Issue: Blockchain Blockchain - By: Darrell Delamaide - SAGE Business Researcher
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Issue: Blockchain
Blockchain
By: Darrell Delamaide
Pub. Date: February 11, 2019
Access Date: June 6, 2022
DOI: 10.1177/237455680505.n1
Source URL: http://businessresearcher.sagepub.com/sbr-2022-109029-2917152/20190211/blockchain
©2022 SAGE Publishing, Inc. All Rights Reserved.
©2022 SAGE Publishing, Inc. All Rights Reserved.
Will it transform how businesses track goods?
Executive Summary
Blockchain, the technology originally created to support bitcoin and other cryptocurrencies, is being applied to numerous other business
functions, and advocates call it potentially transformative. The qualities of transparency, decentralization and inalterability that made
blockchain work for cryptocurrencies also make it useful for applications ranging from documenting shipping manifests to tracing food
production and managing inventory and supply chains. Several major corporations are investing in blockchain and exploring its uses,
including IBM, Walmart, Accenture, the shipper Maersk and diamond producers De Beers and Alrosa. Yet skeptics question whether
blockchain offers anything unique, and some experts say it will take many years for the technology to develop and spread.
Some key takeaways include:
Blockchain’s designers seek to prevent hacking and fraud by requiring that multiple users accept a transaction as valid before it can
be included in the digital ledger.
One of the technology’s biggest boosters, Overstock founder Patrick Byrne, has said he plans to sell his e-retailer and devote his
fortune to blockchain.
Potential obstacles to blockchain’s development include the adequacy of its speed, whether individual blockchains can
communicate and the possibility of government regulation.
Full Report
The locations where ethereum programming is being worked on are displayed on a computer screen. The ethereum blockchain
is being used to track things such as fish shipments. (Jens Kalaene/picture-alliance/dpa/AP Images)
When Wired writer Louise Matsakis wanted to learn how blockchain technology worked in applications other than cryptocurrencies, tech
startup company Viant was happy to oblige with a demonstration of how to track raw tuna from Fiji to her sushi roll in Brooklyn.
Each step of the fish’s journey – from the time it was put on ice in a boat in Fiji, to the landing dock, to the processing facility, and finally to
the truck that brought it to Brooklyn – was cataloged on the ethereum blockchain.
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“Blockchains,” Matsakis wrote, “are digitized, more secure versions of the ledgers that merchants and traders have relied on for thousands
of years.” 1
The distributed ledger technology originally created to support bitcoin has spread beyond cryptocurrencies to numerous other applications
in business and is being touted by its advocates as on its way to becoming a transformative technology in its own right. The same qualities
that made blockchain work for bitcoin – transparency, decentralized control, inalterability – make it useful for applications such as
documenting ship manifests through various ports, tracing seafood back to where it was caught or romaine lettuce to where it was grown,
or managing inventory and supply chains.
Not everyone is a fan. Some skeptics contend that, for all its novelty, blockchain performs these tasks no better than current technology or
digital alternatives. And after some early hype, blockchain is undergoing a critical re-examination. Potential difficulties include questions
about whether or how governments will regulate it, whether the speed of blockchain transactions is adequate and the degree to which
discrete blockchain networks can communicate with each other. The sharp decline in the value of cryptocurrencies has also led some to
question the worth of the whole blockchain concept. 2
One of the skeptics, Jimmy Song, confronted a crowd of believers with some heresies last May at Consensus, the biggest cryptocurrency
conference of the year. Song is a bitcoin fellow at Blockchain Capital, a venture capital firm that invests in blockchain-related companies.
But he told the conference that most enterprise blockchain solutions do not really benefit from the decentralization advertised by the
technology. Blockchain is supposed to eliminate the need for third-party verification, but in most cases there still must be involvement by a
bank, lawyer or regulator, he said. 3
Former IBM executive Irving Wladawsky-Berger has cautioned that every transformative technology is overhyped at the beginning, and that
blockchain is no exception. Wladawsky-Berger, now a visiting lecturer in information technology at the MIT Sloan School of Management,
cited the dot-com bubble of the late 1990s as an example. “Blockchain is still in its early phases of experimentation and adoption,” he
wrote. “Much work remains to be done on standards, platforms, interoperability, applications and governance.” 4
Harvard Business School professors Marco Iansiti and Karim Lakhani have argued that blockchain is many years away from achieving its
full potential. That is true, they wrote, because it is not a “disruptive” technology, one that can “attack a traditional business model with a
lower-cost solution and overtake incumbent firms quickly.” Rather, they wrote, it is a “foundational” technology, one that can create “new
foundations for our economic and social systems,” but in a process that will be gradual rather than sudden. 5
For example, contracts, transactions and the documents supporting them are
the essence of the legal and economic system, but they remain rooted in
obsolete technology and have failed to adapt to the digital age, Iansiti and
Lakhani wrote. 6 Blockchain will remedy that situation – but it will take
decades, not years, for the technology to embed itself that deeply, they
argued. 7
Iansiti and Lakhani compare blockchain to the internet revolution ushered in
by the development of TCP/IP (transmission control protocol/internet protocol)
telecommunications architecture in 1972. This protocol allowed data to flow in
multiple packets through a broad network rather than straight along dedicated
lines in its entirety. But it took 30 years before the protocol technology
reached what the professors called a “transformation phase.” 8
“Blockchain technology is still very, very early and so it is very difficult to
predict the full effects,” says Nathana O’Brien Sharma, a faculty member at Singularity University, a Silicon Valley research facility. “But
what is important is that we now have a technology that can match producers and consumers much more closely. We’re only at the
beginning of feeling the effects of that.”
