Effect of Cryptocurrency On Business Model Innovatio1

EFFECT OF CRYPTOCURRENCY ON BUSINESS MODEL INNOVATION
Effect of Cryptocurrency on Business Model Innovation
Student Details
University Details
Course Details
Date
0
Table of Contents
Abstract 3
Chapter 1: Introduction ..4
Chapter 2: Literature Review .7
2.1: Innovation ..7
2.2: Business model innovation .9
2.3 cryptocurrency ...17
2.4 BMI & cryptocurrency ...19
Chapter 3: Methodology .21
3.1 Research design 21
3.2 Research purpose..22
3.3 Research sample24
3.4 Research method ..23
3.5 Research Limitations and solutions.25
3.6 Scope for further research.26
Chapter 4: Findings and Discussions.26
Conclusion and Recommendation..36
References .38
1
List of Figures
Figure 1: Innovation Types .7
Figure 2: BMI Canvas..10
Figure 3: BMI Types.....12
Figure 4: Analytical Framework..13
Figure 5: How Cryptocurrencies work16
Figure 6: Selection of literature24
2
Abstract
This paper analyzes the effects of cryptocurrency like bitcoins on the business model
innovation. For this purpose, this paper first introduces and explains the fundamental
concepts along with comprehensive examples to get the reader on page for the second
element of discussion which is the influence of modern day disruptive innovation
technology in transactions and financial systems as done and planned by
cryptocurrency companies. This paper uses scholarly literature as the foundation for
discussing and explaining the fundamental (first) as well as second phase of discussion.
The examples are cited and taken from the scholarly literature. This paper
comprehensively explains innovation, BMI, categories of innovation, types of BMI,
business model framework (BMF), value creation, value capturing, procedures of value
creation and value capturing. The second phase of discussion involves the idea,
introduction and adoption of Bitcoins and there correlation with BMI which also takes in
the influences of cryptocurrency on BMI levels (six levels of BMI). The limitation of this
research is that it is only theoretical and it does not portray the real time scenarios of
influences of cryptocurrency technology on BMI. However, it does provide real time
examples of companies in discussing and explaining the basic concepts. The
methodology involves consultations, interviews and expert opinions on the influences
being discussed. People from the real business companies have been consulted and
their views have been recorded and portrayed in this research paper. Business model
innovation provides with the working and operational concepts that can beat any
innovation in the market. Examples for good BMIs are discussed in this paper like
Apple, Wal-Mart and Dell. Cryptocurrency roots out conventional banking systems and
provides a decentralized transactions system along with providing anonymity to both the
parties making the transactions thus giving the power to the user and no third party can
access or view the details of these deals and agreements Mining, Wallet services,
Cryptocurrency storage and log keeping, and finally the smart contracts.
3
Chapter 1: Introduction
Innovation is a term that has evolved alongside the evolution of human beings and
business. In the recent past, innovation was taken as the investment in R&D and most
up to date research laboratories, having the most updated technologies, and hiring the
most intelligent and brilliant people a company could find. The company would use
these features in order to produce novel products and earn the maximum output from
those products. The other companies would not even try to do these adventures since
they took so much of expenditure, less reliability if the product didnt acquire interest
from the people and thus risks of huge losses. In current era, the cost of creation of a
completely new R&D based product and its shipping cost too much these days. Another
factor that plays its part in this worse situation is the shortening of product lives. The
products that have shorter lives turn out to become commodities and commodities are
often replaced pretty quickly. Thus the companies do not have enough time to earn
good revenues before the products become commodities. This kind of situation which is
the situation of the current market, give rise to the idea of having a business model
rather than having a business idea or nicer product. Business models matter. An
improved business model frequently will beat a better idea or technology (Chesbrough,
2007). Thus a company is better off if it has a good business model rather than an idea
or technology which used to be the strong points of companies in the past but not
anymore. Wal-Mart in retailing services, Dell in PCs, and Southwest airlines are best
examples in their fields of having a good business models.
Business model has become the key necessity for current era business companies and
by understanding the concepts associated with business models and their innovation,
we come to know that every business company has a business model whether it depicts
any or not. Business models are supposed to perform two main functions; firstly value
creation and secondly value capturing. The activities undermined and performed during
the procedure of procuring the raw materials up till accomplishing the satisfaction of
consumers produce a newer product or service and produce a net value during all these
activities and this value is the reason other companies are involved in business with the
company conducting this procedure. This is the creation of value and occurs during
4
these activities from procuring till satisfaction of consumers. The business model
captures some of the value from those activities for the business company that holds
the authority of conducting and operating those activities. Both these functions are very
important for the company as one keeps the other companies tied to the host company
and the second keeps providing revenues and profits to the company. If the company
does not get any value from the activities performed then the company cannot sustain
those activities for very long as they act to dismantle the financial base of company and
give no outcome.
Business models are becoming a trend these days but business model innovations are
still not properly understood by majority of the business companies (Bucherer et al.,
2012). People often mix the concept of business model innovation with product
innovation. Although product innovation also produces better results sometimes but
business model innovation is a system that ensures long time sustainability and
reliability of a business company and its products. Wal-Mart, Southwest airlines and
Dell did not work to innovate their products as strongly as they adopted non-immitatable
and innovative business models. Thus business model innovation is pretty much
different from the product innovation and process innovation (Zott & Amit, 2002).
Products, processes and services despite of being unique and innovative can always be
copied and imitated but the business model innovations are comprehensive, systematic
and are based on larger scale mostly in the span of whole organizations, which make it
very much difficult for the competitors to imitate business models and business model
innovations (Kim & Mauborgne, 1999). Business models are difficult to imitate because
they include the factors like organizational culture, employee skill set, companys core
competencies, companys strategies. Moreover business model imitation and
implementation takes huge amount of time which might not be feasible for a company
as there is always a chance of spoiling the procedures as all imitations do not prove to
work as strongly as they do for the companies that create them. (Bucherer et al., 2012)
Bitcoin is the first and most important cryptocurrency invented by Satoshi Nakamoto on
09 January 2009. It is a new electronic cash payment system that utilizes peer-to-peer
networking and prevents double spending of a single coin. This currency system is
5
completely decentralized and there exists no central authority monitoring or controlling

the transactions and procedures but a detail of each and every transaction or movement
of bitcoins from one person to another is available for public to view keeping both the
parties anonymous. This type of system ensures that there is no double spending of a
single coin which is lacked by the currency banking systems as they are not as much
open as cryptocurrency system. In the recent couple of decades, there have been
multiple attempts of creating digital currency but all of them failed in creating a non-trust
based system that is decentralized. The biggest problem with decentralized digital cash
system is the double spending of currency by a single user. This issue is easier to solve
in a centralized system where the central authority keeps track of all the transactions
and maintains a database that prohibits spending of the same currency twice by a
single user. Satoshi made it possible by finding the missing pieces of codes that all
other attempted systems lacked. He made the absolute consensus of all the peers of a
network on each and every transaction possible which is considered to be the major
invention as people believed that such a creation is impossible. (Davis, 2011)
Now with the advent of cryptocurrency, there is a lot of interest, discussion and
proliferation of startups and accompanied with those startups, a lot of capital investment
opportunities and thoughts for investments for creation and capturing of value from such
networks and businesses. The cryptocurrency companies with their already set
business models make use of strategic management and information systems in order
to capture value from the digital business models (Kazan et al., 2015). Further details of
how these companies capture value from the business models in place regarding
cryptocurrencies are discussed in the following chapters.
6
Chapter 2: Literature Review
2.1 Innovation
The literature provides extensive details and relationships aspects of types of

