Economists constantly watch the progress of blockchain technology with great interest. Basing solutions on blockchains lends itself particularly well to decentralized business procedures, as they can integrate more independent parties together (common in logistics or when manufacturing products). If tangible or intangible assets (like property rights) are passed through several hands, blockchains offer the chance to visibly record all processes and any status changes for all participants involved.
Furthermore, blockchain technology complies with the rapidly developing IoT sector. Internet of things is at a constant rise and so are the amount of devices that it brings together. In the future, data exchange and payments made in the IoT sector could be based on blockchains.
Blockchain technology is becoming an increasingly important factor in pilot projects. The trend is also moving closer towards private blockchains, which isproprietary software developed especially for internal business applications. Contrary to open source blockchains such as Ethereum or Bitcoin, private blockchains are only available to a selected group of individuals (workers, business partners, stakeholders etc.).
| Open source blockchains | Private blockchains |
Access | Open | Necessitates authorization |
Speed | Slow | Quick |
Identity | Anonymous/based on nicknames | Not in any way anonymous |
Safety of use | Proof of work/stake | Predetermined admin |
Blockchain technology offers highly transparent automated procedures, which do not always meet with the approval of all group members. Only a minority of all businesses have full trust in the legal security of the technology. One of the most common problem areas of this sector is the possible loss of control over it, as well as deficient data protection or its unclear legal status.
Decentralized applications of blockchains can do without any supervisory authorities – this software brings many participants together and regulates any procedures related to their transactions or status changes without the need for any human intervention. From a legal point of view, it is worth questioning who should be made accountable for any potential mistakes or conflicts.
Open source blockchains are continuously presenting companies with data protection problems. Although transaction participants within a blockchain network are anonymous, information on the nature and scope of each transaction is accessible to all network participants. This is, however, something that companies sometimes keep confidential and it is for this reason that most of them check for admission restrictions within various blockchain technologies and their respective areas of use.
At the same time, open source blockchains used as part of consortia have also experienced a strong push forward. An example of this from the world of business is the so-called Hyperledger, which is an umbrella project of the Linux Foundation working together with SAP, Daimler, IBM, and Intel. Business applications based on Ethereum blockchains soon established what is nowadays known as the Enterprise Ethereum Alliance. In the insurance industry, leading companies such as Aegon, Allianz, or Munich Re federated into a blockchain consortium under the name of B3i standing for “Blockchain Insurance Industry Initiative.”
As a result, the research scope goes far beyond decentralized applications (called dApps). Blockchain technology offers valuable suggestions for decentralized organizations on contracts (smart contracts) and organizational forms (such as DAOs – decentralized autonomous organizations). In theory, even entire companies can be managed by means of blockchains.