Advertisement

Smart City Applications on the Blockchain: Development of a Multi-layer Taxonomy

Chapter
Part of the Progress in IS book series (PROIS)

Abstract

Blockchain Technology (BT) has become widely recognized beyond the financial sector. Various other fields of application for the ground-breaking innovation are discussed by researchers and practitioners alike. One such field is the smart city. Driven by startups, projects aimed at alleviating negative effects of urbanization build on the properties of BT to improve quality of life, administrative processes, and environmental sustainability. Yet, due to the entrepreneurial dynamics and abundant fields of application for BT in smart cities, an integrated and boundary-spanning analysis is lacking. This study aims at developing a multi-layer taxonomy that illustrates how BT is used in different smart city business models. For this purpose, we identified a sample of 80 startups which offer applications for smart cities and examined their business models. The paper explores business model configurations and technological characteristics of blockchain-based smart city applications. We identify BT startup archetypes in several domains: sharing economy, privacy and security, and internet of things (IoT). The paper will be useful for researchers, practitioners, and regulators interested in gaining novel insights about how startups leverage BT to create and capture value.

Keywords

Blockchain Smart city Taxonomy Business model 

References

  1. Anthopoulos, L., Fitsilis, P., & Ziozias, C. (2016). What is the source of smart city value? A business model analysis. International Journal of Electronic Government Research, 12(2), 56–76.CrossRefGoogle Scholar
  2. Beck, R., Czepluch, J. S., Lollike, N., & Malone, S. (2016). Blockchain–The gateway to trust-free cryptographic transactions. In Proceedings of the 24th Conference on Information Systems (ECIS), Istanbul, Turkey.Google Scholar
  3. Beck, R., Müller-Bloch, C., & King, J. L. (2018). Governance in the blockchain economy: A framework and research agenda. Journal of the Association for Information Systems, 1020–1034.  https://doi.org/10.17705/1jais.00518
  4. Beinke, J. H., Nguyen, D., & Teuteberg, F. (2018). Towards a business model taxonomy of startups in the finance sector using blockchain. In Proceedings of the 39th International Conference on Information Systems (ICIS), San Francisco, CA, USA.Google Scholar
  5. Biswas, K., & Muthukkumarasamy, V. (2017). Securing smart cities using blockchain technology. In Proceedings of the 18th IEEE International Conference on High Performance Computing and Communications, Sydney, Australia.Google Scholar
  6. Boulton, A., Brunn, S. D., & Devriendt, L. (2011). 18 Cyberinfrastructures and ‘smart’ world cities: Physical, human and soft infrastructures. In P. Taylor, B. Derudder, M. Hoyler, & F. Witlox (Eds.), International Handbook of Globalization and World Cities (pp. 198–208). Cheltenham, UK: Edward Elgar.Google Scholar
  7. Cachin, C., & Vukolić, M. (2017). Blockchains consensus protocols in the wild. In Proceedings of the 31st International Symposium on Distributed Computing, Vienna, Austria.Google Scholar
  8. Cardwell, D. (2017, March). Solar Experiment Lets Neighbors Trade Energy Among Themselves. Retrieved September 22, 2018 from https://www.nytimes.com/2017/03/13/business/energy-environment/brooklyn-solar-grid-energy-trading.html.
  9. Chanson, M., Risius, M., & Wortmann, F. (2018). Initial Coin Offerings (ICOs): An introduction to the novel funding mechanism based on blockchain technology. In Proceedings of the 24th Americas Conference on Information Systems (AMCIS), New Orleans, LA, USA.Google Scholar
  10. Chesbrough, H. (2006). Open innovation: A new paradigm for understanding industrial innovation. In H. Chesbrough, W. Vanhaverbeke, & J. West (Eds.), Open innovation: Researching a new paradigm (pp. 0–19). Oxford, UK: Oxford University Press.Google Scholar
  11. Chourabi, H., Nam, T., Walker, S., Gil-Garcia, J. R., Mellouli, S., Nahon, K.,… Scholl, H. J. (2012). Understanding smart cities: An integrative framework. In Proceedings of the 45th Hawaii International Conference on System Sciences (HICSS), Manoa, HI, USA.Google Scholar
