Papers Associated with Bitcoin and Related Topics in Law: Part XX

Christensen (2006) introduced a theory of disruption that sought to explain disruptive technologies in a manner analogous to that of Schumpeter (Knell & Vannuccini, 2022). Denning (2016) explored changes to Christensen’s original publication (2003) and counterarguments such as that by Clayton (2013) to introduce concepts of how to avoid commoditisation and deliver products that the customer needs. In some ways, this leads to a later book by the author designed to aid innovators in seeing what would be next (Christensen et al., 2004), and to predict innovation.

            A question that can be posed is why cryptocurrencies have not supplanted more traditional currencies. Yet, exploring such a question also requires an understanding of the nature of Bitcoin and blockchain technology, including, first of all, the question of what Bitcoin is. Bitcoin is neither a cryptocurrency nor a currency system. The definition, though, is widely misunderstood. Bitcoin presents a public ledger that provides a micropayment solution and a foundation to deliver digital cash. Understanding such distinction is a key foundational component of understanding the framework noted by Christensen (2004, p. 4) when it comes to gaining an understanding of “signals of change within an industry.”

            Limba et al. (2019) utilized disruptive technologies to explore the introduction of cryptocurrency in the financial industry. Yet, in exploring cryptocurrency, the authors fail to understand the nature of the disruptive technology developed with Bitcoin and delivered through the blockchain. The same problem with defining the disruptive status of the technology may be seen in the work by Wörner et al. (2016).

            Other approaches to analyzing Bitcoin have focused on the disruption that may occur through the replacement of fiat money (Wachira & Wachira, 2021). Yet, such analyses also fail to incorporate the integration of Bitcoin as a payment rail that would allow central bank digital currencies (CBDCs) to deliver services and implement new forms of financial control and structures—currently infeasible with the inability to offer negative interest rates and monitor physical cash. Finally, Patrickson (2021) continues to conflate innovation with the hype cycle noted by Christensen and, as a consequence, fails to understand the potential value and source of disruption that can be applied to systems built on the technology behind the blockchain.

Annotated Bibliography

Limba, T., Stankevičius, A., & Andrulevičius, A. (2019). Cryptocurrency as Disruptive Technology: Theoretical Insights.

Limba et al. (2019, p. 2069) have taken the easy approach of noting the explanation of a new technology that says, “[c]urrently according to Kaplanov – “Bitcoin is the world’s first digital, private cryptocurrency exchanged over the internet through the use of a peer-to-peer network.” Yet, Bitcoin is neither the first “digital, private cryptocurrency” nor, for that matter, a “cryptocurrency.” Karma (Garcia & Hoepman, 2005) predates Bitcoin, and presents the properties attributed to Bitcoin by Limba et al. (2019).

The Internet was launched in 1969, and the current networking protocols attributable to TCP were released in 1984. Despite this, the Internet took another two decades to become the framework of commerce and communication that it represents today. The aim of the paper presented by Limba et al. (2019, p. 2070) is “to reveal possible problematic features of cryptocurrency, as social phenomenon.” To this end, the authors present Bitcoin as an unregulated financial system outside government control.

The description of Bitcoin and blockchain technology provided by the authors captures many of the benefits while completely failing to understand the technology or purpose of the system. For example, in analyzing virtual currency, the authors have overlooked the cash-based structure of Bitcoin and focused on the notion of cryptocurrency, a previous technology that has been replaced by Bitcoin. In doing so, the authors fail to understand that an ICO, or initial coin offering, is no different to any previous attempts at delivering digital financial systems, including those within the 1990s, such as web IPOs.

The paper utilizes quotes from people the authors (Limba et al., 2019, p. 2073) reference as scientists. Paul Ehlig, for instance, says that “currency is any agreed upon means of exchanges of goods and services, so you could have some small stones, as used in history, and if it’s accepted by a sufficiently large population” (Mohsin, 2013). Yet, such an individual is not a scientist and has ignored the legal definitions of money and currency in applying an analysis of Bitcoin based on the desired outcomes of the original paper and which may be found in more reliable works (Proctor, 2012).

Overall, the paper has failed to describe Bitcoin or the potential disruption it could bring. Instead, in misrepresenting Bitcoin as a cryptocurrency, the authors present a paper that documents problems unrelated to the technology and with solutions outside the scope of what Bitcoin can deliver. In addition, the authors make an all too common mistake in assuming quotes and definitions presented in a series of newspaper articles and through papers promoted by individuals incentivized to promote alternative agendas as being definitive. Overall, the paper fails to incorporate ideas of disruption associated with augmenting the existing financial system, and that can be extended through the development of new technology built on top of Bitcoin, analogous to how the web was built on top of the Internet.

Patrickson, B. (2021). What do blockchain technologies imply for digital creative industries? Creativity and Innovation Management, 30(3), 585–595.

Patrickson (2021) seeks to examine what blockchain technologies can do in the development and disruption of the digital creative industry. Yet, the author again falsely attributes Bitcoin to a cryptocurrency and represents the trading of assets created on a blockchain with the underlying technology. Then, in analyzing solutions that can be built on the blockchain, the author looks into IP ownership. In doing so, Patrickson (2021, p. 587) says that “Blockchain solves a problem that nobody’s resolved before … digital scarcity … by making the possibility of duplication almost impossible (it) opens up a whole new range of possibilities (Musician).”

