Do you Need a Blockchain?

Abstract

Blockchain is being praised as a technological innovation which allows to revolutionize how society trades and
\ninteracts. This reputation is in particular attributable to its
\nproperties of allowing mutually mistrusting entities to exchange
\nfinancial value and interact without relying on a trusted third
\nparty. A blockchain moreover provides an integrity protected
\ndata storage and allows to provide process transparency.
\nIn this paper we critically analyze whether a blockchain is
\nindeed the appropriate technical solution for a particular application scenario. We differentiate between permissionless (e.g.,
\nBitcoin/Ethereum) and permissioned (e.g. Hyperledger/Corda)
\nblockchains and contrast their properties to those of a centrally
\nmanaged database. We provide a structured methodology to
\ndetermine the appropriate technical solution to solve a particular
\napplication problem. Given our methodology, we analyze in depth
\nthree use cases — Supply Chain Management, Interbank and
\nInternational Payments, and Decentralized Autonomous Organizations and conclude the article with an outlook for further
\nopportunities.