2 Significance of the Study
Blockchain is a foundational technology that would transform industries. UAE is a global financial, trading and
marketing hub, and aspires to be a global leader. In that
sense, UAE should adopt this emerging foundational technology, invest in it and accordingly develop financial, marketing and other business and social applications. These
applications could create significant value and sustainable
economic growth. This study contributes to the existing
literature by identifying and discussing some important
blockchain applications for UAE. We also recommend how
these applications can benefit business, citizens and the UAE
government.
3 What Is Blockchain?
Blockchain technology is often mistakenly considered as
synonymous to Bitcoin. While Blockchain was firstly used
when Bitcoin was introduced (Yli-Huumo et al. 2016), it is a
technology with a much broader range of applications than
only cryptocurrencies. Many predict a plethora of applications, from government to healthcare and financial industries. Nevertheless, while expectations are high, the real
world impact of Blockchain is unclear, probably due to
inflated expectations (Seebacher and Schϋritz 2017). In that
sense there is significant uncertainty surrounding the technology itself and the realization of its applications. Due to
the continuous development of the Blockchain technology
and its applications there are different approaches to define
it. Therefore, a generally accepted definition does not exist
(Seebacher and Schϋritz 2017).
The definition of Blockchain is usually based on its
characteristics and considerably varies across different
studies. Seebacher and Schüritz (Seebacher and Schϋritz
2017) in a literature review identify 11 distinct characteristics of Blockchain Technology and some authors associate it
with only one (Lewenberg et al. 2015), while others with ten
(Beck et al. 2016). This example illustrates the variability of
characteristics and consequently the definitions of Blockchain. Many studies on Blockchain are concerned with
technical aspects. Accordingly, these studies focus on the
technical aspects of the Blockchain technology. There is no
doubt that the technical features of Blockchain are crucial to
its characterization and definition. Nevertheless, our research
regards its application to the business environment. Thus, we
would concentrate on the characteristics for the Blockchain
technology applications.
A useful characterization of Blockchain in respect to
organizations and business applications, is that it is distributed and encrypted (Tapscott and Tapscott 2017).
1 The
term distributed features technical characteristics, but at the
same time it can denote business characteristics, as decentralization in organizations, peer to peer exchange, and the
lack of intermediaries. Encrypted is another crucial characteristic and largely, enables distributed systems. Encryption
provides the security level for peer to peer exchange, without
the need for a trusted third party (intermediary). It therefore
enables peer to peer exchange and decentralization by providing trust through security for distributed systems.
Encrypted can respectively denote trust and peer verification.
2 Encryption is especially critical when there is
exchange of significant value. Personal information as well
as business contracts and currency are some examples of
Blockchain applications, where a high level of trust can be
secured by cryptography.
4 General Applications of Blockchain
Technology
While the literature on Blockchain is increasingly expanding, most of the studies have not considered a comprehensive discussion of blockchain applications (Tama et al.
2017). The lack of comprehensive studies can be mainly due
to the limits of realizing in practice of blockchain technology. There is overwhelming amount of hype expectations
regarding blockchain technology over the past years, and a
high number of ‘evangelists’, people who believe that
blockchain applications can solve everything (Mulligan et al.
2018). It is important to emphasize that many of the
Blockchain applications are theorical rather than applied in
practice. However due to its potential, Blockchain develops
very fast and can be therefore considered an important
emerging technology.
In addition, the investment in this technology seems to
exponentially increase, enabling Blockchain applications to
have the necessary funding and accordingly to grow quicker.
According to data by Pitchbook, in the three quarters of
2018, blockchain and crypto companies have raised nearly
$3.9 Billion in traditional Venture Capital, which in just
three quarters is around 280% more than 2017 (Diar 2018).
3
The number of deals also nearly doubled from last year and
1
Tapscott and Tapscott (2017) identify a third advantage (characteristic), public; that anyone can view blockchain because they reside in the
network. Although this is true for Bitcoin and other applications,
Blockchain can be also private. Thus, we prefer to adopt a more general
approach in our analysis and overlook this characteristic, although we
recognize its importance.
2
This are two important characteristics identified by (Seebacher and
Schϋritz 2017).
3
https://diar.co/volume-2-issue-39/.
