Will future blockchain forks are going to split apart large blockchains
When sitting down inside of EY and discussing what are the most prominent risks to the future of the blockchain industry, one topic which comes up, again and again, is the high rate at which main blockchains are forking and the possibility that future blockchain forks are going to split apart large blockchains with critical mass.
It is very significant as we do not believe that private blockchains are going to efficiently scale beyond highly specific use cases into a general platform for digital contracting between enterprises. That job, if any of the systems is to take it, will belong to public blockchains.
The more companies, investors as well as users, there are on a single network, the more likely it is you can transact with your key business partners over a common infrastructure.
But, if the public blockchains splinter into a lot of different camps, one of their main advantages over networks of private blockchain forks is going to disappear.
Forking a public blockchain is as easy as to copy and paste
However, right now, using a blockchain fork in a public blockchain is as easy as to copy and paste, and it occurs all the time as a means to “resolve” governance disputes.
It is an option which will not be viable for much longer because the real-world assets that are represented by the digital tokens start popping up on public blockchains. The link between those assets – be they real estate, diamonds, gold or U.S. dollars in escrow accounts – and the blockchain tokens which are only going to be valid on the primary network.
If they do not already, the purchase agreements for these tokens, as well as the assets need to be specific about what constitutes the “primary” or “original” blockchain on which the token is located. And some external firms that are involved in attestation and adult are going to have to agree to and link up those plans.
It is necessary for investor confidence
The role of the external firms is going to be particularly important going ahead. As nowadays blockchains technology is more and more linked to ownership of real-world assets, verifying the link to those assets will be necessary to investor confidence.
It is still going to be possible to fork blockchains, but the chances that users are going to come to alternative paths are declining by the day. Those users are going to be closely tied to their investment assets, which if they represent off-chain items, are going to have one and only one valid public blockchain representation.
As a result of that, it is going to become more and more significant for the significant public blockchains to develop robust governance models which can manage change and incorporate the views of stakeholders. It is also crucial for the users to understand that as blockchains mature, they are likely to become much less dynamic, as well as change less frequently.
It is not a surprise that trustworthy institutions tend to evolve slowly and prize stability.