Future of Blockchain: Blockchain technology has many promising trends, developments, and predictions to alter numerous industries. Blockchain’s decentralization can improve IoT network security and efficiency, making it a major trend. Blockchain’s tamper-proof data recording can make IoT devices safer and more trustworthy. Scalability innovations in blockchain are also growing. Sharding and layer-2 protocols aim to solve early blockchain networks’ scalability concerns, enabling faster, cheaper transactions. These advances are essential for blockchain’s large-scale applications and widespread adoption.
Decentralized finance is another major prediction. The blockchain-based DeFi platforms are disrupting traditional financial institutions by delivering intermediary-free lending, borrowing, and trading. Financial services democratization could boost global financial inclusion. Regulatory changes will shape blockchain’s future. Blockchain initiatives can operate with greater certainty and compliance as governments and regulatory organizations clarify norms, fostering innovation and consumer protection. Blockchain’s future is bright, with trends and advancements creating a more decentralized, secure, and efficient digital ecosystem.
When is blockchain worth it?
Many companies examine blockchain technology and its impact on business market value in the age of developing technologies. Previous research has indicated that blockchain projects help firms, but value and risk drivers are unknown. We demonstrate numerous conditions where blockchain adds firm market value. We also examine whether blockchain announcements affect business systemic risk. Based on the resource-based view, we use event research techniques, multivariate regression, and firm beta analysis. If the announcement is tied to a blockchain consortium or alliance, made by a tech business, or follows up on early blockchain news, stock markets react positively. Our data also demonstrate that blockchain announcements do not significantly impact a firm’s systematic risk.
The Starting Point
Blockchain news:
Blockchain Multivariate and univariate analyses show that stock markets react positively to blockchain news from firms that announce a collaboration or consortium. Our second subsampling analysis showed tech firms earn more than non-tech firms. However, multivariate regression cannot confirm these findings. Final subsampling research suggests organizational blockchain announcements have substantially larger returns than original announcements. These findings are supported by multivariate regression. Results from risk analyses are insignificant. Mediation and market risk rise are negligible.
Our blockchain technology value studies are based on the resource-based view (RBV). We demonstrate that shareholders value blockchain resources and announcements benefit enterprises. We also demonstrate that investors rate initial blockchain announcements as less successful than subsequent ones. Risk studies indicate that shareholders don’t think blockchain projects affect a firm’s risk.
This paper continues. First, we analyze blockchain value and risk literature and our theoretical RBV backdrop. We then construct hypotheses and outline the research approach, dataset, and measurements. We then present subsampling, multivariate regression, and market risk results. Next, we discuss our findings, their theoretical and practical implications, study restrictions, and future research.
Value of the Blockchain Industry
Cahill et al. (2020) found that disclosing a blockchain effort generates average anomalous returns of 5% on the announcement day in an international data sample from November 2016 to December 2018. US and small- and medium-sized organizations experience this effect more. Research indicates a correlation between Bitcoin price performance and abnormal returns, with speculative blockchain releases eliciting more positive market reactions than non-speculative news (Cahill et al., 2020). Cheng et al. (2019) show that shareholders react positively to blockchain announcements by speculative enterprises, depending on Bitcoin prices.
Sharma and Paul (2021) analyze how blockchain- and cryptocurrency-related name changes affect company value. Name changes related to blockchain have higher anomalous returns and larger market reactions during periods of increased public interest in cryptocurrency (Sharma & Paul, 2021).
Klöckner et al. (2022) establish positive anomalous returns were significant. The 2015–2019 analysis also suggests that blockchain projects dedicated to tracing actual objects or exchanging explicit data have lower positive abnormal returns. Additionally, a company’s innovation doesn’t improve market reaction. However, Research and development intensity, data restrictions, and industry characteristics strongly impact market reactions to blockchain announcements (Klöckner et al., 2022).
Zhang and Liu et al. (2022) show positive stock market reactions to Asian blockchain announcements. Liu et al. (2022) found that technological innovation and strategic announcements yield larger anomalous returns than operational-level blockchain news. Zhang et al. (2022) found that announcements from Chinese IT enterprises and the presence of a chief information officer positively mediate abnormal returns.
Blockchain hypothesis development
Blockchains, as immutable decentralized ledgers, are valuable in applications where several partners or network participants benefit from their architecture (Klöckner et al., 2022). The banking sector is exploring blockchain technology to enhance trust, consensus, and security in institutional transactions (Liang et al., 2021). According to Yuan et al. (2018), smart contracts are a typical type of financial blockchain application that executes transactions depending on predetermined circumstances. Industrial blockchain deployments provide more benefits in inter-organizational contexts (Babich & Hilary, 2020). Blockchain can build trust between supply-chain parties and reduce intermediary expenses. However, non-interorganizational blockchain technology use cases rarely increase corporate value. Non-fungible tokens (NFTs) are often released with marketing goals (Hofstetter et al., 2022).
Companies that research new technologies alone need people resources, knowledge, and a developed technology infrastructure. Organizations profit from collaborating with partners by sharing knowledge, technology, human capital, and expertise (Zavolokina et al., 2020). This gives the firm resources it couldn’t generate or activate internally. Collaboration between organizations not only distributes current knowledge but also fosters new knowledge development (Hardy et al., 2003). However, Juell-Skielse et al. (2017) emphasize the significance of this for complicated activities and technology. Recent research indicates that inter-organizational collaboration benefits from increasingly complex and innovative activities or technologies (Lundin, 2007). Blockchain technologies are new and complex, thus exploring them in inter-organizational situations could be useful. Single companies may find it challenging and risky to explore blockchain use cases due to its inherent strengths in multilateral data sharing and transfer, including decentralization and audibility…
In Summary:
Blockchain technology will change due to trends, developments, and strategic predictions. Blockchain is increasingly used in IoT networks to improve security and efficiency by capturing data tamper-proofly. IoT device vulnerabilities are addressed by this integration, making networked systems safer. To overcome early Bitcoin network restrictions, sharding, and layer-2 protocols are essential. These solutions facilitate large-scale applications and mainstream adoption with faster, cheaper transactions. Another prediction is that decentralized finance (DeFi) platforms will transform financial systems. However, DeFi might democratize financial services and improve global financial inclusion by delivering decentralized lending, borrowing, and trading without intermediaries. Blockchain will be heavily impacted by regulation. Clearer government and regulatory rules will let blockchain initiatives operate with predictability and compliance, supporting innovation and consumer protection. Blockchain technology is poised to create a more decentralized, secure, and efficient digital world. These innovations will transform industries and improve the digital ecosystem.
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