JoWUA

Abstract

Traditional methods of reaching consensus in monetary systems depend on centralized authorities that are considered trustworthy. Blockchain challenges the traditional model by establishing consensus through a decentralized network of peers, which is responsible for validating transactions and preserving a chronologically ordered ledger of transactions. Utilizing blockchain technology has extended beyond cryptocurrencies to encompass various industrial systems. Nevertheless, much ambiguity surrounds the benefits of employing blockchain technology compared to competing technological solutions. The limited adoption of blockchain-based systems can be attributed to the absence of clear guidelines on blockchain governance and the difficulty in evaluating the pros and cons of blockchain solutions. The existence of various blockchain variants, including permissionless and permissioned, can provide challenges in selecting an appropriate solution for a given use case. This article aims to tackle these difficulties by analyzing blockchain governance and its associated tradeoffs, encompassing energy usage, consensus mechanisms, performance, and security considerations. We present a taxonomy guideline that aims to offer valuable insights into the tradeoffs involved and assist in efficiently selecting the appropriate governance structure for blockchain-based solutions across different scenarios. The taxonomy under consideration examines several characteristics of blockchain technology, encompassing energy consumption, consensus techniques, performance, and security elements. These factors are analyzed to provide an appropriate governance model for a blockchain-based solution, such as permissionless, permissioned, or consortium. Moreover, this research study presents a comprehensive evaluation of various consensus mechanisms, including Proof of Work (PoW), Proof of Stake (PoS), Practical Byzantine Fault Tolerance (PBFT), and Proof of Authority (PoA), while taking into account significant characteristics.