innovations on various parts and procedures of a business company. However some
types that have been extensively discussed are product, process, incremental and
radical innovations (Sciulli, 1998). Radical innovation is also known as disruptive
innovation and is named so because of its influence on the existing market. This type of
innovation creates big changes in the economic market and sometimes changes the
fortune and fate of the existing markets. It might open up a completely newer market
and draw the existing consumers towards the newer market thus bankrupting the
existing businesses. However, incremental innovation is more prevalent and is
dominant. Incremental innovation involves the advancement and enhancing of the
existing service or product by introducing better ways of producing it or modifying some
parts of it in order to increase efficiency. Schumpeter mentions the radical innovation to
be the disruptive one as they creative disruptive changes while incremental innovations
continuously advance the process of change (Johannsson et al., 2001) (Schumpeter,
1942).
7
Figure 1: Innovation Types
(Hinch et al., 2010)
Product innovation involves the extensive modification and improvement of a product

considering the characteristics and usage properties. The modifications might be done
in technical specifications, comprising parts, material of making, software, user
friendliness and other properties. The key point thus remains the intense modification
and improvement of a product for the users to be more interested and allured towards
the product. For example the first mp3 player or first microprocessors or digital cameras
combined various technologies in order to produce a very much enhanced and modified
product (Manual, 2005). Process innovation however is the modification and
advancement in the procedures and practices that are used in order to produce the
product or service. The methods by which certain products are produced can be
improved and newer and more sustainable methods can be adopted in order to produce
long lasting, environment friendly and specification wise better products (Fritsch &
Meschede, 2001). Thus process innovation involves the advancement of production
methods for example introduction of RFID in the field of tracking systems and the
introduction of bar code mechanisms in those RFIDs.
All these types of innovations carry their respective importance and impacts in the
business environment and field. The business environment is not stagnant but is
constantly improving and changing at a great speed. Every day we come across newer
modifications, advancements and enhancements in the products and the products along
with the inventions and introduction of newer products and services. Thus in order to
survive and thrive in this competitive and fast paced rapidly changing business
environment, innovation has become a key to success for the business companies
(Highsmith & Cockburn, 2001). Now whenever a business company carries out its
operation within a regime and targets a specific set of population in its consumer base,
it makes use of a business model which is the name of design and architecture of the
value, its creation and capturing revenues as profits. This field too has space for
innovation and is named as business model innovation (Teece, 2010).
8
2.2 Business Model Innovation
Business models are and have always been there with or without the company knowing
it. Some companies define and act upon their defined business models and keep on
innovating it step by step and with the passage of time while some of them dont even
know that they have a business model. The companies that are talked about mostly for
their successful business model innovations are Apple, Dell, Amazon and Wal-Mart
(Sosna et al., 2010). These companies have proved that the business model changes
are the most sustainable types of innovations. It appears as if the successful companies
just get an idea in the drawing room and they directly implement and start earning
revenues, which is not the case in real. Many companies fail in accommodating and
implementing a change in their business model as this requires strong decision making
skills and sudden changes in various departments of the organization (Sosna et al.,
2010). Many companies fail in realigning the organization, mobilizing scarce resources,
making good decisions in hardships, and structuring the organization along with
development of unique competencies. Thus even after the implementation of change
they remain just an ordinary business company and feel as much difficult to compete as
they did earlier. Thus business model innovation requires adjustments in organizational
structure, realignment of the organization, strong decision making people, learning and
adaptation of change, and development of areas of unique competencies where the
organization can make a competitive edge over the other companies competing in the
specific market. (Zott et al., 2010)
9
Figure 2: Business Model Canvas
(Cowan, 2017)
The business model can be divided into its components which are empirically and
actually related to each other through certain specific relationships and collectively
determine the success and validity of a business model and strategy. A business model
canvas provided by Mr. Osterwalder named as business model canvas demonstrates
that there are some specific key components of a business model that integrate to form
a complete business model (Osterwalder et al., 2011). The components listed below
demonstrate the right side of the canvas and collectively describe the revenue
generation mechanism that a company has employed in order to generate profits and
livelihood for itself as well as its employees (Trimi & Berbegal-Mirabent, 2012). These
components are jotted below:
Value Proposition: this component demonstrates the unique and specific value that a
companys product or service exists to produce and provide to the consumers.
10
Customer Segments: this component identifies the target market or target population or
the segment of public population that the company intends to sell its product or service
to.
Customer Relationships: this component as obvious from the name demonstrates the
strategy of the company in maintain the relationships with the consumers. These
relationships can be good, loyal or disregarding based on the level of service the
company provides to its consumers and the level of satisfaction those customers
possess regarding the product or service of that company.
Customer Channels: this component depicts the distribution channels as well as the
methods of acquiring and retaining customers. This component also depicts the
strength of a company in terms of consumer base and the amount of consumers the
product and service reaches up to.
Revenue streams: this is the main and integrating component of a business model as it
brings all the other components together and demonstrates how a company manages to
pull all of the other components together in order to accomplish revenues and
continuous flow of cash.
The components on the left side of the canvas (Osterwalder et al., 2011) are listed
below and collectively describe the cost structure of the company (Trimi & Berbegal-
Mirabent, 2012):
Key Partnerships: This component demonstrates the partnerships that a company

