The Promise and Prospects of Blockchain-Based Decentralized Business Models

Abstract

The emergence of Bitcoin and the underlying blockchain technology have enabled novel solutions for creating, transacting, and validating digital assets. In this vein, inspired by Bitcoin, a variety of projects has been building blockchain-based “decentralized” business models (BDBM), market places, and organizations. However, there has been ambiguity and confusion around the meaning of “decentralized” in the context of blockchain technology-based business models in both research and practice. Moreover, the implications for mainstream adoption of BDBM from a mass customers’ perspective are insufficiently understood. This article discusses the notion of decentralization in BDBM and develops a two-dimensional framework explaining the decentralization focus of BDBM. Based on this typology, the article analyzes the implications, prerequisites, and desirability of decentralization for BDBMs’ mainstream adoption.