  12. Christidis, K., & Devetsikiotis, M. (2016). Blockchains and smart contracts for the internet of things. IEEE Access, 4, 2292–2303.CrossRefGoogle Scholar
  13. Clohessy, T., Acton, T., & Morgan, L. (2014). Smart city as a service (SCaaS): A future roadmap for e-government smart city cloud computing initiatives. In Proceedings of the IEEE/ACM 7th International Conference on Utility and Cloud Computing, London, UK, pp. 836–841.Google Scholar
  14. Cocchia, A. (2014). Smart and digital city: A systematic literature review. In R. P. Dameri & C. Rosenthal-Sabroux (Eds.), Smart city (pp. 13–43). Berlin, Germany: Springer.Google Scholar
  15. Davidson, S., De Filippi, P., & Potts, J. (2016, March). Economics of Blockchain. Retrieved September 30, 2018 from https://ssrn.com/abstract=2744751.
  16. Eickhoff, M., Muntermann, J., & Weinrich, T. (2017). What do FinTechs actually do? A taxonomy of FinTech business models. In Proceedings of the 38th International Conference on Information Systems (ICIS), Seoul, South Korea.Google Scholar
  17. Fernández-Breis, J.T., Vivancos-Vicente, P.J., Menárguez-Tortosa, M., Moner, D., Maldonado, J.A., Valencia-García, R., & Miranda-Mena, T.G. (2006). Using semantic technologies to promote interoperability between electronic healthcare records’ information models. In Proceedings of the 2006 International Conference of the IEEE Engineering in Medicine and Biology Society, New York, NY, USA, pp. 2614–2617.Google Scholar
  18. Freeman, J., & Engel, J. S. (2007). Models of innovation: Startups and Mature Corporations. California Management Review, 50(1), 94–119.CrossRefGoogle Scholar
  19. Fridgen, G., Regner, F., Schweizer, A., & Urbach, N. (2018). Don’t slip on the ICO—A taxonomy for a Blockchain-enabled form of crowdfunding. In Proceedings of the 26th European Conference on Information Systems (ECIS), Portsmouth, United Kingdom.Google Scholar
  20. Gallup. (2016, June). Americans’ Confidence in Institutions Stays Low. Retrieved September 15, 2018 from https://www.gallup.com/poll/192581/americans-confidence-institutions-stays-low.aspx.
  21. Gimpel, H., Rau, D., & Röglinger, M. J. E. M. (2017). Understanding FinTech start-ups—A taxonomy of consumer-oriented service offerings. Electronic Markets, 28(3), 1–20.Google Scholar
  22. Glaeser, E. L., & Berry, C. R. (2006). Why are smart places getting smarter. Taubman Center Policy Briefs 2.Google Scholar
  23. Glaser, F. (2017). Pervasive decentralisation of digital infrastructures: A framework for blockchain enabled system and use case analysis. In Proceedings of the 50th Hawaii International Conference on System Sciences (HICSS), Manoa, HI, USA.Google Scholar
  24. Granath, M., & Axelsson, K. (2014). Stakeholders’ views on ICT and sustainable development in an urban development project. In Proceedings of the European Conference on Information Systems (ECIS), Tel Aviv, Israel.Google Scholar
  25. Harrison, C., & Donnelly, I. A. (2011). A theory of smart cities. In Proceedings of the 55th Annual Meeting of the ISSS, Hull, UK.Google Scholar
  26. Hashem, I. A. T., Chang, V., Anuar, N. B., Adewole, K., Yaqoob, I., Gani, A., … Chiroma, H. (2016). The role of big data in smart city. International Journal of Information Management, 36(5), 748–758.Google Scholar
  27. Hayek, F. Av. (1960). The constitution of liberty. Chicago, IL, USA: University of Chicago Press.Google Scholar
  28. Hileman, G. (2016, January). State of Bitcoin and Blockchain 2016: Blockchain hits Critical Mass. Retrieved October 10, 2018 from https://www.coindesk.com/state-of-bitcoin-blockchain-2016/.
  29. Holotiuk, F., Pisani, F., & Moormann, J. (2017). The impact of blockchain technology on business models in the payments industry. In Proceedings of the 13th International Conference on Wirtschaftsinformatik, St. Gallen, Switzerland.Google Scholar
  30. Iansiti, M., & Lakhani, K. R. (2017). The truth about blockchain. Harvard Business Review, 95(1), 118–127.Google Scholar
  31. Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing your business model. Harvard Business Review, 86(12), 57–68.Google Scholar