makes with the investors and shareholders in order to increase the scalability and
efficiency of business.
Key Resources: this component describes the resource base of a company which
includes the assets and knowledge areas that are used in order to deliver the products
and services to the customers along with gaining a competitive advantage over the
other companies.
11
Key Activities: This component describes the companys activities and practices that
make it stand in the market and deliver successfully its products and services to its
consumer base.
Cost Structure: This is the main component of the left side of the canvas. It describes
the costs and expenditures associated with all the elements, activities and other
components of the business company. It also acts to minimize the expenditures and
maximize the profits for a business company.
Figure 3: BMI Types
(Travadi, 2010)
Now the business model innovation can be divided into three types; the industry model
innovation, the revenue model innovation and the enterprise model innovation. Industry
12
model innovation involves the transformation of the whole of an industry into a modified
and different industry somehow acting as a disruptive type of innovation. Apple changed
the industry of music and combined the hardware and software technologies by
introducing the iTunes and iPods product and service combination (Gambardella &
McGahan, 2010). Similarly, Dell introduced a direct model of reaching the customer
base called direct to customer sales model which proved to be very beneficial for the
company (Teece, 2010). Revenue model innovation is more related to the innovation in
pricing mechanisms and techniques. For example the trend of giving away razors for
free or at lower prices to allure customers and then earning profits from the blades.
Netflix also underwent a change in business model from product or rental based model
to subscription based model and earned huge revenues by just changing the pricing
mechanisms (Teece, 2010). Enterprise model innovation is the integrated innovation
within an enterprise. Zaras fast fashion model is actually a highly integrated business
model with a very strong value chain (Tokatli, 2008). Similarly connect & develop model
presented by Bharti as an innovative R&D model is a great success for the business
company (Huston & Sakkab, 2006).
Figure 4: Analytical Framework
(Kazan et al., 2015)
Business Model framework under the light of six types of business models that usually
companies adopt as presented by (Chesbrough, 2007) can actually help in generating a
13
good guess of where your company stands regarding the business models and whether
you need a business model innovation or not. One can easily identify the standard of
business model by going through the business model framework provided by
Chesbrough and comparing the companys business model with it. This framework also
provides the necessary guidelines that are necessary for the organization in order to
change and innovate its business model by advancing to a better level of business
models. Even the companies that have level 5 or level 6 business models also cannot
be free from the worries but they also need to emphasize on their model for reliability
and sustainability. No great business model lasts forever and all the business models
require innovation and advancement from time to time otherwise their products and
services become commodities and commodities are often replaced by the population.
Xeroxs extremely effective rental model was taken down by the Japanese companies
arriving into the market with much smaller and easy to use copiers along with
expendable cartridges that could be bought and sold via retailers. (Chesbrough, 2007)
Thus at any stage of development and earning, a company must always beware of the
market, customer behaviors and consumer attitudes and be ready for any innovational
change for it to last longer and its course and model to remain sustainable for longer
period of time and its products remain alluring to the customers.
Nowadays companies make very hard core efforts and go through tough procedures in
order to innovate their products and thus in turn accomplish higher percentages of
revenues and profits. Sometimes, these innovative procedures may depict higher time
consumption, greater expenditures and huge initial investments in order to implement
those innovative ideas. Despite of all these investments and implementation
procedures, the result and outcomes of such practices are still not completely certain. It
may also happen that the companies implement innovative procedures but still dont
see much increment in revenues and profitability. These risks and hesitations make the
managers and administration of a company to go for business models rather than ideas
and quick innovations. (Amit & Zott, 2012)
14
Moreover in the current saturated and competent business environment, the product
and process innovations have risen and been adopted so much that almost all the
innovations that could have been possible, have been done (Van de Ven, 1996) and
thus the companies are now shifting towards having a stable and sustainable business
model so that they can adopt business model innovation (Kindstrom, 2010). As Mateo
Castagno mentions it, any business company is just one innovation away from having
itself removed from the business market by other competing companies. Thus those
companies that compete on the basis of product and process innovation stand no
chance against those that adopt business model innovation. This can be easily
understood by considering the example of Apples mp3 players, iPods and iTunes.
Although any company nowadays can come up and provide a better mp3 player and a
better software for running it but the consumer base of Apple which is in millions would
sparingly take any interest in tha
t newer competitor in the market (Abel, 2008). The business of Apple would still remain
dominant in the market. This is the power of business model and business model
innovation.
15
Figure 5: How Cryptocurrencies Work
(Greenxgene, 2017 )
How do companies create value and then capture value through business model
innovation? To answer this question we take example of Apple. Apple has been the
North Star for rest of the technological world in making smartphone technology and
business model innovation successful (Johnson et al., 2008). While the rest of the
companies focused on the hardware and beauty of interface of smartphones and
computers, Apple launched its iPods and associated system for downloading music
16
directly to their devices and this was all legal. This was value creating through radical
innovation because it left behind all those previous and tardy methods for download
music from websites and most of the times the downloading was not supported or was
illegal. Thus Apple created space for itself and thus gave rise to a new market. Thus the
music distribution and entertainment was distributed from the starters to the end users
in a monotonous way that no other company could provide. Apple targeted its
customers by trying to create a relationship with them by having a business model just
like that of razor and blade model of Gillette. They created value through radical
innovation and then captured it through the sales of hardware and use of software
(Gobeli & Brown, 1987).
Strategic business model generates and provides hands on logic and creates a
relationship between the technical potential of the business and the actualization of
economic value that can be accomplished from it. Thus the business model liberates
the value from the technology and keeps looking for better and improved business
models and innovations that can be made possible. Xerox is a good example of
strategic business model innovation that used technology for rising to the top. Xerox
implemented a strategic and effective business model in order to commercialize a
technology which was greatly misread, disregarded and rejected by other leading
companies in tech products. Soon after accomplishing the climax of its business life, it
failed to innovate further and thus little product innovations and process innovations
gave Japanese the edge over Xerox and Xerox lost its customer base. (Chesbrough &
Rosenbloom, 2002)
2.3 Cryptocurrency
Cryptocurrency concept needs thinking and some level of intelligence as a base for
understanding and is not easy for a layman to understand the concept. Cryptocurrency
is a type of digital currency that utilizes the tactics like encryption etc. in order to
regulate the production of currency units. This encryption also operates to make
transactions possible and transfer currency units. The main difference between
cryptocurrency and electronic or running currency is that cryptocurrency is decentralized
and does not have any centralized database or managing authority rather all the users
17
and participants are the authority. Nobody controls this system but everybody that is in it
knows what is happening. The only controlling authority is the cryptography and the
codes of the program written by Satoshi Nakamoto (DeCastro, 2014)
Currently there are a number of crypto currencies openly available and working on the
internet. Some of them include the original Bitcoin, and the rest as PP coin, Namecoin,
NXT, Quark, and Litecoin etc. by the end of 2013, the number of cryptocurrencies
available and operating on the internet rose to 80 but the most used and accepted has
always been Bitcoin. (Khidzev, 2016)
There has not been any legal action against cryptocurrency as of yet maybe because
there is no one to hold accountable for it and no one responsible just bits and bytes of
data and anonymous identities of people making the transactions. Cryptocurrency is
vague and volatile and still it is much widespread. There is great proof that it is being
used and some of the cases did appear where some people were caught dealing in
cryptocurrency. However no legal basis of cryptocurrency has yet been established by
any country. (Geva, 2016)
To understand how cryptocurrency works we first need to understand the decentralized