Blockchain is a chain of digital blocks, each successive block linked to the previous one through code that renders each block and its
history inalterable. Multiple copies of the chain are distributed over many computers, called nodes, so that every transaction is traceable.
The chain moves through the internet independently, with no central authority. It is almost limitlessly scalable. 9
The technology has its roots in cryptography, and specifically something called the cryptographic hash function. These are one-way codes
of identical length that hold the links of the chain together and seek to make it unhackable. Computer scientist Ralph Merkle’s development
of a binary function in 1979, the Merkle tree, allowed for secure verification of content. Merkle trees are based on the creation of a pair of
data structures for each transaction that lead back to the “root hash,” which contains a record of all the transactions. Because of this link,
each transaction – a relatively small piece of data – is backed, or verified, by the connection to the whole body of data. 10
These are blockchain’s core components that make it suitable for cryptocurrency, and it was experiments in secure digital
communications, such as cryptographer Adam Back’s hashcash and its “proof of work” system, that led to bitcoin. 11 Hashcash was
designed to prevent email spamming by requiring each email to contain a special code – a proof of work, like a complex version of the
CAPTCHA tests on some websites – to be accepted. 12
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The final component of blockchain is its distributed or decentralized nature. A transaction must be accepted in several different places to
be recognized as valid, a process called consensus. Only then does it take its place in the blockchain. This provides a check against the
feeding of false information into the chain and is designed to make blockchain extremely difficult to hack. 13
Blockchain Has High Growth Potential
Projected global blockchain technology revenue, 2016-30
Source: “2030 Projection of Blockchain Technology Market,” Autonomous Next, Feb. 24, 2017, https://tinyurl.com/yck6wufk
The global market for blockchain technology will reach $20 billion by 2030, according to an analysis by an
equity and credit research firm.
The technology was originally devised by a still-unidentified person or persons using the pseudonym of Satoshi Nakamoto, who applied a
hashcash-like encryption to develop blockchain as a support for bitcoin and publicized the creation in a 2008 white paper. 14 A single line
of code contains the latest transaction and all the transactions that preceded it. That information is locked into place and the chain is
irreversible – there is no going back; the record is permanent. Because it is distributed over several nodes simultaneously, each block
ensures the transparency and reliability of each transaction.
A cryptocurrency is just a code; there is nothing else behind it. How does this cryptography work for that tuna fish tracked for the Wired
writer? It starts with a QR (for Quick Response) tag, a sophisticated barcode supplied by Viant and attached to the fish. That QR code is
then logged into Viant’s blockchain, enabling it to be tracked to its final destination. Participating fisheries could even upload into the
blockchain a video of the fish being caught. Distributors who want to track the fish could use radio frequency identification (RFID) to
access the ledger instead of a QR code. 15 Viant, in fact, has produced a video showing this fish at each stage of its journey. 16
The business value of this verification is illustrated by the fact that establishing the source of food is increasingly important to a wide range
of consumers, and proof of provenance can benefit many products, including luxury goods. 17
IT consultant Redmer Huizinga and Arturo Bris, a finance professor at IMD Business School in Switzerland, have sought to demonstrate
how blockchain’s ability to make peer-to-peer transactions trustworthy offers the possibility of fundamentally changing the way business is
conducted. Trust, they wrote, “is the main element in the business model of every bank, [real] estate agent, marketplace, notary, credit card
company, insurance company and countless other organizations in our modern economy.” For them, eliminating the need for third-party
verification transforms the way business is conducted. The blockchain provides the verification – the trust factor – needed in transactions,
they wrote. 18
Some See Vulnerabilities
Critics counter that every system, including blockchain, is vulnerable to attack at weak points. On the one hand, the proof of work
requirement makes flooding a site for denial of service extremely expensive and impractical – and even a successful attack of this kind
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would not tamper with the information, only slow things down. But blockchains may be susceptible to what is called a routing attack
because traffic, for now, is relatively centralized on a few internet service providers. If one or more is corrupted, this could theoretically split
the blockchain and in the case of a cryptocurrency allow the coin to be spent twice. 19
“As far as we know,” crypto expert James Risberg wrote, “this kind of attack has not occurred, and there are steps that can be taken to
make coins immune to this behavior.” 20
But a successful 2016 attack against the ethereum cryptocurrency involved creation of dummy companies via something called the
“decentralized autonomous organization” (DAO) that eventually enabled the exchange of fraudulent DAO tokens for valuable ethereum
coins. Operators had to split the blockchain to neutralize the effect. 21
Still, according to Risberg, the main vulnerability lies not in the blockchain but in digital wallets, cryptocurrency exchanges and third-party
services, which often have weak protection. 22 It was by utilizing online exchanges that two groups of cybercriminals probably were able to
steal $1 billion in cryptocurrency, the software maker Chainalysis reported in January. 23
Cryptocurrencies are usually public blockchains, which make them more open to hacking attempts. Most of the commercial applications
being developed for blockchain are private or permissioned blockchains, which use tokens or protocols to limit access. 24
But critics point to another potential problem: the weak link between a digital blockchain and a physical object. Whether it is a fish or a
piece of real estate, the critics, argue, there would still be a need for a central authority to verify that a QR code applies to a specific fish,
potentially making a decentralized blockchain redundant. 25
Nonetheless, numerous startups, including some cryptocurrency firms, are pursuing blockchain applications. And the new technology is
also drawing some multinationals, including the venerable IBM, which, in its 108th year, is reinventing itself yet again.
