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This chapter explores the intersection of data governance, data quality, and blockchain technology, presenting a paradigm shift from traditional centralized data management to decentralized architectures. As data solidifies its role as a critical asset, ensuring its integrity and trustworthiness has become paramount. We begin by establishing the principles of data governance and quality, highlighting the limitations of conventional systems that rely on trusted intermediaries, which introduce single points of failure and censorship risks. Blockchain technology emerges as a compelling alternative, offering a decentralized, immutable, and transparent ledger that fundamentally enhances data integrity and trust. Through an analysis of its core components – including cryptographic hashing, consensus mechanisms, and distributed networks – we examine the inherent advantages and disadvantages of blockchain. The chapter delves into the functional extensions of blockchain, such as smart contracts and Decentralized Autonomous Organizations (DAOs), which enable automated, transparent, and autonomous governance models. However, the transition to blockchain is not without its challenges. We critically assess issues of scalability, data privacy, the “oracle problem,” and the “garbage in, garbage out” principle, which persist in decentralized environments. The chapter concludes that the “quality” of blockchain as a data management solution is not absolute but is contingent upon the specific requirements of the use case, demanding a careful evaluation of its trade-offs.
Faculty of Economics Department of Management Information Systems, Istanbul University, Istanbul, Türkiye
*Address all correspondence to: emre.akadal@istanbul.edu.tr
1. Introduction
In an era defined by digital transformation, data has unequivocally become one of the most valuable assets for enterprises, governments, and individuals alike. The ability to effectively manage, secure, and trust information underpins modern economies and technological progress. Consequently, the disciplines of data governance and data quality have ascended to critical prominence. Data governance provides the framework of rules, roles, and processes necessary to control data assets, while data quality ensures that the information itself is accurate, consistent, and fit for its intended purpose. For decades, the management of this data has been predicated on centralized architectures – databases and systems operated by a single, trusted authority. While effective in many contexts, this model presents inherent vulnerabilities, including susceptibility to single points of failure, censorship, and the absolute need to trust the central intermediary. These limitations have spurred the search for alternative models, leading to the emergence of blockchain technology as a revolutionary force in data management.
Blockchain offers a fundamentally different approach to storing and sharing data. It is a decentralized, distributed, and immutable ledger technology that allows multiple parties, who may not trust each other, to maintain a shared, consistent, and tamper-proof record of transactions. First introduced as the technology powering Bitcoin, its potential has been recognized far beyond cryptocurrencies, extending into nearly every industry that relies on data. The architecture of a blockchain consists of a series of interconnected blocks, each containing a set of transactions. Every block is cryptographically linked to the one before it, forming a chain that is incredibly difficult to alter. Any attempt to change a past transaction would require altering all subsequent blocks across the entire network, a feat that is computationally infeasible in a sufficiently large and decentralized system. This structure, maintained by a network of peers rather than a single entity, creates a new paradigm for trust, one based on cryptographic certainty and collective consensus rather than reliance on a central institution.
However, the transition from a centralized to a decentralized data paradigm introduces a host of new challenges, particularly for governance. The challenge extends deeply into the realm of data quality. Blockchain’s most celebrated feature – immutability – can become a significant liability when data quality is poor. The principle of “garbage in, garbage out” is not only applicable but amplified in a blockchain context. If inaccurate, incomplete, or malicious data is entered onto the chain, it becomes a permanent part of the immutable record. Unlike a traditional database where an administrator can correct an error, a blockchain preserves the mistake with the same cryptographic finality as it does valid data. This creates a permanent, unchangeable, and yet verifiably false record, posing a significant risk to any application that relies on its data. This problem is further compounded by the inherent technical trade-offs of the technology, often summarized as the “blockchain trilemma.” This concept describes the difficulty of simultaneously optimizing for decentralization, security, and scalability. Most blockchain implementations have prioritized security and decentralization, often at the expense of scalability, leading to limitations on transaction throughput and speed, which can impact the “quality” of the system’s performance for certain use cases.
