An assessment of emerging business models from blockchain technology / Geraldo Serrano

Date : December 13, 2017
Number of Pages : 86 leaves
Adviser : Dr. Serafin D. Talisayon

Abstract

The emergence of the digital economy have disrupted and turned obsolete a number of traditional business models while giving birth to new business models attributed to it. Blockchain is one of the emerging digital technologies today that is expected to truly disrupt business models especially in industries that rely on trust, such as the financial sector. The public, shared, and tamper proof ledger are the core features of the technology and these allow people to transact with anyone on the network. This results in a "trustless economy" as the blockchain allows performing a transaction of any asset of value in a chronologically-updated, distributed, and cryptographically sealed manner while verification of the transactions happen with the consensus of system participants. With these core features of the technology, this research acknowledges that blockchain is capable of increasing transparency, enhancing efficiency, reducing risks, and cutting expenditures associated with transaction costs as evident in the first applications of the technology. Blockchain was introduced after the financial crisis in 2008 through a whitepaper that also introduced Bitcoin, the first blockchain technology and cryptocurrency. As evident, blockchain's first application is in the financial sector but with the other economic sectors that heavily relies on trust, blockchain is expected to be employed beyond its financial use-cases. Smart contract is another application of blockchain that is expected to be employed by firms to change their current systems. Ethereum is an example of a blockchain technology platform with a smart contract functionality. The rise in popularity and adoption of the Bitcoin and Ethereum blockchains have resulted in the establishment of different blockchain startups patterned after their protocols while incumbent firms are pouring in millions of dollars in research and development (R&D) efforts to develop blockchains both privately and on a large scale. With the current hype about blockchain, the benefits as well as the drawbacks of the technology are surfacing.

This research focused on exploring the current adoption and applications of blockchain at the global level through case analysis of companies that started deploying the technology with an analysis of its effect to the introduction of new business models, anchored on the pace of technology substitution as a theoretical construct. Blockchain technology and business models were proposed to have a two-way relationship. Case analysis and interview results revealed this relationship with the emergence of new business models attributed to the adoption of blockchain technology. Tokenization, disintermediation, digital lock-in, and platform-as-a-service as well as P2P networks are some identified business models either created or enhanced by blockchain. Value patterns were also recognized owing to the features associated with the technology to include transparency, privacy, and security. The research contributed to the literature by examining the pace of a technology's application at the firm level and explored its several contributions to the development of new business models.