Blockchain: A Resource of Competitive Advantage in Open and Distance Learning System

Blockchain: A Resource of Competitive Advantage in Open and Distance Learning System

Nikhil Kant (Indira Gandhi National Open University, India)
Copyright: © 2020 |Pages: 26
DOI: 10.4018/978-1-5225-9478-9.ch007


Blockchain, having proved its commercial applications, is receiving increasing interest in the context of ODL system, which has flourished with the support of ICTs. ODL system cannot remain insulated from the associated potential risks of ignoring it and opportunities of embracing it. ODL institutions tend to gain competitive advantage by enhancing capabilities of combining resources. Intangible resources such as technological innovations are more strategically significant than tangible resources. ODL system is yet to taste the benefits of using blockchain. ODL institutions might use it as a resource to fill the gaps between needs, priorities, models, and practices for effective decision making anticipating future trends. The issue of considering it as a resource of competitive advantage for ODL system faces inadequacy of relevant literature. This chapter is an exploratory study considering blockchain as a resource of competitive advantage for ODL system. The significance of the chapter will be for the professionals, policymakers, researchers, governments, and regulators.
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Blockchain is an open-source resource which is commonly known as the core technology behind the creation of crypto currency. In as short a period as a decade only, it has been able to carve a niche through its huge commercial and industrial applications. It has been receiving increasing interests of various industries and universities in Europe and other countries (Grech & Camilleri, 2017). In an era when Open and Distance Learning (ODL) system has flourished with the adequate use and support of the Information and Communication Technologies (ICTs), it is further believed to possess tremendous potential of addressing issues of access by presenting itself as a viable alternative of conventional learning system for capacity building (McQuaide, 2009). Taking a cue, it is worthwhile to expect that Blockchain as an emerging technological innovation has potential to revolutionize the ODL system more than conventional system of learning.

The institutions creating the ODL system, like other organizations, too tend to attain competitive advantage in the educational market place with their cost effective or differentiated products and services by enhancing their capabilities of combining their internal and external tangible and intangible resources. In recent times, the competition has only increased due to presence or emergence of umpteen learning institutions with similar objectives in a liberalized, privatized and globalized world. At this juncture, technological developments in the much-hyped fourth industrial revolution have brought forward Blockchain, a digitally distributed ledger, as an emerging technological innovation which has started to make its presence felt by touching upon various aspects of our daily life. ODL system cannot remain insulated from the associated potential risks of ignoring it and opportunities of embracing it. Figure 1tries to depict an outline of a university using Blockchain for its simple transaction system. Blockchain, generally assumed to be the next great disruptive technological innovation, can encourage the ODL system to make suitable strategic efforts initially for creation of competitive advantage and subsequently for its sustenance.

Figure 1.

Outline of a university using Blockchain for simple transaction system

Source: (Mikroyannidis, Domingue, Bachler, & Quick, 2018)

While consensus exists in the extant literature about innovations contributing to the competitiveness, the focus has shifted towards technological innovations (Weerawardena & Mavondo, 2011). As per discussions in strategic management, intangible resources such as technological innovations are known to be more strategically significant than tangible resources. Whether Blockchain can be utilized by the ODL system as an innovation or as the best fitted technology from a strategic perspective or as a contributor to their competitiveness by proving it a valuable intangible resource, is yet to be tested. Moreover, the different relevant stakeholders are largely unaware of the advantages, and potential assessment of the application of Blockchain in learning is still in infancy.

Any invention which has not been commercially utilized successfully is not considered an innovation. Lévy, Stumpf-Wollersheim, & Welpe (2018) argue that Blockchain has the potential to disrupt educational arena by innovating from the digital transformation of education perspective and social innovation perspective. ODL institutions need to be able to apply efficiently and effectively Blockchain as a resource to fill the gaps between needs, priorities, models and practices by keeping abreast of the dynamic developments and strategic information for effective decision-making anticipating future trends.

Blockchain can be a source of learners’ empowerment and can encourage the formulation of the idea of a free society where learners and learning institutions are probable beneficiaries of its adoption. The expectations of disruption can be related to activities such as award of degrees/certificates, accreditation & licensing, administration/ management of learners’ records and intellectual property, payments of fee/subsidies/grants/fellowships etc.

Key Terms in this Chapter

VRIN Characteristics: While RBV emphasizes that an organization is a bundle of resources, all these resources may not be strategically relevant for the organization to attain competitive advantage. The potential for competitive advantage lies in only those certain resources which have four attributes forming resources with VRIN characteristics namely Valuable, Rare, Inimitable and Non-substitutable.

Resource-Based View (RBV): RBV emphasizes on an inside-out approach for organizational analysis as a theory considering organization as a bundle of resources. It underscores that organizational difference exists because of these resources and the manner to combine them. This theory, thus, stipulates that the analysis of the organization starts from its internal environment.

Permissionless/Unpermissioned Blockchain: A digitally distributed ledger with no single owner. Its purpose is to permit any participant to contribute data for all other participants in the chain having possession of the ledger and identical copies. No participant can restrict any transaction from being added but the ledger’s integrity is maintained by a consensus mechanism.

Bitcoin: A crypto currency and a digital payment system. It is known to have been invented as open-source software by an unknown programmer, Satoshi Nakamoto, in 2009 where transactions take place in a peer-to-peer system directly between users without any intermediary, to be verified by network nodes and recorded in Blockchain. It is also known as the first decentralized digital currency.

Crypto Currency: A medium of exchange. It is electronically created and stored in Blockchain by means of encryption for the purpose of controlling the monetary units’ creation and funds transfer verification. The best-known example is Bitcoin.

Distributed ledger: A digital record of ownership. It does not have any centralized administrator or data storage and hence is different from conventional database technology. It is replicated among many various nodes in a peer-to-peer system where every transaction is signed with a private key in a unique way.

Smart Contracts: An application running on a custom-built Blockchain according to the manner it was programmed where there is no possibility of downtime, fraud, censorship, and interference by any third-party.

Permissioned Blockchain: A digitally distributed ledger with one or multiple owners. The ledger’s integrity is checked, every time when a new record is added, by a limited consensus mechanism. This is generally carried out by trusted actors, such as Government or Banks, through highly-verifiable data sets. This kind of ledger is found to be faster than a permissionless one.

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