Multiview of Virtual Currency Adoption and Systemic Risks
An Action Research on Service Businesses in the UK
Associate Lecturer in financial and digital Innovation
Professor of IS and Systemic Change
Senior Research Fellow in Innovation Economics
20th August 2014
Table of Contents
1. Research Overview: ........................................................................................................... 2
2. Research Methodology: ..................................................................................................... 5
2.1. Research Approach and Design: .............................................................................. 5
2.2. Project team and their involvement: ........................................................................ 7
3. Potential Contribution: ....................................................................................................... 8
4. Research Timetable:........................................................................................................... 9
References: ............................................................................................................................... 10
Multiview of Virtual Currency Adoption and Systemic Risks:
An Action Research on Service Businesses in the UK
Mostafa Mohamad Trevor Wood-Harper Ronald Ramlogan
email@example.com firstname.lastname@example.org email@example.com
Manchester Business School Manchester Business School Manchester Business School
1. Research Overview:
Our research focuses on the impact of Virtual Currency (VC) adoption on the British service
businesses. We follow the systemic multiple perspectives theory (Linstone, 2010) to explore
the Technical, Organizational, and Personal (TOP) changes that organizations conduct to
issue Bitcoin account and use it as Cryptocurrency. Falling to manage such changes creates
TOP risk and decrease the rate of adopting and accepting Bitcoin as alternative of physical
According to Orlikowski (2008), both technologies and organizations are subject to huge
changes in form and function. The spread of the Internet around the world, the Web 2.0
diffusion, and cloud computing together with the new technical and cultural predispositions
of modern society, allowed a huge increase in the adoption of VC. This type of currency is
traded on open source cyberspace (i.e. the mining) that aims for creating communications and
interactions among traders (Guo et.al, 2011). Individuals and organizations use this currency
as a computing power to pay for or exchange products/services and record these transactions
in a public ledger. Access to Bitcoin can be through wallet software, personal computer, web
application, but mostly through special Bitcoin mobile applications. In this virtual space,
things like words, human relationships, data, and wealth are all computer-mediated. Today,
the VCs are reducing the boundary between physical and virtual worlds, leading huge
changes in many types of business including their technological, organizational, personal
progressions. When adopting and modeling the surroundings of the Bitcoin we are no longer
modeling open source software rather than we enter the world of business modeling (Carugati
& Rossignoli, 2011). Both of the Bitcoin as (as an Information System) and the organizations
(as Business Systems) will be planned to set up at the same time (Eriksson & Penker, 2000).
Service sector represents 80% of the British Economy in terms of trading and transaction size
and 65% of the GDP (Office of National Statistics, 2012). Adopting virtual currency was a
critical tool to improve the flexibility and competition among UK service firms to attract
more customers and build a track their needs through electronic databases (Yermack, 2013).
In the UK, there are only ten sectors that approved Bitcoin as a money substitute (The
Telegraph, 10th Jan 2014). All of them are service industries such as transportation,
entertainment, real estates, food, shipment, fashion, and placement (Office of National
Statistics, 2013). Recently, Cumbria University adopted Bitcoin as a money substitute and
had to conduct different technical, organizational, and personal changes to succeed (Times
Higher Education, 21st 2014).
The environment of adopting Bitcoin represents a wicked problem situation that requires an
inclusive Kantian approach to reconcile the disparate views of individuals, groups, and
organizations that constitute this type of information society. "People only see what they are
prepared to see" (Ralph Waldo Emerson cited in Holmes, 2007). Interestingly enough that it
has been said long time ago and we all know it very well, yet ironically people fail to accept,
digest or even see other perspectives or different point of views other than their own (Mitroff
& Linstone, 1993).
The “Multiperspectives Theory” developed by Harold Linstone in the mid eighties provides a
concrete Kantian view that forces us to distinguish “how we are looking” from “what we are
looking at” (Linstone, 1989; 321). In our research this theory shifted our attention from
“What are the challenges of adopting Bitcoin” toward “How different service businesses see
these risks from different technical, organizational, and personal view”. These three
perspectives naturally present varying attributes and offers insights on a system that is
unattainable with the others. Each perspective offers different archetype (See table 1) through
which humans experience the world (and themselves) and order the world of phenomena, so
that they are able to have experience (Mitroff, 1983: 84).
Table 1: Characteristics of the TOP perspectives
Adopted from Linstone (1989: 313)
Before writing this proposal, we reviewed 20 journal articles and conducted pilot phone
interviews with nine service firms adopted Bitcoin. This pilot was necessary to negotiate
access and develop our interview guide for phase 1 of data collection. In figure 1 below, we
present different TOP risks and changes required to manage them.
