IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v146y2019icp94-102.html
   My bibliography  Save this article

Blockchain-based platforms: Decentralized infrastructures and its boundary conditions

Author

Listed:
  • Pereira, Joana
  • Tavalaei, M. Mahdi
  • Ozalp, Hakan

Abstract

Blockchain technology has been receiving much public attention recently, promising to disintermediate transactions through decentralized governance and distributed data-infrastructures. However, the majority of the previous studies have focused on the technical aspects, and overlooked blockchain investigation from a managerial perspective. In this paper, based on platform-ecosystem, transaction cost economics, and open-source literature, we contrast and compare blockchain-based platforms and centralized platforms; in other words, decentralized versus centralized governance modes. We base our conceptual analysis on three dimensions—transaction cost, cost of technology, and community involvement—, exploring the conditions under which blockchain-based platforms are more advantageous than centralized platforms. We first compare gains from lower opportunism and uncertainty costs thanks to protocols and smart contracts in blockchain technology versus the costs of higher coordination and complexity of (re)writing those contracts. Second, we compare the gains from immutability and transparency in blockchain-based platforms versus the technological costs of verification and storage of a distributed ledger. Finally, we compare intrinsic and extrinsic motivations of the communities around centralized and blockchain-based platforms in the short and medium term.

Suggested Citation

  • Pereira, Joana & Tavalaei, M. Mahdi & Ozalp, Hakan, 2019. "Blockchain-based platforms: Decentralized infrastructures and its boundary conditions," Technological Forecasting and Social Change, Elsevier, vol. 146(C), pages 94-102.
    • Handle: RePEc:eee:tefoso:v:146:y:2019:i:c:p:94-102
    DOI: 10.1016/j.techfore.2019.04.030
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162518319693
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2019.04.030?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    2. Josh Lerner & Jean Tirole, 2002. "Some Simple Economics of Open Source," Journal of Industrial Economics, Wiley Blackwell, vol. 50(2), pages 197-234, June.
    3. Amrit Tiwana & Benn Konsynski & Ashley A. Bush, 2010. "Research Commentary ---Platform Evolution: Coevolution of Platform Architecture, Governance, and Environmental Dynamics," Information Systems Research, INFORMS, vol. 21(4), pages 675-687, December.
    4. Williamson, Oliver E, 1973. "Markets and Hierarchies: Some Elementary Considerations," American Economic Review, American Economic Association, vol. 63(2), pages 316-325, May.
    5. Thomas R. Eisenmann & Geoffrey Parker & Marshall Van Alstyne, 2009. "Opening Platforms: How, When and Why?," Chapters, in: Annabelle Gawer (ed.), Platforms, Markets and Innovation, chapter 6, Edward Elgar Publishing.
    6. Meng Ma & Ritu Agarwal, 2007. "Through a Glass Darkly: Information Technology Design, Identity Verification, and Knowledge Contribution in Online Communities," Information Systems Research, INFORMS, vol. 18(1), pages 42-67, March.
    7. Boudreau, Kevin J. & Lakhani, Karim R., 2015. "“Open” disclosure of innovations, incentives and follow-on reuse: Theory on processes of cumulative innovation and a field experiment in computational biology," Research Policy, Elsevier, vol. 44(1), pages 4-19.
    8. Jean-Charles Rochet & Jean Tirole, 2003. "Platform Competition in Two-Sided Markets," Journal of the European Economic Association, MIT Press, vol. 1(4), pages 990-1029, June.
    9. Ron Adner & Rahul Kapoor, 2010. "Value creation in innovation ecosystems: how the structure of technological interdependence affects firm performance in new technology generations," Strategic Management Journal, Wiley Blackwell, vol. 31(3), pages 306-333, March.
    10. E. Glen Weyl, 2010. "A Price Theory of Multi-sided Platforms," American Economic Review, American Economic Association, vol. 100(4), pages 1642-1672, September.
    11. Kevin J. Boudreau & Andrei Hagiu, 2009. "Platform Rules: Multi-Sided Platforms as Regulators," Chapters, in: Annabelle Gawer (ed.), Platforms, Markets and Innovation, chapter 7, Edward Elgar Publishing.
