Abstract
Blockchain is a relatively new technology that is often described as “creating trust” or “removing intermediaries”. In this paper, we posit that blockchain is a new form of digitally-enabled boundary spanning that allows co-ownership models for the companies in question. Where companies have traditionally employed humans to act as interfaces to the external world, new digital technologies enable a digitised approach to many corporate operations that require interaction towards the external market and environment within which firms must operate. Blockchain is a special subset of digital technologies in this regard, enabling companies to co-operate to control parts of the market and to internalise transaction costs that until now have been a market function; using blockchain companies effectively create a new transaction boundary that means boundary spanning can be deeply embedded in core business, rather than kept to its periphery. This digitally-enabled boundary spanning is a key attribute of the emerging digital economy. Understanding its implications is of critical importance for economics, business and social science literature.
Highlights
Over the past few years a relatively new technology – blockchain – has emerged and started to gain traction in various industries
Blockchain allows the creation of boundary-spanning technology-based consortia that allow companies to cordon off part of the market without internalizing the transaction costs
Blockchain allows the creation of boundary-spanning technology-based consortia that allow companies to cordon off part of the market without fully internalizing the transaction costs
Summary
Over the past few years a relatively new technology – blockchain – has emerged and started to gain traction in various industries This technology is often touted as recreating how “trust” is enacted within the economy through removing the need for intermediaries such as banks and replacing them with mathematics or “code” (The Economist, 2015). Blockchain allows the creation of boundary-spanning technology-based consortia that allow companies to cordon off part of the market without internalizing the transaction costs. This is furthering the development of alliance capitalism – firms are utilizing digital technologies increasingly deeply to manage and control the most efficient interactions with the market together with other actors in their industry. We focus solely on the underlying platforms and their use by firms as our unit of analysis – we do not investigate the role of cryptocurrencies, ICOs or token economies
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