nature of it. Cryptocurrencies do not have any central regulatory authority or a bank that
regulates and covers up each and every transaction. Actually the cryptocurrency is just
a cypher code and is computed by making use of a certain algorithm and that algorithm
gives nobody the authority of controlling this currency. Even the Federal Financial
Monitoring Service mentioned in one of their memorandums that there is no control over
the existence, proliferation and operation of cryptocurrencies as they are totally
decentralized and the governments have still no control over them. (Glaser &
Bezzenberger, 2015)
Secondly cryptocurrency transactions are anonymous. That means no one can actually
identify the person making the transactions and to some extent the people selling the
services and products. This anonymity gives rise to the proliferation of crimes. The
users of this currency can pay online for the buying and selling of services and products
without the need of face to face interactions or anyone knowing about such deals. The
18
disclosing of black market named as silk road is a good example for that. The black
market used to sell drugs and ammunition which is banned and the procedures for such
sales were being carried out song cryptocurrencies. Bitcoins were used in the process
of buying narcotics, drugs and ammunitions without anyone knowing it. Thus the people
and companies can be involved in illegal transactions like money laundering and
criminal activities that cannot be sustained by the civilized states thus making
cryptocurrencies vulnerable to the criminals, militants and rogue organizations and
communities. (Sleiman et al., 2015)
The only step taken against controlling such activities by the use of Bitcoins is the rules
and regulations created by the state of New York that contains very specific restrictions
and clauses that deal with the companies trading suing the cryptocurrencies and
making transactions. The amount of transactions and the equivalent dollar value have
been specified and anyone defaulting such clauses and rules must be held for
investigation and legal proceedings. Thus it can be concluded that cryptocurrency is a
very much valid virtual currency and there can be no issue in using it for making
transactions and daily life business activities if the very specific rules that control the
criminal activities can be enacted by the countries and legislative bodies of states.
(Marian, 2014)
Thus Cryptocurrencies can be a very good option for the business transactions and
payments not involving the banking systems or centralized authorities and giving the
power to the person dealing in cryptocurrency but the issue as of yet is that no clear
definition in the light of law has yet been identified. Many countries have accepted the
use and circulation of cryptocurrencies like Canada while some are still waiting for the
specific rules and regulations to fist control the cryptocurrency transactions and
operations and then implementing it for normal use and circulation like US and some
have banned the usage of such currencies since there is a great chance of economical
unrest and global collapse of general currency and economy like Russia. Scholars are
interested in the research and normalization of this paradigm so that they can study and
analyze the subject more clearly. (Khizdev, 2016)
2.4 BMI and Cryptocurrency
19
With the advent of cryptocurrency, many adventurous, eccentric and opportunists have
risen and have thought of taking a startup of a business using cryptocurrencies. The
companies having high venture capital and reserves for investments seem to be very
much interested in this new paradigm of business. Companies are now looking to create
and capture value through cryptocurrency networks (Adner & Kapoor, 2010). According
to some websites, the number of cryptocurrencies as of 11 th July 2017 has risen to 900
or even more.
Cryptographic currencies or digital currencies are founded on cryptographic

technologies that operate between two or more parties called peer to peer networks.
The transactions as mentioned previously are decentralized and anonymous but are
stored in a public ledger like Blockchain and are made available to all the users of the
currency. This removes the chance of double spending of a single coin.
Cryptocurrencies since are being used for payments and transactions and payments as
alternative currencies, thus they open up the room for the investors to invest in the
currencies, mine them or buy them and when the rates of these currencies go very high,
they can cash their currencies out and earn humungous profits.
The business model is perceived as a theoretical and ideal layer or relationship

between the business strategy and business process. The business strategy can be
taken for example the industry positioning and business process like operational
activities. Thus the companies can use this model to interconnect their strategies and
implement them on their business processes. The business models have the goals of
value creation and value capturing as discussed in the previous discussions. The
business companies can create value by making use of their value chains by
transforming their inputs into valuable outputs like apple putting in their input of strong
technical base and getting outputs as iTunes and other platforms, making use of their
value shops by solving the contemporary problems (legal platforms for downloading and
saving of music onto the smartphones and devices), and finally making use of their
value networks (connecting all the websites that offer music services to the user
accounts and identities). (Stabell & Fjeldstad, 1998)
20
Some of the business companies that are currently working in cryptocurrency sector are
CEX.IO based in UK, BitPesa based in Kenya, Blockchain.info based in UK, KnCMiner
based in Sweden, and Sirious Money based in Denmark. These companies include
some that deal in exchange of currencies from Fiat currencies to cryptocurrencies and
vice versa. Cex provides efficient and transparent mechanisms for exchange of
currencies and setting up of accounts and systems and finally handling them neatly.
Cex charges a fee of 0.2% for each buy and sell transaction. Now the thing to see here
is that Cex has created value through its efficient mechanisms and platform for
exchange of currency exchange and then captured value for each and every transaction
that its users make or perform. BitPesa Charges 3% for its services of bitcoin
remittance. Blockchain is an online wallet for cryptocurrency users. It allows the users to
store, spend and transfer their bitcoins in an efficient and secure manner. The company
gives the owners of the wallets, full control over their wallets, spending and transferring
independence, and provides them with the private keys to those wallets. (Kazan et al.,
2015)
Chapter 3: Methodology
3.1 Research Design
The research conducted hereby, is purely exploratory and based on observations, study
and research of scholars on the subject matter, and involves case studies of different
companies that are involved in the department and field of subject matter like Apple for
its extensively successful and radically innovative business models, HP for its
innovation, Wal-Mart for its secure, efficient and productive business models, Cex,
Blockchain, BitPesa and other such companies for their involvement in business
regarding cryptocurrencies. This research also provides review of the scholarly research
papers written by the scholars in this field and provided analysis for the subject matter
under discussion.
This research involves the business models, international aspects, financial effects and
trends, economical aspects and legislative dimensions regarding cryptocurrencies and
their implementation in regular businesses. This research takes the comprehensive and
21
step by step approach to completely familiarize the readers to the topic selected and
discussed. Innovation is neatly and comprehensively explained along with its types in
business and the business companies that have employed such innovation types. This
research also provides the analysis of those innovation types to choose the best one for
your business model and business type.
Business models, types, levels and business model framework with proper citations and
references have been explained thus business model innovation has been introduced
and the practical examples of those implementations in Apple, Walmart and Dell have
been discussed to familiarize the readers with the concept of business model
innovation.
Finally the cryptocurrency, which is the main area for research has been introduced
along with its relation to business model and business model innovation have been
discussed with reference to the companies carrying out businesses by seizing the
opportunities in the cryptocurrency sector have been demonstrated like Cex,
Blockchain, BitPesa, and Sirious Money.
Thus this research provides a comprehensive and step by step approach for clear
understanding of the topic and analysis and case studies of various companies for the
business model innovations and room for BMI in cryptocurrency department.
The reason of conducting this research is that there is not enough data and information
available in the scholarly literature that explains the combined procedures and
influences of business model innovation on cryptocurrencies and vice versa. Thus this
research is intended to play a fundamental role in making the readers understand the
connection and carry out further researches in the subject matter.
3.2 Research Purpose
The main purpose of conducting this research study is to familiarize the readers with the
most important paradigms of business in the contemporary era and the introduction and
familiarization with the concept of cryptocurrencies and implementation and application
22
of business model approaches like value creation and value capturing to the
cryptocurrency businesses. The purposes of this research study are mentioned below:
Familiarize the readers with the concept of innovation under the light of scholarly
literature along with innovation types and currently applicable and successful
innovation approaches.
Familiarize the readers with the concept of business models and business model
innovation along with the specific levels and framework of business models.
Make the readers understand the importance and scope of business models and
business model innovation over the product and process types of innovations
adopted by companies.
Familiarize the readers with the concept of cryptocurrencies and the current
paradigm shift caused by their advent in the business world.
Construct a relationship between BMs, BMI and cryptocurrencies.
Analysis of the companies involved in businesses that base on cryptocurrency