  32. Kazan, E., Tan, C.-W., & Lim, E. T. (2015). Value creation in cryptocurrency networks: Towards a taxonomy of digital business models for bitcoin companies. In Proceedings of the 19th Pacific Asia Conference on Information Systems (PACIS), Singapore.Google Scholar
  33. Kennedy, C., Stewart, I. D., Ibrahim, N., Facchini, A., & Mele, R. (2014). Developing a multi-layered indicator set for urban metabolism studies in megacities. Ecological Indicators, 47, 7–15.CrossRefGoogle Scholar
  34. Kiviat, T. I. (2015). “Smart” Contract Markets: Trading Derivatives Contracts on the Blockchain. Retrieved September 29, 2018 from https://www.academia.edu/10766594/_Smart_Contract_Markets_Trading_Derivatives_on_the_Blockchain.
  35. Komninos, N., Pallot, M., & Schaffers, H. (2013). Special issue on smart cities and the future internet in Europe. Journal of the Knowledge Economy, 4(2), 119–134.Google Scholar
  36. Kramers, A., Höjer, M., Lövehagen, N., & Wangel, J. (2014). Smart sustainable cities—Exploring ICT solutions for reduced energy use in cities. Environmental Modelling and Software, 56, 52–62.CrossRefGoogle Scholar
  37. Kranz, J., Gallenkamp, J., & Picot, A. (2010). Power control to the people? Private consumers’ acceptance of smart meters. In Proceedings of the 18th European Conference on Information Systems (ECIS), Pretoria, South Africa.Google Scholar
  38. Kranz, J, Nagel, E., Sandner, P., & Hopf, S. (2019). Blockchain token sale. In Business and information systems engineering (pp. 1–9). Retrieved May 25, 2019 from https://link.springer.com/article/10.1007/s12599-019-00598-z#citeas.
  39. Kuk, G., & Janssen, M. (2011). The business models and information architectures of smart cities. Journal of Urban Technology, 18(2), 39–52.CrossRefGoogle Scholar
  40. Labazova, O., Dehling, T., & Sunyaev, A. (2019). From hype to reality: A taxonomy of blockchain applications. In Proceedings of the 52nd Hawaii International Conference on System Sciences (HICSS), Manoa, HI, USA.Google Scholar
  41. Lee, J., Jung, D. K., Kim, Y., Lee, Y. W., & Kim, Y. M. (2010). Smart grid solutions, services, and business models focused on telco. In Proceedings of the 2010 IEEE/IFIP Network Operations and Management Symposium Workshops, Osaka, Japan, pp. 323–326.Google Scholar
  42. Lessig, L. (2008). Remix: Making art and commerce thrive in the hybrid economy. New York, NY, USA: The Penguin Press.CrossRefGoogle Scholar
  43. Lövehagen, N., & Bondesson, A. (2013). Evaluating sustainability of using ICT solutions in smart cities–Methodology requirements. In Proceedings of the International Conference on Information and Communication Technologies for Sustainability, Zurich, Switzerland.Google Scholar
  44. Lubin, J. (2016). Towards a dynamic economic, social and political mesh. In Proceedings of Devcon1 Developer Conference, Las Vegas, NV, USA.Google Scholar
  45. Magretta, J. (2002). Why business models matter. Harvard Business Review, 80(5), 3–8.Google Scholar
  46. Malović, M. (2014). Demystifying bitcoin: Sleight of hand or major global currency alternative? Economic Analysis, 47(1–2), 32–41.Google Scholar
  47. Manville, C., Cochrane, G., Cave, J., Millard, J., Pederson, J. K., Thaarup, R. K., … Kotterink, B. (2014). Mapping Smart Cities in the EU. Retrieved September 18, 2018 from https://www.rand.org/pubs/external_publications/EP50486.html.
  48. Mayer, C. (2013). Firm commitment: Why the corporation is failing us and how to restore trust in it. Oxford, UK: Oxford University Press.Google Scholar
  49. McElroy, W. (2017, January). Fedcoin: The U.S. Will Issue E-Currency That You Will Use. Retrieved September 11, 2018 from https://news.bitcoin.com/fedcoin-u-s-issue-e-currency/.
  50. Melville, N. P. (2010). Information systems innovation for environmental sustainability. MIS Quarterly, 34(1), 1–21.CrossRefGoogle Scholar
  51. Morabito, V. (2017). Business innovation through blockchain: The B3 perspective. Berlin, Germany: Springer.CrossRefGoogle Scholar
  52. Moss Kanter, R., & Litow, S. S. (2009). Informed and interconnected: A manifesto for smarter cities. Harvard Business School General Management Unit Working Paper 09-14. Retrieved October 22, 2018 from https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1420236.
