When Is Blockchain Worth It? A Case Study of Carbon Trading

Fangyuan Zhao and Wai Kin (Victor) Chan
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Fangyuan Zhao: Tsinghua-Berkeley Shenzhen Institute, Tsinghua University, Shenzhen 518052, China
Wai Kin (Victor) Chan: Tsinghua-Berkeley Shenzhen Institute, Tsinghua University, Shenzhen 518052, China

Energies, 2020, vol. 13, issue 8, 1-28

Abstract: Blockchain, as an emerging technology and a disruptive innovation, has attracted attention from both academia and industry. However, there are many potential risks associated with it, such as the technical risk, the legal risk and the privacy risk. A comprehensive risk analysis is crucial for cost-effective deployment of blockchain technology. Important adoption decisions, including when to deploy blockchain, how to plan the investment, how to transfer current businesses onto blockchain, and how to price the blockchain service depend on this risk analysis. Yet very little study exists concerning the blockchain adoption planning with risks analysis. This research presents a cost-and-risk analysis framework and an adoption planning method for the case of blockchain application in carbon trading. Design requirements implied by the analysis are inferred and the architecture of a novel hybrid blockchain system is proposed. The system leverages the advantages of blockchain technology and incorporates institutional risk control framework. The optimal adoption strategy of this system is derived through modelling of users’ and the organizer’s behavior.

Keywords: blockchain; risk analysis; system design; innovation adoption; carbon trading (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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