exchange, trading, and storage and study how they can make use of business
models and business model innovations in order to deepen their roots in the
newer business opportunities regarding cryptocurrencies.
To pave the way for further research in the field as not much of research has
already been conducted in this department and scholars have not yet focused on
the influence of business model innovation on cryptocurrency and vice versa.
3.3 Research Method
The research method adopted in this research is observational, exploratory, analytic,

and qualitative. First of all, the descriptive material regarding the subject matter was
acquired from the scholarly sources, and then only those sources were cited, referred
and included in discussion that had good relationship and correspondence with the
research at hand. Secure, unbiased, and online surveys were conducted using the polls
23
on the internet and social media where questions were asked and answers were
gathered. These surveys included the opinions of people regarding various subjects and
topics discussed in this paper like innovation types, business models and
cryptocurrency. The results of these polls are discussed in the findings and discussion
chapter of this research.
Some of the people indulged in the businesses of cryptocurrencies, innovation

techniques, business models, business model innovations and business model
employment to the cryptocurrency business were contacted too. The interviews, calls,
skype sessions and interactions were based on question and answer formats where
questions were asked from the representatives and answers were noted. The
conclusions and findings of these interactions have been mentioned in the findings and
analyses section of this research.
Figure 6: Selection of Literature Procedure
3.4 Research Sample
The research sample for conducting this research study was mainly common people in
order to gather their views regarding the matters, experts that represented the different
business companies and related to the specific job types like innovation personnel,
business model experts and cryptocurrency business personals. Scholars were also
24
contacted and included in the samples so that the research study could always be
backed up by the scholarly views and opinions.
The research sample for the polls and online discussions were common people.
The research sample for interviews and interactions were mainly business
personnel and scholars related to the concerned fields and departments.
The research sample for citation, references and descriptive research were the
scholarly articles from various trustworthy databases such as Google Scholar,
ProQuest, NBU library, Jstor and EBSCO host.
The number of people who participated in the survey polls and answered the
questions was 1761 altogether. They answered different questions with an option
for everyone to answer more than one question. Mainly the sample space for this
research was the population of the United States originating from various states
and cities. They belonged to different backgrounds and had different
qualifications.
3.5 Research Limitations and solutions
This research is comprehensive regarding its subject but there exist some limitations
that are listed below:
The research is generalized and does not go into very specific details of
cryptocurrency procedures and practices
The research mainly focuses on the one cryptocurrency that is Bitcoin and does
not take into account all of them.
The concept mentioned in this research is that cryptocurrencies are

decentralized like Bitcoin. But actually some of the cryptocurrencies are
centralized too and have a central authority in control of all the procedures and
transactions. Ripple is a cryptocurrency type that has a centralized methodology
considering the production, verification and transaction of cryptocurrencies.
25
Owing to the fact that there is not relevant data available in the scholarly
literature that combines the business model innovation with the cryptocurrency
business. Thus major findings and discussions are based on fundamental
concepts, deductions and introductory levels of such relationships and detailed
and comprehensive information is not provided
3.6 Scope for further research
Although this research is entirely descriptive and not many practical implications can be
found and predicted, but this research due to its approach and content can pave way for
further research in the field. After comprehensive research from the databases
mentioned in research methodology section, and interactions with business personnel, it
was concluded that this department needs further research apart from its immense
significance in the field of business.
We know that the cryptocurrency business is the future paradigm and that the future
business proceedings will someday be shifted entirely to the digital money. When such
a thing happens, the companies with the best business models and approaches would
rule the business world. Thus it is very important as of now to study the interrelationship
between cryptocurrency and business models. This research provides the basis for
such studies and researches by introducing the fundamental relationships under the
light of scholarly literature.
Chapter 4: Findings and Discussions
The bitcoin or cryptocurrency business when viewed under the knowledge of business
models suggest that there must be some way in which value can be created during the
activities that are performed. We know the activities to be storage, transaction and
spending as far as those companies that are mentioned in this research are concerned.
Cex, Blockchain, and BitPesa are the companies that offer these services and carry out
these activities. In order to create value in these activities, they must perform the work
above par, transparently and efficiently so that the customers and users they have are
satisfied thus giving rise to the creation of value. The best company in providing these
activities and services would benefit the most since they would be creating the most
26
value out of these activities. Users are generally willing to pay more if the value
generated during these activities and provision of services is more. Thus they can keep
their profits margins higher if they accomplish greater quality and value generation. Only
if the companies manage to employ business model techniques and business model
innovation in this field, they can cash much more than the current profits and revenues.
We have found from the scholarly literature that cryptocurrencies are the currencies of
the future and they would soon be taking over the business procedures, transactions,
agreements, payments and cashing mechanisms. Some views recorded from the
professionals are given below:
Bill Gates, Microsoft co-founder says, Bitcoin is a technological tour de force.
Rick Falvinge, IT professional mentions, Bitcoin can do to banks exactly the thing email
did to the postal industry.
Goldman Sachs says that the basic and important hindrances for Bitcoin being used
more largely in the payments methods are debatably not unbeatable, though
connections with the conservative banking system are eventually vital to its operation.
We also found that Bitcoins are decentralized cryptocurrency units that means the
banking systems are longer required and their existence is completely defied by the
cryptocurrency systems. The best part about cryptocurrencies like Bitcoins is that it
offers transactions at extremely low costs. These transactions are virtually frictionless
and can be used internationally with no boundaries or restrictions of borders at hand.
This system proves to be much better than that of credit cards, money exchange and
transfer services provided by various companies, letters and receipts of credits, and
taxes and payments every now and then on transactions, storage, transference, and
spending since the companies like BitPesa and Cex do not cost very much for these
services while the conventional banking systems get much out of each and every
activity even the storage one. Thus the cost benefits ease benefits and redemption from
the conventional, lengthy and tardy processes of conventional banking and transaction
systems will soon prove to be very much alluring to the business companies and
personnel involved in such businesses. Currently the bitcoin transactions cost even
27
lesser than 1% for transactions and their processing while the amount being paid to the
current merchants for credit card transaction processing is 2-3%.
We have found that Bitcoin is the most widely accepted and considered cryptocurrency
and now the current market capitalization of Bitcoins is over $10 billion USD. Bitcoin is
a peer to peer electronic payment system and also provides a solution to the double
spending issue majorly faced by all the attempts for creation of a decentralized, single
spending cryptocurrency. The main thing here to conclude is that it eliminates the
existence and need for the third party that bases on trust and provides services of
transference, exchange, storage and spending of money. Satoshi had a serious
problem with the foundation of this conventional banking system that is the trust. The
conventional banking systems bases on trust to provide such services while this factor
is eliminated in cryptocurrencies thus eliminating the risks of frauds, increasing
efficiencies, and the controversial proof of work to guarantee the validity, assurance
and security in all the transactions. (Nakamoto, 2008)
Coming to the possible business ventures in which bitcoin technology and currency can
become extremely successful include the markets that demonstrate a lag in
conventional financial infrastructure but depict good access to mobile data and internet.
Those markets are also good for incorporating and choosing bitcoins where that have
highly inflated currencies and are in demand for tools and techniques for the
mobilization and exchange of currencies. In a study from literature, we find that the
expected 5 year forecast for Bitcoin is $2550 USD which is a 301% increment in the
value from October 2016. (DAlfonso et al., 2016)
Blockchain as discussed in the literature review is involved in business using