From the technical perspective, design of the ledger technologies imposes different reporting
systems for business that adopt Bitcoin. Trading through Bitcoin mining in the UK
(https://bitbargain.co.uk/) requires creating a virtual community for the firm and its staff and
customers. This electronic median reflects the faster information sharing, processing, which
need new work routines and bylaws.
Access to Bitcoin wallet and the mining cyberspace is facilitated through web and mobile
applications. Each of them reflects different dialogue and interfaces sequence. How
businesses change their electronic payment systems in a way that become easy for them to
synchronize with Bitcoin wallet. How they change their payment and record keeping policies
to facilitate the technological changes. Further, businesses need to plan how to prevent
system errors, response time, and maintain the system periodically. System control, recovery,
and monitoring are also significant technical issues that businesses need to plan while
From the organizational perspective, we will explore how service firms create new value
propositions for Bitcoin customers than to direct branch customers (Grinberg, 2011). How
they attach new payment system such as peer-to-peer communities with no third parties
involved as EBC, Fed, and other government organizations. Public institutions and many
governments around the world are facing hard work due to the difficulties of regulating a
system coming from the evolution of IT and cryptography. In fact, Bitcoin system is able to
substitute public institutions as EBC and Fed controls and guarantees, with crypto proofs (e.g.
Block chain). Our participants emphasized that Bitcoin is attracting more customers from the
informal economy where they do not have formal bank accounts rather than electronic
payment platforms such as Pingit, Ukash, Neteller, OKPay, NoChex, NatWest Pay Your
Contact, and Paym. They argue that Bitcoin should advantage the regulators by tracking the
informal economy and securing additional sources of taxes. On the other side, the central
bank and fellow financial institutions argue that money laundering and operational risks in
managing deposits will destroy the financial system in the country (Kaplanov, 2012).
Bankers think of Bitcoin as a threat, while one of our participants (from Pakistan) argues that
Bitcoin can improve the practices of Islamic banking and help David Cameron’s strategy of
transforming London to the biggest Islamic banking city to attract the middle East
investments (UK Trade & Investment, 2013; The Independent, 29th Oct 2013). Suppliers of
service firms and other partners in the supply chains need to change the contractual terms and
receivables documentation cycles to reflect shorter lead-time and flexible payment
From the personal view, we question the distinction between cultural and technological
preferences of a society (Abrahamson, 2011). These two elements, in fact, influence the
digital artifacts (e.g. Bitcoin) used by the businesses and society. For the authors technologies
are also subject to periods of gradual evolution. There are some areas in which we can find
really exciting applications of VC that also demonstrate the similarities between virtual and
real world (Orlikowski & Scott, 2008). Our participants refer to personal issues such as
reputation-based incentives, trust, fraud, public media, social networks, anonymity, and
privacy as key risks that face them when adopting Bitcoin (Bogliolo et.al, 2102). The three
perspectives complement each other and offer a rich picture of systemic risks associated with
Bitcoin adoption (Reid & Harrigan, 2013; Blundell-Wignall, 2014).
Figure 1: TOP Views of Adopting Bitcoin in the Service Companies in the UK
The authors’ pilot study
2. Research Methodology:
2.1. Research Approach and Design:
To consider different views we follow inductive action research to understand the TOP risks
associated with Bitcoin adoption by service businesses. This includes deploying qualitative
data collection methods to produce a grounded framework (Glaser & Strauss, 1967). This
process of generating theory comes through dense descriptions of the themes of subjective
meanings that actors attach to their behavior, then via testing causal hypotheses deduced from
a pre-set theory. In this approach, researchers follow a reflective process model that contrast
between “what we know from theory” and “what we found in the action experiment”
(Baskerville and Wood-Harper, 1998). Our research does not aim to build theoretical themes,
however, some replication features will be revealed for how best a Bitcoin adoption strategy
can be applied and a systemic model for risk management can be developed (Reason &
Our research includes two phases of data collection. In the first stage, we will conduct semi-
structured interviews (Denzin & Lincoln, 2011) with finance, IT, and CRM executives
working with service firms working in the UK. Out of the ten businesses approved Bitcoin, a
quota sample of nine firms have been selected (Miles & Huberman, 1994) (See table 2).
Table 2: Research Methods - Phase 1
This stage of data collection is expected to take place between November 2014 and Jan 2015.
Interview guide has been developed, but will be examined further on two participants to
ratify it. There are three versions of the interview guide that target finance executives, IT
executives, and customer service executives. The interviews will also include some questions
about demographic characteristics, cultural issues, financial performance, and technical
breakdowns. The average time of interview is expected to be 30 minutes and a copy of the
interview transcription will be sent back to participants to make sure a rich picture
(Checkland & Poulter, 2010) of the situation and problems is agreed.
