Page 82 - U4SSC Blockchain for smart sustainable cities

(3) The users know each other
If the users know each other, most likely blockchain is not necessary. However, this can be a case for a
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permissionless blockchain, depending on the other requirements. If the users are known but not trusted,
a permissioned Blockchain is recommended. If the set of writers is not fixed and known to the participants,
a permissionless blockchain is a suitable solution. In public service, the writers are known as government
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agencies. If they are considered to be trusted, the rule states that blockchain technology is not the most
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suitable. However, if they are not all considered as trusted, it is recommended to use a permissioned
blockchain. The use-cases in this situation use Bitcoin blockchain, which is a permissionless blockchain (see
Table 2). This is also possible because of the off-chain mechanism that can be used to recognize records
written by the authorized parties. In this specific situation, the case is using the government agencies
publicly-released blockchain identity. This condition does not systematically question the applicability of
blockchain; however, it helps to determine the most appropriate architecture for the blockchain system
(See Figure 3).

(4) Need for control by a specific entity

Blockchain is a shared ledger, and if a specific entity is needed for the control, a normal database could be
more suitable than blockchain. This is consistent with most of the decision models analyzed. However,
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60 per cent of the use-cases are assuming the need for the control of a specific entity. Two fundamental
conditions must be met without having to rely on any particular party in the system. Often participants
need to trust each other despite using a distributed ledger. Otherwise, the use of blockchain to replace
the control of one specific entity or TTP as presented earlier is limited. It is most likely that other more
efficient or more practical solutions exist. This dimension is similar to the presence of a third party. The
need for control will not specifically question the applicability of blockchain but will determine the type of
blockchain to adopt for the city.

(5) Removing the intermediaries

Blockchain is recommended when a business process can be redefined to remove intermediaries. It is
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one of the main criteria of blockchain applicability. Nearly 40 per cent of the cases did not require the
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removal of intermediaries, given that they are dealing directly with the citizens, which demonstrates that
this rule is not adequate in the context of public service whether it is at the local level or national level.

These use-cases prioritize the immutable record capability as the main value proposition of blockchain
to motivate the use of blockchain, and not necessarily the disintermediation property of blockchain. A
McKinsey report (2018) also specified that the role of blockchain should not be limited to a disintermediator.
In brief, removing the intermediaries is not the most critical property to determine the applicability of
blockchain in the public service.

72 U4SSC: Blockchain for smart sustainable cities