Blockchain is foundational not disruptive: Harvard professors
Although blockchain promises many benefits, it is a “foundational” rather than a “disruptive” model, say Harvard business administration professors Karim Lakhani and Marco Lansiti. In their paper “The Truth About Blockchain” in the Harvard Business Review, the pair describe blockchain as a new foundation for economic and social change, rather than an alteration of an existing model. Blockchain could radically change transaction costs and become a system of records for all transactions, though the challenges of introducing the technology and the complexity of its implementation must be addressed. Single-use applications could be the initial step to making blockchain truly transformative.

Summary.

Contracts, transactions, and records of them provide critical structure in our economic system, but they haven’t kept up with the world’s digital transformation. They’re like rush-hour gridlock trapping a Formula 1 race car.

Blockchain promises to solve this problem. The technology behind bitcoin, blockchain is an open, distributed ledger that records transactions safely, permanently, and very efficiently. For instance, while the transfer of a share of stock can now take up to a week, with blockchain it could happen in seconds. Blockchain could slash the cost of transactions and eliminate intermediaries like lawyers and bankers, and that could transform the economy. But, like the adoption of more internet technologies, blockchain’s adoption will require broad coordination and will take years. In this article the authors describe the path that blockchain is likely to follow and explain how firms should think about investments in it.