    12. Erik Brynjolfsson & Daniel Rock & Chad Syverson, 2018. "Artificial Intelligence and the Modern Productivity Paradox: A Clash of Expectations and Statistics," NBER Chapters, in: The Economics of Artificial Intelligence: An Agenda, pages 23-57, National Bureau of Economic Research, Inc.
    13. Franke, Nikolaus & Shah, Sonali, 2003. "How communities support innovative activities: an exploration of assistance and sharing among end-users," Research Policy, Elsevier, vol. 32(1), pages 157-178, January.
    14. Gwendolyn K. Lee & Robert E. Cole, 2003. "From a Firm-Based to a Community-Based Model of Knowledge Creation: The Case of the Linux Kernel Development," Organization Science, INFORMS, vol. 14(6), pages 633-649, December.
    15. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    16. Davidson, Sinclair & De Filippi, Primavera & Potts, Jason, 2018. "Blockchains and the economic institutions of capitalism," Journal of Institutional Economics, Cambridge University Press, vol. 14(4), pages 639-658, August.
    17. Hakan Ozalp & Carmelo Cennamo & Annabelle Gawer, 2018. "Disruption in Platform‐Based Ecosystems," Journal of Management Studies, Wiley Blackwell, vol. 55(7), pages 1203-1241, November.
    18. Geoffrey G. Parker & Marshall W. Van Alstyne, 2005. "Two-Sided Network Effects: A Theory of Information Product Design," Management Science, INFORMS, vol. 51(10), pages 1494-1504, October.
    19. Carliss Baldwin & Eric von Hippel, 2011. "Modeling a Paradigm Shift: From Producer Innovation to User and Open Collaborative Innovation," Organization Science, INFORMS, vol. 22(6), pages 1399-1417, December.
    20. Kevin Boudreau, 2010. "Open Platform Strategies and Innovation: Granting Access vs. Devolving Control," Management Science, INFORMS, vol. 56(10), pages 1849-1872, October.
    21. Annabelle Gawer & Rebecca Henderson, 2007. "Platform Owner Entry and Innovation in Complementary Markets: Evidence from Intel," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(1), pages 1-34, March.
    22. Michael G. Jacobides & Carmelo Cennamo & Annabelle Gawer, 2018. "Towards a theory of ecosystems," Strategic Management Journal, Wiley Blackwell, vol. 39(8), pages 2255-2276, August.
    23. Marten Risius & Kai Spohrer, 2017. "A Blockchain Research Framework," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 59(6), pages 385-409, December.
    24. Rainer Böhme & Nicolas Christin & Benjamin Edelman & Tyler Moore, 2015. "Bitcoin: Economics, Technology, and Governance," Journal of Economic Perspectives, American Economic Association, vol. 29(2), pages 213-238, Spring.
    25. Bresnahan, Timothy, 2010. "General Purpose Technologies," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 761-791, Elsevier.
    26. Dahlander, Linus & Magnusson, Mats G., 2005. "Relationships between open source software companies and communities: Observations from Nordic firms," Research Policy, Elsevier, vol. 34(4), pages 481-493, May.
    27. Eric von Hippel & Georg von Krogh, 2003. "Open Source Software and the “Private-Collective” Innovation Model: Issues for Organization Science," Organization Science, INFORMS, vol. 14(2), pages 209-223, April.
    28. Robert J. David & Shin‐Kap Han, 2004. "A systematic assessment of the empirical support for transaction cost economics," Strategic Management Journal, Wiley Blackwell, vol. 25(1), pages 39-58, January.
    29. Lakhani, Karim R. & von Hippel, Eric, 2003. "How open source software works: "free" user-to-user assistance," Research Policy, Elsevier, vol. 32(6), pages 923-943, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Omar, Ilhaam A. & Hasan, Haya R. & Jayaraman, Raja & Salah, Khaled & Omar, Mohammed, 2021. "Implementing decentralized auctions using blockchain smart contracts," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    2. Friedman, Nicola & Ormiston, Jarrod, 2022. "Blockchain as a sustainability-oriented innovation?: Opportunities for and resistance to Blockchain technology as a driver of sustainability in global food supply chains," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    3. Devine, Anthony & Jabbar, Abdul & Kimmitt, Jonathan & Apostolidis, Chrysostomos, 2021. "Conceptualising a social business blockchain: The coexistence of social and economic logics," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    4. Wan, Yinglin & Gao, Yuchen & Hu, Yimei, 2022. "Blockchain application and collaborative innovation in the manufacturing industry: Based on the perspective of social trust," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    