The Myth that Proof of Work creates Irreversibility

Proof of Work does not make a blockchain irreversible. Many people have made this claim to me during recent interviews. They stated it with such certainty that I didn’t dare correct them on the spot.

I believe this myth has its origin in the defense of proof of work relative to proof of stake blockchains. The argument is that without proof of work anyone could rewrite the history of the blockchain. The erroneous conclusion is that proof of work makes the blockchain irreversible.

What Makes it Irreversible

There are three things that make a blockchain irreversible:

1. hash-linked blocks
2. public record
3. public opinion

The reality is that blockchain irreversibility comes from a public broadcast where many independent observers have recorded the same events. These events are hash-linked which means the public cannot change one event without changing everything that happened after it. If someone wants to change the history, then everyone would see it is a change. Public opinion would be firmly behind the original order of events because any other history would be a lie.

You will notice that there is no need for computationally expensive proof of work to ensure the record is irreversible. You just need enough independent parties who agree on a common history.

Immutable is independent from Irreversible

A blockchain may log all events into an immutable record, but a record is meaningless on its own. What gives a record value is people’s opinion and perception. This means that people can choose to ignore or reinterpret the ledger without actually changing the ledger.

Ethereum is Reversing Transactions

The fact that Ethereum, a proof of work blockchain, is reversing the effects of a transaction is proof that having an immutable record doesn’t make transactions immutable. The people who use Ethereum have collectively decided to reinterpret the immutable history in such a way that produces a better outcome for almost everyone.

Value of Proof of Work

Proof of work provides an objective metric of value invested (sunk cost). This objective metric can be used to authenticate with high probability that a certain history had the backing of public opinion. Without the backing of public opinion the values represented by the data would be worthless. Hence, proof of work is strong evidence of public opinion, but not absolute proof.

Root of Confusion

This may be the root of the confusion. People are mixing up the evidence with the thing the evidence is proving. This would be like someone claiming that a particular set of finger prints cause murders. A person murders someone, the finger prints are just evidence.

Likewise, public opinion secures immutability and proof of work is just the evidence that someone believed the public opinion placed value on something in the past.