Since its introduction in 2008, blockchain technology has outgrown its use in cryptocurrencies and is now preparing to revolutionize a multitude of commercial applications including value and supply chains, business models, and market structures. This work follows design science research to guide the implementation of a blockchain-based proof-of-concept prototype that enables the automated transaction of real-world assets, such as cars, and provides a valid, transparent, and immutable record of vehicle history to market participants, authorities, and other third parties. The contribution of this study to existing research is threefold: First, it introduces a built-in mechanism to reduce transaction risk resulting from the irreversibility of transactions in blockchain-based systems. Second, it replaces a trust-based, centralized, and bureaucratic register with a tamper-free and autonomous transactional database system that comprises a secure registration and transaction process. Third, it proposes a novel approach to mitigate adverse selection effects in lemon markets by providing a reliable, transparent, and complete record of each marketable asset’s history. In total, the findings in this article illustrate the potential of blockchain-based systems but also highlight technological shortcomings and challenges for commercial applications, such as scalability or privacy issues.
Notheisen, Benedikt 60848387; Cholewa, Jacob Benjamin; and Shanmugam, Arun Prasad
"Trading Real-World Assets on Blockchain - An Application of Trust-Free Transaction Systems in the Market for Lemons,"
Business & Information Systems Engineering:
Vol. 59: Iss. 6, 425-440.
Available at: http://aisel.aisnet.org/bise/vol59/iss6/4