cryptocurrency that is bitcoin. Blockchain is much more than just a company or a host
that provides mechanisms for storage and spending of Bitcoins and buying of illicit
goods and stuff from online marketplaces. Blockchain facilitates bitcoin trading and
trades and businesses that accept bitcoin as a mode of payment. It is one of the most
sound and safe place to offer transactions. Blockchain possesses the capability of
introducing great business models than to just finalize the payments and transactions
for bitcoin users. Some people believe that it can introduce radical innovations and
28
change entirely the banking archetype and start a competition for newer and more
advanced business models in the fields involving cryptocurrencies. Currently blockchain
is not doing what it is capable of. It is just providing the services of transaction
completion between two parties. It makes use of an automated procedure and handles
these activities quite efficiently without charging much. All these procedures are secure
and safe for both the users and no information loss in there.
Since there is a great threat for the banking systems from the cryptocurrencies, there
needs to be introduced an innovation and upgradation in the banking systems of the
current era in order to save them from the serious threat of cryptocurrencies taking over
the banking systems. Thus the innovators and experts in the business of banking
systems need to make use of business model innovation and develop an improved
business model so that the customers do not feel the need to change their transaction
systems and stick to the conventional banking systems. This can be done by creating
value in the daily life procedures and providing extensive quality and security in their
daily life transactions. This value can be created through lesser transaction costs, lesser
taxes, greater withdrawal limits, lesser interest rates, and improved quality assurance.
This would lead to customer satisfaction and customer engagement which are of great
value for the consumers. When the banking systems can create this type of value, the
customers would be retained and the threat of customer turnover towards
cryptocurrencies would be reduced. In this manner, the cryptocurrency will not take over
the banking systems but it would have only have its own place in the market beside the
other currencies.
Currently there has been a proposal of Linux Foundation that is believed to be

partnering with the giants and successful companies in finances and technology in order
to improve and enhance the blockchain technology. This partnership is an open
example of technical and financial giants being greatly interested in the cryptocurrency
business and by improving the blockchain business models; they can improve the
infrastructure, operations and procedures occurring in cryptocurrency transactions. This
partnership is going to form up an enterprise and an open source distributed ledger
framework and will involve big companies like IBM, Cisco, Fujitsu, Intel, and many
29
more. The mission of this enterprise is to point out the significant attributes,
requirements and features that are lacking considering the inter-industry open source
distributed ledgers. By creating such quality standards in the procedure, value can be
created in the business transactions that are occurring every time around the entire
world.
From the discussions with the experts and representatives of companies having
improved business models, exceled business model innovations and cryptocurrency
involving companies, some of the business opportunities that bitcoin intervention will
create and rule are discussed as follows:
Apart from the companies providing wallet services and storage services for the bitcoin
users, where they can store their bitcoins safe and sound and then use them for future
payment and transaction procedures, there are some other parts of this industry which
are yet to be explored and good business models can take the companies to great
heights.
Record keeping
In order to increase transparency and provide all the users with logs of all transactions
occurring daily, Bitcoins public ledger provides trust based record keeping where
transparency is ensured and double spending is completely avoided. Companies can
come up with strong databases and start creating value by efficiently storing the logs in
ledgers and databases so that the system of bitcoins is improved and strengthened.
Some startups have been witnessed in this field as Monegraph which was initiated by
NYU professor in order to record and keep the databases digital ownerships and logs of
transactions, payments and movements of the cryptocurrency named as namecoin
blockchain. Internet based public record keeping services are already established by
some business cases. CrowdCurity makes use of blockchain in order to find the weak
links in the websites. Hello! Block is a public ledger startup that offers record keeping
data-as-a-service through HTTP language. Thus this blockchain is a great opportunities
for startups so that they can automate the recordkeeping mechanisms and monitor
business transactions with logs generated automatically. This technology is being used
30
in bitcoin transactions and ledgers and demonstrates great opportunity for the other
businesses that require automated record keeping and transaction data recording.
Wallet Technology
Wallet as obvious from the name is an online site that stores the bitcoins or any
cryptocurrency and is owned by the businessmen. This technology came to existence
soon as the cryptocurrencies arrived. These sites are based on algorithms and codes in
designated languages and provide services of storage of cryptocurrencies. This sector
also hosts much chances and potential for innovation, business models and business
model innovations. The companies currently offering such services have their business
models set in place and advanced technologies and innovations are very much
welcomed.
Multi-signature is a tech which is an emerging one regarding wallet technologies. The

name multi-signature implies the fact that there are several keys completely private and
only known by the user and not even the company, is used in order to store and lock the
bitcoins in the users accounts. Thus this is a secure and safe way of storing the
currency with all power belonging to the users. The company only gets a small
percentage of the transaction amount. BitGo is the name of a company which excels in
wallet technologies and is always up for innovations and advancements in the multi-
signature technology advancing it to further modifications so that bigger companies also
choose to use their technologies. Hive like companies are some examples that dont
just rest on what they offer-the wallet services- but walk an extra mile to offer
applications, BIPS32 HD security and HTML5 web wallet. Future business models
would contain increased flexibility in monitoring and handling digital money thus giving
rise to new financial tools and self-executable escrow products.
Smart Contracts
Nick Szabo in 1990s provided a concept of smart contracts. Smart contract is an

emerging concept and a very interesting one. This concept involves generation of
automated and automatic agreements and contracts that are programmable and self-
executing thus eradicating the need of a third party that takes the financial budget for
31
making up an agreement and making the two parties settle for a joint pact. As of now,
there has not yet been complete and final software that would do the desired task
however some companies are offering such applications and software that create digital
agreements between parties.
Hedgy is a company working in such regard. They intend to build smart contracts in the
bitcoin blockchain to actualize the cost agreements in contracts. This reduces the
chances of volatility of a digital currency. Codius is the name of a project that utilizes the
fault isolation technology initiated by Google and is being used by Ripple Labs. This
project will realize the digital agreements that are automatically generated and
produced.
The scope of such software is to replace the archaic paper contracts and offer the
multidimensional views and angles towards an agreement. More number of versions of
an agreement can be automatically generated and the best one may be selected.
Correct business models in such business can lead to progress and revenues in no
time.
Mining
Bitcoin mining is another paradigm of cryptocurrencies like bitcoin and is a great