88
P. N. Petratos et al.
Blockchain is a foundational technology that would transform industries. UAE is a global financial, trading and
marketing hub, and aspires to be a global leader. In that
sense, UAE should adopt this emerging foundational technology, invest in it and accordingly develop financial, marketing and other business and social applications. These
applications could create significant value and sustainable
economic growth. This study contributes to the existing
literature by identifying and discussing some important
blockchain applications for UAE. We also recommend how
these applications can benefit business, citizens and the UAE
government.
3 What Is Blockchain?
Blockchain technology is often mistakenly considered as
synonymous to Bitcoin. While Blockchain was firstly used
when Bitcoin was introduced (Yli-Huumo et al. 2016), it is a
technology with a much broader range of applications than
only cryptocurrencies. Many predict a plethora of applications, from government to healthcare and financial industries. Nevertheless, while expectations are high, the real
world impact of Blockchain is unclear, probably due to
inflated expectations (Seebacher and Schϋritz 2017). In that
sense there is significant uncertainty surrounding the technology itself and the realization of its applications. Due to
the continuous development of the Blockchain technology
and its applications there are different approaches to define
it. Therefore, a generally accepted definition does not exist
(Seebacher and Schϋritz 2017).
The definition of Blockchain is usually based on its
characteristics and considerably varies across different
studies. Seebacher and Schüritz (Seebacher and Schϋritz
2017) in a literature review identify 11 distinct characteristics of Blockchain Technology and some authors associate it
with only one (Lewenberg et al. 2015), while others with ten
(Beck et al. 2016). This example illustrates the variability of
characteristics and consequently the definitions of Blockchain. Many studies on Blockchain are concerned with
technical aspects. Accordingly, these studies focus on the
technical aspects of the Blockchain technology. There is no
doubt that the technical features of Blockchain are crucial to
its characterization and definition. Nevertheless, our research
regards its application to the business environment. Thus, we
would concentrate on the characteristics for the Blockchain
technology applications.
A useful characterization of Blockchain in respect to
organizations and business applications, is that it is distributed and encrypted (Tapscott and Tapscott 2017).
1 The
term distributed features technical characteristics, but at the
same time it can denote business characteristics, as decentralization in organizations, peer to peer exchange, and the
lack of intermediaries. Encrypted is another crucial characteristic and largely, enables distributed systems. Encryption
provides the security level for peer to peer exchange, without
the need for a trusted third party (intermediary). It therefore
enables peer to peer exchange and decentralization by providing trust through security for distributed systems.
Encrypted can respectively denote trust and peer verification.
2 Encryption is especially critical when there is
exchange of significant value. Personal information as well
as business contracts and currency are some examples of
Blockchain applications, where a high level of trust can be
secured by cryptography.
4 General Applications of Blockchain
Technology
While the literature on Blockchain is increasingly expanding, most of the studies have not considered a comprehensive discussion of blockchain applications (Tama et al.
2017). The lack of comprehensive studies can be mainly due
to the limits of realizing in practice of blockchain technology. There is overwhelming amount of hype expectations
regarding blockchain technology over the past years, and a
high number of ‘evangelists’, people who believe that
blockchain applications can solve everything (Mulligan et al.
2018). It is important to emphasize that many of the
Blockchain applications are theorical rather than applied in
practice. However due to its potential, Blockchain develops
very fast and can be therefore considered an important
emerging technology.
In addition, the investment in this technology seems to
exponentially increase, enabling Blockchain applications to
have the necessary funding and accordingly to grow quicker.
According to data by Pitchbook, in the three quarters of
2018, blockchain and crypto companies have raised nearly
$3.9 Billion in traditional Venture Capital, which in just
three quarters is around 280% more than 2017 (Diar 2018).
3
The number of deals also nearly doubled from last year and
1
Tapscott and Tapscott (2017) identify a third advantage (characteristic), public; that anyone can view blockchain because they reside in the
network. Although this is true for Bitcoin and other applications,
Blockchain can be also private. Thus, we prefer to adopt a more general
approach in our analysis and overlook this characteristic, although we
recognize its importance.
2
This are two important characteristics identified by (Seebacher and
Schϋritz 2017).
3
https://diar.co/volume-2-issue-39/.
88
P. N. Petratos et al.