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See detailThe Energy Consumption of Blockchain Technology: Beyond Myth
Sedlmeir, Johannes; Buhl, Hans Ulrich; Fridgen, Gilbert UL et al

in Business and Information Systems Engineering (2020)

When talking about blockchain technology in academia, business, and society, frequently generalizations are still heared about its – supposedly inherent – enormous energy consumption. This perception ... [more ▼]

When talking about blockchain technology in academia, business, and society, frequently generalizations are still heared about its – supposedly inherent – enormous energy consumption. This perception inevitably raises concerns about the further adoption of blockchain technology, a fact that inhibits rapid uptake of what is widely considered to be a groundbreaking and disruptive innovation. However, blockchain technology is far from homogeneous, meaning that blanket statements about its energy consumption should be reviewed with care. The article is meant to bring clarity to the topic in a holistic fashion,looking beyond claims regarding the energy consumption of Bitcoin, which have, so far, dominated the discussion. [less ▲]

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See detailThe token’s secret: the two-faced financial incentive of the token economy
Drasch, Benedict J; Fridgen, Gilbert UL; Manner-Romberg, Tobias et al

in Electronic Markets (2020)

Multi-sided platforms are omnipresent in today’s digital world. However, establishing a platform includes challenges: The platform utility usually increases with the number of participants. At an early ... [more ▼]

Multi-sided platforms are omnipresent in today’s digital world. However, establishing a platform includes challenges: The platform utility usually increases with the number of participants. At an early stage, potential participants expect the platform utility to be low and lack an incentive to join (i.e., “chicken and egg” problem). Blockchain-enabled utility tokens hold the promise to overcome this problem. They supposedly provide a suitable financial incentive for their owners to join the platform as soon as possible. In the first half of 2018, investors seemed to believe in the presumption and spent more than US$ 17.6 billion in token sales. To date, we know little about this financial incentive in the context of the token economy. For this purpose, we model the token value development and the associated incentives in a multi-sided blockchain-enabled platform. The resulting findings suggest that blockchain-enabled utility tokens can help to overcome the “chicken and egg” problem. However, these tokens lead to contradictory incentives for platform participants, and can even inhibit platform usage. The contribution of our work is twofold: First, we develop one of the first models for token value development. Second, our research contributes to a deeper understanding of the utility token’s financial incentive. [less ▲]

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See detailThe insurance effect of renewable distributed energy resources against uncertain electricity price developments
Fridgen, Gilbert UL; Halbrügge, Stephanie; Olenberger, Christian et al

in Energy Economics (2020), 91

To combat climate change, many countries all around the world currently foster the development of renewable energy sources (RES). However, in contrast to traditional energy systems that relied on few ... [more ▼]

To combat climate change, many countries all around the world currently foster the development of renewable energy sources (RES). However, in contrast to traditional energy systems that relied on few central power plants, RES are typically highly decentral and spread all over a country. Against this backdrop, the promotion of a decentralization of the energy system by fostering a regional balance of energy demand and supply with a corresponding increase in energy democracy is seen as a promising approach. However, energy democracy driven by an increasing involvement of consumers requires adequate investments of consumers in their own local RES in order to become active players, usually called prosumers. Risk associated with uncertain long-term electricity price developments is generally seen as a barrier to investments. In contrast, we describe that an investment in distributed energy resources (DERs) may actually serve as a consumer's insurance against price risk. Our results set out that the consideration of risk-aversion may actually positively shift an investment decision in renewable DERs. This is due to the prosumer becoming more self-sufficient and less dependent on uncertain price developments. To analyze such an insurance effect, we create a formal decision model considering the prosumer's risk-aversion and derive the prosumer's optimal investment in renewable DERs. However, our results also indicate that under some circumstances the insurance effect disappears: When a prosumer turns into a predominant producer, the prosumer is again exposed to risk in terms of uncertain revenues. Ultimately, our work highlights the importance of a consideration of the insurance effect when assessing an investment in renewable DERs. [less ▲]

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See detailHow to Develop a GDPR-Compliant Blockchain Solution for Cross-Organizational Workflow Management: Evidence from the German Asylum Procedure.
Guggenmos, Florian; Lockl, Jannik; Rieger, Alexander UL et al

in Proceedings of the Hawaii International Conference on System Sciences 2020 (2020)

Blockchain technology has the potential to resolve trust concerns in cross-organizational workflows and to reduce reliance on paper-based documents as trust anchors. Although these prospects are real, so ... [more ▼]

Blockchain technology has the potential to resolve trust concerns in cross-organizational workflows and to reduce reliance on paper-based documents as trust anchors. Although these prospects are real, so is regulatory uncertainty. In particular, the reconciliation of blockchain with Europe’s General Data Protection Regulation (GDPR) is proving to be a significant challenge. We tackled this challenge with the German Federal Office for Migration and Refugees. Here, we explain how we used Action Research to guide the Federal Office in creating a GDPR-compliant blockchain solution for the German asylum procedure. Moreover, we explain the architecture of the Federal Office’s solution and present two design principles for developing GDPR- compliant blockchain solutions for cross- organizational workflow management. [less ▲]