5. Nguyen, Phong Thanh & Nguyen, Linh Thi My, 2022. "Understanding platform market value through decentralization governance — An integrative model from signaling and mechanism design theory," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    6. Ipert, Chloé & Mauer, René, 2023. "Infrastructural or organizational decentralization? Developing a typology of blockchain ventures," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    7. Chang, Victor & Baudier, Patricia & Zhang, Hui & Xu, Qianwen & Zhang, Jingqi & Arami, Mitra, 2020. "How Blockchain can impact financial services – The overview, challenges and recommendations from expert interviewees," Technological Forecasting and Social Change, Elsevier, vol. 158(C).
    8. García-Monleón, Fernando & Danvila-del-Valle, Ignacio & Lara, Francisco J., 2021. "Intrinsic value in crypto currencies," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    9. Chand Bhatt, Priyanka & Kumar, Vimal & Lu, Tzu-Chuen & Daim, Tugrul, 2021. "Technology convergence assessment: Case of blockchain within the IR 4.0 platform," Technology in Society, Elsevier, vol. 67(C).
    10. Cowden, Birton & Tang, Jintong, 2022. "Institutional entrepreneurial orientation: Beyond setting the rules of the game for blockchain technology," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    11. Paul, Tripti & Mondal, Sandeep & Islam, Nazrul & Rakshit, Sandip, 2021. "The impact of blockchain technology on the tea supply chain and its sustainable performance," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    12. Vineet Paliwal & Shalini Chandra & Suneel Sharma, 2020. "Blockchain Technology for Sustainable Supply Chain Management: A Systematic Literature Review and a Classification Framework," Sustainability, MDPI, vol. 12(18), pages 1-39, September.
    13. Kamble, Sachin S. & Gunasekaran, Angappa & Kumar, Vikas & Belhadi, Amine & Foropon, Cyril, 2021. "A machine learning based approach for predicting blockchain adoption in supply Chain," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    14. Zibiao Li & Han Li & Siwei Wang, 2022. "How Multidimensional Digital Empowerment Affects Technology Innovation Performance: The Moderating Effect of Adaptability to Technology Embedding," Sustainability, MDPI, vol. 14(23), pages 1-27, November.
    15. Jovanovic, Marin & Kostić, Nikola & Sebastian, Ina M. & Sedej, Tomaz, 2022. "Managing a blockchain-based platform ecosystem for industry-wide adoption: The case of TradeLens," Technological Forecasting and Social Change, Elsevier, vol. 184(C).
    16. Daim, Tugrul & Lai, Kuei Kuei & Yalcin, Haydar & Alsoubie, Fayez & Kumar, Vimal, 2020. "Forecasting technological positioning through technology knowledge redundancy: Patent citation analysis of IoT, cybersecurity, and Blockchain," Technological Forecasting and Social Change, Elsevier, vol. 161(C).
    17. Garg, Poonam & Gupta, Bhumika & Chauhan, Ajay Kumar & Sivarajah, Uthayasankar & Gupta, Shivam & Modgil, Sachin, 2021. "Measuring the perceived benefits of implementing blockchain technology in the banking sector," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    18. Bingyou Chen & Yu Luo & Jieni Li & Yujian Li & Ying Liu & Fan Yang & Junge Bo & Yanan Qiao, 2023. "Blockchain-based Decentralized Co-governance: Innovations and Solutions for Sustainable Crowdfunding," Papers 2306.00869, arXiv.org, revised Jun 2023.
    19. Orji, Ifeyinwa Juliet & Kusi-Sarpong, Simonov & Huang, Shuangfa & Vazquez-Brust, Diego, 2020. "Evaluating the factors that influence blockchain adoption in the freight logistics industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    20. Chenchen Lv & Yifeng Wang & Chai Jin, 2022. "The possibility of sports industry business model innovation based on blockchain technology: Evaluation of the innovation efficiency of listed sports companies," PLOS ONE, Public Library of Science, vol. 17(1), pages 1-24, January.
    21. Centobelli, Piera & Cerchione, Roberto & Esposito, Emilio & Oropallo, Eugenio, 2021. "Surfing blockchain wave, or drowning? Shaping the future of distributed ledgers and decentralized technologies," Technological Forecasting and Social Change, Elsevier, vol. 165(C).
    22. Giulio Caldarelli, 2020. "Exploiting Corporate Governance to Evaluate Blockchain Applications: A Comprehensive Framework," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(4), pages 166-183.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gawer, Annabelle, 2014. "Bridging differing perspectives on technological platforms: Toward an integrative framework," Research Policy, Elsevier, vol. 43(7), pages 1239-1249.
