[pfraze]

I think you're right that handling catastrophic failure is the key question for a hosted ledger. You have to find a way for the network to agree on who will rehydrate the balances, so to speak, into a replacement host, and you need to do it quickly. The whole network has to agree on this.

This isn't impossible to solve. You can establish, in the ledger itself, the process for migration after a catastrophic failure. You can set a party which will mediate the issue and decide on the solution. You set up rules for how to reconfigure the network, and trigger them when a corruption proof is published.

I agree it's less elegant than what decentralized consensus provides for handling bad nodes, but you really have to balance this against the expenditure of proof-of-work. The cost of a handling every ledger failure ever will almost certainly be less than the cost of proof-of-work.

Part of my point is also that it's a gamble, which I find questionable, that Bitcoin will become "the blockchain" in the future, because it still has a political reality, and that political reality has involved plenty of forks. So, my point is, between the cost and the political instability, PoW doesn't sustain it's claim.