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See detailDemand response through automated air conditioning in commercial buildings—a data-driven approach
Drasch, Benedict J.; Fridgen, Gilbert UL; Häfner, Lukas

in Business Research (2020), 13(3), 1491--1525

Building operation faces great challenges in electricity cost control as prices on electricity markets become increasingly volatile. Simultaneously, building operators could nowadays be empowered with ... [more ▼]

Building operation faces great challenges in electricity cost control as prices on electricity markets become increasingly volatile. Simultaneously, building operators could nowadays be empowered with information and communication technology that dynamically integrates relevant information sources, predicts future electricity prices and demand, and uses smart control to enable electricity cost savings. In particular, data-driven decision support systems would allow the utilization of temporal flexibilities in electricity consumption by shifting load to times of lower electricity prices. To contribute to this development, we propose a simple, general, and forward-looking demand response (DR) approach that can be part of future data-driven decision support systems in the domain of building electricity management. For the special use case of building air conditioning systems, our DR approach decides in periodic increments whether to exercise air conditioning in regard to future electricity prices and demand. The decision is made based on an ex-ante estimation by comparing the total expected electricity costs for all possible activation periods. For the prediction of future electricity prices, we draw on existing work and refine a prediction method for our purpose. To determine future electricity demand, we analyze historical data and derive data-driven dependencies. We embed the DR approach into a four-step framework and demonstrate its validity, utility and quality within an evaluation using real-world data from two public buildings in the US. Thereby, we address a real-world business case and find significant cost savings potential when using our DR approach. [less ▲]

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See detailScheduling Flexible Demand in Cloud Computing Spot Markets
Keller, Robert; Häfner, Lukas; Sachs, Thomas et al

in Business and Information Systems Engineering (2020), 62(1), 25--39

The rapid standardization and specialization of cloud computing services have led to the development of cloud spot markets on which cloud service providers and customers can trade in near real-time ... [more ▼]

The rapid standardization and specialization of cloud computing services have led to the development of cloud spot markets on which cloud service providers and customers can trade in near real-time. Frequent changes in demand and supply give rise to spot prices that vary throughout the day. Cloud customers often have temporal flexibility to execute their jobs before a specific deadline. In this paper, the authors apply real options analysis (ROA), which is an established valuation method designed to capture the flexibility of action under uncertainty. They adapt and compare multiple discrete-time approaches that enable cloud customers to quantify and exploit the monetary value of their short-term temporal flexibility. The paper contributes to the field by guaranteeing cloud job execution of variable-time requests in a single cloud spot market, whereas existing multi-market strategies may not fulfill requests when outbid. In a broad simulation of scenarios for the use of Amazon EC2 spot instances, the developed approaches exploit the existing savings potential up to 40 percent – a considerable extent. Moreover, the results demonstrate that ROA, which explicitly considers time-of-day-specific spot price patterns, outperforms traditional option pricing models and expectation optimization. [less ▲]

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See detailStrukturierte Analyse von Nachfrageflexibilität im Stromsystem und Ableitung eines generischen Geschäftsmodells für (stromintensive) Unternehmen
Haupt, Leon; Körner, Marc-Fabian; Schoepf, Michael UL et al

in Zeitschrift für Energiewirtschaft (2020)

The expansion of renewable energy requires appropriate flexibility in the electricity system in order to maintain the balance between electricity generation and consumption at all times. The industrial ... [more ▼]

The expansion of renewable energy requires appropriate flexibility in the electricity system in order to maintain the balance between electricity generation and consumption at all times. The industrial sector plays a central role for a successful energy transition due to the power-intensive processes and the resulting high electricity demand. Industrial demand response may be a cost-effective alternative to other flexibility options. At the same time, companies can reduce electricity procurement costs by providing demand response. Nevertheless, due to a complex decision-making environment and a lack of planning security, only a few companies are currently exploiting the existing potential. To reach the goals of the energy transition, the potential used must still be raised significantly, i.e., companies must align their demand for electricity more closely to the existing supply of electricity. This article supports companies in this transformation process by illustrating dimensions and characteristics of a business model for demand response. Through a literature study and subsequent expert workshops, a generic business model for companies is derived that provides transparency regarding the necessary activities and resources for enabling and implementing demand response. The results were developed using the established Business Model Canvas. This supports companies that have not yet started to use demand response in their business model development and thus reduces barriers to entry. The results presented contribute to an increase in the demand response potential of the industry. [less ▲]

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See detailA holistic view on sector coupling
Fridgen, Gilbert UL; Keller, Robert; Körner, Marc-Fabian et al

in Energy Policy (2020), 147

Sector coupling (SC) describes the concept of a purposeful connection and interaction of energy sectors to increase the flexibility of supply, demand, and storing. While SC is linked to research on smart ... [more ▼]

