Typically blockchain networks are formed when a set of independent legal entities come together to form a consortium. The initial set of members are referred to as the Founding Members. These Members put together a charter on the objectives and a road map for the consortium.

Since the Blockchain technology is by nature decentralized, founders also need to think about how changes will be managed in the network. There are two categories of changes that will need to be managed:

Type-1 Consortium level – Not related to the technology. Examples:

Adding a new consortium member

Removing a consortium member

Type-2 Technology level – Platform technology. Examples:

Making a configuration change to the network

Adding a new communication endpoint or node

Since there is NO single administartor or owner of the network the question comes down to

WHO will make the change?

will make the change? HOW the change will be rolled out?

the change will be rolled out? WHAT changes are allowed to be made?

Founding members need to think through these aspects and layout the rules | policies for managing changes to the network.

Centralized Network Management

One way to address these questions would be to go with Centralized administration model. In this model a dedicated (sometime independent) entity will take care of all the changes. This entity may be one of the members as well. This is how today’s centralized systems work e.g., trade clearing houses.

In this model consortium members will come together to make change related decision and convey it to the Central Administration Team that will make the agreed upon desired changes. So the change decision making aspect in this scenario is managed off the blockchain platform for example by way of working group committees.

From enforcement perspective the centralized team will need to manage some kind of change trail that can be validated (proven) for agreements by the involved members. This is essential for avoiding any conflict that may arise from a change to the system.

For example if the policy says that addition of a new member requires approval by 5 existing members then the trail MUST prove the acceptance of new member by 5 existing members.

De-Centralized Management

Another way to manage the changes would be to go with De-Centralized administration model. In this model the responsibility for managing network change is shared by multiple entities.

A 100% De-centralized network will be an extreme case where all of the members of the network will have equal say in the management of changes. This may lead to in-efficiencies in network change management process. So a balanced approach may be to create a De-centralized administration team with a subset of consortium members. The Subset-De-centralized model will be more efficient in terms of decision making.

Consortium members may put together rules on how the members will be selected to become part of the De-Centralized admin team. In addition the rules | policies will still be needed for how the De-Centralized team will make the decisions and roll out the changes.

Now all of these processes | rules | policies may be designed and managed manually off the Blockchain platforms BUT it would be challenging from the enforcement perspective.

The good news is that Enterprise Blockchain Platforms such as Hyperledger Fabric have in built features for creation and enforcement of De-Centralized administration for the Blockchain networks.

Technology driven De-Centralized Administration

Hyperledger Fabric platform allows the creation of policies that are enforced on the network by way of the platform itself. All change related decisions are defined as Network Policies that are applied at run time before the change gets rolled out. These policies define WHO | HOW | WHAT for all categories of changes.

Changes are made by way of config objects that MUST be signed by agents representing the member organizations. Rules may be defined with clause such as “Majority members MUST Approve” or “3 Out of 5 MUST approve”. Consent is provided by member organizations by signing the config blocks with their private key and these signed blocks are added to the ledger providing immutable change audit!!! Keep in mind that even policies may be changed over a period of time 🙂

Long story short, for De-Centralized management of Blockchain Network one MUST opt for a platform that would enforce network management by way of policies created by the members of the consortium.

Would you like to learn more about policies? Let me know and I will be happy to add another article which will go deeper.

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