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.
Note: An earlier version of this paper was presented at the European Conference on Information Systems (ECIS) 2019.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
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.
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.
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
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.
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.
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.
Cachin, C., & Vukolić, M. (2017). Blockchains consensus protocols in the wild. In Proceedings of the 31st International Symposium on Distributed Computing, Vienna, Austria.
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.
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.
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.
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.
Christidis, K., & Devetsikiotis, M. (2016). Blockchains and smart contracts for the internet of things. IEEE Access, 4, 2292–2303.
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.
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.
Davidson, S., De Filippi, P., & Potts, J. (2016, March). Economics of Blockchain. Retrieved September 30, 2018 from https://ssrn.com/abstract=2744751.
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.
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.
Freeman, J., & Engel, J. S. (2007). Models of innovation: Startups and Mature Corporations. California Management Review, 50(1), 94–119.
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.
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.
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.
Glaeser, E. L., & Berry, C. R. (2006). Why are smart places getting smarter. Taubman Center Policy Briefs 2.
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.
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.
Harrison, C., & Donnelly, I. A. (2011). A theory of smart cities. In Proceedings of the 55th Annual Meeting of the ISSS, Hull, UK.
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.
Hayek, F. Av. (1960). The constitution of liberty. Chicago, IL, USA: University of Chicago Press.
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/.
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.
Iansiti, M., & Lakhani, K. R. (2017). The truth about blockchain. Harvard Business Review, 95(1), 118–127.
Johnson, M. W., Christensen, C. M., & Kagermann, H. (2008). Reinventing your business model. Harvard Business Review, 86(12), 57–68.
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.
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.
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.
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.
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.
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.
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.
Kuk, G., & Janssen, M. (2011). The business models and information architectures of smart cities. Journal of Urban Technology, 18(2), 39–52.
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.
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.
Lessig, L. (2008). Remix: Making art and commerce thrive in the hybrid economy. New York, NY, USA: The Penguin Press.
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.
Lubin, J. (2016). Towards a dynamic economic, social and political mesh. In Proceedings of Devcon1 Developer Conference, Las Vegas, NV, USA.
Magretta, J. (2002). Why business models matter. Harvard Business Review, 80(5), 3–8.
Malović, M. (2014). Demystifying bitcoin: Sleight of hand or major global currency alternative? Economic Analysis, 47(1–2), 32–41.
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.
Mayer, C. (2013). Firm commitment: Why the corporation is failing us and how to restore trust in it. Oxford, UK: Oxford University Press.
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/.
Melville, N. P. (2010). Information systems innovation for environmental sustainability. MIS Quarterly, 34(1), 1–21.
Morabito, V. (2017). Business innovation through blockchain: The B3 perspective. Berlin, Germany: Springer.
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.
Mulligan, C. E., & Olsson, M. (2013). Architectural implications of smart city business models: An evolutionary perspective. IEEE Communications Magazine, 51(6), 80–85.
Nakamoto, S. (2008). Bitcoin: A Peer-to-Peer Electronic Cash System. Retrieved September 15, 2018 from https://bitcoin.org/bitcoin.pdf.
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.
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.
Nofer, M., Gomber, P., Hinz, O., & Schiereck, D. (2017). Blockchain. Business and Information Systems Engineering, 59(3), 183–187.
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.
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.
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.
Osterwalder, A., & Pigneur, Y. (2010). Business model generation: A handbook for visionaries, game changers, and challengers. Hokoben, NJ, USA: Wiley.
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.
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.
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.
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.
Puschmann, T., & Alt, R. (2016). Sharing economy. Business and Information Systems Engineering, 58(1), 93–99.
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.
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/.
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/.
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.
Sikorski, J. J., Haughton, J., & Kraft, M. (2017). Blockchain technology in the chemical industry: Machine-to-machine electricity market. Applied Energy, 195, 234–246.
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.
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.
Swan, M. (2015). Blockchain: Blueprint for a new economy. Sebastopol, CA: O’Reilly Media Inc.
Teece, D. J. (2010). Business models, business strategy and innovation. Long Range Planning, 43(2), 172–194.
Timmers, P. (1998). Business models for electronic markets. Electronic Markets, 8(2), 3–8.
