How Blockchain facilitates Smart City Applications- Development of a Multi-Layer Taxonomy

A decade after Satoshi Nakamoto published his famous whitepaper, blockchain technology (BT) has started to become widely recognized and used beyond the cryptocurrency Bitcoin. While the financial sector is the most prominent adopter of the technology, numerous other fields of application for the ground-breaking innovation are discussed by researchers and practitioners alike. One key area in which blockchain-based applications are expected to drive radical and disruptive innovation is smart cities. BT provides unique benefits which smart cities can leverage to improve quality of life, administrative processes, and environmental sustainability. However, due to the entrepreneurial dynamics and abundant fields of application for BT in smart cities, an integrated and boundary-spanning analysis is lacking. Thus, our paper aims at analysing how BT is used in different smart city business models to present a multi-layer taxonomy. For this purpose, we identified a global sample of 80 startups which offer products or services for smart cities and examined their business models. The paper explores economic and technological characteristics of blockchain based smart city applications. These unique insights will be useful for researchers, practitioners, and regulators.

[1]  Yves Pigneur,et al.  Business Model Generation: A handbook for visionaries, game changers and challengers , 2010 .

[2]  Annalisa Cocchia.  Smart and Digital City: A Systematic Literature Review , 2014 .

[3]  Vincenzo Morabito,et al.  Business Innovation Through Blockchain: The B³ Perspective , 2017 .

[4]  Markus Kraft,et al.  Blockchain technology in the chemical industry: Machine-to-machine electricity market , 2017 .

[5]  Roman Beck,et al.  Blockchain - the Gateway to Trust-Free Cryptographic Transactions , 2016, ECIS.

[6]  Michael Devetsikiotis,et al.  Blockchains and Smart Contracts for the Internet of Things , 2016, IEEE Access.

[7]  Vincenzo Morabito,et al.  Business Innovation Through Blockchain , 2017 .

[8]  Catherine Mulligan,et al.  Architectural implications of smart city business models: an evolutionary perspective , 2013, IEEE Communications Magazine.

[9]  M. Iansiti,et al.  The Truth about Blockchain , 2017 .

[10]  D. Teece.  Business Models, Business Strategy and Innovation , 2010 .

[11]  N. Komninos,et al.  Special Issue on Smart Cities and the Future Internet in Europe , 2012, Journal of the Knowledge Economy.

[12]  H. Chesbrough,et al.  Open Innovation: A New Paradigm for Understanding Industrial Innovation , 2006 .

[13]  Marko Malović,et al.  Demystifying Bitcoin: Sleight of Hand or Major Global Currency Alternative? , 2014 .

[14]  Satoshi Nakamoto.  Bitcoin : A Peer-to-Peer Electronic Cash System , 2009 .

[15]  Karin Axelsson,et al.  Stakeholders' Views on ICT and Sustainable Development in an Urban Development Project , 2014, ECIS.

[16]  Nigel Melville,et al.  Information Systems Innovation for Environmental Sustainability , 2010, MIS Q..

[17]  Rainer Alt,et al.  Sharing Economy , 2016, Bus. Inf. Syst. Eng..

[18]  Thomas A. Hemphill.  Firm Commitment: Why the Corporation is Failing Us and How to Restore Trust in It , 2014 .

[19]  Mattias Höjer,et al.  Smart sustainable cities - Exploring ICT solutions for reduced energy use in cities , 2014, Environ. Model. Softw..

[20]  Solveig Wikström.  Value creation by company‐consumer interaction , 1996 .

[21]  Stanley D. Brunn,et al.  Cyberinfrastructures and ‘Smart’ World Cities: Physical, Human and Soft Infrastructures , 2011 .

[22]  Zibin Zheng,et al.  Blockchain challenges and opportunities: a survey , 2018, Int. J. Web Grid Serv..

[23]  Cesare Pautasso,et al.  A Taxonomy of Blockchain-Based Systems for Architecture Design , 2017, 2017 IEEE International Conference on Software Architecture (ICSA).

[24]  Melanie Swan,et al.  Blockchain: Blueprint for a New Economy , 2015 .

