Blockchain as a Strategy for Enhancing Transparency and Trust in Digital Business
Keywords:
Blockchain, Transparency, Trust, Digital Business, Smart Contracts, Distributed Ledger TechnologyAbstract
Digital business depends on transactions between parties who rarely meet, across platforms, firms and borders, so the capacity to see what has happened in a transaction and to rely on the parties behind it becomes a strategic resource. This paper examines blockchain technology as a strategy for enhancing transparency and trust in digital business, treating the two outcomes as distinct constructs rather than as synonyms. Transparency is understood here as the visibility, accessibility and integrity of records about products, transactions and obligations, while trust is understood as a willingness to be vulnerable to another party based on expectations of ability, benevolence and integrity. Drawing on a systematic review of the peer reviewed literature and on conceptual framework building, the paper analyzes four affordances of blockchain systems, namely immutability of records, provenance tracking, smart contract execution and disintermediation, and sets them against five structural limits, namely the oracle problem, the persistence of inaccurate input data, scalability and energy constraints, and unresolved questions of governance. Evidence from four application domains, covering supply chains, finance, certification and digital platforms, shows that documented value concentrates in multi party settings where records are shared, disputed or audit intensive, and that failures such as the TradeLens discontinuation trace back to governance and adoption problems rather than to cryptographic weaknesses. The paper therefore proposes a decision framework that tests whether a use case involves multiple writers, an absent or costly trusted intermediary, a need for a shared and tamper evident history, and data that can be verified at the point of entry, before blockchain is preferred over a conventional database. The Indonesian context shows why adoption strategy must separate the trading of crypto assets from enterprise blockchain deployment, which faces barriers of skills, infrastructure, legal fit and organizational readiness rather than prohibition.
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[2] Z. Zheng, S. Xie, H.-N. Dai, X. Chen, and H. Wang, "An overview of blockchain technology: Architecture, consensus, and future trends," in Proc. 2017 IEEE International Congress on Big Data (BigData Congress), Honolulu, HI, USA, 2017, pp. 557-564, doi: 10.1109/BigDataCongress.2017.85.
[3] R. Beck, M. Avital, M. Rossi, and J. B. Thatcher, "Blockchain technology in business and information systems research," Business & Information Systems Engineering, vol. 59, no. 6, pp. 381-384, 2017, doi: 10.1007/s12599-017-0505-1.
[4] F. Casino, T. K. Dasaklis, and C. Patsakis, "A systematic literature review of blockchain-based applications: Current status, classification and open issues," Telematics and Informatics, vol. 36, pp. 55-81, 2019, doi: 10.1016/j.tele.2018.11.006.
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[6] P. A. Pavlou, "Consumer acceptance of electronic commerce: Integrating trust and risk with the technology acceptance model," International Journal of Electronic Commerce, vol. 7, no. 3, pp. 101-134, 2003.
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[8] D. H. McKnight, M. Carter, J. B. Thatcher, and P. F. Clay, "Trust in a specific technology: An investigation of its components and measures," ACM Transactions on Management Information Systems, vol. 2, no. 2, pp. 1-25, 2011, doi: 10.1145/1985347.1985353.
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[12] K. Francisco and D. Swanson, "The supply chain has no clothes: Technology adoption of blockchain for supply chain transparency," Logistics, vol. 2, no. 1, art. no. 2, 2018, doi: 10.3390/logistics2010002.
[13] X. Li, P. Jiang, T. Chen, X. Luo, and Q. Wen, "A survey on the security of blockchain systems," Future Generation Computer Systems, vol. 107, pp. 841-853, 2020, doi: 10.1016/j.future.2017.08.020.
[14] N. Kshetri, "Blockchain's roles in meeting key supply chain management objectives," International Journal of Information Management, vol. 39, pp. 80-89, 2018, doi: 10.1016/j.ijinfomgt.2017.12.005.
[15] M. Montecchi, K. Plangger, and M. Etter, "It's real, trust me! Establishing supply chain provenance using blockchain," Business Horizons, vol. 62, no. 3, pp. 283-293, 2019, doi: 10.1016/j.bushor.2019.01.008.
[16] L. W. Cong and Z. He, "Blockchain disruption and smart contracts," The Review of Financial Studies, vol. 32, no. 5, pp. 1754-1797, 2019, doi: 10.1093/rfs/hhz007.
[17] J. Mendling, I. Weber, W. M. P. van der Aalst, J. vom Brocke, C. Cabanillas, F. Daniel, S. Debois, C. Di Ciccio, M. Dumas, S. Dustdar, A. Gal, L. García-Bañuelos, G. Governatori, R. Hull, M. La Rosa, H. Leopold, F. Leymann, J. Recker, M. Reichert, H. A. Reijers, S. Rinderle-Ma, A. S. Solti, M. Weske, and X. Xu, "Blockchains for business process management: Challenges and opportunities," ACM Transactions on Management Information Systems, vol. 9, no. 1, art. no. 4, 2018, doi: 10.1145/3183367.
[18] J. F. Galvez, J. C. Mejuto, and J. Simal-Gandara, "Future challenges on the use of blockchain for food traceability analysis," TrAC Trends in Analytical Chemistry, vol. 107, pp. 222-232, 2018, doi: 10.1016/j.trac.2018.08.011.
[19] W. Viriyasitavat and D. Hoonsopon, "Blockchain characteristics and consensus in modern business processes," Journal of Industrial Information Integration, vol. 13, pp. 32-39, 2019, doi: 10.1016/j.jii.2018.07.004.
[20] S. Saberi, M. Kouhizadeh, J. Sarkis, and L. Shen, "Blockchain technology and its relationships to sustainable supply chain management," International Journal of Production Research, vol. 57, no. 7, pp. 2117-2135, 2019, doi: 10.1080/00207543.2018.1533261.
