On or off the blockchain? Insights on off-chaining computation and data

Abstract

The potential for blockchains to fundamentally transform how organizations produce and capture value is huge and very real. Practical applications dealing with nearly any type of digital asset demonstrate this capacity. Blockchain-based application architectures benefit from a set of unique properties including immutability and transparency of cryptographically-secured and peer-recorded transactions, which have been agreed upon by network consensus. Blockchain-based applications, however, may also suffer from high computational and storage expenses, negatively impacting overall performance and scalability. In this paper, we report on lessons learned and insights gained from a set of experimental blockchain projects, focusing on off-chaining: How to move computation and data off-the-chain, without compromising the properties introduced and benefits gained by using blockchains in the first place.