The Truth About Blockchain

Aluno: Lurye Binda		Referee Report nº:	3
Disciplina:	Introdução à Administração	Data: 12/10/18
Texto: The Truth About Blockchain
Autores: Marco Iansiti and Karim R. Lakhani

Ideia central do texto e principais argumentos

The paper “The Truth About Blockchain” claims that Blockchain is going to revolutionize the world. Supporting this idea, the text discusses the meaning of it, how it works and its function. Besides that, it wonders whether Blockchain is going to take too long to be implemented or not by comparing it with TCP/IP’s journey. The text also compares Blockchain and TCP/IP to try to understand if the first is going to have the same implementation process in the market as the second. And it is stated that Blockchain is likely to take many years to be truly applied. A framework was created to understand the evolution of a foundation technology using two dimensions: novelty and complexity, along with single-use, substitution, transformation and localization. Companies such as JPMorgan and Bank of America are mentioned as users of the system. Lastly, the text shows, by means of a guide, how companies can start using Blockchain.

Principais contribuições

The authors say that Blockchain’s platform is able to store transactions between two parties including money, goods and properties. Transactions that are transformed in digital codes and are quite secure. It says that Blockchain is a foundational technology due to its potential to create new foundations for the economy and social systems, having an enormous impact in societies. The comparison established between Blockchain and TCP/IP is the implementation process. The TCP/IP took a long journey before its success among companies and people, starting with a single-use by researchers and bursting into broad public around 1990. So, it was necessary to gain critical mass and stabilize the infrastructure to revolutionize the whole world. The authors believe that the Blockchain’s process will be similar starting with the bitcoin as TCP/IP started with the e-mail. If the system is correctly accepted and implemented, it will cause a radical shift in the economy and Blockchain will be the system of record for all the transactions. Today we often need a third-party or a long time to process bank transactions, but with Blockchain it would take seconds to host the transactions, validate and store them in the safest way possible. A framework was created to understand the evolution of foundational technologies and the text says that organizations can use it to have a better usage of Blockchain’s system. The idea would be to start with the single-use (because there is a minor risk) adding Bitcoins as a payment method. After that, companies should go with localized applications (high in novelty) focused in a small number of users to create immediate value. But, they should be careful with substitute applications due to the difficulty of dislodging existing solutions. For this part it is advised for substitutes to deliver functionality and be an application easy to absorb and adopt. Finally, the transformative application will take a long time to be adopted yet and executives should have patience (since its adoption will require major social, legal and political changes), but it will, for sure, deliver an enormous value.

Análise crítica (pontos fortes e fracos)

I believe the content of the paper was outstanding. Besides some technical expressions, the comprehension of the text was easy. When the text talks about Blockchain being a revolutionary system, I completely agree. I believe life will be easier if we don’t depend on a third-party to complete transactions and it will be more secure to keep our informations on it. As the paper states, it will bring transparency to negotiations, purchasings, contracts, supply chain, etc. According to the authors it is still going to take a long time to adopt the system. I couldn’t agree more. If you asked me I would say that it will take a long time for developed countries, but a lot longer for underdeveloped countries. That is something I would like to have read in the text, however the authors didn’t discuss that. Last but not least, the guide advising how to start investing in this technology is magnificent. It really shows that it is possible to start your researches about it and adopt it.

Possibilidade de aplicação à realidade brasileira

In my opinion, Brazil is making its way into Blockchain’s technology. There have been studies in universities and the interest has been growing. As far as I am concerned the infrastructure needed is a high level one. It is necessary to improve, then, our infrastructure to be well prepared for the improvements concerning the Blockchain. I believe that the financial system in Brazil will be the most benefited. That is because nowadays we have many (and high) fees to make transactions. Our current system is secure, but it can be more secure with Blockchain. And we must have transparency as well. Applying that in our current market, I know that FIAP is a university that uses blockchain and accepts cryptocurrency as payment. Besides that, the presidential candidate Marina Silva used Blockchain to raise funds to her campaign. Her goal was to avoid frauds, have a transparent fundraising so everyone could check how much money she was receiving and where it was coming from. I think we still have a long way towards this technology and it will greatly benefit us.

Questão para debate (estritamente relacionada ao texto)

I have done some researches while writing this report and I am confused if Blockchain is or is not a disruptive innovation. The text says it is not, but many researches say it is. So, my question is: Is Blockchain a disruptive innovation or not? Is the financial market the one who is going to benefit the most from it?