opportunity for the adventurous and ambitious people to startup and proliferate a
business model. This is a procedure which is used by the computers to generate
bitcoins and to confirm the transactions being made in a network. Mining is based on
solving of complex computational problems. With the progress of a person mining the
bitcoins and solving the computational problems, the bitcoins keep on generating and
the problems keep on becoming more and more complex and much more advanced
systems are then required to solve the even more complex problems.
Merging and consolidation is a process that occurs when two companies combine their
mining efforts in order to reduce efforts and share the resources for more mining.
PeerNova is a company that is a result of a merger and consolidation between
HighBitcoin and Cloudhashing. Currently the companies are working together with
greater resources and higher mining speeds.
32
Cryptsy is a mining pool or venture opened by the renowned BTC China. This is a
platform for exchanging currencies as well as mining contracts. Thus improved business
models in this sector can lead to companies having higher chances for success and
more advanced technologies. The benefit of advancement in this field is that the world
will get to have even better technologies for solving complex problems in various fields
of science.
The above discussions and findings are the summary of interactions with the business
representatives, research from scholarly literature and interviews with the scholars. The
number of people who participated in the polls and answered the questions was 1761
altogether. They answered different questions with an option for everyone to answer
more than one question. Mainly the sample space for this research was the population
of the United States originating from various states and cities. They belonged to
different backgrounds and had different qualifications.
The polls that were conducted on online and social apps based questionnaires are
written as under:
Questions and their respective results
1) Awareness with the word cryptocurrency and bitcoins?
Total of 1744 people responded to this question and the 85% of them voted that they
were aware of these words.
2) Awareness with the word business model innovation?
1714 people answered this question and 1476 voted that they knew about the term.
3) Is business model innovation better than product and process innovation?
1428 people answered this question. 820 voted for the business model innovation and
608 voted for the product or process innovation.
4) Does cryptocurrency have a future considering the increasing interest of

business companies and businessmen in the sector?
33
1274 people answered this question. 940 voted for the cryptocurrency to have a good
chance of being adopted in the business field while 311 said that it would be used side
by side along with the conventional currencies. 32 people were of the view that it would
take over the current and conventional currencies and in some time frame
cryptocurrencies would be the only currencies being used.
5) Which cryptocurrency would turn out to be the most normalized and widely
accepted?
74% of the people voted for the Bitcoin currency thus choosing it to be the currency of
the future.
6) Can BMI be employed to mining, wallet techs, smart contracts, and record
keeping trends and technologies associated with cryptocurrencies? Would they
be as much useful as in normal businesses?
81% people replied with the comments that these trends and technologies are ventures
and opportunities for new startups and BMI can make them very much successful and
that the BMI would be just as much useful as it is in normal businesses. 19% were of
the contrary view that these technologies and trends would require higher degree of
understanding and mentioned the reasons to be difficult to find skilled people,
insecurities about the new technology, no legal basis of cryptocurrencies and/or they
preferred conventional banking systems as they are easier to understand and handle.
7) Do you see Cryptocurrency eradicating the banking system?
65% people responded positively that the advent of cryptocurrency is a threat to the
conventional banking systems and that it would take over the conventional banking
systems.
8) Do you believe that cases like Silk Road Black Market would cause the
governments to ban the cryptocurrencies or do you believe that the governments
would take control over the crimes through strong check and balance and
improved software?
34
17% people were of the view that the cryptocurrencies would be banned due to the
criminal cases like Silk Road case and that there are greater chances of criminal
activities when the decentralization and anonymity is provided to the population.
74% thought that soon there is going to be a software improvement or a legislative

announcement for strict check and balance and that the currency would take its place in
the market no matter what.
9% replied that they are not sure what would be the future of cryptocurrency.
35
Conclusion and Recommendation
Business model innovation is a very important technique for having a reliable,

sustainable and long lasting relationship with your customers. The other types of
innovations like product innovation or process innovations have grown older and almost
everybody has become the master of such innovations. Thus newer ways need to be
adopted and newer procedures for innovations are required in order to gain a
competitive advantage over the competitors in such a saturated business environment.
Business model innovation provides with the working and operational concepts that can
beat any innovation in the market. Examples for good BMIs are discussed in this paper
like Apple, Wal-Mart and Dell. Thus business model innovations provide long lasting and
sustainable revenues with loyal consumer base and profitable business environment
with competitors being down and under the influence of companies that possess such
BMs and BMIs. Cryptocurrency is a currency of the future and is already setting its feet
into the soil as of now. Cryptocurrency roots out conventional banking systems and
provides a decentralized transactions system along with providing anonymity to both the
parties making the transactions thus giving the power to the user and no third party can
access or view the details of these deals and agreements. Businesses that have been
opened up as opportunities for the startups, eccentric and ambitious people are too
many and anyone having a good command over computers and digital languages can
do well in this field. These businesses include Mining, Wallet services, Cryptocurrency
storage and log keeping, and finally the smart contracts. These are some of the
examples of such businesses and opportunities while there are too many in real. If
proper business model innovation techniques of value creation, value capturing are
employed in these businesses, then they can prove to be very much profitable and have
the capability of making fortunes out of these values. The effects of cryptocurrency on
business model innovation are all positive and they encourage the people and
businessmen to adopt and improve business models in the businesses currently active
and associated with the cryptocurrencies. Thus this is a great opportunity for business
and anyone having the venture capital should invest and earn profitable revenues from
such business.
36
The major recommendation for the readers is to read go through this research with the
mindset of understanding the basics and fundamentals of business models, business
model innovations, cryptocurrency mainly bitcoins, and the useful impacts of business
model innovation on cryptocurrency and vice versa. This research is qualitative in
nature and provides huge scope for further research as it paves the way for the readers
to understand and then stand on the shoulders of giants to accomplish the heights of
knowledge and information. Another recommendation is the one for future research
since there is not much data and information available in this field where relationship
between cryptocurrency and business model innovation has been discussed thus
making sufficient room for further research based on this limited research.
37
References
Abel, I., 2008. From technology imitation to market dominance: the case of
iPod. Competitiveness Review: An International Business Journal, 18(3), pp.257-274.
Adner, R. and Kapoor, R., 2010. Value creation in innovation ecosystems: How the
structure of technological interdependence affects firm performance in new technology
generations. Strategic management journal, 31(3), pp.306-333.
Cowan, A., (2017). The 20 Minute Business Plan: Business Model Canvas Made Easy.
[online] Alex Cowan. Available at: https://www.alexandercowan.com/business-model-
canvas-templates/ [Accessed 29 Aug. 2017].
Chesbrough, H., 2007. Business model innovation: it's not just about technology
anymore. Strategy & leadership, 35(6), pp.12-17.
Chesbrough, H. and Rosenbloom, R.S., 2002. The role of the business model in
capturing value from innovation: evidence from Xerox Corporation's technology spinoff
companies. Industrial and corporate change, 11(3), pp.529-555.
D'Alfonso, A., Langer, P. and Vandelis, Z. (2016). The Future of Cryptocurrency.