    2. Tavalaei, M. Mahdi, 2020. "Waiting time in two-sided platforms: The case of the airport industry," Technological Forecasting and Social Change, Elsevier, vol. 159(C).
    3. Panos Constantinides & Ola Henfridsson & Geoffrey G. Parker, 2018. "Introduction—Platforms and Infrastructures in the Digital Age," Information Systems Research, INFORMS, vol. 29(2), pages 381-400, June.
    4. Burcu Tan & Edward G. Anderson, Jr. & Geoffrey G. Parker, 2020. "Platform Pricing and Investment to Drive Third-Party Value Creation in Two-Sided Networks," Information Systems Research, INFORMS, vol. 31(1), pages 217-239, March.
    5. Shi, Xianwei & Liang, Xingkun & Luo, Yining, 2023. "Unpacking the intellectual structure of ecosystem research in innovation studies," Research Policy, Elsevier, vol. 52(6).
    6. Jingtao Yi & Jinqiu He & Lihong Yang, 2019. "Platform heterogeneity, platform governance and complementors’ product performance: an empirical study of the mobile application industry," Frontiers of Business Research in China, Springer, vol. 13(1), pages 1-20, December.
    7. Cenamor, Javier & Frishammar, Johan, 2021. "Openness in platform ecosystems: Innovation strategies for complementary products," Research Policy, Elsevier, vol. 50(1).
    8. Jan Frederic Nerbel & Markus Kreutzer, 2023. "Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-20, December.
    9. Jabbour, Chady & Rey-Valette, Hélène & Maurel, Pierre & Salles, Jean-Michel, 2019. "Spatial data infrastructure management: A two-sided market approach for strategic reflections," International Journal of Information Management, Elsevier, vol. 45(C), pages 69-82.
    10. Xue Ding & Zhong Yang, 2022. "Knowledge mapping of platform research: a visual analysis using VOSviewer and CiteSpace," Electronic Commerce Research, Springer, vol. 22(3), pages 787-809, September.
    11. Rodolphe Durand & Robert M. Grant & Tammy L. Madsen & David P. McIntyre & Arati Srinivasan, 2017. "Networks, platforms, and strategy: Emerging views and next steps," Strategic Management Journal, Wiley Blackwell, vol. 38(1), pages 141-160, January.
    12. Miric, Milan & Jeppesen, Lars Bo, 2023. "How does competition influence innovative effort within a platform-based ecosystem? Contrasting paid and unpaid contributors," Research Policy, Elsevier, vol. 52(7).
    13. Boudreau, Kevin J. & Lakhani, Karim R., 2015. "“Open” disclosure of innovations, incentives and follow-on reuse: Theory on processes of cumulative innovation and a field experiment in computational biology," Research Policy, Elsevier, vol. 44(1), pages 4-19.
    14. Thomas, Llewellyn D.W. & Autio, Erkko & Gann, David M., 2022. "Processes of ecosystem emergence," Technovation, Elsevier, vol. 115(C).
    15. Liu, He & Li, Xuerong & Wang, Shouyang, 2021. "A bibliometric analysis of 30 years of platform research: Developing the research agenda for platforms, the associated technologies and social impacts," Technological Forecasting and Social Change, Elsevier, vol. 169(C).
    16. Kimmo Karhu & Robin Gustafsson & Kalle Lyytinen, 2018. "Exploiting and Defending Open Digital Platforms with Boundary Resources: Android’s Five Platform Forks," Information Systems Research, INFORMS, vol. 29(2), pages 479-497, June.
    17. Jens Foerderer, 2020. "Interfirm Exchange and Innovation in Platform Ecosystems: Evidence from Apple’s Worldwide Developers Conference," Management Science, INFORMS, vol. 66(10), pages 4772-4787, October.
    18. Brunswicker, Sabine & Schecter, Aaron, 2019. "Coherence or flexibility? The paradox of change for developers’ digital innovation trajectory on open platforms," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    19. Martin Poniatowski & Hedda Lüttenberg & Daniel Beverungen & Dennis Kundisch, 2022. "Three layers of abstraction: a conceptual framework for theorizing digital multi-sided platforms," Information Systems and e-Business Management, Springer, vol. 20(2), pages 257-283, June.
    20. Miric, Milan & Boudreau, Kevin J. & Jeppesen, Lars Bo, 2019. "Protecting their digital assets: The use of formal & informal appropriability strategies by App developers," Research Policy, Elsevier, vol. 48(8), pages 1-1.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:146:y:2019:i:c:p:94-102. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.