Abstract
In the era of the digital revolution, organizations are surrounded by disruptive technologies and find themselves constantly in the middle of change processes. In recent years, blockchain technology has evolved tremendously, and in the future, it may fundamentally influence and change the finance and accounting domain of the early 21st century. Originally the blockchain technology was created only as technology to introduce the cryptocurrency Bitcoin, however by now the blockchain is considered by experts as a major innovation beyond its initial scope. In light of these changing circumstances, innovative opportunities, as well as new challenges, arise. This creates many questions and academic debates among researchers all over the globe as to which business models and functions in the financial sector may become obsolete or where to streamline and enhance processes through blockchain applications. The paper addresses the research question to what extent the blockchain technology is capable of changing well-known business processes and finance functions within companies. In doing so, it shows the opportunities and challenges, which are based on an extensive literature-review by the authors. The paper presents current use cases on market and finishes with an outlook on the future potential of blockchain.
Highlights
This is possible by using the blockchain technique and the functionality of smart contracts, which ensure the automatic execution of general contract conditions, which the parties have committed to, e.g. exchange of liquidity vs. token/coin (Boreiko & Sahdev, 2018, p. 8 et seqq.)
Conclusion & Outlook The given paper addressed in simple terms the essential features of the blockchain technology and the idea of smart contracts
Concerning the initially presented research question use-cases illustrated the functionality of the blockchain technology and smart contracts
Summary
Each party on a blockchain has access to the entire database and its complete history. There is no central control and every party can verify the records without an intermediary. Communication takes place directly between peers instead through a central node. Each node stores and forwards information to all other nodes. Transactions are visible and transparent to anyone with system access. Users can remain anonymous or provide proof of their identify. Once a transaction is entered the records cannot be altered
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