DOI: https://doi.org/10.36719/2706-6185/49/118-124
Tayfun Guliyev
WSB University
Master student
https://orcid.org/0009-0005-6190-8623
tayfunguliyev@outlook.com
The Economics of Blockchain Scalability: Balancing Security,
Decentralization and Transaction Costs
Abstract
This article explores the evolution, challenges, and potential of blockchain technology within the context of smart industry and digital economic transformation. Initially propelled by the rise of cryptocurrencies, blockchain has moved beyond its early hype to become a subject of critical scrutiny regarding its scalability, energy efficiency and real-world applicability. The study examines expert opinions ranging from enthusiastic to sceptical, highlighting fundamental tensions between blockchain’s decentralized philosophy and its actual industrial implementations.
Focusing on the economic functions of blockchain—such as transaction verification, tokenization and consensus mechanisms—the article discusses the implications of its architecture for reducing transaction costs and enabling new forms of trust in digital systems. It also evaluates the emergence of “quasi-blockchain” platforms like Hyperledger Fabric and Corda, which sacrifice full decentralization for greater scalability and integration into existing enterprise environments.
Key use cases such as e-Invoicing, supply chain finance, and the convergence of blockchain with IoT and AI are analysed as examples of blockchain's potential to optimize operations, improve transparency and support institutional innovation. The article concludes that while blockchain offers promising opportunities for decentralized value exchange and digital identity, its long-term impact will depend on the development of high-performance, cost-efficient and scalable systems—grounded in both technological advancement and socio-economic research.
Keywords: Blockchain technology, smart industry, transaction costs, tokenization, decentralized systems, digital identity, e-Invoicing, supply chain financing, scalability, digital transformation, institutional innovation, distributed ledger