The ability to introduce micro-shares and assign IP licensing provides new opportunities for a variety of industries. Yet, as with other authors, the failure to understand that funding methodologies enacted over a blockchain are already covered in existing regulatory frameworks has limited the value of the work. Presuming that common law provisions and the existing regulations around the funding of corporate groups and partnerships are not applicable because they are associated with a digital system misses both the history of the industry and the nature of the existing legal structures.

The author has argued that Christensen’s innovation theory will result in flashy innovations failing to achieve disruptive outcomes. In part, this can be demonstrated with some of the systems referenced by the author, while the nature of these flashy technologies equally captures the author. Similarly, in analyzing the most prevalent technologies, the paper has failed to present technologies that deliver solutions. For example, the Government of the Philippines is implementing digital cash in transaction systems based on the technology behind Bitcoin, running over the Bitcoin (BSV) blockchain.

Such an analysis is missed by Patrickson (2021), who references Christensen’s innovation theory while watching the flashy technology and missing the more ‘boring’ day-to-day systems that are revolutionizing trade and processing. Moreover, in documenting the overhyped systems, gaining promotion to sell many fraudulent concepts and pyramid schemes, the author has failed to understand that existing implementations are being deployed in providing government services and trade solutions in the logistics industry (Henninger & Mashatan, 2021).

Wachira, V. K., & Wachira, E. W. (2021). Digital Currencies and Their Potential to Disrupt and Replace Fiat Money: The Case of Bitcoins. European Journal of Economic and Financial Research, 5(1), Article 1.  

As with the other papers in this annotated bibliography, Wachira and Wachira (2021) falsely portray Bitcoin as a digital currency. As such, the focus of this paper has been on the prediction of prices in unregulated bucket shops trading as exchanges. The work starts by misrepresenting the nature of digital currency and mobile payments, saying that “the development of digital currencies such as mobile payments, PayPal, Bitcoin, and blockchain has led to a new innovative means of exchange, utilizing and enhancing internet transactions in the financial sector as a means for improving liquidity” (Wachira & Wachira, 2021, p. 9). Such an error undermines the main premise of the paper, and falsely portrays payment systems, including PayPal, as currencies.

The paper starts by misrepresenting digital currencies as systems individuals can issue without liability. The analysis further fails to note the development of private money, the issuing of systems related to private issues in history dating back centuries, and the over 10,000 digital private money systems that have existed before Bitcoin and which have been based on an electronic exchange.

In analyzing Bitcoin as a disruptive innovation, Wachira and Wachira (2021) correctly note that the technology remains controversial. Yet, in doing so, the authors have used the statements of individuals with known bias and failed to note the same when analyzing how the integration into central banks will disrupt other technologies. Further, the authors fail to understand that Bitcoin can act as a payment rail allowing for the deployment of CBDCs while providing a means to increase the privacy of transactions compared to what is available now. In taking such an approach, the paper examines Bitcoin as a threat without understanding the opportunity and then seeks to present a false level of rigour by applying an unrelated ARIMA model related to the fluctuation of prices.


Christensen, C. M. (2003). The Innovator’s Dilemma: The Revolutionary Book that Will Change the Way You Do Business. HarperCollins.

Christensen, C. M., Anthony, S. D., & Roth, E. A. (2004). Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change. Harvard Business Press.

Christensen, C. M., Baumann, H., Ruggles, R., & Sadtler, T. M. (2006). Disruptive innovation for social change. Harvard Business Review, 84(12), 94.

Clayton, M. (2013). The Innovator’s Solution: Creating and Sustaining Successful Growth. Harvard Business Press.

Denning, S. (2016). Christensen updates disruption theory. Strategy & Leadership, 44(2), 10–16.

Garcia, F. D., & Hoepman, J.-H. (2005). Off-Line Karma: A Decentralized Currency for Peer-to-peer and Grid Applications. In J. Ioannidis, A. Keromytis, & M. Yung (Eds.), Applied Cryptography and Network Security (pp. 364–377). Springer.

Henninger, A., & Mashatan, A. (2021). Distributed Interoperable Records: The Key to Better Supply Chain Management. Computers 2021, 10, 89. s Note: MDPI stays neutral with regard to jurisdictional claims in published ….

Knell, M., & Vannuccini, S. (2022). Tools and concepts for understanding disruptive technological change after Schumpeter. Jena Economic Research Papers.

Limba, T., Stankevičius, A., & Andrulevičius, A. (2019). Cryptocurrency as Disruptive Technology: Theoretical Insights.

Mohsin, S. (2013). Bitcoins Fail Currency Test in Scandinavia’s Richest Nation—Bloomberg.

Patrickson, B. (2021). What do blockchain technologies imply for digital creative industries? Creativity and Innovation Management, 30(3), 585–595.

Proctor, C. (2012). Mann on the legal aspect of money. Oxford University Press.

Wachira, V. K., & Wachira, E. W. (2021). Digital Currencies and Their Potential to Disrupt and Replace Fiat Money: The Case of Bitcoins. European Journal of Economic and Financial Research, 5(1), Article 1.

Wörner, D., Von Bomhard, T., Schreier, Y.-P., & Bilgeri, D. (2016). The bitcoin ecosystem: Disruption beyond financial services?

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