The company is aggressively pioneering use of the technology, from the IBM Food Trust partnership with retailers to trace food to a joint
venture with the Maersk shipping line to track and document shipments. IBM has more than 500 blockchain projects worldwide, across
multiple industries. 26
Accenture, the consulting firm spun off from accounting giant Arthur Andersen in 2001, is also a leader in blockchain applications. In
October, it announced a breakthrough that allows blockchains to communicate with each other without compromising the technology that
makes blockchain unalterable. This interoperability was a “critical challenge” that had to be surmounted to make the technology broadly
adoptable, Accenture officials said. 27
Patrick Byrne says he will sell his online retail company to fund blockchain ventures. (George Frey/Bloomberg via Getty
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Images)
Even some firms not linked directly to technology are feeling the lure of blockchain. Patrick Byrne, founder of the e-retailer Overstock, has
said he is planning to sell his retail business and devote his fortune to blockchain. Overstock has invested $175 million in a fully owned unit
called Medici Ventures that houses a collection of startups developing new uses for blockchain technology. 28
Blockchain startups are also proliferating in supply chain management. Companies such as Infor, Ecovadis, Global Ranger and Cloud
Logistics are using blockchain technology for inventory management, measuring suppliers’ compliance with environmental restrictions,
vendor-to-vendor communication and data storage. 29
One of the first industries to embrace blockchain technology is a highly traditional one: Shipping is a complex business that utilizes
sheaves of paper collecting rubber stamps at various ports of call. The collaboration between Maersk, the world’s largest container
shipping line, and IBM is aimed at tracking all this documentation on a blockchain platform. The venture, called TradeLens, gives users
access to a blockchain node like those in a cryptocurrency that enables payments to be made without using banks. 30
IBM and Maersk have signed up more than 100 companies and organizations. 31 Those participating include ports in Singapore, Hong
Kong and Rotterdam, as well as customs authorities in the Netherlands, Saudi Arabia, Singapore, Australia and Peru. Container carrier
Pacific International Lines (PIL) is one of the few other shipping lines that have joined. 32 Many of Maersk’s competitors balked at joining a
platform dominated by the Danish shipper. Accenture has signed up Singapore-based American President Lines for a rival blockchain
pilot that includes freight-forwarder Kuehne + Nagel, beer giant AB InBev and a European customs agency, uniting the four stakeholders
necessary for it to function. 33
The application of a blockchain platform to shipping eliminates the need to use middlemen for tracking the location of a container.
TradeLens is able to record shipping events at the rate of a million a day, according to IBM. 34
Blockchain tracking also increases the ability of vendors and customers to verify the true origins of a product and confirm that the
conditions involved in its production – catching fish in line rather than in a net, which avoids trapping other species, or not using child labor
– correspond to the customer’s values.
Starbucks, for example, has launched a “bean to cup” traceability pilot utilizing blockchain to enable
customers to track the beans in their morning latte back to the producer in Costa Rica, Colombia, or
Rwanda. 35 Arthur Karuletwa, director of traceability at the Seattle-based coffee giant, said the program
will bring a new level of transparency to its claim that 99 percent of its coffee is ethically sourced from more
than 380,000 farms. 36
Diamond giant De Beers announced in early 2018 it will use blockchain technology to verify that its gems
are not “blood diamonds” from conflict zones and are not mined or produced with child labor. 37 The
platform uses a combination of data science and physical identification techniques, along with know-your-
customer safeguards for participants, to ensure integrity. 38 In October, the world’s biggest diamond
producer, Russia’s Alrosa, said it would join the De Beers pilot, dubbed Tracr. 39 Retail jewelry chains
Zales and Kay have also joined Tracr. 40
Food Origins Traced
Blockchain’s biggest appeal is in the area of food safety. Walmart and other food retailers, along with
some producers, began developing a blockchain food management system with IBM in 2017. The resulting
IBM Food Trust system uses the IBM blockchain platform and the open-source Hyperledger Fabric from
Arthur Karuletwa Linux. Prior to blockchain, it could take seven days to trace where a particular food item came from. With
the new platform, that search has been cut to 2.2 seconds, according to former Walmart vice president
41
Frank Yiannas.
Customer data and services also fit well with blockchain technology. Spanish telecom giant Telefónica announced in November that it
signed on with IBM to develop a blockchain platform for managing international call traffic. 42 The goal is to improve the traceability of
international calls to verify their origin, destination and length. 43 The technology enables Telefónica to avoid reconciling call data with
partners, an expensive and time-consuming process.