This chapter will navigate these complex issues by providing a thorough examination of the intersection between blockchain technology, data governance, and data quality. We will begin by deconstructing the blockchain itself, explaining its core components and operational principles. We will then explore its inherent advantages and disadvantages, moving beyond the hype to offer a balanced perspective on its capabilities. The core of our analysis will focus on how data governance is reimagined in a decentralized landscape, exploring concepts of data ownership, process control, and the vital role of smart contracts in automating on-chain governance. We will argue that the quality of a blockchain is not an inherent feature but is contingent upon the robustness of its governance model and the integrity of the data it consumes. The value of any blockchain is ultimately derived from the trust placed in the information it secures. By dissecting these challenges and exploring potential solutions, this chapter aims to provide a clear framework for understanding and implementing best practices for data integrity and assurance in the evolving world of blockchain technology.
This chapter aims to provide a comprehensive examination of the intersection between blockchain technology, data governance, and data quality. Its principal objective is to move beyond the prevailing hype surrounding the technology to offer a balanced and critical perspective. The novelty of this chapter lies in the argument that the “quality” of a blockchain solution is not an intrinsic feature of the technology itself, but is rather contingent upon the robustness of its governance model and the integrity of the data it processes. To substantiate this argument, the chapter is structured as follows: It will first deconstruct the core components and operational principles of blockchain. Subsequently, the analysis will examine how data governance is reimagined within a decentralized landscape, discussing the concepts of data ownership, process control, and the vital role of smart contracts in automation. Finally, by dissecting these challenges and exploring potential solutions, the chapter provides a clear framework for understanding best practices for data integrity and assurance in blockchain systems, concluding with an assessment of future directions for this topic.
Blockchain is a decentralized, distributed, and immutable digital ledger technology that securely records transactions across a network of computers [1, 2]. In some respects, it can be considered a primitive form of data storage compared to conventional database management systems, as it lacks many of their advanced features. Nevertheless, the primary advantage and reason for its prominence lie in its ability to guarantee data integrity and immutability without the need for a central authority.
Blockchain technology offers significant advantages for decentralized data management, including enhanced security, immutability, and user-controlled data ownership [3, 4]. It provides a secure and transparent framework for digital transactions across various sectors, such as healthcare, education, and supply chain management [5, 6]. Blockchain’s decentralized nature eliminates single points of failure and reduces the need for intermediaries [7]. Smart contracts enable automated processes and ensure compliance with predefined rules [8]. However, challenges such as scalability, regulatory uncertainties, and integration difficulties persist [5]. To address privacy concerns and enable data updates, hybrid solutions combining blockchain with distributed hash tables and encryption mechanisms have been proposed [9]. Overall, blockchain technology shows promise in revolutionizing data security, transparency, and ownership across multiple industries.
Blockchain technology gained widespread attention with the publication of a 2008 paper by the pseudonymous Satoshi Nakamoto, which introduced the cryptocurrency Bitcoin [10]. The core objective of Bitcoin was to create a peer-to-peer electronic cash system that operated independently of any central authority by using a blockchain to decentrally record all transactions. This concept garnered significant community support, ultimately enabling Bitcoin to become a widely recognized and valued digital asset.
The technology itself is not new, as it builds upon previous developments. For instance, the hash function frequently used in blockchain technology is a result of cryptographic research. The requirement for a time delay in block production is also rooted in the Hash Cash algorithm. Both cryptocurrency initiatives and technical advancements in blockchain technology predated Nakamoto’s proposal, particularly in the works of the Cypherpunk community. Nevertheless, Nakamoto successfully integrated these developments, garnering community support to create a decentralized digital asset, Bitcoin. This section will delve deeper into the blockchain technology.
2.1 How it works
Blockchain is a data storage technology designed to preserve data immutably, a guarantee secured through its decentralized architecture. The system is composed of a series of blocks linked together in chronological order, with each block containing transaction data and a cryptographic hash of the preceding block [11, 12]. This structure creates an unbroken chain where each block reinforces the integrity of the one before it. This design ensures the transparency, immutability, and security of transactions without requiring intermediaries [13, 14].
Any attempt to alter data within a block would invalidate the hash stored in the subsequent block, thereby breaking the chain and making the tampering evident. To successfully alter a block, one would need to recalculate the hashes for all following blocks. However, the technology’s distributed nature acts as a crucial defense mechanism. Operating on a peer-to-peer network, transactions are validated by a consensus of participants, making the ledger highly resistant to unauthorized revision [15]. Unless the network community reaches a consensus, the altered blocks cannot be regenerated, thus preserving the integrity of the record.