Ryerson University, p.25.
Davis, J., 2011. The crypto-currency. New Yorker, 87(31), pp.62-70.
DeCastro, E.D., 2014. Systems and methods for providing multi-currency platforms
comprising means for exchanging and interconverting tangible and virtual currencies in
various transactions, banking operations, and wealth management scenarios. U.S.
Patent Application 14/506,651.
Fritsch, M. and Meschede, M., 2001. Product innovation, process innovation, and
size. Review of Industrial organization, 19(3), pp.335-350.
Gambardella, A. and McGahan, A.M., 2010. Business-model innovation: General

purpose technologies and their implications for industry structure. Long range
planning, 43(2), pp.262-271.
38
Geva, B., 2016. Virtual Currencies and Blockchains: A Primer.
Glaser, F. and Bezzenberger, L., 2015. Beyond Cryptocurrencies-A Taxonomy of

Decentralized Consensus Systems.
Gobeli, D.H. and Brown, D.J., 1987. Analyzing product innovations. Research
Management, 30(4), pp.25-31.
Highsmith, J. and Cockburn, A., 2001. Agile software development: The business of
innovation. Computer, 34(9), pp.120-127.
Hinch, S., Hinch, S. and profile, V. (2010). The Second Tenet of Innovation. [online]
Stephenhinch.blogspot.com. Available at:
http://stephenhinch.blogspot.com/2010/04/second-tenet-of-innovation.html [Accessed
29 Aug. 2017].
Huston, L. and Sakkab, N., 2006. Connect and develop. Harvard business
review, 84(3), pp.58-66.
Johnson, M.W., Christensen, C.M. and Kagermann, H., 2008. Reinventing your
business model. Harvard business review, 86(12), pp.57-68.
Kazan, E., Tan, C.W. and Lim, E.T., 2015. Value Creation in Cryptocurrency Networks:
Towards A Taxonomy of Digital Business Models for Bitcoin Companies. In The 19th
Pacific Asia Conference on Information Systems. PACIS 2015.
Khidzev, A., 2016. CRYPTO-CURRENCY: LEGAL APPROACHES TO THE CONCEPT

FORMATION. , (1), pp.72-76.
Kim, W.C. and Mauborgne, R., 1999. Creating new market space. Harvard business
review, 77(1), pp.83-93.
Kindstrm, D., 2010. Towards a service-based business modelKey aspects for future
competitive advantage. European Management Journal, 28(6), pp.479-490.
Manual, O., 2005. The measurement of scientific and technological activities. Proposed
guidelines for collecting and interpreting innovation data.
39
Osterwalder, A., Pigneur, Y., Oliveira, M.A.Y. and Ferreira, J.J.P., 2011. Business Model
Generation: A handbook for visionaries, game changers and challengers. African
journal of business management, 5(7), pp.22-30.
Schumpeter, J.A., 1942. Capitalism, Socialism, and Democracy: Harper and Brothers,
New York.
Sciulli, L.M., 1998. How organizational structure influences success in various types of
innovation. Journal of Retail Banking Services, 20(1), pp.13-19.
Sleiman, M.D., Lauf, A.P. and Yampolskiy, R., 2015, October. Bitcoin Message: Data
Insertion on a Proof-of-Work Cryptocurrency System. In Cyberworlds (CW), 2015
International Conference on (pp. 332-336). IEEE.
Stabell, C.B. and Fjeldstad, .D., 1998. Configuring value for competitive advantage: on
chains, shops, and networks. Strategic management journal, pp.413-437.
Teece, D.J., 2010. Business models, business strategy and innovation. Long range
planning, 43(2), pp.172-194.
Tokatli, N., 2008. Global sourcing: insights from the global clothing industrythe case of
Zara, a fast fashion retailer. Journal of Economic Geography, 8(1), pp.21-38.
Travadi, Z. (2010). Business Model Innovation. [online] slideshare.net. Available at:

https://www.slideshare.net/zahirnt/topic-4-business-model-innovation [Accessed 29 Aug.
2017].
Trimi, S. and Berbegal-Mirabent, J., 2012. Business model innovation in

entrepreneurship. International Entrepreneurship and Management Journal, 8(4),
pp.449-465.
Van de Ven, A.H., 1986. Central problems in the management of

innovation. Management science, 32(5), pp.590-607.
Zott, C. and Amit, R., 2002. Measuring the performance implications of business model
design: evidence from emerging growth public firms. Fontainebleau: Insead.
40
Zott, C., Amit, R. and Massa, L., 2010. The business model: Theoretical roots, recent
developments, and future research. IESE business school-University of Navarra, pp.1-
43.
41

Effect of Cryptocurrency On Business Model Innovatio1

Hochgeladen von

Dokumentinformationen

Originaltitel

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Effect of Cryptocurrency On Business Model Innovatio1

Hochgeladen von

Copyright:

Verfügbare Formate

EFFECT OF CRYPTOCURRENCY ON BUSINESS MODEL INNOVATION

Effect of Cryptocurrency on Business Model Innovation

Chapter 1: Introduction ..4

Chapter 2: Literature Review .7

2.1: Innovation ..7

2.2: Business model innovation .9

2.3 cryptocurrency ...17

2.4 BMI & cryptocurrency ...19

Chapter 3: Methodology .21

3.1 Research design 21

3.2 Research purpose..22

3.3 Research sample24

3.4 Research method ..23

3.5 Research Limitations and solutions.25

3.6 Scope for further research.26

Chapter 4: Findings and Discussions.26

Conclusion and Recommendation..36

Figure 1: Innovation Types .7

Figure 2: BMI Canvas..10

Figure 3: BMI Types.....12

Figure 4: Analytical Framework..13

Figure 5: How Cryptocurrencies work16

Figure 6: Selection of literature24

completely decentralized and there exists no central authority monitoring or controlling

Chapter 2: Literature Review

The literature provides extensive details and relationships aspects of types of

Figure 1: Innovation Types

(Hinch et al., 2010)

Product innovation involves the extensive modification and improvement of a product

2.2 Business Model Innovation

Figure 2: Business Model Canvas

Key Partnerships: This component demonstrates the partnerships that a company

Figure 3: BMI Types

Figure 4: Analytical Framework

(Kazan et al., 2015)

Figure 5: How Cryptocurrencies Work

To understand how cryptocurrency works we first need to understand the decentralized

2.4 BMI and Cryptocurrency

Cryptographic currencies or digital currencies are founded on cryptographic

The business model is perceived as a theoretical and ideal layer or relationship

3.1 Research Design

3.2 Research Purpose

Construct a relationship between BMs, BMI and cryptocurrencies.

Analysis of the companies involved in businesses that base on cryptocurrency

3.3 Research Method

The research method adopted in this research is observational, exploratory, analytic,

Some of the people indulged in the businesses of cryptocurrencies, innovation

Figure 6: Selection of Literature Procedure

3.4 Research Sample

3.5 Research Limitations and solutions

The concept mentioned in this research is that cryptocurrencies are

3.6 Scope for further research

Chapter 4: Findings and Discussions

Bill Gates, Microsoft co-founder says, Bitcoin is a technological tour de force.

Blockchain as discussed in the literature review is involved in business using

Currently there has been a proposal of Linux Foundation that is believed to be

Multi-signature is a tech which is an emerging one regarding wallet technologies. The

Nick Szabo in 1990s provided a concept of smart contracts. Smart contract is an

Bitcoin mining is another paradigm of cryptocurrencies like bitcoin and is a great

Questions and their respective results

1) Awareness with the word cryptocurrency and bitcoins?

2) Awareness with the word business model innovation?

3) Is business model innovation better than product and process innovation?