Blockchain and Its Transformational Impact to Global Business
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Southern Methodist University SMU Scholar Engineering Management, Information, and Engineering Management, Information, and Systems Research Theses and Dissertations Systems Summer 8-15-2020 Blockchain And Its Transformational Impact To Global Business Mohammed Qaudeer [email protected] Follow this and additional works at: https://scholar.smu.edu/engineering_managment_etds Part of the Computer and Systems Architecture Commons, Digital Communications and Networking Commons, E-Commerce Commons, Operations and Supply Chain Management Commons, and the Technology and Innovation Commons Recommended Citation Qaudeer, Mohammed, "Blockchain And Its Transformational Impact To Global Business" (2020). Engineering Management, Information, and Systems Research Theses and Dissertations. 12. https://scholar.smu.edu/engineering_managment_etds/12 This Dissertation is brought to you for free and open access by the Engineering Management, Information, and Systems at SMU Scholar. It has been accepted for inclusion in Engineering Management, Information, and Systems Research Theses and Dissertations by an authorized administrator of SMU Scholar. For more information, please visit http://digitalrepository.smu.edu. BLOCKCHAIN AND ITS TRANSFORMATIONAL IMPACT TO GLOBAL BUSINESS Approved by: _______________________________________ Dr. Halit Üster Professor, EMIS ___________________________________ Dr. Sila Çetinkaya Dept. Chair and Professor, EMIS ___________________________________ Dr. Miju Ahn Asst. Professor, EMIS ___________________________________ Dr. Harsha Gangammanavar Asst. Professor, EMIS ___________________________________ Dr. Stephen Szygenda Professor Emeritus, CSE BLOCKCHAIN AND ITS TRANSFORMATIONAL IMPACT TO GLOBAL BUSINESS A Praxis Presented to the Graduate Faculty of Lyle School of Engineering Southern Methodist University in Partial Fulfillment of the Requirements for the degree of Doctor of Engineering in Engineering Management with a Major in Engineering Management by Mohammed Abdul Qaudeer B.E., Computer Sciences and Engineering, Osmania University, M.S., Computer Science, Wayne State University August 4, 2020 Copyright (2020) Mohammed Abdul Qaudeer All Rights Reserved ACKNOWLEDGMENTS First of all I would like to sincerely thank my outstanding doctoral praxis committee: Dr. Halit Üster, Dr. Stephen Szygenda, Dr. Sila Çetinkaya, Dr. Miju Ahn, and Dr. Harsha Gangammanavar. This work could not have been accomplished without the guidance of my respected advisors, Dr. Üster and Dr. Szygenda, along with their colleagues in the Department of EMIS at SMU. I am forever grateful to my dearest family: my wife Humera, and kids Shahid, Faatima, Ahmed and Aisha. I would like to further extend my gratitude towards my father, Mohammed Abdul Jaleel, my mother-in-law, Habeebunnissa Begum, and my extended family of my brother, sisters and my in-laws. Above all, I would attribute the drive behind my work and pursuit of further education and curiosity to my ever-ambitious late mother, Hameedunnisa Begum. For my dearest wife, Humera, I express special thanks for her relentless support, sleepless nights helping me, and encouraging me saying, “You can do it!” Most importantly, I appreciate her for believing in my success. My sincerest thanks go to my ex-boss at Verizon, Rami El-Youssef and my friends and colleagues for their guidance. Last but not least, I would like to thank my employer Verizon and my leadership (Lauren Adelson-Luft and Jagannath Rangarajan) for investing in me for my doctoral education. iv Qaudeer, Mohammed B.E., Computer Sciences and Engineering, Osmania University M.S., Computer Science, Wayne State University M.B.A., Business Administration, University of Phoenix Blockchain and its Transformational Impact to Global Business Advisor: Professor Halit Üster Doctor of Engineering in Engineering Management conferred August 4, 2020 Dissertation completed June 25, 2020 The advent of internet to the public back in 1994 resulted in the 4th industrial revolution disrupting and transforming business and communication models. As much as the transformation changed our lives and experiences, it has resulted in centralized models like Amazon and Facebook. It also resulted in exponential growth of Fraud, Identity theft, and lack of trust. Blockchain is considered an emerging technology of this era, which will trigger the 5th industrial revolution enabling another massive storm of disruptive transformation completely changing the current business models based on trust, security, collaboration and crypto currency. As the evolution of blockchain technology is on full swing, companies and product vendors are rushing to innovate and disrupt to be the first in the gold rush. In this praxis, we will assess what companies are doing in various process areas including supply chain, dispute management, logistics, and cryptocurrency. Additionally, we will review some of the economic opportunities in the near future and what are some of the key lessons learned and gaps including global adoption, blockchain interoperability, governance frameworks, and global acceptance. v TABLE OF CONTENTS TABLE OF CONTENTS ........................................................................................................... vi LIST OF FIGURES ................................................................................................................... ix Chapter 1 - INTRODUCTION ....................................................................................................... 1 1.1 Trust............................................................................................................................................................ 2 1.2 Visibility ..................................................................................................................................................... 3 1.3 Traceability ................................................................................................................................................. 4 1.4 Business Rules ............................................................................................................................................... 4 1.5 Access to Opportunity .................................................................................................................................... 5 1.6 Lack of Accountability ................................................................................................................................... 5 1.7 Cost of doing business ................................................................................................................................... 5 Chapter 2 - BLOCKCHAIN ........................................................................................................... 7 2.1 Distributed Ledger ....................................................................................................................................... 10 2.2 Types of Blockchains ................................................................................................................................... 10 2.3 Consensus .................................................................................................................................................... 12 2.4 Smart Contracts ............................................................................................................................................ 13 2.5 Bitcoin: A popular Blockchain ..................................................................................................................... 15 2.5.1 History of Bitcoin ................................................................................................................................. 15 2.5.2 How Bitcoin works? ............................................................................................................................. 15 2.5.3 What is mining?.................................................................................................................................... 16 2.5.4 What are the bitcoin participants solving?............................................................................................ 16 2.5.5 How much miners earn? ....................................................................................................................... 18 Chapter 3 – TECHNOLOGY AND ECONOMIC IMPACTS ..................................................... 21 3.1 Technology Impact....................................................................................................................................... 21 3.1.1 Identity ................................................................................................................................................. 22 3.1.2 Crypto Currency or Token.................................................................................................................... 24 vi 3.1.3 Traceability ........................................................................................................................................... 25 3.1.4 Business Rules ...................................................................................................................................... 27 3.1.5 Cost of doing business .......................................................................................................................... 28 3.2 Economic Impact ........................................................................................................................................