Blockchain’s operational principles are rooted in cryptography, particularly the hash function, which enables the creation of a fixed-length, encrypted representation of any data piece. This ensures that any alteration to the data would necessitate a change in its encrypted form, making tampering easily detectable. The security of these hashes is further ensured by their inclusion in subsequent blocks.
The decentralized architecture of blockchain is maintained by a network of peers, rather than a single entity, ensuring that data is not controlled by a central authority. This design makes blockchain an attractive solution for applications requiring transparency, security, and immutability.
Another area where cryptography is employed is the concept of wallets. In the blockchain, users are anonymous and can conceal their real identities while still being able to prove ownership of their wallets. This is made possible by the use of asymmetric encryption, which enables users to share their public key with others while keeping their private key confidential. The private key grants the user the authority to make transactions, and thus, it must be kept secret. A wallet is a pair of public and private keys, and it is not a physical storage space like a real wallet. The analogy of a wallet is drawn from the fact that this pair of keys enables the secure storage of assets.
Although blockchain incorporates mechanisms to guarantee data immutability, storing the entire ledger on a single computer would undermine this assurance. Data stored on a single machine could be altered by its owner, and the absence of duplicates would make it impossible to prove that a modification occurred. The most straightforward solution to this vulnerability is to maintain the records across multiple machines. When blockchain records are stored on numerous computers, any malicious attempt to alter the data will be identified and thwarted by other participants who hold valid copies. This approach, known as distributed ledger technology (DLT), ensures that data remains tamper-proof.
While distributed ledger technology enhances data security, it introduces a new challenge: ensuring consistency across all copies of the ledger. Every new record added to the blockchain must be recorded identically on all machines that store a copy. If a valid, error-free data entry is not uniformly applied by all nodes, inconsistencies can arise in the ledger. Given that new data requests can originate from various locations, the network participants require a robust communication protocol. This protocol must include a mechanism for participants to agree on accepting a new data entry request. This mechanism is known as a consensus algorithm, which establishes the rules for how new data is accepted, written to the blockchain, and distributed across the network. The Bitcoin blockchain, for example, utilizes a method called Proof of Work (PoW). In this system, a new block can only be created and propagated across the network after solving a cryptographic puzzle. This prevents multiple participants from creating new blocks simultaneously. However, it is possible for multiple parties to produce a new block at roughly the same time, leading to a phenomenon known as a fork. The network resolves this by accepting the longest chain as the authoritative one, causing shorter-lived forks to eventually disappear. For this reason, it is common practice to wait for several new blocks to be added after a transaction to ensure its finality, as a different fork could otherwise become active and lead to inconsistencies in the transaction history.
2.2 Advantages and disadvantages of blockchain
Blockchain technology offers several key advantages for decentralized data management, primarily centered on security, immutability, and user-controlled data ownership [3, 4]. These features provide a secure and transparent framework applicable to diverse sectors such as healthcare, education, and supply chain management [5, 6]. The primary advantages include:
Immutability: In a blockchain, each block represents a set of data. Once this data is recorded, its cryptographic hash is included in the subsequent block, rendering it unchangeable. This architectural design makes it impossible to retroactively alter or delete data, ensuring a permanent and tamper-proof ledger.
Decentralization: The ledger and all its data are maintained by a distributed network of participants rather than a single central authority. This decentralized structure prevents malicious actors from manipulating the data, as any change would be rejected by the network consensus. This eliminates single points of failure and reduces the need for intermediaries, making the data both publicly accessible and secure [7].
Data Security: The robust security of blockchain is a direct outcome of its immutability and decentralization. Since data cannot be altered and the system is not governed by a central entity, an infrastructure built on blockchain technology remains resilient and operational as long as it is supported by its community.
Data Access and Transparency: Public blockchains, such as Bitcoin and Ethereum, are designed to be fully transparent. All records, from the very first block, can be freely and limitlessly downloaded and inspected by anyone. While private blockchain solutions may offer more restricted access, the traditional model promotes open and unfettered access to data.
