Is there anything blockchain can’t do?
There’s a good reason to ask.
CoDE’s Prof Roger Maull, Dr Phil Godsiff, Prof Alan Brown and Dr Beth Kewell have just published a seminal article with cryptocurrency expert Dr Cathy Mulligan of Imperial College, London, in the journal Strategic Change. ‘Distributed Ledger Technology: Applications and implications’ is significant for specifically addressing how to choose the right blockchain solution – or none at all – depending on the transactional context.
The value of this kind of research into DLT cannot be overstated. It’s a game-changing innovation that’s transforming food security, funding transparency, identity validation, provenance, migration tracking….the list goes on:
- For charities, blockchain can increase fundraising transparency, speed the verification of aid workers, and hold charities much more accountable for the impact of their work.
- For the academic community, academic qualifications on blockchain mean validation and evaluation that is reliable all over the world; QR codes on CVs provide instant verification.
- For the creative industries, blockchain represents provenance in the fashion trade, and a new way of auditing royalties in the music industry, ensuring transparency through these supply chains.
- For organisations trying to track and aid migrants and the homeless, blockchain can provide remote access to information that’s not paper-based (which otherwise might be easily lost, rendering the person unable to prove identity).
Further, DLTs are rewriting conventional notions of business transacting, creating fresh opportunities for value creation and capture. But what’s the precise nature of the relationship between technology innovation and business model innovation? The team’s article explores this relationship and hunts for alignment by considering the potential applications of DLTs.
The team devised and share a flowchart to identify when and which type of DLT will be useful in different scenarios. For example, if the partners or ‘writers’ are known and trusted and they have unified interests, then the role of a DLT is less compelling: with unified interests between known and trusted parties, it is possible to use a relatively simple database. If, however, the writers’ interests are not unified, DLT can help manage these differences.
In its purest form, DLT (such as the Bitcoin blockchain) represents a unique technology in two ways:
- Firstly, it is distributed in nature: agreement about the state of the ledger is achieved by consensus by the network of users rather than having to rely on trust in a third‐party intermediary (say, a bank);
- Secondly, users can“deposit” on the ledger (blockchain) digital assets, the record of which is rendered immutable, transparent, and auditable yet resistant to censorship and manipulation due to the technology’s cryptographic and distributed foundations.
These qualities, assuming sufficient and maintained encryption and technical architecture, render the blockchain highly resilient.
The openness of DLT unlocks the potential for new economic models based on more complete information; in other words, it has the potential to contribute to the idea of a “sharing economy” as an alternative to the “exchange economy.” These sort of collaborative commons have been enabled at a local level by Internet technology, but DLT offers the opportunity for global scale.
DLT offers the potential for the first truly dual digital economy technology; that is, through such features as smart contracts, a digital technology that can enable the economy to work in totally new ways. It has the potential to redefine how we organize our economic system, which may even redefine the notion of a firm itself.
These research questions are fundamental not just to the development of DLTs, but to the future of the whole economic system.