0

I am not sure if this is the right place for a high level technology choice question. If not, please direct me to the appropriate forum.

Context I am involved in a business that deals with payment processing, PCI compliant payment gateways, pre-paid cards, loyalty cards, point of sale, and other financial services aimed at small businesses.

Right now the architecture is a centralized Azure based set of APIs and clients.

I am in the process of researching Ethereum.

Ethereum technology questions So far my understanding is that Ethereum does not itself bring a unique set of business benefits with it, apart from perhaps its own coolness factor and following. Am I right to perceive Ethereum as in essence an alternative platform to Azure and the various protocols used to communicate between clients and servers?

So for example, our pre-paid card payments could be implemented using multi-sig designs with a custom 'currency' in an Ethereum Dapp, and similarly with loyalty cards. This would be an alternative architecture to running a centralized Azure hosted db+REST API+trust model.

Am I right to take the point of view that for our intents and purposes Ethereum is an alternative technology choice to some of Azure's IaaS and PaaS offerings, and that is all? The price/service comparison would be made on the basis of running costs and security risks?

Or am I missing the point to some extent? Does Ethereum bring more to the table in terms of extensibility or business use cases? For example, on Azure there is the Azure Marketplace for re-sale of multitenant apps.

In essence, what I am looking for is a reverse approach: what arguments would I be able to make to persuade the other stakeholders in the organization that moving to Ethereum for these financial services is a good idea for both the short and longer terms?

1

let me try to add some thoughts to your questions.

When comparing a solution based on Azure IaaS/PaaS to a solution running on Ethereum I think the main difference could be on the security level for your use case.

I assume you would use Ethereum in a closed ecosystem between the entities described above. So by using Ethereum you could introduce a decentralized model without a single master instance if you will; prone to be manipulated.

With Ethereum you can surely create your own token to do whatever you want with it. How to handle the exchange from Fiat currency to your own token is a different question. I guess you would need to have a smart contract in place that is automatically issuing tokens based on transferred Fiat currency with a fixed FX-rate. If the token is not a scarce resource or bound to the input of Fiat the model will not fly (IMHO).

The overall question I would investigate is, if Ethereum can offer all functionality you need for your given use case without introducing external dependencies like traditional hierarchical databases as you would actually lose its decentralized flavor.

In terms of answering whether there is a business case for Ethereum or not I think the answer is: it depends. If all functionality needed could be offered by Ethereum there should be a business case (not knowing how expensive your traditional Azure IaaS/PaaS is). Assume running a Ethereum node on Azure will have a burnrate of $250 approx depending on your chosen template.

Maybe I've helped a bit but your questions is rather broad... :)

  • Yes this actually helps quite a lot. It's more about perspective.You know, I am inspired by Ethereum (and IPFS) and I can see that the whole future of technology could lie in this direction.The creative part of me says "let's just do it all on Ethereum," but the critical part of me asks "why?"So when I look at the business reasons, I can't help feeling right now that what I am looking at here is simply a different technology stack that doesn't come 'out of the box' with revolutionary reasons why to use it. With that sentiment I approach the community to see if I am looking at things correctly. – Sentinel Mar 31 '17 at 7:44
  • And yes, the tokens would be based on a) fixed FX rate purchase (the tokens would actually be USD) and b) POS sale events for loyalty points – Sentinel Mar 31 '17 at 7:46
  • I can only agree to your comments above. Though let me ponder on your critical question regarding the "Why?". IMHO I think Blockchain (and let's assume Ethereum for the sake of this conversation) has the potential to overcome current business challenges - but this is not where its disruptive power is. Blockchain as such is rather a foundational technology like TCP/IP enabling completely new business models. Think about IoT integration, automation, visibility, in-economic services, B2B/B2C/C2C/C2B/B2T/T2T/T2C/C2T models. Mid-term it might be the interface between push and pull economies. My 2c! – Borinho Apr 4 '17 at 6:09
  • Thanks for those thoughts. Getting way off base here, but can you help with pointers to resources on PCI Compliance audit fulfillment on blockchain? Google isn't being too helpful, and I am starting to feel a bit pioneering with this. – Sentinel Apr 4 '17 at 7:39
  • I know that we are really getting off base here :) Personally I didn't really look at PCI compliance yet (I'm not an expert here on that). But doesn't PCI compliance stipulate that any customer data must be "scrabled" and if yes, wouldn't Ethereum comply as there is no direct linkage between a "Ethereum Identity" vs. "Human/Organizational Identity"? (That's only true in a permissionless instance btw...) – Borinho Apr 4 '17 at 7:53

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.