In a retail application, Japanese IT company Fujitsu has developed a blockchain platform allowing consumers to collect and redeem
coupons, stamps and loyalty points. The consumers do not have to be conversant with blockchain. The distributed ledger will allow a more
efficient transfer of transactions and stores them so that customers can access them via QR codes. 44
Fujitsu is also developing a virtual private digital exchange together with crowdsourcing firm Topcoder to use blockchain functionality at the
Tokyo Olympics in 2020 to help visitors find hotel rooms and restaurant reservations. 45
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Another popular potential application for blockchain technology is to make tickets to concerts and other events fraud-proof. Amid wide-
scale reselling of tickets, the spread of counterfeited PDF tickets mean many ticketholders lose their money and miss the event. 46
Top Blockchain Barriers Are Regulation, Implementation
Percentage of executives who see barriers to blockchain investment
Source: “Breaking blockchain open: Deloitte’s 2018 global blockchain survey,” Deloitte, accessed Jan. 30, 2019, p. 24, https://tinyurl.com/y9mb59g3
The biggest barriers to further investment in blockchain technology are regulatory issues and implementation,
according to a survey of executives.
Back-office functions, especially in financial institutions, are prime testing grounds for blockchain, as banks, stock exchanges and
clearinghouses attempt to streamline and modernize their procedures.
The Depository Trust and Clearing Corporation, which provides post-trade clearing and settlement services to financial markets, plans to
shift its Trade Information Warehouse, which clears 98 percent of worldwide derivatives transactions, to a blockchain platform. It has
entered into a test phase with 15 major global banks. 47
A currency-trading settlement platform, CLSNet, has gone live with a blockchain-based platform and has signed up Goldman Sachs and
Morgan Stanley. The platform’s goal is to bring greater automation and standardization to foreign exchange markets. 48 The increased
efficiency in settlements can reduce disputes that lock up $100 million a year. 49
Blockchain technology offers opportunities to make energy grid operations vastly more efficient, particularly in integrating power from
renewable sources. It can help track renewable energy certificates, the tradable documents that verify creation of electricity from a
renewable source, and their contribution to the grid. Currently, this is a time-consuming process moving through several intermediaries,
documenting and verifying transfers of electricity. This can hinder development of renewable energy. 50
The growing use of so-called distributed energy – connecting smaller power sources such as rooftop solar panels to the grid – could also
benefit from blockchain technology. In a traditional environment, it can take 60 to 80 days for a small producer to be paid. Power Ledger,
an Australian startup using blockchain for peer-to-peer energy trades, enables immediate payment, sharply reducing the need for capital
to start and maintain power generation. 51
Experts at Deloitte, the global business consulting firm, say they believe blockchain could help emerging markets to carry out
electrification projects by bridging finance gaps, enabling transactions and increasing transparency. Developing countries might be able
52
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to leapfrog developed countries on this front, according to Deloitte.
Art of the Deal?
Cryptocurrencies are often called digital assets. But there is an array of products using blockchain for investment and trading that involve
real money, physical commodities and derivatives, in addition to cryptocurrencies. These generally take the form of security tokens, which
are like a single-purpose cryptocurrency. 53
Even fine art masterpieces are being turned into financial products by blockchain. The technology could support a platform that allows
hedge funds and other investors to trade on parts of art works in digital currency. 54 An art investment platform called Maecenas is beta-
testing a blockchain platform to sell small bits of Warhol and Picasso paintings. 55
Such fractionalization may be extended to other assets, such as real estate, in which parts of a property are broken up into digital assets
to sell to investors. 56 Critics complain that the link between the digital token and physical asset requires a separate, centralized authority
to verify it, obviating the need for a blockchain. 57 Proponents counter that the security tokens do represent a real claim on future value,
akin to airline miles, for instance, and blockchain allows them to be traded without reference to a central authority. 58
Government regulation may inhibit development of blockchain projects. For example, the European Union’s General Data Protection
Regulation (GDPR), also known as the “right to be forgotten,” may conflict with the inalterability of the blockchain, a key quality in its value.
The GDPR gives anyone within the EU the right to delete personal data from the internet, and its impact extends far beyond Europe
because the Web is a global entity. One solution being offered by blockchain architects is to make the data inaccessible, which is
tantamount to the deletion mandated by GDPR. 59
U.S. regulatory authorities are still contemplating how to categorize crypto-assets. The Securities and Exchange Commission calls them
securities, the Commodity Futures Trading Commission (CFTC) sees them as commodities, the Treasury Department’s Financial Crimes
Enforcement Network applies currency rules to them and the Internal Revenue Service considers them property. 60
None of these agencies has produced any regulatory clarity and only the CFTC has set the clunky
rulemaking machinery into motion. In the meantime, various federal agencies are looking at blockchain
applications for their own operations. The Food and Drug Administration hired Walmart’s Yiannas to serve
as its deputy commissioner for food policy and response in part because of his experience with using
blockchain to improve food tracking and the Department of Homeland Security is looking at possible
solutions in licensing and certification for its various agencies. 61
A major technical obstacle to blockchain development is speed. Blockchain is relatively slow in processing
transactions. Bitcoin’s speed of 5 to 7 transactions per second (TPS) is much slower than credit card
company Visa, which handles an average of 2,000 TPS. 62 Lack of standards in coding languages,
protocols and consensus mechanisms, which create difficulties in connecting individual blockchains with
each other or with existing enterprise systems, are also major hindrances to adoption. Other legal and
regulatory issues abound – who owns or controls the intellectual property, how enforceable are smart
contracts and what is the jurisdiction for settling disputes. Experts are working to surmount all of these
Frank Yiannas obstacles. 63
Many of the initial blockchain applications are what Harvard professors Iansiti and Lakhani consider single-
use connections between two parties, similar to e-mail as the initial application of TCP/IP. The next stages of evolution for a foundational
technology such as blockchain, according to Iansiti and Lakhani, are localization, involving more parties but on a closed network;
substitution, replacing an existing technology; and transformation, creating applications that are high in innovation and complexity. 64
Smart contracts are one example of how blockchain could enter the
transformative phase. These are agreements that are automatically executed
once the stipulated conditions, as tracked on a blockchain, are met. Simple
smart contracts are already in use in the fields of venture capital, banking and
digital rights management. 65
Advocates are imagining car purchasing and leasing via blockchain, 66
Others speculate on the impact on home buying as title insurance becomes
superfluous and blockchain handles mortgage approval and settlement. 67
Venture capitalist William Mougayar foresees blockchain creating a new flow
of value, just as the internet has, but there will be bumps on the road. 68
“Speed in hyping what the blockchain can do will end up derailing it, putting us
ahead of reality,” he wrote. “This type of disconnect is guaranteed to
disappoint those who expect benefits faster than what is possible.”