Data Ownership: User-controlled data ownership is a cornerstone of blockchain technology [5, 6]. This is facilitated through a “wallet” system based on asymmetric cryptography, which employs public and private key pairs. A user can share their public key to receive assets or data, but the private key is required to authorize transactions or manage assets. This key pair does not need to be linked to a real-world identity, allowing users to remain anonymous while maintaining secure control over their digital assets.
However, blockchain technology is not without its drawbacks. These challenges must be carefully considered when evaluating its suitability for a given application. The most significant disadvantages include:
The Blockchain Trilemma and Scalability: A primary challenge is the “blockchain trilemma,” which posits that a blockchain network cannot simultaneously optimize for decentralization, security, and scalability [16, 17]. In practice, most blockchain implementations prioritize security and decentralization, which necessitates a trade-off in scalability. This limitation hinders widespread adoption [18, 19] and manifests as low throughput, often measured in transactions per second (TPS). The struggle to improve this metric without compromising the other two pillars remains a central focus of research, with proposed solutions including off-chain protocols and novel architectures [18, 20], though scalability remains a major hurdle, especially for complex systems like decentralized identity [21].
Resource and Energy Consumption: The security and decentralization of a blockchain are achieved through massive redundancy. Data is replicated across numerous nodes, and consensus mechanisms like Proof-of-Work (PoW) require participants to solve complex cryptographic puzzles. This process consumes a substantial amount of computational power and energy, far exceeding what is necessary for traditional centralized databases. While essential for the network’s integrity, this high consumption is a significant environmental and operational concern.
Community and Incentive Dependency: The decentralized nature of a blockchain relies on a distributed community of participants (nodes) to maintain and validate the ledger. Sustaining this community requires strong motivation. For cryptocurrencies, this incentive is typically financial, as participants are rewarded with native tokens that have monetary value. However, for blockchains intended to store non-financial data, creating a compelling and sustainable incentive model to ensure long-term community participation can be a significant challenge.
Private Key Management: While the cryptographic key pair system provides data ownership and potential anonymity, it also introduces a critical point of failure. The private key is the sole means of authorizing transactions and controlling assets. If a private key is lost or destroyed, it is irrecoverable, and access to the associated assets is permanently forfeited. Conversely, if the key is compromised or stolen, an unauthorized party gains complete control over the assets, and such transfers cannot be reversed.
Given these advantages and disadvantages, the decision to implement blockchain technology requires a careful cost-benefit analysis. If the drawbacks present unacceptable risks or inefficiencies for a specific use case, alternative technologies may be more appropriate.
2.3 How data is stored in a blockchain
When defining blockchain, it is arguably necessary to use the term “primitive.” This is because many advantages offered by other database management systems are not applicable to blockchain. In relational databases, one of the most common data storage methods, data is organized into rows, columns, and tables, made accessible through relationships between them. This schema provides numerous benefits. Approaches like NoSQL offer more performant solutions for storing large datasets compared to relational databases, while data warehousing works with denormalized databases. All these are widely used data storage schemas. In contrast, blockchain records data as a primitive, raw piece of information. There is no requirement for variables, rows, columns, objects, or any other specific data format. On average, a block is approximately 1.5 MB on the Bitcoin blockchain and 115 KB on the Ethereum blockchain. Any raw data that can fit within this size can be recorded on the blockchain. Although cryptocurrency applications store data such as sender, receiver, and amount, this structure is not a mandatory schema imposed by the blockchain itself.
Of course, the aforementioned data structure also offers its own unique advantages. The absence of a mandatory schema in blockchain blocks provides developers with considerable freedom. While transaction lists are a common data structure, especially since the primary application of blockchain has been cryptocurrencies, we are not limited to them. We can also write a binary file to a block, which means any file content can be stored on the blockchain. Ethereum expanded this potential by introducing smart contracts – pieces of code recorded on the blockchain that can operate and execute transactions autonomously. This enables the creation of decentralized, autonomous software that even its developers cannot interfere with. Decentralized Finance (DeFi), a term we frequently hear today, is one of the best examples of this capability.
Each block in the blockchain fundamentally consists of two parts: the Block Header and the Block Body. The Block Header contains metadata about the block, such as the timestamp, the block producer, the nonce, and the hash of the previous block. The Block Body, on the other hand, contains the data intended to be recorded in the block, which is typically a list of transactions.
