Knowledge sharing across organisations (II): How blockchains provide incentives to jointly solve bus

Blockchains – frequently associated with Bitcoin and other cryptocurrencies – can provide valuable incentive schemes to share knowledge across organisations and to additionally stop free-riding. The appendix of this article lists various materials to better understand general technological, business, and social implications of blockchains which form the basis of the following solution. The basic suggestion of this article, however, does not require advanced technical knowledge, it is much simpler. And it applies to business and social problems alike.

When actors contribute knowledge to networks, they can store their contribution in blockchain databases to which other firms have access. This is as easy as adding files to websites which can be downloaded by everyone with a given interest. What makes blockchains suitable to host this knowledge exchange is their opportunity to include peer-to-peer evaluations and reputation systems with full transparency for everyone. In practice, this means that everyone who builds on previously provided information can evaluate the quality of the initial contribution. These evaluations translate into a reputation score: the more positive evaluations an actor receives, the higher the reputation score. Providing evaluations is rewarded too but not as high as making actual knowledge contributions. Previously, knowledge in decentralised networks was primarily shared when actors where intrinsically motivated to do so. Through blockchains, evaluation systems and reputation scores, actors have an additional external motivation to provide knowledge, as high reputation scores will signal their general credibility and competence.

In a second step, high reputation scores can be linked to the distribution of tokens. One example of tokens are Bitcoins which – when not bought directly – are rewarded to actors providing computing power to the specific Bitcoin blockchain. A knowledge sharing blockchain instead, can be designed in such a way that those actors with high reputation scores earn tokens. Ultimately, these digital assets could be exchanged into other cryptocurrencies or cash. In sum, blockchains help to design powerful incentive schemes which facilitate knowledge exchange, stop free-riding and thus help to solve business and social problems.

Further Material

How the blockchain will radically transform the economy – TED talk with Bettina Warburg

Blockchain beyond the hype: What is the strategic business value? Overview by Digital McKinsey

Swan, M. (2015) Blockchain: Blueprint for a New Economy. Sebastopol, CA: O’Reilly Media, Inc.

Pazaitis, A., De Filippi, P. and Kostakis, V. (2017) ‘Blockchain and Value Systems in the Sharing Economy: The Illustrative Case of Backfeed’, Technological Forecasting and Social Change, 125, pp. 105– 115. doi: 10.1016/j.techfore.2017.05.025.

Tapscott, D. and Tapscott, A. (2016) Blockchain Revolution: How the Technology Behind Bitcoin is Changing Money, Business and the World. London: Portfolio Penguin.