartel?
The DLT consortium (private / licensed) can be considered a cartel. Sooner or later, the cartel authority can ask questions about this. A secure strategy ensures that the conditions for the consortium are set in accordance with the Antitrust Act.
By the way, having a completely centralized system is much safer. But a centralized system will never achieve the same level of reliability and trust as a blockchain. Therefore, it will be as weak as all other centralized systems.
Central DLT is not installed. The registry can be rewritten arbitrarily by the person (or more) who controls it, or as a result of a cyber attack. Due to its open and competitive nature (mining, betting, etc.), any blockchain can achieve immutability, and therefore the records will be reliable. Thousands of independent nodes can guarantee a level of resistance without resistance to all types of attacks.
A discussion about endurance usually follows. How do I fix the error? What if you need to change a smart contract? What if you lose your private key? You can not do anything retroactively – the transition to blockchain is not possible. What happened happened. In this regard, DLT is usually the opposite of blockchain options. You will hear that DLT can be designed so that those who control the network validate transactions upon entry so that incompatible transactions do not go through. But it would be a mistake to think that network censorship will eventually eliminate all errors and unwanted transactions. There will always be a chance for error. So what? Reverse change as a last resort? But if you can change the story, you will undermine the whole idea of blockchain. No other technology can guarantee this level of data stability. This is not one of the benefits of blockchain – it is its hallmark.
Related: Back to the original blockchain goal: timestamp
Immutability, however, is seen as an obstacle to its legal application. Let’s say your circumstances have changed and you need to change your smart connection. The answer to this question is the correct design of the application, which does not undermine the stability of the registry. The smart contract should be designed in such a way that the user can attach a new transaction to reflect the change in the previous transaction. The blocks are strictly chronological, and only the most recent transaction will reflect the current situation, and all previous transactions will be historical references.