To blockchain or not!!!

There was a hot discussion with one of my friends which is the primary trigger for this blog. It’s more about blockchain vs. centralized database. Since blockchain is going through the hype cycle, there is a natural tendency to go for the same even if it is not the ideal choice. At the same time, blockchain itself has two major variations in terms of permissionless blockchain and permissioned blockchain. In the case of the permissionless blockchain, it is open and decentralized one which do not put the restriction on who can join the chain. So technically any peer can read from and write to the blockchain. In the case of the permissioned blockchain, there will be a restriction on who can read or write to the blockchain.   (At the same time, many in the industry hold the view that permissioned blockchain is not blockchain in itself. I will blog about the same in the near future). 

Now the question is when one should adopt permissioned blockchain vs. permissionless blockchain vs. centralized database? If the transaction between the entities does not involve any state to be stored, then there is no need for centralized database or blockchain. If it requires the state to be stored, then we need to consider if there is a single trusted party who could maintain the state information on behalf of other entities. In that case, the centralized database should be considered. If no single trusted party could play the role, then blockchain could be considered. If all the writers to blockchain are known but not trusted ones,  permissioned blockchain could be considered. But if the writers are not known, then permissionless blockchain should be considered. 

Please note that performance of centralized database far ahead of the blockchain. The permissionless blockchain like  Bitcoin could handle only five transactions per second, but at the same time, the interbank Visa system can handle around 2,500.  

Above one is the quick and dirty check to assess the fitment of blockchain in your scenario. But at the same time, innovation possibilities on top of blockchain are unlimited, so it's better to look at blockchain from the business perspective also. So, it is recommended to look at a business angle for the adoption of the blockchain. There are many industry materials in this evolving area. HBR and BCG have published many articles in this space which will provide you the business side of the blockchain and its worth the read.