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But the installation phase of 2015 to 2018 will give way to a deployment phase, Mougayar predicted. “We will likely overshoot with
exuberance into the installation phase, before smooth sailing into a prosperous deployment phase.” 69
About the Author
Darrell Delamaide was a foreign correspondent in Europe for two decades and is now a freelance writer based in Washington. He has
written for Dow Jones, Institutional Investor, Bloomberg and MarketWatch, among others. He is the author of two nonfiction books and a
financial thriller.
Chronology
1970-1997 Encryption advances lay groundwork for blockchain.
1970s Cryptographic hash functions, the encryption coding that reduces any amount of information to a single line of code, are
developed and put to use.
1979 Computer scientist Ralph Merkle patents the “Merkle tree,” a data structure that efficiently links codes known as hash
lists and enables verification.
1991 Cryptographers Stuart Haber and W. Scott Stornetta implement a system to make time stamps tamper-proof, paving
the way for a secured chain of blocks.
1992 Haber, Stornetta and mathematician Dave Bayer build Merkle trees into their blockchain, making it possible to collect
several document certificates in one block.
1997 Cryptographer Adam Back develops “hashcash,” a proof-of-work system to keep email secure.
2008-Present Blockchain moves from cryptocurrencies to broader applications.
2008 A person or group of people using the pseudonym Satoshi Nakamoto publishes a white paper on how blockchain can
support bitcoin, the first cryptocurrency, by introducing a hashcash-like method to add blocks securely without outside
verification.
2009 Bitcoin is launched and soon generates numerous imitators, making cryptocurrencies objects of intense speculation
among investors around the world.
2014 The Chamber of Digital Commerce is formed in Washington by Perianne Boring, a former legislative assistant, as an
advocacy group for blockchain technology, bitcoin and digital assets.
2015 Patrick Byrne, CEO of the online retailer Overstock, launches a blockchain investment venture with the unveiling of the
tZero trading system.… JPMorgan Chase executive Blythe Masters joins the blockchain firm Digital Asset, giving the
technology a boost in credibility.
2016 The Linux Foundation, a nonprofit technology consortium to support and promote the open-source Linux operating
system, launches the Hyperledger Project as an open-source network for blockchain technology. IBM and others
incorporate it in their blockchain applications.
2017 IBM partners with Walmart and other retailers to develop the IBM Food Trust to track food supplies.
2018 IBM and the Maersk shipping line join to apply blockchain to shipping documents in a project that becomes TradeLens,
attracting more than 100 participants.… The consulting firm Accenture develops two methods to enable blockchains to
connect with each other, claiming to solve a basic challenge to widespread use.… Blockchain startups and beta tests
multiply in finance, customer service and data and numerous other fields.
Resources for Further Study
Bibliography
Books
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Blockchain
SAGE Business Researcher©2022 SAGE Publishing, Inc. All Rights Reserved. Eha, Brian Patrick, “How Money Got Free: Bitcoin and the Fight for the Future of Finance,” Oneworld, 2017. A former editor at Entrepreneur Magazine recalls the early days of cryptocurrency and blockchain, and the rogue’s gallery of actors who populated it. Huizinga, Redmer, and Arturo Bris, “Blockchange! How to Survive the Crypto Economy,” IMD Lausanne, 2018. Management experts at the Swiss business school argue that blockchain is a new technological framework that will form the basis for numerous changes in how we do business. Mougayar, William, “The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology,” Wiley, 2016. A venture capitalist offers a vision of how the technology can transform business. Articles Darrow, Barb, “At the Ripe Age of 105, IBM Seeks to Reinvent Itself – Again,” Fortune, June 16, 2016, https://tinyurl.com/jqxpdfy. The iconic company has moved through several phases as a producer of computer hardware and is now offering cloud services, quantum computing, artificial intelligence and blockchain technology. Iansiti, Marco, and Karim R. Lakhani, “The Truth About Blockchain,” Harvard Business Review, January-February 2017, https://tinyurl.com/h6n4no6. Two Harvard business professors describe blockchain as a long-term foundational technology that has the potential to transform society as much as