In blockchain, all data verification processes are carried out using a cryptographic one-way encryption function known as a hash. Data of any size is summarized by the hash function selected for the blockchain, producing a fixed-length output that is used to verify the data’s integrity. A block can contain numerous transactions, and a hash is generated for each one, as well as for the entire block. To test the validity of a single transaction within a block, it would traditionally be necessary to re-hash all transactions and the block itself to compare it with the hash in the subsequent block. However, this process would be time-consuming for a large number of transactions. For this reason, blockchain employs a data structure called a Merkle Tree. This structure summarizes all transactions in a binary tree format, progressively hashing them until a single root hash is reached. It is sufficient to record only the Merkle root hash in the block header. Consequently, to verify a single transaction, it is not necessary to re-hash all transactions; instead, verification can be performed by tracing its path within the Merkle Tree to the root hash.
Web-based applications typically feature four main operations, commonly referred to by the acronym CRUD: Create, Read, Update, and Delete. A standard database-connected application allows for the listing of all records (Read), the modification of these records (Update), their removal (Delete), and the addition of new records (Create). Given that blockchain operates over the internet and serves as a data storage solution, it might be expected to support the full CRUD framework. However, due to its fundamental design principles, native CRUD operations are not possible. Blockchain directly supports only Create and Read operations. Update and Delete operations are achieved indirectly through the Create operation. When a record needs to be updated or deleted, a new version of that record is created and written to a new block. While anyone reading the entire chain can see the previous versions of the record, they understand that only the most recent version is considered current. In this way, although data on the blockchain is never truly updated or deleted, the full functionality of CRUD is emulated through a workaround.
Furthermore, blockchain provides a flexible infrastructure regarding the types of data that can be stored. Data on the blockchain is maintained in binary format, which allows any file type to be converted to binary and subsequently stored on-chain.
When discussing blockchain, the concepts of decentralization and independence from authority are consistently highlighted. However, like any system, governance is still a key aspect. In this context, independence from authority means that decisions cannot be made according to the whims of a specific individual or group. This raises several questions: Who governs the blockchain? How is governance managed? How are necessary changes addressed, evaluated, and implemented? Who sets the rules?
Eric Hughes provides a clear answer in “A Cypherpunk’s Manifesto”: “Cypherpunks write code” [22]. This statement encapsulates the principle of “In Code We Trust.” In blockchain, trust is established through algorithms, the code that executes these algorithms, and the decentralized infrastructure that hosts this code. Each layer secures the one before it. Let us now discuss the implications and outcomes of this model.
3.1 Blockchain and cryptocurrencies
The widespread recognition of blockchain is undoubtedly attributable to the success of Bitcoin, the first major cryptocurrency, which operates on a blockchain foundation. Consequently, cryptocurrencies have become the primary application domain for blockchain technology.
While a deep dive into the question “Why blockchain?” would necessitate a foundational discussion of “What is money?”, such an inquiry is beyond the scope of this chapter. For our purposes, it can be explained as follows: blockchain serves as a distributed ledger for cryptocurrencies. Its ability to record transfers between parties, store them immutably, and operate in a decentralized manner has instilled trust in these digital assets. A user can be confident that once a cryptocurrency is acquired on the blockchain, no one can deny or alter that ownership. The individual has sovereign control over their own crypto-assets.
3.2 Smart contracts
Beyond recording transactions, blockchains can store and execute smart contracts. These are self-executing, tamper-resistant programs that facilitate, verify, and enforce digital agreements without intermediaries [23, 24]. Operating on decentralized platforms like Ethereum and written in languages such as Solidity [24], smart contracts represent a functional evolution of traditional paper-based agreements due to their autonomous nature.
A key distinction lies in the enforcement mechanism. A traditional contract or law might stipulate the total supply of a digital asset, relying on legal recourse in case of a breach. In contrast, a smart contract enforces this rule algorithmically; the governing code makes it impossible for participants to create more assets than the defined limit. This capability allows anyone to deploy a contract on the blockchain to create custom digital assets, often called “tokens,” with predefined, immutable rules. The integration of smart contracts with blockchain technology thus offers significant potential for automating business processes and creating trustless systems [25, 26].
