lumineau et al. (2021)

Question 1

blockchain

Answer 1

a cryptography-based decentralised system consisting of an ongoing list of digital records that are shared within a peer-to-peer network (ie. a chain of blocks of digital records). many experts regard it as one of the most distruptive technological innovations that may change how collaborations are organised.

Question 2

traditional financial models

Answer 2

rely heavily on intermediary institutions such as banks. they are important in solving the classic double-spending problem and keep ledgers for every account and verify each transaction. they are efficient and convenient but risky because of possible tampering of a record or being hacked.

Question 3

classic double-spending problem

Answer 3

the possibility that one unit of digital cash can be spent twice by the same party.

Question 4

Bitcoin

Answer 4

a type of cryptocurrency introduced in 2008 that solved the double-spending problem without recourse to a centralised authority. the ledgers are distributed to everyone who has access to the internet. via consensus algorithms, everyone shares and keeps an identical list of transaction records. these records are stored in blocks that are linked linearly using cryptographic hash functions and can be traced back to the genesis block.

Question 5

cryptographic hash functions

Answer 5

one-way mathematical functions that map data of any size to data of a fixed size.

Question 6

genesis block

Answer 6

the first block back to which every other block can be traced.

Question 7

miners

Answer 7

some servers (computers) in the blockchain that are incentivised by token rewards to verify every claimed transaction and propagate valid ones to the rest of the system. thus, no one is able to spend a bitcoin twice. it is made costly by a consensus mechanism called proof-of-work.

Question 8

proof-of-work

Answer 8

a consensus mechanism that makes validating processes deliberately costly. no single node has the required computational power to fake transaction records. so, in bitcoin blockchain, all information is immutable and trustworthy.

Question 9

IBM, AIG, and Standard Chartered Bank’s insurance blockchain

Answer 9

enables a shared, real-time view of policy data and documentation to all parties involved and permits the recording and tracking of events in each country and the automatic execution of payments if prespecified conditions are met.

Question 10

General Services Administration (GSA)

Answer 10

a federal agency providing procurement services for US government offices and one of the largest buyers globally. it initiated a collaboration with United Solutions to develop a new procurement blockchain.

Question 11

immutable

Answer 11

no single party can change information without the consensus of all the nodes in the network.

Question 12

consensus in a centralised network

Answer 12

relies on the central party distributing information and other parties accepting such information as the agreed truth. information is controlled by a single party who is the sole information holder and decision maker.

Question 13

consensus in a decentralised network

Answer 13

requires careful design of the consensus algorithms. blockchains provide a solution to this problem.

Question 14

consensus in blockchain

Answer 14

no single party owns the whole decision right. more than one party verifies, accepts, or rejects transactions. thus, control is shared and entities can update and interact directly without relying on central coordination. a major benefit is data integrity.

Question 15

machine-based automation

Answer 15

blockchains are run automatically on machine-driven systems. machines are at the centre of collaborations. it gives the ability to bypass human actors’ unpredictability and inability to process massive amounts of information, and to exploit benefits of machines, eg. reliability and faster and cheaper computation.

Question 16

smart contracts

Answer 16

programs written in the blockchain that automatically verify and approve valid transactions that satisfy prescribed protocols.

Question 17

architectural innovation

Answer 17

rests on the recombination of existing components in previously unforeseen ways. blockchain is an example as it blends existing technologies such as cryptography and distributed databases.

Question 18

coordination

Answer 18

about aligning expectations between transacting parties. to seek solutions to coordination challenges, partners turn to governance mechanisms, such as (1) contractual and (2) relational governance mechanisms.

Question 19

contracts

Answer 19

legally enforceable agreements giving rise to obligations that are enforced or recognised by law. they effectively protect the investment of transacting parties from opportunistic inclinations of partners. also, they serve as a mechanisms for facilitating coordination and communication to help build a collaborative environment.

Question 20

contractual governance

Answer 20

relates to a legally binding promise defining the rights and obligations of the parties. in case of a breach, the law ensures the injured party can pursue legal remedies such as compensation or cancellation. the basic purpose is to prevent changes in the actions of the parties to an agreement.

Question 21

relational governance

Answer 21

based on the patterns of behaviour to which parties are expected to conform. it emphasises flexible arrangements and extensive information exchange to establish a shared value system and sense of solidarity between partners. it relies on self-enforcing agreements.

Question 22

self-enforcing agreements

Answer 22

enforced only by the parties themselves.

Question 23

blockchain governance

Answer 23

represents a self-contained and autonomous system of formal rules. it relies on a set of protocols and code-based rules (eg. smart contracts), which are automatically enforced by the underlying blockchain based network. it creates order without law and implements what can be thought of as private regulatory frameworks.

Question 24

cooperation failure

Answer 24

the potential opportunism in human nature. blockchains mitigate this at its source by employing machines to automatically execute transactions.

Question 25

procedural coordination

Answer 25

day-to-day communication and exchange of information.

Question 26

structural coordination

Answer 26

the distribution of rights and responsibilities in a relationship, such as the division of labour, roles, and task descriptions.