the internet did. Marr, Bernard, “How Blockchain Will Transform the Supply Chain and Logistics Industry,” Forbes, March 23, 2018, https://tinyurl.com/ycn7cg8j. An international speaker and consultant gives a quick overview of supply chain applications for blockchain’s distributed ledger technology. Wladawsky-Berger, Irving, “Blockchain Beyond the Hype,” The Wall Street Journal, Dec. 19, 2018, https://tinyurl.com/y87dg7mo. A former IBM executive says blockchain is still in the experimental phase and, like any new transformative technology, will have ups and downs as users find its best applications. Reports and Studies “Blockchain/DLT: A game-changer in managing MNCs intercompany transaction,” IBM, 2017, https://tinyurl.com/y9asnx6l. IBM’s computer services group pitches the uses of blockchain for multinational corporations. Auer, Raphael, and Stijn Claessens, “Regulating cryptocurrencies: assessing market reactions,” BIS Quarterly Review, September 2018, https://tinyurl.com/y9zzx5ru. Cryptocurrencies and blockchain, although still outside the reach of national regulation, are subject to regulatory developments. Nakamoto, Satoshi, “Bitcoin: A Peer-to-Peer Electronic Cash System,” bitcoin.org, 2008, https://tinyurl.com/kkxbyss. The pseudonymous founder of bitcoin describes the new cryptocurrency and the blockchain technology supporting it. Schatsky, David, Amanpreet Arora and Aniket Dongre, “Blockchain and the five vectors of progress,” Deloitte Insights, Sept. 28, 2018, https://tinyurl.com/ydc6qlh2. Blockchain faces many obstacles – technical, legal and regulatory – but interested parties are working on all fronts to overcome them, according to three managers at the global consulting firm. The Next Step Application “Ugandan Firm Uses Blockchain To Trace Coffee From Farms To Stores,” Forbes Africa, Jan. 24, 2019, https://tinyurl.com/ybmnndfm. A Ugandan company is using blockchain technology to provide consumers with detailed information about its coffee shipments. Paton, Elizabeth, “Will Blockchain Be a Boon to the Jewelry Industry?” The New York Times, Nov. 30, 2018, https://tinyurl.com/y9o66jt4. Major diamond companies, such as De Beers, are embracing blockchain as a way to digitally track their product from mine to consumer and vouch for its authenticity and value. Pupazzoni, Rachel, “How blockchain tracking technology could revolutionise Australia’s food industry,” Australian Broadcasting Corp. News, updated Jan. 17, 2019, https://tinyurl.com/y95kxhqk. Australian companies are using blockchain to let consumers know the origin of their food. Investments Baydakova, Anna, “Overstock Venture Chief Expects Market for Blockchain Products in 2019,” CoinDesk, Dec. 13, 2018, https://tinyurl.com/y98pxfmc. The founder of venture fund Medici Ventures says its parent company, e-retailer Overstock, is investing more Page 10 of 14 Blockchain SAGE Business Researcher
©2022 SAGE Publishing, Inc. All Rights Reserved. heavily in companies that develop blockchain technology. Rooney, Kate, “72-year-old Fidelity bets on the future with blockchain, virtual reality and AI,” CNBC, updated Oct. 2, 2018, https://tinyurl.com/y8gwutxo. The financial firm Fidelity is exploring how blockchain technology could be used beyond its initial purpose for cryptocurrency. Sharma, Ridhima, “Swiss fintech raises $2m for blockchain project,” Investment Europe, Jan. 30, 2019, https://tinyurl.com/ybvwbuvf. A Geneva-based financial technology firm has sold shares in the company to investors using blockchain-generated tokens. Organizations BECON/Blockchain Ecosystem Network Guiness Enterprise Centre, Taylor’s Lane, Dublin 8, Ireland +353 1 4100 600 https://www.becon.global/ A global and cross-sector platform for collaboration, networking, explaining and advancing blockchain methodologies and solutions. Blockchain Alliance c/o Jason Weinstein, Steptoe & Johnson, 1330 Connecticut Ave., N.W., Washington, DC 20036 1-202-429-8061 https://blockchainalliance.org/ A public-private forum for open dialogue among industry, law enforcement and regulatory agencies to help combat criminal activity on the blockchain. Chamber of Digital Commerce 1133 15th St., N.W., Washington, DC 20005 1-202-302-6064 https://digitalchamber.org/ An advocacy group for blockchain and digital assets. It co-sponsors the DC Blockchain Center, a resource for technology providers and governments investing in blockchain-based technologies. Global Blockchain Business Council 1440 G St., N.W., 9th floor, Washington, DC 20005 https://www.gbbcouncil.org/\ info@gbbcouncil.org An industry association that seeks to advance understanding of blockchain technology