What business cases can be made for using Ethereum as a platform?

Question

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?

Answer 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... :)