Potential and limits of Blockchain technology for networked businesses

Abstract

New ways to organize economic activities are emerging, facilitated by Blockchain technology or the broader term Distributed Ledger Technology. Blockchains consist of dynamic shared ledgers that can be applied to ensure transparency and traceability and to save time when recording transactions between parties, remove costs associated with intermediaries (or, according to Nakamoto ( 2008 ), remove the need for intermediaries altogether), while enabling the introduction of pseudonymous parties on the Internet. First, and probably the most known application of blockchain technology, is cryptocurrency, such as Bitcoin. It has taken businesses and industries some time to recognize that the underlying technology of Bitcoin could be the next wave for disruption of their existing business models. All too often, the focus of the media coverage is on the connection of cyber-currencies to criminal activities or on the highly speculative nature of their exchange rates and issues with coin exchanges.