and promote its adoption. Hyperledger Project, Linux Foundation 1 Letterman Drive, Building D, Suite D4700, San Francisco, CA 94129 1-415-723-9709 https://www.hyperledger.org info@hyperledger.org An open-source project for blockchain and related tools operated by the Linux Foundation, a resource for developing applications using the Linux operating system. Wall Street Blockchain Alliance 355 Madison Ave., New York, NY 10017 1-917-293-2405 https://www.wsba.co/ info@wsba.co Trade association that works to promote adoption of blockchain technology by financial markets throughout the world. Notes [1] Louise Matsakis, “Following a Tuna from Fiji to Brooklyn – on the Blockchain,” Wired, May 22, 2018, https://tinyurl.com/yc5p2yf5. [2] Paul Vigna, “Layoffs Become the Latest Thing in Cryptocurrency,” The Wall Street Journal, Dec. 10, 2018, https://tinyurl.com/y8s4c2qb. [3] Erin Griffith, “When the Blockchain Skeptic Walked Into the Lion’s Den,” Wired, May 15, 2018, https://tinyurl.com/y8r7q2m5. [4] Irving Wladawsky-Berger, “Blockchain Beyond the Hype,” The Wall Street Journal, Dec. 19, 2018, https://tinyurl.com/y87dg7mo. Page 11 of 14 Blockchain SAGE Business Researcher
©2022 SAGE Publishing, Inc. All Rights Reserved. [5] Marco Iansiti and Karim Lakhani, “The Truth About Blockchain,” Harvard Business Review, January-February 2017, https://tinyurl.com/h6n4no6. [6] Ibid. [7] Ibid. [8] Ibid. [9] Bernard Marr, “How Blockchain Will Transform the Supply Chain and Logistics Industry,” Forbes, March 23, 2018, https://tinyurl.com/y8j4p9xx. [10] Shaan Ray, “Merkle Trees,” Hackernoon/Medium, Dec. 15, 2017, https://tinyurl.com/ybd245r3. [11] Isaac Simpson, “To Understand Blockchains, You Should Understand Cryptographic Hashes First,” Vandal Press/Medium, Sept. 19, 2017, https://tinyurl.com/yd25xggd. [12] Aaron van Wirdum, “The Genesis Files: Hashcash or How Adam Back Designed Bitcoin’s Motor Block,” Bitcoin Magazine, June 4, 2018, https://tinyurl.com/y7cqpvug. [13] Gideon Greenspan, “The Blockchain Immutability Myth,” Coindesk, May 9, 2017, https://tinyurl.com/ya4cwr57. [14] Satoshi Nakamoto, “Bitcoin: A Peer-to-Peer Electronic Cash System,” bitcoin.org, 2008, https://tinyurl.com/kkxbyss. [15] Jeff John Roberts, “Are You Eating Sustainable Fish? Blockchain May Provide the Answer,” Fortune, Jan. 3, 2018, https://tinyurl.com/y9f8llh6. [16] “Watch How Viant Tracks Sustainable Fish from Bait-to-Plate with Blockchain Tech,” ConsenSys/Medium, July 6, 2018, https://tinyurl.com/yapxrxhz. [17] Elizabeth Paton, “Blockchain Could Work for Luxury, Too,” The New York Times, Nov. 19, 2018, https://tinyurl.com/y88um33n. [18] Redmer Huizinga and Arturo Bris, “Blockchange! How to Survive the Crypto Economy,” IMD Lausanne, 2018, Location 175 in the Kindle edition. [19] James Risberg, “Yes, the Blockchain Can Be Hacked,” Coin Central, May 7, 2018, https://tinyurl.com/y8ej7mo3. [20] Ibid. [21] Ibid. [22] Ibid. [23] Paul Vigna, “Two Groups Account for $1 Billion in Cryptocurrency Hacks, New Report Says,” The Wall Street Journal, Jan. 28, 2019, https://tinyurl.com/y6wprrby. [24] Shobhit Seth, “Public, Private, Permissioned Blockchains Compared,” Investopedia, April 10, 2018, https://tinyurl.com/y8q6wxh8. [25] Farzam Ehsani, “The False Promise Blockchains Will Revolutionize Real-World Assets,” Coindesk, Jan. 5, 2019, https://tinyurl.com/y95hwose. [26] Nick Ismail, “Blockchain momentum is growing across Europe,” Information Age, Nov. 14, 2018, https://tinyurl.com/ybagxple. [27] Caroline Basile, “Accenture develops two blockchain integration solutions,” Housingwire, Oct. 22, 2018, https://tinyurl.com/yc3du86p. [28] Paul Vigna, “Overstock’s Founder Bets on Blockchain, Not Bedsheets,” The Wall Street Journal, Nov. 23, 2018, https://tinyurl.com/ya3sosx4. [29] Hemant Sharma, “Supply Chain StartUps That Use Best Blockchain Technology,” Enuke Software, Sept. 3, 2017, https://tinyurl.com/yddsklld. [30] Michael del Castillo, “IBM-Maersk Blockchain Platform Adds 92 Clients as Part of Global Launch,” Forbes, Aug. 8, 2018, https://tinyurl.com/yaykft3j. [31] “Spanish port to use IBM’s Tradelens platform for supply chain management,” Crypto News Review, Jan. 23, 2019, https://tinyurl.com/y6w5vahs. Page 12 of 14 Blockchain SAGE Business Researcher
