Page 23 - U4SSC Blockchain for smart sustainable cities

2.5 Blockchain potentials, challenges and implications

Blockchain is a technology that is impacting the world of finance through the cryptocurrencies. It is now
transforming other fundamental aspects of society, particularly with reference to how governance is
carried out at the regional, national and local levels. The governments and public service sectors are
increasingly interested in the use of blockchain technology. The technology is presented with great
potential and offers solutions and relevant opportunities at the national level, local and city levels.
Table 3, below, summarizes some of the promised opportunities and benefits of blockchain technology.

Table 3: Opportunities of blockchain 30

Categories Opportunities and Benefits of Blockchain technology
Strategic Transparency, avoiding fraud and manipulation, reducing corruption.
Organizational Increased trust, transparency and accountability, predictive capability,
increased control.
Economical Clear ownerships, reduced costs.
Informational Increased resilience to attack, data integrity and high quality, reducing
human errors, information access, privacy, reliability.
Technological Resilience, security, persistency and immutability (irreversibility).
Most of the studies highlight that the adoption of blockchain by government and public services is still
minimal. It also underscores the lack of empirical evidence of the adoption and overall success rates. A
limited number of studies have measured the implications of blockchain technology. The uncertainty
and complexity of the technology are affecting its adoption level. Blockchain technology is not the first
technology to which organizations and institutions are struggling to adapt. The main challenges, as
presented in Table 4, are technological, organizational and institutional.

Table 4: Challenges and barriers of blockchain technology 31

Categories Challenges and barriers of blockchain technology
Technological Immature technology, security, Scalability, flexibility, data privacy, cost and
performance, energy consumption, interoperability, complexity, limited
technical skills
Organizational Feasibility, acceptability governance model, organizational readiness,
leadership readiness, business model alignment
Institutional Legal framework, regulatory uncertainty, ethical parameters, inter-
organizational relationship, ecosystem readiness

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