Blockchain is a revolutionary technology that has the potential to eliminate intermediaries, reduce transaction costs, and enhance security and transparency in various industries. From the financial sector to supply chain management, blockchain has revolutionized many industries. However, in certain situations, blockchain may require the involvement of third-party intermediaries to perform specific functions. In this post, I am going to tell you five instances where blockchain needs a third-party intermediary.

When Blockchain Needs Third-Party Intermediaries

What is a Third-Party Intermediary?

A third-party intermediary is an entity that performs a function in a transaction or exchange of value between two parties. The intermediary acts as a trusted third party to ensure the transaction is completed successfully.

They may provide services such as verification, validation, dispute resolution, and payment processing. In traditional systems, intermediaries such as banks, payment processors, and escrow agents play a crucial role in facilitating transactions and ensuring they are secure and reliable.

Blockchain technology was designed to eliminate intermediaries by enabling direct peer-to-peer transactions without the need for trusted third parties. The decentralized and transparent nature of blockchain eliminates the need for intermediaries, making transactions faster, cheaper, and more secure. However, there are situations where blockchain may still require the involvement of third-party intermediaries.

Blockchain Technology Vs Artificial Intelligence

When Blockchain Needs Third-Party Intermediaries?

Here I am going to share five instances when you may think about third-party intermediaries even in the blockchain ecosystem. Well, it proves that artificial intelligence, and blockchain cannot alter human functionalities, but all these can reduce workloads. The first and most important case is:

Legal Compliance

In some industries, compliance with legal regulations is mandatory. Blockchain-based applications may require third-party intermediaries to ensure compliance with regulatory requirements.

For instance, in the healthcare industry, healthcare data is subject to strict regulatory requirements to ensure privacy and security.

Blockchain-based healthcare systems may require the involvement of third-party intermediaries, such as regulators or auditors, to verify compliance with regulatory requirements.

Dispute Resolution

Dispute resolution is another area where third-party intermediaries may be required in blockchain-based systems. In case of a dispute between two parties, a third-party mediator may need to resolve the issue in a human way. In traditional systems, intermediaries such as courts and arbitration bodies are used for dispute resolution.

In blockchain-based systems, smart contracts can automate the dispute resolution process. However, in some cases, a human mediator needs to resolve the dispute.

Identity Verification

Identity verification is another area where you may need third-party intermediaries instead of completely relying on blockchain-based smart contract systems. In some situations, you may need to manually verify the identity of a user before allowing them to participate in a transaction.

For instance, in the financial industry, Know Your Customer (KYC) regulations require financial institutions to verify the identity of their customers.

In blockchain-based financial systems, third-party intermediaries such as identity verification providers can conduct such steps safely to enhance another layer of security, especially in a private blockchain for an organization.

Payment Processing

Do you want to take any risk for your business transactions? Relying completely on automated processes may not be safe! You need an intermediary (maybe from your organization) to verify the payments, even in blockchain-based systems.

While blockchain technology enables direct peer-to-peer transactions without the need for intermediaries, payment processing may still require human intervention.


This word is enough to understand blockchain technology is designed to eliminate intermediaries. However, some blockchain-based systems require the involvement of third-party intermediaries to maintain decentralization.

For instance, in proof-of-stake (PoS) blockchain networks, validators maintain network security and validate transactions. In this case, the validators all around the world act as third-party intermediaries to ensure the network is secure and reliable.

Read More,

Where is Data Stored in a Public and Private Blockchain?

Are Human Jobs Still Safe?

Blockchain technology is disrupting industries by enabling direct peer-to-peer transactions without the need for intermediaries. However, there are situations where blockchain may still require human involvement and third-party intermediaries.

In this post, I have shared my views when I think most organizations may need human help instead of completely relying on smart contracts. Do you want to learn more about different aspects of blockchain and how it revolutionizes your industry, read the following posts:

Blockchain Vs. Distributed Ledger Technology: 4 Key Differences

Can You Query Data in a Blockchain?

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