Often times, the question may emerge: why do we put some things on blockchain and others not?
First, let’s look at what are the pros and cons of using blockchain versus central database (CD).
Blockchain pro #1
Censorship-resistance. That means that a single party can’t change the rules at its will. Any significant change in the rules requires consensus, and this makes blockchain robust to misbehavior of a single party/company.
Blockchain pro #2
Publicity. What it means is that every single action performed on the blockchain is public and therefore observable. It allows anyone to check that their action was executed as intended.
Blockchain con
Cost. Unfortunately, it’s still the case that blockchain is a pretty expensive database. While new-generation blockchains, like EOS, are significantly decreasing the cost of using a blockchain, it’s still much more expensive than CD.
It can be seen that the main advantage of blockchain is prevention from abuse by a single party, and in the case of our application, by our company. Therefore, when designing our architecture and deciding whether blockchain or central database is suitable for each specific case, we should analyse the trade-off between the cost and the possibility of us potentially abusing the system for our benefit. With that being said, here’s a set of assumptions and rules that we’ll follow when making trade-offs between blockchain vs central database.
Assumption #1: we’re rational profit-maximizing agents
Assumption #2: we build our company with a long-term vision, therefore we value our community and will do things that will increase trust in our brand
Rule 1: whatever we can do for our sole benefit without being noticed by the public, we might do; therefore things that benefit us at the expense of others and things that are unobservable should be put on the blockchain
Example: voting. If voting was carried out on our central servers, then we could be bribed for manipulating the results of voting and nobody would notice.
Rule 2: whatever is either not to our benefit or is both noticeable by the community and detrimental to our brand, may be put on our central server if it’s more cost-efficient.
Example: user pics. We have no incentive to change user pictures, and storing images on blockchain is very expensive, hence we can store it on CD.
Rule 3: personal funds of users will never be stored on our servers
