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Article | Harvard Business Review | January–February 2017

The Truth about Blockchain

by Marco Iansiti and Karim R. Lakhani

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Abstract

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. The authors describe the path that blockchain is likely to follow and explain how firms should think about investments in it.

Keywords: Technological Innovation; Technology Adoption; Information Management; Information Technology Industry;

Format: Print Find at Harvard Register to Read

Citation:

Iansiti, Marco, and Karim R. Lakhani. "The Truth about Blockchain." Harvard Business Review 95, no. 1 (January–February 2017): 118–127.

About the Authors

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Marco Iansiti
David Sarnoff Professor of Business Administration
Unit Head, Technology and Operations Management
Technology and Operations Management

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Karim R. Lakhani
Charles Edward Wilson Professor of Business Administration
Technology and Operations Management

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More from these Authors

  • Case | HBS Case Collection | February 2018

    EmQuest: Travel Distribution in the Digital Era

    Karim R. Lakhani and Gamze Yucaoglu

    EmQuest, Emirates Group’s travel distribution company, must decide what to do with its contract with the global distribution system it uses, Sabre. Since its founding in 1988, EmQuest was servicing travel agents in the MENA region by providing a connection to over 400 airlines as well as numerous other travel suppliers. EmQuest mainly relied on Sabre to provide this service to the agents, and its contract was coming to an end.
    In the last decade years, since the beginning of EmQuest’s Sabre contract, while EmQuest grew, a lot happened in the travel industry: the Internet transformed customer habits, low-cost carriers emerged, and the Middle East experienced a boom in tourism. The conditions under which EmQuest had first signed its contract with Sabre a decade before were much different in 2017.
    With change happening so rapidly and impacting the fundamentals of the travel business model so dramatically, it was a real challenge to predict where the industry would be in the next decade. Yet the management needed to make a decision regarding the Sabre contract in 2017, amidst such a whirlwind in the market.

    Keywords: UAE; emerging markets; for-profit firms; business model; Business Strategy; competitive advantage; growth and development strategy; value creation; change management; decision; Business Model; Competitive Strategy; Growth and Development Strategy; Decision Choices and Conditions; Travel Industry; United Arab Emirates;

    Citation:

    Lakhani, Karim R., and Gamze Yucaoglu. "EmQuest: Travel Distribution in the Digital Era." Harvard Business School Case 618-040, February 2018.  View Details
    CiteView DetailsEducators Related
  • Case | HBS Case Collection | September 2015 (Revised October 2017)

    Vistron Inc.: The Z Glass Project

    Roy Shapiro and Marco Iansiti

    Keywords: Technology Industry;

    Citation:

    Shapiro, Roy, and Marco Iansiti. "Vistron Inc.: The Z Glass Project." Harvard Business School Case 616-002, September 2015. (Revised October 2017.)  View Details
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  • Article | Review of Economics and Statistics

    A Field Experiment on Search Costs and the Formation of Scientific Collaborations

    Karim R. Lakhani, Kevin Boudreau, Tom Brady, Ina Ganguli, Patrick Gaule, Eva C. Guinan and Anthony Hollenberg

    We present the results of a field experiment conducted at Harvard Medical School to understand the extent to which search costs affect matching among scientific collaborators. We generated exogenous variation in search costs for pairs of potential collaborators by randomly assigning individuals to 90-minute structured information-sharing sessions as part of a grant funding opportunity. We estimate that the treatment increases the probability of grant co-application of a given pair of researchers by 75%. The findings suggest that matching between scientists is subject to considerable friction, even in the case of geographically proximate scientists working in the same institutional context.

    Keywords: Cost; Marketplace Matching; Groups and Teams; Science;

    Citation:

    Lakhani, Karim R., Kevin Boudreau, Tom Brady, Ina Ganguli, Patrick Gaule, Eva C. Guinan, and Anthony Hollenberg. "A Field Experiment on Search Costs and the Formation of Scientific Collaborations." Review of Economics and Statistics 99, no. 4 (October 2017): 565–576.  View Details
    CiteView DetailsFind at Harvard Read Now Related
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