The output of phase 1 is a conceptual framework that clarifies the essential technical,
organizational, and personal changes that service firms need to conduct when adopting
Bitcoin. Template analysis using NVivo software will be used to analyze data along with
drawing rich picture of different technical, organizational, and personal perspectives (See
Harrop, Gillies and Wood-Harper, 2012). GraphPad is computerized data analysis
software that will be used to draw factors analysis of our numerical (economic and
demographic) indicators. Such analysis will offer insight on the relationship between
adoption of Bitcoin and the firm’s performance and the overall contribution to the GDP of the
service sector in the UK.
In the second phase, we use our conceptual framework as a lens to understand the ongoing
action project in Cumbria University. Professor Jem Bendell at the University founded an
institute for leadership and sustainability that deliver two courses addressing the role of
complementary currencies in economic and social systems. These two courses are titled as
“Certificate of Achievement in Sustainable Exchange” and “Postgraduate Certificate in
Sustainable Leadership”. In between Jul-Sep 2015, we will conduct periodical semi-
interviews and observations with a sample of three academics (the chair and two program
directors), three administrative staff (IT, tuitions, and admission managers), and students
enrolled in those two courses.
Data collected at this stage, will help us comparing and contrasting between TOP risks in
education and other service business. Then a final framework will be developed to guide
policy makers and practitioners on how to successfully adopt Bitcoin and conduct the
appropriate transformations to manage the TOP risks (Brito & Castillo, 2013). .
2.2. Project team and their involvement:
Our team includes three investigators who will collaboratively perform the research tasks
listed in table 3 to deliver a high quality research up to the world class standards.
Mostafa Mohamad will act as a principle investigator with his accumulated experience with
virtual and electronic payment technologies. His recent journal peer-reviewed journals and
book contributions highlight the role of complementary currencies and alternative payment
tool in economic and social systems. Mohamad has experience leading participatory action
research projects that aim to explore the socio-technical issues of information system
development in the networked society. This august Mohamad has been granted the best paper
award at the Academy of Management (AoM) presenting his work at the IFIP WG 8.2. Prior
to his award, he got a grant from the National Science Foundation of the United States for his
doctoral research presented at the AoM OCIS group in 2012.
Trevor Wood-Harper is a co-investigator who has almost four decades experience in the
areas of information system development, system thinking, and action research. In addition to
his 210 publications, he is an associate editor of the European Journal of Information Systems
and continues on the Information Systems Journal. Wood-Harper led many successful
research projects as a founding chair of £100,000 of the Computing and Information Systems
at the University of Salford in 1990.
Ronald Ramlogan is a co-investigator who has an extensive expertise as an economist and
innovation systems specialist. Previously, he led research projects funded by the ESRC and
others funded by the Centre for research in Innovation and Competition at Manchester
Business School. He has highly cited journal papers in the areas of evolutionary and complex
systems with an empirical emphasis on innovations in medical technology. Recently, he
conducted a research about the new perspectives on the place of the economy in society. His
expertise covers the political economy, multinational corporations, ICT adoption in emerging
economics, and Innovation in the education sector.
Table 3: Roles of the team members
3. Potential Contribution:
Our research explores the required transformations from TOP perspectives to help
professionals and policy makers highlight the systemic risk associated with adopting Bitcoin
as a “money substitute”. In doing so, this research offers three outputs as follow:
a. A systemic literature review of the TOP risks associated with Bitcoin adoption in
b. A conceptual framework of successful adoption of Bitcoin and managing systemic
risk in service firms.
c. A Conceptual framework of successful adoption of Bitcoin and managing systemic
risk in education services.
d. Factors analysis of TOP risks and the contribution to the GDP in service sectors.
All together contribute to the growing body of literature on the impact of virtual currency (as
IT enabler) on business practices and the overall society (e.g. Ritter & Gemünden, 2004;
Banker 2006; Shin, 2008). For Bitcoin in particular, our research uncovers the innovative
ways that service firms re-engineer their processes to manage the TOP risks and build a
sustainable ecosystem (Nakamoto, 2008; Barber et.al, 2012; Blundell-Wignall, 2014;
4. Research Timetable:
Our research is expected to take place between October 2014 and January 2016 as shown in
table 4 below. All team members will be involved to conduct these activities according to a
preset budget. 30-40% of the total budget will be allocated as salaries in a monthly base,
while 50% will be dedicated to the fieldwork and data analysis. 10-20% will be dedicated to
writing-up, conference presentations, and journal submissions.
Table 4: Timetable for the research activities
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