Smart contracts have diverse applications across financial services, healthcare, IoT, and supply chain management [26, 27]. However, their adoption faces significant challenges related to security, privacy, and legal compliance [26, 28]. Ongoing research aims to address these issues by improving security, performance, and standardization, which will be crucial for the widespread development of blockchain-enabled smart contracts [27, 29].
For instance, a digital asset’s total supply can be stipulated in a traditional contract or law, but this relies on legal recourse in case of a breach. In contrast, a smart contract enforces this rule algorithmically, making it impossible for participants to create more assets than the defined limit. This capability allows anyone to deploy a contract on the blockchain to create custom digital assets, often called “tokens,” with predefined, immutable rules. Furthermore, smart contracts can be used to create decentralized autonomous organizations (DAOs), which are run by smart contracts and do not require intermediaries.
3.3 Blockchain governance
In the blockchain ecosystem, ownership of assets is established through a public and private key pair, which enables identity verification while maintaining anonymity. The private key is confidential and must be securely stored. However, in certain scenarios, relying solely on a single private key can be an insufficient security measure. For instance, if a project’s treasury is controlled by a single private key, its theft would result in the immediate loss of all funds. To mitigate this risk, blockchain utilizes multi-signature technologies. This approach establishes a rule defining the minimum number of signatures required to authorize a transaction involving a smart contract or asset. A common configuration is a majority rule, but it is not required; any “m–of–n” rule can be implemented, where a transaction is executed only when signed by at least “m” out of “n” total private keys (where n ≥m). This governance model is known as a Decentralized Autonomous Organization (DAO).
3.4 Data and process ownership
Data ownership on the blockchain is based on cryptographic proofs rather than real-world identity information. An individual proves ownership of their data using a private key. As it is impossible to determine the real-world identity of the private key’s owner, the individual can both prove ownership of the data and maintain their anonymity. The private key is cryptographically linked to a public key; while the public key can be derived from the private key to verify its authenticity, it is computationally infeasible to derive the private key from the public key.
Individuals bear the ultimate responsibility for the security of their private keys. Unlike traditional systems, where a lost password can be recovered by verifying one’s identity with a central authority like a bank, there is no such recourse for a lost private key. Since the key is not tied to a real-world identity, there is no one to appeal to for recovery. If an individual loses their private key, they lose the ability to prove ownership of their assets, effectively forfeiting them. More precisely, they lose the right to transfer those assets, which is tantamount to losing ownership.
A further risk is the compromise of a private key. Since ownership is proven by possession of the private key, anyone who has it can claim ownership, and the protocol will validate this claim. Consequently, if an asset owner shares their private key with 100 other people, all 100 individuals gain the right to transfer the associated assets. The first person to execute a transfer will gain control of all the assets, and this action is irreversible.
Blockchain is a data storage method. Its adoption depends on the specific use case, given its inherent advantages and disadvantages. This section will delve into the details of data storage on the blockchain.
4.1 Blockchain data
Blockchain is flexible regarding data types. Since data is recorded in binary format, developers can write any data they wish to the blockchain. Common methods for writing data to the blockchain include:
Lists of transactions
Smart contracts
Raw data
As long as the block size is sufficient, raw data can be written directly into a block. Although examples of this exist, this approach is not widely used due to its impracticality. Instead, a smart contract tailored to the specific use case is typically developed, and its functions are used to record data on the block in a structured manner.
For example, consider a ticket sale managed by a smart contract. In this scenario, there would be a function to create a ticket. To generate a new ticket record, this function is called, and it adds the record to the block in a format that the contract can interpret. This approach generally yields the most optimized result.
4.2 The quality of data in blockchain
Quality is a critical concept in data management, as in all fields. If quality is defined as meeting and exceeding expectations, using blockchain as a data management tool can positively contribute to quality in several ways. Let’s examine these positive aspects in detail.
We have previously mentioned that one of the most important features of blockchain is immutability. If the requirement is to ensure that a piece of data written to a database is not altered, blockchain definitively meets this need. This requirement is most prominent in the financial sector, where no one wants to see their payments unmade or their assets reduced to zero. The permanence of records in finance is critical. By guaranteeing that data is not and will not be changed, blockchain provides a key quality indicator in this regard.
