Where Blockchains Add Real Value

new way of constructing a database in which the database is placed under the collective control of multiple parties instead of a central authority. Therefore, the first question to ask when assessing a way of using blockchain is whether it could be satisfactorily implemented on a regular centralized database, such as Oracle, SQL Server, MySQL, or Postgres. If the answer is “yes,” there is no value in using a blockchain, which remains a relatively young and immature technology, whereas programs like Oracle and MySQL have decades of development behind them. Nonetheless, there are certainly a good number of applications whose ideal architecture has a blockchain at its core. This paper provides a framework for evaluating the viability of blockchain usage from four different angles. First we focus on the raison d’être of blockchains, database disintermediation, which can be defined as the ability for multiple parties to directly share a single database without putting that database under a single party’s control. We provide a checklist for assessing whether this disintermediation is helpful. We next look at two key disadvantages of blockchains when compared with regular databases—performance and confidentiality. We then outline four general types of usage in which the tradeoffs tend to favor a blockchain architecture. Finally, we look at three real-world examples of our software being used in production to see what conclusions can be drawn. It’s important to clarify that this paper is written primarily with “permissioned” blockchains in mind, which are fundamentally different from the permission-less blockchains that underlie crypWHERE BLOCKCHAINS ADD REAL VALUE