The Benefits of Deploying Smart Contracts on Trusted Third Parties
This work addresses the problem of overemphasis on blockchain-based smart contracts for developers and researchers, offering a pragmatic shift for applications that can tolerate centralization, though it is incremental in proposing an alternative approach.
The paper argues that smart contracts deployed on trusted third parties (on-TTPs) are often a better alternative to on-blockchain smart contracts for many applications, as they simplify engineering problems like decentralization and data indelibility, using a car insurance example to illustrate this.
The hype about Bitcoin has overrated the potential of smart contracts deployed on-blockchains (on-chains) and underrated the potential of smart contracts deployed on-Trusted Third Parties (on-TTPs). As a result, current research and development in this field is focused mainly on smart contract applications that use on-chain smart contracts. We argue that there is a large class of smart contract applications where on-TTP smart contracts are a better alternative. The problem with on-chain smart contracts is that the fully decentralised model and indelible append-only data model followed by blockchains introduces several engineering problems that are hard to solve. In these situations, the inclusion of a TTP (assuming that the application can tolerate its inconveniences) instead of a blockchain to host the smart contract simplifies the problems and offers pragmatic solutions. The intention and contribution of this paper is to shed some light on this issue. We use a hypothetical use case of a car insurance application to illustrate technical problems that are easier to solve with on-TTP smart contracts than with on-chain smart contracts.