Content area
Full Text
Blockchain as an emerging technology is considered a future game-changer for a wide range of economic activities. The true potential of the technology, though, is still at the enabling stage and much more research is required to understand the nature of the business opportunities.
Vincenzo Morabito, at the Bocconi Management School, in his recent book Business Innovation Through Blockchain provides an interesting viewpoint of blockchain research by studying the technology from a business innovation perspective. Although the blockchain has shown its disruptive potential in cryptocurrencies, real business cases outside of bitcoins have yet to emerge.
The book consists of three major parts: the blockchain technology and its management, the digital currency phenomenon and the blockchain business innovations.
The first chapter defines the blockchain technology as decentralised databases, which consist of proof of work/stake and smart contracts. Initially, blockchain as a form of decentralised database materialised through Bitcoin. Decentralisation, in as far as the database is concerned, has no central owner, but it adheres to strict rules of editing that are imposed beforehand. Each user is identified through a separate key. Proof of work/stake are algorithms used to protect attacks on the blockchain database. Smart contracts are algorithms executed by the database that help to ease agreement enforcements.
The second chapter describes the process behind blockchain technology operations, its application opportunities, key challenges and technological limitations. The technology works on the basis of transactions that are composed into blocks linked to the previous transactions. The transactions are created with the help of a “proof of work/stake” concept by “volunteers” (miners) – who are rewarded for their work. The future application of the blockchain in the financial industry focuses on replacing the multiple centralised databases with...