The storage of data in binary format on the blockchain can complicate its preview, filtering, and analysis. For this reason, blockchain may not be considered suitable for data management when data is recorded directly in binary. However, the smart contract mechanism serves as a guide to the standards by which all recorded data is stored, which in turn guides processes such as data analysis.
One of the most important features of data storage methods is the availability rate, also known as uptime. Even a single failure in 100 access attempts can lead to critical problems. An uptime of more than 99.9% is an expected feature of electronic systems. An uptime rate below this would be considered underperforming and thus of “lower quality.” Blockchain is a successful method in this respect. Because it is run by a distributed network, even if some devices on the network are inaccessible, the accessible devices support the continuation of the network. Thus, a blockchain network can achieve an uptime rate of over 99.9%.
When considering scalability, two dimensions can be discussed: the number of transactions per second and the total capacity. As explained in the context of the trilemma, blockchain has limits in terms of transactions per second and its scalability is therefore limited. However, it offers great potential in terms of total capacity. If a project has high requirements for the number of transactions per second, blockchain would be a low-quality choice.
Blockchain provides a good platform for parties to come together and make decisions. Through blockchain, it is possible to implement contracts with automatically enforceable decisions between parties, as well as to make decisions by reaching consensus on common assets. Some large communities, even those consisting of thousands of people, can vote on a proposal and ensure that the necessary change (e.g., a token transfer) is made on the blockchain according to the outcome. In today’s traditional approach, this is only possible by bringing together many layers to ensure the security of the vote. As the number of participants in a vote grows, it becomes more insecure and costly to conduct. However, on the blockchain, the method and effect of 3 people voting is almost the same as 300,000 people voting.
Blockchain cannot access real-world data. Queries on the blockchain can only be made on data recorded on the blockchain. Smart contracts can also only operate on blockchain records. For example, a smart contract cannot act based on a time limit. A transaction cannot be triggered to occur at a precisely specified date and time because the blockchain does not know the time. The closest it knows to the time is the timestamp of the last added block. It also cannot know the value of a coin or token, nor can it access information from other web sources. It cannot even generate random numbers. The way to overcome this “blindness” is through an approach called Oracles. Oracles, through specially written smart contracts within the blockchain, can use real-world data on the blockchain. Of course, in this case, the Oracle must be considered a trusted source. An Oracle used to generate random numbers is expected to always send a truly randomly generated number. This need for Oracles can be interpreted as a quality deficiency for blockchain.
As with any application related to data science, the “garbage in, garbage out” rule applies here. Blockchain is ultimately a data storage method, and its quality will be shaped by the quality of the data added to it. Today, we could copy the Bitcoin blockchain, change its name, and start running the exact same software in parallel. However, it would not have the value of the Bitcoin blockchain because what we have created would be a copy that people do not value. Therefore, the value of a blockchain will be shaped by the records added to it and the effectiveness of its smart contracts.
Blockchain is a popular and distinct data storage technology. Its characteristics offer definitive advantages and disadvantages. For instance, the immutability of data and its distributed storage are prominent features of blockchain. Additionally, the creation of records by anonymous accounts using cryptography is another significant attribute.
When considering the concept of quality as a response to expectations, it is not possible to directly discuss the quality of blockchain. Instead, the decision to utilize blockchain in cases requiring data storage should be made by considering its characteristics. This indicates that the quality of blockchain must be re-evaluated for each application project. For projects where data privacy is crucial, such as the protection of financial assets, and where scalability can be sacrificed for this purpose, blockchain is a high-quality tool. Conversely, for a gaming project, the high costs, low limits, and delays may cause blockchain to be seen as a low-quality solution.
Blockchain offers significant benefits, particularly in terms of governance. Smart contracts are a structure that makes blockchain much more capable. The digital nature of a contract, its signing by anonymous parties, autonomously triggered processes based on conditions, and the recording of these processes on the blockchain enable smart contracts to be applicable in many areas.
This research was supported by the Scientific Research Projects Coordination Unit of Istanbul University under project number SBA-2022-38449.
The author further declares that generative artificial intelligence tools were used as assistive instruments for language editing and workflow efficiency. The author affirms the originality of this study and accepts full responsibility.
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Written By
Emre Akadal
Reviewed: 29 September 2025Published: 03 March 2026
Open access peer-reviewed chapter - ONLINE FIRST
