Commit or Not? How Blockchain Consortia form and Develop

What is it about?

In blockchain consortia, different companies band together to develop, govern, and operate a shared blockchain-based system. However, many blockchain-based systems are exposed to the risk of never going live without a proper understanding of the peculiar collaboration this technological architecture entails. To understand how blockchain consortia develop and advance collaborative relationships, this article reports on an extensive analysis of online material and interviews of key members. It draws from the literature on interorganizational collaboration and digital platforms to explain the staged progression of blockchain consortia and the key features of blockchain consortia.

Featured Image

Why is it important?

------------------------------------------------------- Contribution to Academic Scholarship ------------------------------------------------------- Drawing on literature on interorganizational collaboration and digital platforms as well as a comprehensive dataset including both qualitative and quantitative data, this articles highlights peculiarities of blockchain collaboration, explains the staged progression of blockchain consortia, and frames it according to an analogy to romantic partnerships. Based on our analysis, we suggest that blockchain-based systems remain different from other interorganizational systems because of their ‘coopting’ capacity, ie. their capacity to pull in external assets and commit them through the typical immutability of distributed ledgers. As such, blockchain consortia make sense where ‘make or buy’ decisions are not possible and ‘collaboration’ is hindered by low trust. ------------------------------------------------------- Contribution to Management Practice ------------------------------------------------------- We contribute to managerial practice by providing recommendations for the developmental stages of blockchain consortia. As an overarching theme, this article highlights the peculiarly front-loaded collaboration that blockchain’s technological architecture entails, which creates challenges especially in the early stages of design and development. This article is of interest for business leaders who want to establish or join a blockchain consortium, practitioners who are already involved in a blockchain consortium and may look for advice regarding the specific developmental stage that they are in as well as IT companies seeking to understand and develop their role in such collaborations. ---------------------------- Author Perspective ---------------------------- The extreme instability of permissionless blockchains for digital currencies suggested us to look at alternative modes of governance of blockchains. This drew our attention to the variety of blockchain consortia that have been formed, continue to be formed, and fail. Specifically, we became interested in the factors that influence the development and advancement of blockchain consortia. This led us to identify and explain the unique traits of blockchain collaboration as well as to carve out blockchain’s function as ‘organization technology’.