Using Smart Contracts for Digital Services: A Feasibility Study based on Service Level Agreements

The blockchain can facilitate trustworthy business relations by acting as a digital institution for trust. Its features, the immutable ledger of transactions as well as the distributed storage and execution of code (so-called smart contracts), offer a great potential for diverse ways of applications, e.g., the enforced fulfillment of obligations. In spite of the vast potential of the blockchain and smart contracts, they are on a quest for enriching their scope of utilization.

We regard digital services as a prospective application domain for the blockchain. Smart contracts could solve domain-specific challenges, such as the non-fulfillment of obligations, infeasible enforcement of rights, and missing readiness for future demands of cloud computing as well as the Internet of Things.

To gain knowledge about the use of blockchain in the application domain, we study the feasibility of smart contracts for supporting service level agreements (SLA) of digital services.

In this master's thesis, we conduct design science research by designing, developing and evaluating a prototypical, blockchain-based application that aims at solving challenges of SLAs of digital services.

The results of the evaluation show that the developed prototype is a technically viable blockchain-based application, which fulfills the designed requirements. Experts from the digital service domain recognize capabilities of smart contracts to solve challenges of SLAs, as the prototype automates processes and establishes trust among service partners by acting as an escrow.
Simultaneously, experts hold concerns against the blockchain technology that decrease their tendency of employing smart contracts. The prototype's practicability is further impaired by the blockchain's high cost and latency.

We conclude that SLAs of digital services present a viable domain for support by smart contracts. The practicability can be increased by improvements of the blockchain technology and a growing acceptance among service partners.