©2022 SAGE Publishing, Inc. All Rights Reserved. [32] Jacob Gronholt-Pedersen, “Maersk, IBM say 94 organizations have joined blockchain trade platform,” Reuters, Aug. 9, 2018, https://tinyurl.com/ycd5agw9. [33] Ian Allison, “IBM and Maersk Struggle to Sign Partners to Shipping Blockchain,” Coindesk, Oct. 26, 2018, http://tinyurl.com/y822d6fj. [34] “Maersk and IBM Introduce TradeLens Blockchain Shipping Solution,” Press Release, IBM, Aug. 9, 2018, https://tinyurl.com/yburd79q. [35] Howard Bryman, “Starbucks Launching Pilot Program for Blockchain in Its Supply Chain,” Daily Coffee News, March 22, 2018, https://tinyurl.com/y8f3tqnf. [36] “Starbucks to pilot ‘bean to cup’ traceability with new technology,” press release, Starbucks, March 21, 2018, https://tinyurl.com/y89xp76a. [37] Bernard Marr, “How Blockchain Could End the Trade in Blood Diamonds – An Incredible Use Case Everyone Should Read,” Forbes, March 14, 2018, https://tinyurl.com/ycbdruqa. [38] “De Beers to launch first diamond blockchain; here’s how it will work,” Business Today, Sept. 14, 2018, https://tinyurl.com/yal8jfuq. [39] Marie Huillet, “The World’s Largest Diamond Producer Alrosa Joins De Beers’ Blockchain Pilot,” Cointelegraph, Oct. 29, 2018, https://tinyurl.com/y93nmq9v. [40] Tiffany Hsu, “You Know Your Diamond’s Cut and Carat. But Does It Have Ethical Origins?” The New York Times, Jan. 8, 2019, https://tinyurl.com/y78grybr. [41] Kim Nash, “Walmart-Led Blockchain Effort Seeks Farm-to-Grocery-Aisle View of Food Supply Chain,” The Wall Street Journal, June 25, 2018, https://tinyurl.com/yamjqcua. [42] Laura Mullan, “Telefónica partners with IBM to collaborate on telecom blockchain,” Gigabit, Nov. 16, 2018, https://tinyurl.com/y74t98ua. [43] Ibid. [44] “Fujitsu Introduces Blockchain-Based Digital Asset Service,” Coinwire, June 11, 2018, https://tinyurl.com/yabzgwfr. [45] Jiordan Castle, “How Topcoder Is Helping Fujitsu Expand on Blockchain Technology,” Topcoder Blog, Aug. 14, 2018, https://tinyurl.com/y9zdz2t8. [46] Susan Adams, “A Tech Startup Wants to Use Blockchain to Make Event Tickets Fraud-Proof (And to Sell More Stuff),” Forbes, June 15, 2017, https://tinyurl.com/y9l6glpv. [47] Marie Huillet, “Post-Trade Financial Services Giant, 15 Major Banks Test DLT Project for Credit Derivatives,” Coin Telegraph, Nov. 7, 2018, https://tinyurl.com/ydarnzlh. [48] Anna Baydakova, “Goldman, Morgan Stanley Go Live With CLS’ IBM-Powered Blockchain,” Coindesk, Nov. 28, 2018, https://tinyurl.com/yc25juov. [49] Marie Huillet, “$5 Trln FX Settlement Giant CLS to Launch Blockchain-Based Netting Service ‘Within Days,’ ” Cointelegraph, Nov. 14, 2018, https://tinyurl.com/ybnknnzb. [50] Mike Orcutt, “How Blockchain Could Give Us a Smarter Energy Grid,” Technology Review, Oct. 16, 2017, https://tinyurl.com/ydgb5qcs. [51] Ibid. [52] Kathleen O’Dell, et al., “Powered by blockchain: Reimagining electrification in emerging markets,” Deloitte Insights, Aug. 1, 2018, https://tinyurl.com/y828vbu7, [53] Ashwini Anburajan, “Security Tokens: Where Digital Assets Meet the Real World,” Stratfor Worldview, Feb. 9, 2018, https://tinyurl.com/ybz585hn. [54] Scott Reyburn, “Art Is Becoming a Financial Product, and Blockchain Is Making It Happen,” The New York Times, June 8, 2018, https://tinyurl.com/y82lrzrc. [55] Mark Toner, “There’s a New Art to Putting Picasso on the Auction Blockchain,” ThirtyK, Dec. 10, 2018, http://tinyurl.com/yamb8kdd. Page 13 of 14 Blockchain SAGE Business Researcher
©2022 SAGE Publishing, Inc. All Rights Reserved. [56] Doug Alexander and Olga Kharif, “Novogratz’s Crypto Firm Turns to Tokenization of Real Estate,” Bloomberg, Nov. 13, 2018, https://tinyurl.com/y73vb2hq. [57] Ehsani, op. cit. [58] Anburajan, op. cit. [59] James Donaghue, “Solutions Suggest Blockchain Can Conform to GDPR’s ‘Right to Be Forgotten,’ ” Blockchain Land, Aug. 8, 2018, https://tinyurl.com/y7hevsu2. [60] Kirill Bryanov, “US Federal Government: Confusing Regulation for Crypto, Full Clearance for Blockchain,” Cointelegraph, Dec. 16, 2018, https://tinyurl.com/ybz9ddlc. [61] Ibid.; “Meet Frank Yiannas, Deputy Commissioner for Food Policy and Response,” press release, U.S. Food & Drug Administration, last updated Feb. 1, 2019, http://tinyurl.com/yafrru2z. [62] William Mougayar, “The Business Blockchain: Promise, Practice, and Application of the Next Internet Technology,” Wiley, 2016, p. 20. [63] David Schatsky, Amanpreet Arora and Aniket Dongre, “Blockchain and the Five Vectors of Progress,” Deloitte Insights, Sept. 28, 2018, https://tinyurl.com/ydc6qlh2. [64] Iansiti and Lakhani, op. cit. [65] Ibid. [66] Thorsten Linz, “The Five Ways Blockchain Will Redefine Car Ownership,” Move Forward, March 13, 2018, https://tinyurl.com/ycorr7vy. [67] Amanda Farrell, “Beyond Bitcoin: The Role of Blockchain Smart Contracts in Real Estate Transactions,” Oct. 4, 2018, https://tinyurl.com/yay2bpgx. [68] Mougayar, op. cit., p. 156. [69] Ibid., p. 162. Page 14 of 14 Blockchain SAGE Business Researcher
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