  53. Mulligan, C. E., & Olsson, M. (2013). Architectural implications of smart city business models: An evolutionary perspective. IEEE Communications Magazine, 51(6), 80–85.CrossRefGoogle Scholar
  54. Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. Retrieved September 15, 2018 from https://bitcoin.org/bitcoin.pdf.
  55. Nam, T., & Pardo, T. A. (2011). Conceptualizing smart city with dimensions of technology, people, and institutions. In Proceedings of the 12th Annual International Digital Government Research Conference: Digital Government Innovation in Challenging Times, College Park, MD, USA.Google Scholar
  56. Nickerson, R. C., Varshney, U., & Muntermann, J. (2013). A method for taxonomy development and its application in information systems. European Journal of Information Systems, 22(3), 336–359.CrossRefGoogle Scholar
  57. Nofer, M., Gomber, P., Hinz, O., & Schiereck, D. (2017). Blockchain. Business and Information Systems Engineering, 59(3), 183–187.CrossRefGoogle Scholar
  58. OECD. (2017). Does Technology Against Corruption Always Lead to Benefit? The Potential Risks and Challenges of the Blockchain Technology. Retrieved September 30, 2018 from https://www.oecd.org/cleangovbiz/Integrity-Forum-2017-Kim-Kang-blockchain-technology.pdf.
  59. Ojo, A., Curry, E., & Janowski, T. (2014). Designing next generation smart city initiatives–harnessing findings and lessons from a study of ten smart city programs. In Proceedings of the European Conference on Information Systems (ECIS), Tel Aviv, Israel.Google Scholar
  60. Orsini, L., Wei, Y., & Lubin, J. (2016). Use of blockchain based distributed consensus control. Google Patents. Retrieved September 20, 2018 from https://patents.google.com/patent/US20170103468A1/en.
  61. Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. Hokoben, NJ, USA: Wiley.Google Scholar
  62. Osterwalder, A., Pigneur, Y., & Tucci, C. L. (2005). Clarifying business models: Origins, present, and future of the concept. Communications of the Association for Information Systems, 16(1), 1–25.Google Scholar
  63. Pick, F., & Dreher, J. (2015, May). Sustaining hierarchy–Uber isn’t sharing. Kings Review 5. Retrieved October 20, 2018 from https://www.researchgate.net/profile/Julia_Dreher/publication/275889451_Sustaining_Hierarchy_-_Uber_isn't_sharing/links/5552753908ae980ca606afbb.pdf.
  64. Pieroni, A., Scarpato, N., Di Nunzio, L., Fallucchi, F., & Raso, M. (2018). Smarter city: Smart energy grid based on blockchain technology. International Journal on Advanced Science, Engineering and Information Technology, 8(1), 298–306.CrossRefGoogle Scholar
  65. Püschel, L., Röglinger, M., & Schlott, H. (2016). What's in a smart thing? Development of a multi-layer taxonomy. In Proceedings of the 37th International Conference on Information Systems (ICIS), Dublin, Ireland.Google Scholar
  66. Puschmann, T., & Alt, R. (2016). Sharing economy. Business and Information Systems Engineering, 58(1), 93–99.CrossRefGoogle Scholar
  67. Rivera, R., Robledo, J. G., Larios, V. M., & Avalos, J. M. (2017). How digital identity on blockchain can contribute in a smart city environment. In Proceedings of the 2017 International Smart Cities Conference (ISC2), Ho Chi Minh City, Vietnam.Google Scholar
  68. Rizzo, P. (2016, September). Blockchain to Drive Wanxiang’s $30 Billion Smart Cities Initiative. Retrieved September 25, 2018 from https://www.coindesk.com/blockchain-smart-cities-china-wanxiang/.
  69. Rizzo, P. (2017, March 14). Dubai Government Taps IBM for City-Wide Blockchain Pilot Push. Retrieved September 10, 2018 from https://www.coindesk.com/dubai-government-ibm-city-blockchain-pilot/.
  70. Sharma, P. K., Moon, S. Y., & Park, J. H. (2017). Block-VN: A distributed blockchain based vehicular network architecture in smart city. Journal of Information Processing Systems, 13(1), 184–195.Google Scholar
  71. Sikorski, J. J., Haughton, J., & Kraft, M. (2017). Blockchain technology in the chemical industry: Machine-to-machine electricity market. Applied Energy, 195, 234–246.CrossRefGoogle Scholar
