MRSE
2593 (Technology Management)

Semester
1, 2017/2018

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POST
MODULE ASSIGNMENT

(DISRUPTIVE
TECHNOLOGY)

 

LECTURER’S
NAME

ASSOC. PROF. DR. ASTUTY
BT AMRIN

DR. ROSLINA MOHAMMAD

                                                STUDENTS
DETAIL

NOR ‘ADILAH BINTI
MOHAMAD RAAZALI (MRS141033)

 

 

 

 

 

TABLE OF CONTENTS

 

 

CHAPTER                                     TITLE                                                             PAGE

 

TABLE OF CONTENTS  2

DISRUPTIVE TECHNOLOGY   3

1.1              Introduction  3

1.2              Current Trends of Disruptive Technologies  5

BLOCKCHAIN TECHNOLOGY   6

2.1              Introduction  6

2.2              Hashing            7

2.3              Digital Signature  8

2.4              Blockchains & Bitcoin  9

2.5              Blockchains Extension  10

2.6              Blockchains in Tech Companies  10

2.6.1      21 Incorporation  11

2.6.2      BTCJam   11

2.6.3      Microsoft Corporation (MSFT) 11

2.6.4      ProofofExistence  11

2.7              Implication to Society  12

CONCLUSION   13

REFERENCES  14

 

                                                                                                                               

 

 

DISRUPTIVE TECHNOLOGY

1.1        
Introduction    

          Clayton M. Christensen (1997) in his
book The Innovators Dilemma defines disruptive technology as lacks refinement
due to having performance problems often due to newly introduced, demanded by a
restricted audience and may not have a proven real-world application. McKinsey
Global Institute (2013) defines disruptive technology as advances that
transform the life, business and global business. Investopia on the other hand,
defines disruptive technology as the technology that alters the way businesses
operate significantly that may force different way for business approach,
having risk of losing market share or products and services may become
irrelevant.

          Advancement in technology has become
more challenging from time to time. Not being able to cope with the advancement,
the businesses may become the victims as technology moves so rapidly in any
directions. It provides new entrants to players in upsetting established orders
by enabling new business models thus changing the current way of living and
working. Yu & Hang (2010) reported that disruptive technology is not equivalent to
destructive technology. Therefore, by identifying considering the potential new
technologies, the disruptive powers can be controlled and overcome in the
economy as well as society.   

 

          Figure 1 shows the
evolution of disruptive technology.

Figure 1: Evolution of Disruptive Technology Theory.

          In his book,
Christensen mentions that lots of large corporations are designed to cope with
sustaining technologies which make them the best at knowing the market hence,
having the instrument to develop existing technologies thus, allow them to stay
connected to the customers. Nevertheless, once the low margin disruptive
technologies get into the picture, they are having difficulties to capitalize
on the potential efficiencies, cost-saving or new marketing opportunities.
Therefore, ii is very likely for a large corporation such as Nokia dismissed
the value of disruptive technologies by Samsung and Apple because it did not
follow the current trends on customers’ demands. By the time, Nokia tried to
cope, it is already too late as the technologies of Samsung and Apple already
matures and having larger market share.

 

BLOCKCHAIN
TECHNOLOGY

2.1        
Introduction

          Don & Alex Tapscott (2016) define the blockchain as an incorruptible digital ledger of
economic transactions. The blockchain technology can be programmed to record
not only financial transactions but also virtually everything of value.
Blockchain technology can be understood as duplicated spreadsheet shared across
a computer network which is   updated
regularly. Blockchain technology is a shared and continually reconciled
database which makes it truly public and can be verified easily as it is not
stored in a single location. Blockchain technology has no centralism of
information to allow hacker to corrupt due to hosted by millions of computers
concurrently as data is available to anyone on the internet. Blockchain
technology by other means cannot be controlled by a single entity and has no
sole point of failure.

          Haseeb Rabbani (2017)
explained that hashing and digital signatures are the means of existence to the
blockchain technology. Blockchain technology cannot exists without hashing and
digital signatures as hashing provides a platform on the blockchain technology
that everyone agree on the current state of the world  while digital signatures ensure all
transactions are made by the rightful owners only. These two properties are the
ones who ensure uncorrupted and uncompromised blockchain.

