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Blockchain-based platforms: decentralized infrastructures and its boundary conditions

Pereira, Joana, Tavalaei, M. Mahdi and Özalp, Hakan (2019) Blockchain-based platforms: decentralized infrastructures and its boundary conditions Technological Forecasting & Social Change, 146. pp. 94-102.

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Blockchain technology has been receiving much public attention recently, promising to disintermediate transactions through a decentralized governance and a distributed data-infrastructure. 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 of the platform. 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 thanks to protocols and smart contracts in blockchain technology versus costs of higher coordination and complexity of (re)writing those contracts. Second, we compare gains from immutability and transparency in blockchain-based platforms versus the technological cost of verification and distributed ledger infrastructure. Finally, we compare intrinsic and extrinsic motivations of community around centralized and blockchain-based platforms to participate and different mechanism involved, i.e. pricing mechanism in the former and crypto-incentives in the latter.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > Surrey Business School
Authors :
Pereira, Joana
Tavalaei, M.
Özalp, Hakan
Date : September 2019
DOI : 10.1016/j.techfore.2019.04.030
Copyright Disclaimer : © 2019. This manuscript version is made available under the CC-BY-NC-ND 4.0 license
Uncontrolled Keywords : Blockchain technology; Platform ecosystems; Decentralized governance; Transaction cost economics; Smart contracts
Depositing User : Clive Harris
Date Deposited : 16 May 2019 15:08
Last Modified : 05 Dec 2020 02:08

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