I’ve already mentioned that cryptocurrencies make use of a new kind of ledger called the Blockchain, but this is a point that requires some clarification before we go much farther here. The original Blockchain is designed to avoid the concept of storing all of your vital financial records in a single, easily modified spreadsheet that is stored on a server or servers that reside on a single, hackable private network. It’s designed to not rely on any single third party. If you have some technical know-how, you could probably even set up your own node on a server in your basement so you aren’t trusting someone else to not run a Sybil Attack. The three points to remember here are:
- Records on the Blockchain cannot be modified unless they are duplicated or the Blockchain’s entire network is wiped clean.
- The Blockchain was designed to be stored on multiple full nodes that frequently update one another with new data, there is no theoretical limit on how many full nodes can exist on a Blockchain network, and those nodes can be separated by any amount of distance if set up with the laws of physics in mind.
- The Blockchain does not particularly care what kind of data is being stored on it.
We’ve mentioned in Chapter 2 that the decentralized Blockchain ledger as it was originally conceived does come with some security issues that can be resolved by an alert Blockchain expert who can spot the red flags. The expert need not worry about the integrity of records if an attack can be detected early enough, however, because the records on the Blockchain can not be altered in any way short of wiping the memory of or destroying all valid nodes on the decentralized network. Basically, users of the Blockchain are trading the ability to edit records after they’ve already been saved to the ledger for the ability to be absolutely sure that records on the Blockchain ledger have not been tampered with after the fact.
Any malicious actor that wishes to use any other method of altering records would need to choose a starting point on the original Blockchain to begin adding fraudulent records and this leads to what Blockchain experts call a fork. Effectively, this is a parallel chain of records that would only be able to exchange data with the original if it could somehow be accepted as a valid one-way or two-way sidechain. If there is a dispute that involves duplicated records on a chain that has been forked, the fork that contains more records is regarded as the valid one by default.
This is not just paranoia. In 2013, a fork in the Bitcoin Blockchain caused by a buggy update was detected and shut down before it had the chance to gain enough processing power to establish itself as the valid chain. At the time, Bitcoin developers saw the wisdom of not bullying Bitcoin miners and users into upgrading to the malfunctioning Version 0.8. Instead, they backtracked and hit the reset button to get things back on track. It was called a “counterintuitive solution” because the developers could have refused to admit a mistake and insisted on staying the course with the upgrade. Instead, they decided that keeping the trust of the Bitcoin community was more important.
For this reason, the amount of resources that are required to maintain the Blockchain and generate new records is regarded as a built-in security feature. If an organization chooses to invest in enough processing power and storage to make it expensive for a malicious actor to attack the Blockchain by forking it, such an attack will usually be regarded as more trouble than it’s worth. In the occasional case where somebody actually succeeds in creating a longer chain of records, the cryptographic hash and timestamps can still be compared to give a more complete picture of when and where the chain was forked.
What this means for a future interplanetary economy is that any individual, organization or coalition that wishes to hijack the ledger or fraudulently alter records will essentially have to overwhelm the collective resources controlled by the entire decentralized network. An especially large and powerful colony might be able to manage it, but in a perfect universe, that will come at the cost of its trading privileges. Somebody will notice if that happens and can warn the other colonies to isolate the fraudulent actor.
This is assuming that the cryptocurrency of choice relies on Proof-of-Work algorithms to secure and relay transactions. Proof-of-Work is increasingly seen as an inefficient way to do things. Maybe instead of overwhelming a potential attacker with pure processing power, an organization that wants a customized Blockchain app may prefer to use a less costly method of validating both nodes and clients and a less expensive means of processing new records to be stored on the Blockchain. Those clients could even be verified using biometrics if one wishes. This may work best for coalitions of colonies that have been formed specifically for trade that have chosen less resource-intensive algorithms for processing transactions and do not wish to make a large investment in dedicated processing power.
As importantly, the ledger will not be very susceptible to mistakes made by human accountants and bank tellers. There will be no teller who can forget to log this month’s loan payment or get distracted into making a mistake when you deposit your paycheck. That client on your tablet basically functions as your bank account and personalized ATM. In the vast majority of cases where somebody sent the wrong amount of Bitcoin or sent it to the wrong address, that was their mistake. At most, colonists would know a good Blockchain expert who can keep an eye on the whole thing and find out what happened if a transaction is disputed.
The Blockchain expert looks at the matter from the perspective of somebody who cares about maintaining the integrity of his system and also cares about not having his time wasted. Did your spacecraft get repossessed because you weren’t making payments on it? Too bad, kid, maybe you shouldn’t have gotten fired from your job as a space miner. Did your spacecraft get repossessed because your lender was fooling around with the Blockchain? Yeah, you’re right, the chain got forked at the point right before you made your last payment. That has to be massively annoying, but we’ll ask the colonies to isolate the lender until he knocks it off and work on getting your spacecraft back on its way to you.
The rest is mostly details that can change depending on the needs of the organization. Regulatory compliance issues or a simple wish to hide sensitive data from competitors might cause an organization to choose a private Blockchain ledger that’s tough for attackers to crack, let alone hijack. An organization that cares about transparency might choose a public Blockchain ledger that grants anyone who is interested “read-only” privileges – the ability to inspect but not create records. Future colonial trading partners may choose to put limits on the number of nodes that each colony can have or put strict controls on exactly who can run a node to prevent the network from being overrun with illegitimate extra votes. From the perspective of colonies that might be interested in trade but don’t want to give up the ability to control their own internal governance, the only wrong answers are ones that might create or exacerbate issues that could cause a colony to collapse or give up its sovereignty against its will.
So the Blockchain is basically a kind of ledger that has been designed to throw up some fairly obvious red flags if somebody tries to tamper with it. If one colony says that this is the correct version of the ledger and eleven other colonies are saying that their ledger says something different, who are you going to believe? A Blockchain expert would believe the eleven colonies, especially once he’s compared the timestamps and established that the eleven have the original, valid version of the Blockchain. That’s the value of having a ledger that is cryptographically secured and can store records in multiple, distant locations.