Blocks, hashes and immutability

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Transactions are grouped into blocks. Each block carries a cryptographic hash of the preceding block, which is a fixed-length fingerprint computed from the block's entire content. Change one character in an old block and every subsequent hash changes, which every participant will detect at once. That chaining is why the record is said to be immutable. The word deserves scepticism from a lawyer. The record is immutable only in the sense that altering it requires the agreement of enough participants to rewrite history from the altered point forward. On a large public network that agreement is practically unobtainable. On a small permissioned network run by five banks it is a matter of a conference call.

Practice note

When a client describes a ledger as "immutable", ask three questions before relying on the word. Who runs the nodes, how many are there, and what would it take for them to agree to rewrite a block? A Swiss ledger-based security must give the creditor "the power of disposal" and protect the register's integrity against unauthorised change under Art. 973d para. 2 CO. A permissioned ledger controlled by the issuer may fail that test if the issuer can unilaterally reverse entries. The question is one of fact and you should document the answer in the registration agreement.

The Swiss Federal Council, in its report of 14 December 2018 that launched the DLT legislation, described this quality as "integrity" and treated it as a property to be secured through technical and organisational measures. The report expressly refused to privilege any particular architecture.¹ Singapore's MAS has taken the same technology-neutral stance in every guidance document since 2017 and has never conditioned a licence on a ledger's degree of decentralisation.

Notes

Federal Council, Legal framework for distributed ledger technology and blockchain in Switzerland, report of 14 December 2018 (Federal Council media release of the same date, admin.ch msg-id 73398). ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of October 2026.

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Dr Alexander Ressos, TEP

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I am Of Counsel with KGP Legal LLC in Singapore, where I work with a global client base of successful entrepreneurs and their families, independent asset managers, commodity trading houses and other commercial clients. I am a German and Swiss attorney-at-law, also admitted as a solicitor in England & Wales and in Hong Kong. I divide my time between Zug in Switzerland, Singapore and Hong Kong. Since 2017 I have advised international clients on more than 700 crypto and digital asset projects. I also have extensive experience in cross-border litigation and arbitration in Singapore, Hong Kong and other markets in South-East Asia and Greater China.

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SingaporeIQ is edited by Dr Alexander Ressos, an international business lawyer with more than 15 years of local experience in Singapore as a permanent resident, a Singapore registered foreign lawyer and managing partner of a Singapore foreign law practice. In addition to significant experience in cross-border investments and transactions, UHNWI private client work and sanctions/export controls, Dr Ressos has extensive experience in cross-border business and in crypto and digital-asset projects in Singapore, drawn from more than 700 projects since 2017.

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