 

2.2        
Hashing

          Haseeb Rabbani (2017)
also explained that hashing is where a random amount of data is applied some
algorithm to produce a fixed-size data called the hash. The data may come from
a single character up to big data such as an entire novel or the spreadsheet of
a banking history. The hash algorithm takes an infinite inputs of bits before
applying some calculations to generate the outputs of infinite number of bits.
Hashing is used to verify that any file has not been modified or altered.

          In blockchain
technology, hashes represent the current world state where the entire state of
the blockchain technology is the input. All the transactions take place will
produce the output of the current world state. All parties involved will agree
on the hash used that the world state is the same one. Then, using the
transaction inside the first block, the hash first hash is calculated. New
block calculation is based on the previous block. This is where the blockchain
is created thus, no transaction can be tampered is guaranteed. Any modification
can be easily detected by comparing the hashes. Investopia (2017) added that
ever-growing size for the blockchain leads to storage and synchronization
issue.

 

2.3        
Digital Signature

          Digital signatures
are the proof of original owners just like the real signatures. However, it is
more secured as it used cryptography or math. Digital signatures allow trust to
be established whenever users visit any website as the browser can verify the
originality of the website whenever the connection is made. As example, when
users browse for Internet banking, digital signatures will verify whether the
website is genuinely from the bank.

          A key pair, a public
and private keys are generated by users using an algorithm in a
disproportionate encryption system. These keys are related to each other
through a mathematical relationship. Public key is disseminated to function as
address to receive messages from other users where private key is used to
signed messages sent to other users. Private key must be kept confidential. The
recipient verifies the signature of sender using the public key. Therefore,
only the account owner transfer the money from the account using the digital
signature.

2.3        
Blockchains & Bitcoin

          The first and still the leading
example of its type, Bitcoin is a cryptocurrency. It is a new form of digital
asset that is said can replace physical currency which is created by the
combination of encryption and peer-to-peer networking. Bitcoin blockchain is an
example of the technology that was invented in 2008 has been operated without a
significant interruption until in 2017. The Guardian reported that nearly USD
64 million in Bitcoin Slovenian-based bitcoin mining marketplace NiceHash was
professionally hacked with a sophisticated social engineering thus, urging its
users to change their passwords immediately.

           

          Bitcoin transaction is transparent
that is controlled by a secret digital key as the proof that the certain amount
of bitcoin is belongs to the owners. The key is similar a password. It allows
access to the money where spending means telling the entire network of
transferring the ownership. However, once the key is lost, resetting it is
impossible. So when someone gains the key, total control over the money is
gained. The record of transaction account of who own which bitcoin is called
the blockchain. Through data mining, a new blocked is added to the blockchain
in average of every 10 minutes.

2.4        
Blockchains Extension

Investopia
visualized blockchain as the full history of a financial transaction where each
block is an individual bank statement. Blockchain simplifies business
operations of all users by aiding as an open electronic ledger as it is a
distributed database system. Nowadays, more and more organizations in
industries such as diamonds, music and insurance becomes interested in the
blockchain technology due to this reason.

          New business models based on the
blockchain technology is beginning to replace the expensive and inefficient
accounting and payment networks of conventional banking industry. Goldman Sachs
reported that stock market operators could save up to USD 6 billion per year by
using the distributed ledger technology (DLT) by blockchain. The banks is
currently exploring into this technology due to potential fraud as well as to
increase a significant amount for cost saving as transactions can become much
faster.

          Commonwealth Bank of Australia and
Wels Fargo & Co (WFC) as the brokers were reported having the first
international blockchain transaction worth USD 35000 with Brighann Cotton
Marketing in October 2016 to procure 88 rolls cotton from US to be sent to
China.

2.5        
Blockchain Initiatives in
Financial Industry

          Lots
of financial institutions has been funding the research into the methods to
improve blockchain technology in term of efficiency, accuracy and speed which
include R3 CEV, a fintech innovation company. The company by using multi-cloud technology
providers has magnificently trialed five distinct blockchain in parallel and currently
promoting its financial-graded distributed ledger platform for commercial use, “Corda”.