Tirole, J. (1999). Incomplete contracts: where do we stand? Econometrica, 67(4), 741–781.
Underwood, S. (2016). Blockchain beyond bitcoin. Communications of the ACM, 59(11), 15–17.
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.
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.
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.
Walravens, N. (2015). Qualitative indicators for smart city business models: The case of mobile services and applications. Telecommunications Policy, 39(3–4), 218–240.
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.
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.
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.
Weiblen, T., & Chesbrough, H. W. (2015). Engaging with startups to enhance corporate innovation. California Management Review, 57(2), 66–90.
Wikström, S. (1996). Value creation by company-consumer interaction. Journal of Marketing Management, 12(5), 359–374.
Williams, K., Chatterjee, S., & Rossi, M. (2008). Design of emerging digital services: A taxonomy. European Journal of Information Systems, 17(5), 505–517.
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.
Yoo, Y. (2010). Computing in everyday life: A call for research on experiential computing. MIS Quarterly, 34(2), 213–231.
Yoo, Y., Boland, R. J., Jr., Lyytinen, K., & Majchrzak, A. (2012). Organizing for innovation in the digitized world. Organization Science, 23(5), 1398–1408.
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.
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.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Appendices
Appendix 1: Sample Structure
Smart city application area | Startups (country) | |||
---|---|---|---|---|
Energy | • Bankymoon (ZA) • Dajie/Prosume (UK) • ElectricChain (AD) • Jump Software (USA) • Sunride (GER) | • Electron (USA) • Energy Blockchain Lab (CHN) • Grid Singularity (AUT) • LO3 (USA) • MyBit (CHE) | • TerraLedger/Voltmarkets (USA) Smappee (USA) • Solether (n/a) • Batan (UK) • Omega Grid (USA) | • Sonnen (USA) • SunExchange (ZA) • Wattcoin (USA) • Consensys (USA) • SolarChange (ISR) |
Transportation | • Arcade City (USA) • T-Mining (BEL) • Chasyr (USA) | • Oaken Innovation (USA) • Parq (NL) | • Powertree (USA) • La’Zooz (ISR) • Slock.it (DEU) | • Cloudpark (USA) • Parkgene.io (GRC) |
Building | • Ubirch (DEU) • HomeSidekick (USA) • Propy (USA) • Smappee (USA) | • Silvertown (UK) • Slock.it (DEU) • Ubitquity (USA) • Blocksquare (SVN) | • Tapclose (USA) • Flip (USA) • BrikShares (IT) • Propify/Coicio (USA) | • Cleverent (USA) • REIDAO (SGP) • REX (USA) • Realblocks (USA) |
Health | • Blockpharma (FR) • BurstIQ (USA) • Hashed Health (USA) • Patientory (USA) | • Health Chain (UK) • SimplyVital Health (USA) • Open Health Network (USA) | • Healthcombix (USA) • PointNurse (USA) • Betternot.rest (BRA) | • GEM (USA) • Health Wizz (USA) • Healthcoin (USA) • DAERS (CH) |
Government | • Advocate (USA) • BitFury (USA) • Bitland Global (GH) • Follow My Vote (USA) • Neocapita (AUT) | • PlaceAVote (USA) • Socioneers (NL) • Voatz (USA) • Disberse (UK) • Helperbit (IT) • Authenteq (DE) | • MiVote (AUS) • Crowdesto (UK) • Start Network (UK) • Bitnation (n/a) • Democracy Earth (n/a) | • VoteHQ (CAN) • Borderless (n/a) • Procivis (CH) • BitGive Foundation (USA) • Votem (USA) |
Appendix 2: Classification Results
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Nagel, E., Kranz, J. (2020). Smart City Applications on the Blockchain: Development of a Multi-layer Taxonomy. In: Treiblmaier, H., Clohessy, T. (eds) Blockchain and Distributed Ledger Technology Use Cases. Progress in IS. Springer, Cham. https://doi.org/10.1007/978-3-030-44337-5_10
Download citation
DOI: https://doi.org/10.1007/978-3-030-44337-5_10
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-44336-8
Online ISBN: 978-3-030-44337-5
eBook Packages: Business and ManagementBusiness and Management (R0)