[21] M. Kouhizadeh, S. Saberi, and J. Sarkis, "Blockchain technology and the sustainable supply chain: Theoretically exploring adoption barriers," International Journal of Production Economics, vol. 231, art. no. 107831, 2021, doi: 10.1016/j.ijpe.2020.107831.
[22] S. Ølnes, J. Ubacht, and M. Janssen, "Blockchain in government: Benefits and implications of distributed ledger technology for information sharing," Government Information Quarterly, vol. 34, no. 3, pp. 355-364, 2017, doi: 10.1016/j.giq.2017.09.007.
[23] H. Min, "Blockchain technology for enhancing supply chain resilience," Business Horizons, vol. 62, no. 1, pp. 35-45, 2019, doi: 10.1016/j.bushor.2018.08.012.
[24] P. Dutta, T.-M. Choi, S. Somani, and R. Butala, "Blockchain technology in supply chain operations: Applications, challenges and research opportunities," Transportation Research Part E: Logistics and Transportation Review, vol. 142, art. no. 102067, 2020, doi: 10.1016/j.tre.2020.102067.
[25] M. M. Queiroz, R. Telles, and S. H. Bonilla, "Blockchain and supply chain management integration: A systematic review of the literature," Supply Chain Management: An International Journal, vol. 25, no. 2, pp. 241-254, 2020, doi: 10.1108/SCM-03-2018-0143.
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[27] D. Yermack, "Corporate governance and blockchains," Review of Finance, vol. 21, no. 1, pp. 7-31, 2017, doi: 10.1093/rof/rfw074.
[28] J. Parra-Moyano and O. Ross, "KYC optimization using distributed ledger technology," Business & Information Systems Engineering, vol. 59, no. 6, pp. 411-423, 2017, doi: 10.1007/s12599-017-0504-2.
[29] B. Notheisen, J. B. Cholewa, and A. P. Shanmugam, "Trading real-world assets on blockchain: An application of trust-free transaction systems in the market for lemons," Business & Information Systems Engineering, vol. 59, no. 6, pp. 425-440, 2017.
[30] A. Savelyev, "Contract law 2.0: 'Smart' contracts as the beginning of the end of classic contract law," Information & Communications Technology Law, vol. 26, no. 2, pp. 116-134, 2017, doi: 10.1080/13600834.2017.1301036.
[31] E. Mik, "Smart contracts: Terminology, technical limitations and real world complexity," Law, Innovation and Technology, vol. 9, no. 2, pp. 269-300, 2017, doi: 10.1080/17579961.2017.1378468.
[32] A. Hughes, A. Park, J. Kietzmann, and C. Archer-Brown, "Beyond Bitcoin: What blockchain and distributed ledger technologies mean for firms," Business Horizons, vol. 62, no. 3, pp. 273-281, 2019.
[33] V. J. Morkunas, J. Paschen, and E. Boon, "How blockchain technologies impact your business model," Business Horizons, vol. 62, no. 3, pp. 295-306, 2019.
[34] J. Angelis and E. Ribeiro da Silva, "Blockchain adoption: A value driver perspective," Business Horizons, vol. 62, no. 3, pp. 307-314, 2019.
[35] M. Risius and K. Spohrer, "A blockchain research framework: What we (don't) know, where we go from here, and how we will know when we have succeeded," Business & Information Systems Engineering, vol. 59, no. 6, pp. 385-409, 2017, doi: 10.1007/s12599-017-0506-0.
[36] L. Hughes, Y. K. Dwivedi, S. K. Misra, N. P. Rana, V. Raghavan, and V. Akella, "Blockchain research, practice and policy: Applications, benefits, limitations, emerging research themes and research agenda," International Journal of Information Management, vol. 49, pp. 114-129, 2019, doi: 10.1016/j.ijinfomgt.2019.02.005.
[37] S. Fosso Wamba and M. M. Queiroz, "Blockchain in the operations and supply chain management: Benefits, challenges and future research opportunities," International Journal of Information Management, vol. 52, art. no. 102064, 2020, doi: 10.1016/j.ijinfomgt.2019.102064.
[38] N. Kshetri, "Blockchain and sustainable supply chain management in developing countries," International Journal of Information Management, vol. 60, art. no. 102376, 2021, doi: 10.1016/j.ijinfomgt.2021.102376.
[39] Commodity Futures Trading Regulatory Agency (Bappebti), Regulation of the Head of Bappebti Number 8 of 2021 concerning Guidelines for the Implementation of Physical Market Trading of Crypto Assets on the Futures Exchange, Jakarta, Indonesia, 2021.
[40] Republic of Indonesia, Law Number 4 of 2023 concerning Financial Sector Development and Strengthening, Jakarta, Indonesia, 2023.
[41] Financial Services Authority (OJK), Regulation of the Financial Services Authority Number 27 of 2024 concerning the Implementation of Trading of Digital Financial Assets Including Crypto Assets, Jakarta, Indonesia, 2024.
[42] Republic of Indonesia, Law Number 27 of 2022 concerning Personal Data Protection, Jakarta, Indonesia, 2022.
[43] M. M. Queiroz and S. Fosso Wamba, "Blockchain adoption challenges in supply chain: An empirical investigation of the main drivers in India and the USA," International Journal of Information Management, vol. 46, pp. 70-82, 2019, doi: 10.1016/j.ijinfomgt.2018.11.021.
[44] S. W. Schuetz and V. Venkatesh, "Blockchain, adoption, and financial inclusion in India: Research opportunities," International Journal of Information Management, vol. 52, art. no. 101936, 2020, doi: 10.1016/j.ijinfomgt.2019.04.009.
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