  72. Son, J. -Y., & Kim, S. S. (2008). Internet users’ information privacy-protective responses: A taxonomy and a nomological model. MIS Quarterly, 32(3), 503–529.CrossRefGoogle Scholar
  73. Stoll, C., Klaaßen, L., & Gallersdörfer, U. (2019). The carbon footprint of bitcoin. MIT CEEPR Working Paper Series 2018-018. Retrieved November 1, 2019 from https://ceepr.mit.edu/files/papers/2018-018.pdf.
  74. Swan, M. (2015). Blockchain: Blueprint for a new economy. Sebastopol, CA: O’Reilly Media Inc.Google Scholar
  75. Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2), 172–194.CrossRefGoogle Scholar
  76. Timmers, P. (1998). Business models for electronic markets. Electronic Markets, 8(2), 3–8.CrossRefGoogle Scholar
  77. Tirole, J. (1999). Incomplete contracts: where do we stand? Econometrica, 67(4), 741–781.CrossRefGoogle Scholar
  78. Underwood, S. (2016). Blockchain beyond bitcoin. Communications of the ACM, 59(11), 15–17.CrossRefGoogle Scholar
  79. United Nations. (2016). The World’s Cities in 2016. Retrieved September 15, 2018 from https://www.un.org/en/development/desa/population/publications/pdf/urbanization/the_worlds_cities_in_2016_data_booklet.pdf.
  80. Veit, D., Clemons, E., Benlian, A., Buxmann, P., Hess, T., Kundisch, D., … Spann, M. (2014). Business models. Business and Information Systems Engineering, 6(1), 45–53.Google Scholar
  81. von Krogh, G., Rossi-Lamastra, C., & Haefliger, S. (2012). Phenomenon-based research in management and organisation science: When is it rigorous and does it matter? Long Range Planning, 45(4), 277–298.CrossRefGoogle Scholar
  82. Walravens, N. (2015). Qualitative indicators for smart city business models: The case of mobile services and applications. Telecommunications Policy, 39(3–4), 218–240.CrossRefGoogle Scholar
  83. Walsh, C., OReilly, P., Gleasure, R., Feller, J., Li, S., & Cristoforo, J. (2016). New kid on the block: A strategic archetypes approach to understanding the blockchain. In Proceedings of the 37th International Conference on Information Systems (ICIS), Dublin, Ireland.Google Scholar
  84. Washburn, D., Sindhu, U., Balaouras, S., Dines, R. A., Hayes, N., & Nelson, L. E. (2009). Helping CIOs Understand “smart city” initiatives. Growth, 17(2), 1–17.Google Scholar
  85. Watson, R. T., Boudreau, M. -C., & Chen, A. J. (2010). Information systems and environmentally sustainable development: Energy informatics and new directions for the IS community. MIS Quarterly, 34(1), 23–38.CrossRefGoogle Scholar
  86. Weiblen, T., & Chesbrough, H. W. (2015). Engaging with startups to enhance corporate innovation. California Management Review, 57(2), 66–90.CrossRefGoogle Scholar
  87. Wikström, S. (1996). Value creation by company-consumer interaction. Journal of Marketing Management, 12(5), 359–374.CrossRefGoogle Scholar
  88. Williams, K., Chatterjee, S., & Rossi, M. (2008). Design of emerging digital services: A taxonomy. European Journal of Information Systems, 17(5), 505–517.CrossRefGoogle Scholar
  89. Xu, X., Weber, I., Staples, M., Zhu, L., Bosch, J., Bass, L., … Rimba, P. (2017). A taxonomy of blockchain-based systems for architecture design. In Proceedings of the 2017 IEEE International Conference on Software Architecture (ICSA), Gothenburg, Sweden.Google Scholar
  90. Yoo, Y. (2010). Computing in everyday life: A call for research on experiential computing. MIS Quarterly, 34(2), 213–231.CrossRefGoogle Scholar
  91. Yoo, Y., Boland, R. J., Jr., Lyytinen, K., & Majchrzak, A. (2012). Organizing for innovation in the digitized world. Organization Science, 23(5), 1398–1408.CrossRefGoogle Scholar
  92. Zheng, Z., Xie, S., Dai, H. -N., & Wang, H. (2016). Blockchain Challenges and opportunities: A survey. International Journal of Web and Grid Services, 14(4), 352–375.CrossRefGoogle Scholar
  93. Zyskind, G., & Nathan, O. (2015). Decentralizing privacy: Using blockchain to protect personal data. In Proceedings of the 36th IEEE Symposium on Security and Privacy Workshops, San Jose, CA, USA, pp. 180–184.Google Scholar

Copyright information

© Springer Nature Switzerland AG 2020

Authors and Affiliations

  1. 1.Ludwig Maximilian University of MunichMunichGermany

Personalised recommendations