[25]  Tomasz Janowski,et al.  Designing Next Generation Smart City Initiatives - harnessing Findings and Lessons from a Study of Ten Smart City Programs , 2014, ECIS.

[26]  Richard T. Watson,et al.  Information Systems and Environmentally Sustainable Development: Energy Informatics and New Directions for the IS Community , 2010, MIS Q..

[27]  Felix Wortmann,et al.  Initial Coin Offerings (ICOs): An Introduction to the Novel Funding Mechanism Based on Blockchain Technology , 2018, AMCIS.

[28]  José Ramón Gil-García,et al.  Understanding Smart Cities: An Integrative Framework , 2012, HICSS.

[29]  Lawrence Lessig,et al.  Remix: Making Art and Commerce Thrive in the Hybrid Economy , 2008 .

[30]  Jan Muntermann,et al.  What do FinTechs actually do? A Taxonomy of FinTech Business Models , 2017, ICIS.

[31]  Jean Tirole,et al.  Incomplete contracts: Where do we stand? , 1999 .

[32]  John Freeman,et al.  Models of Innovation: Startups and Mature Corporations , 2007 .

[33]  Clayton M. Christensen,et al.  Reinventing Your Business Model , 2008 .

[34]  Ali Sunyaev,et al.  From Hype to Reality: A Taxonomy of Blockchain Applications , 2019, HICSS.

[35]  Samir Chatterjee,et al.  Design of emerging digital services: a taxonomy , 2008, Eur. J. Inf. Syst..

[36]  Eric K. Clemons,et al.  Business Models , 2014, Bus. Inf. Syst. Eng..

[37]  Yves Pigneur,et al.  Clarifying Business Models: Origins, Present, and Future of the Concept , 2005, Commun. Assoc. Inf. Syst..

[38]  A. Kemp.  THE CONSTITUTION OF LIBERTY , 1960 .

[39]  R. Kanter,et al.  Informed and Interconnected: A Manifesto for Smarter Cities , 2009 .

[40]  Julia V. Gallenkamp,et al.  Power Control to the People? Private Consumers' Acceptance of Smart Meters , 2010, ECIS.

[41]  Theresa A. Pardo,et al.  Conceptualizing smart city with dimensions of technology, people, and institutions , 2011, dg.o '11.

[42]  J. Potts,et al.  Economics of Blockchain , 2016 .

[43]  Jan Muntermann,et al.  A method for taxonomy development and its application in information systems , 2013, Eur. J. Inf. Syst..

[44]  Alex Pentland,et al.  Decentralizing Privacy: Using Blockchain to Protect Personal Data , 2015, 2015 IEEE Security and Privacy Workshops.

[45]  Nils Urbach,et al.  Don't slip on the ICO - a Taxonomy for a Blockchain-Enabled Form of Crowdfunding , 2018, ECIS.

[46]  Florian Glaser,et al.  Pervasive Decentralisation of Digital Infrastructures: A Framework for Blockchain enabled System and Use Case Analysis , 2017, HICSS.

[47]  Maximilian Röglinger,et al.  Understanding FinTech start-ups – a taxonomy of consumer-oriented service offerings , 2017, Electronic Markets.

[48]  Sung S. Kim,et al.  Internet Users' Information Privacy-Protective Responses: A Taxonomy and a Nomological Model , 2008, MIS Q..

[49]  Chee-Wee Tan,et al.  Value Creation in Cryptocurrency Networks: Towards A Taxonomy of Digital Business Models for Bitcoin Companies , 2015, PACIS.

[50]  Friedrich Holotiuk,et al.  The Impact of Blockchain Technology on Business Models in the Payments Industry , 2017, Wirtschaftsinformatik.

[51]  Anna Bondesson,et al.  Evaluating sustainability of using ICT solutions in smart cities - methodology requirements , 2013 .

[52]  C. Harrison,et al.  A Theory of Smart Cities , 2011 .

[53]  Frank Teuteberg,et al.  Towards a Business Model Taxonomy of Startups in the Finance Sector using Blockchain , 2018, ICIS.

[54]  H. Chesbrough,et al.  Engaging with Startups to Enhance Corporate Innovation , 2015, Open Innovation Results.