Bankrolling

2.6        
Blockchains in Tech Companies

            Tech startups start to adopt the
blockchain technology fascinated by the idea of eliminating the brokers and
moving towards decentralization and democratization.

2.6.1   
21 Incorporation

Incorporation is reported has started to leverage the blockchain
technology into Internet of Thing (IOT) devices where it received USD 116
million in 2015 to be used in embedding the Bitcoin chips into connected IOT
devices and cellphones.

2.6.2  
BTCJam

BTCJam
headquartered in San Francisco is a P2Plending platform specializing in
providing Bitcoin based loans of more than USD 15 million.

2.6.3  
Microsoft Corporation (MSFT)

a)            
MSFT formed a partnership with
a blockchain firm ConsenSys reacting to its interest in blockchain technology. They
announced Ehereum Blockchain as a Service (EBaaS) on the Microsoft’s cloud
computing platform, Azure, in December 2015 to provide its customers a
single-click cloud-based environment. They continuously to develop an open
source, blockchain-based identity system for products, people, services and
apps in Jun 2016.

2.6.4            
ProofofExistence

b)            
One of the first non-financial
companies to utilize blockchain technology is ProofofExistence where it
provides a platform to execute contracts to enable a transaction that cannot be
replicated linked to a unique document by using DLT to store encrypted
information.

2.7     Advantages of Blockchains

          DLT is very efficient which makes it
possible to streamline internal operations thus, reduce the expenses, mistakes
and delays significantly for businesses and bank caused by the traditional
methods of records reconciliations in these areas:

a)     
Cheaper costs are associated in
maintaining electronic ledgers compared to conventional accounting systems as
the number of employees can be reduced greatly.

b)     
DLT systems is nearly fully
automated, thus reducing huge numbers of errors by removing repetitive validation
steps.

c)     
Less capital is being held
against the pending transactions risks as processing delays can be minimized.

          Blockchain technology reduces the need
of intermediaries that can save millions. It allows greater transparency and
auditing can be done much easier thus leads to savings as the regulatory compliance
costs in anti-money laundering. Other than that, the cross-border trades
usually take longer processing time due to time-zone issue. However, blockchain
systems allow smart contracts to be set up or payment to be triggered when
certain conditions are met.

CONCLUSION

Barriers+
in adopting blockchain technology

           

 

 

 

REFERENCES

d)           
“The Innovator’s
Dilemma,” Clayton M. Christensen (1997).

e)            
http://whatis.techtarget.com/definition/disruptive-technology

f)             
https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/disruptive-technologies

g)            
Yu, D., & Hang, C. C.
(2010). A Reflective Review of Disruptive Innovation Theory. International
Journal of Management Reviews, 12(4), 435–452.
https://doi.org/10.1111/j.1468-2370.2009.00272.x

h)            
https://www.investopedia.com/terms/d/disruptive-technology.asp

i)              

15 Disruptive Technology Trends to watch in 2017

j)              
https://richtopia.com/emerging-technologies/11-disruptive-technology-examples

k)            
https://richtopia.com/tech/blockchain

l)              
https://blockgeeks.com/guides/what-is-blockchain-technology/

m)          
https://www.investopedia.com/terms/b/blockchain.asp

n)            
https://www.investopedia.com/news/mapping-bitcoin-interest-us/

o)            
https://www.computerworld.com/article/3191077/security/what-is-blockchain-the-most-disruptive-tech-in-decades.html

p)            
https://www.forbes.com/sites/insideasia/2017/12/10/why-blockchain-is-real-and-bitcoin-is-a-mirage/#5ad4d86b4215

q)            
https://www.forbes.com/sites/groupthink/2017/11/28/to-blockchain-or-not-to-blockchain-its-a-valid-question/#19dd84b2229d

r)             
https://www.theguardian.com/technology/2017/dec/07/bitcoin-64m-cryptocurrency-stolen-hack-attack-marketplace-nicehash-passwords

s)             
https://www.theguardian.com/technology/2017/nov/11/everything-you-ever-wanted-to-know-about-bitcoin-but-were-to-afraid-to-ask-cryptocurrencies

x

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