Sector coupling (SC) describes the concept of a purposeful connection and interaction of energy sectors to increase the flexibility of supply, demand, and storing. While SC is linked to research on smart energy system and locates itself in the research stream of 100% renewable energy systems, it currently focusses on counteracting challenges of temporal energy balancing induced by the intermittent feed-in of renewable energy sources. As regarding the coupling of grids, SC currently remains within classical energy grids. It does not exploit the coupled sectors’ potential to its full extent and, hence, lacks a holistic view. To include this view, we call on the use of all grids from coupled sectors for spatial energy transportation, resulting in an infrastructural system. By using the different loss structures of coupled grids, we illustrate how a holistic view on SC minimizes transportation losses. We argue that SC should include all grids that transport whichever type of energy (e.g., even transportation or communication grids). Ultimately, we derive and discuss implications relevant for policy makers and research: We illustrate why regulation and market design should be aligned in a way that the resulting incentives within and across the different sectors support climate change goals. [less ▲]

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See detailHow ill is your IT Portfolio? : Measuring Criticality in IT Portfolios Using Epidemiology
Guggenmos, Florian; Hofmann, Peter; Fridgen, Gilbert UL

in 40th International Conference on Information Systems, Munich, Germany, 2019 (2019)

IT project portfolios, consisting of IT projects, also interact with the entire IT landscape. In case of a failure of only one element, existing dependencies can lead to a cascade failure, which can cause ... [more ▼]

IT project portfolios, consisting of IT projects, also interact with the entire IT landscape. In case of a failure of only one element, existing dependencies can lead to a cascade failure, which can cause high losses. Despite the present effects of systemic risk, research into IT portfolio management lacks suitable methods to quantitatively assess systemic risk. We follow the design science research paradigm to develop and evaluate our ‘on track’ or ‘in difficulty’ (TD) method by applying the SI model, representing a recognized network diffusion model in epidemiology, in an IT portfolio context. We evaluate our method using a real-world dataset. We introduce a criticality measure for diffusion models in IT portfolios and compare the TD method’s results and the alpha centrality to human judgment as a benchmark. From our evaluation, we conclude that the TD method outperforms alpha centrality and is a suitable risk measure in IT portfolio management. [less ▲]

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See detailDecoupling, Information Technology, and the Tradeoff between Organizational Reliability and Organizational Agility
Keller, Robert; Ollig, Philipp; Fridgen, Gilbert UL

in 27th European Conference on Information Systems (ECIS) (2019)

Information technology (IT) units within organizations pursue both organizational reliability and agility goals. Reliability ensures the stability and business continuity of organizations, whereas agility ... [more ▼]

Information technology (IT) units within organizations pursue both organizational reliability and agility goals. Reliability ensures the stability and business continuity of organizations, whereas agility helps to detect and exploit market opportunities. In our research, we study projects in 19 organizations and unravel the relationship between agility and reliability. We observe that in certain cases reliability can undermine agility and vice versa. Global rules, routines, and procedures can hinder organizational agility whereas responding creatively for agility can locally undermine global organizational reliability. Further, we find that organizations often use decoupling to deal with this trade-off. Although decoupling enables them to be agile and reliable at the same time, it risks undermining both capabilities in the future, by encouraging the accumulation of technical debt. We find indications of how technical debt limits opportunities to creatively respond and can increase vulnerabilities. [less ▲]

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See detailCompensating Balancing Demand by Spatial Load Migration : The Case of Geographically Distributed Data Center
Thimmel, Markus; Fridgen, Gilbert UL; Keller, Robert et al

in Energy Policy (2019), 130

The increasing share of renewables confronts existing power grids with a massive challenge, stemming from additional volatility to power grids introduced by renewable energy sources. This increases the ... [more ▼]

The increasing share of renewables confronts existing power grids with a massive challenge, stemming from additional volatility to power grids introduced by renewable energy sources. This increases the demand for balancing mechanisms, which provide balancing power to ensure that power supply always meets with demand. However, the ability to provide cost-efficient and eco-friendly balancing power can vary significantly between locations. Fridgen et al. (2017) introduce an approach based on geographically distributed data centers, aiming at the spatial migration of balancing power demand between distant locations. Although their approach enables the migration of balancing demand to cost-efficient and/or eco-friendly balancing mechanisms, it will come up against limits if deployed on a global scale. In this paper, we extend Fridgen et al. (2017)’s approach by developing a model based on geographically distributed data centers, which not only enables the migration of balancing demand but also compensates for this migration when it is contradictory between different balancing power markets without burdening conventional balancing mechanisms. Using a simulation based on real-world data, we demonstrate the possibility to exploit the potential of compensation balancing demand offered by spatial load migration resulting in economic gains that will incentivize data center operators to apply our model. [less ▲]

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See detailSustainability's Coming Home : Preliminary Design Principles for the Sustainable Smart District
Keller, Robert; Röhrich, Felix; Schmidt, Lukas et al

in 14. International Business Informatics Conference (2019)

Consumer trends like local consumption, sharing of property, and environmental awareness change our habits and thereby our surroundings. These trends have their origin in our direct environment, in the ... [more ▼]

Consumer trends like local consumption, sharing of property, and environmental awareness change our habits and thereby our surroundings. These trends have their origin in our direct environment, in the districts of our city or community, where we live and socialize. Cities and districts are changing to “smart cities” and “smart districts” as a part of the ongoing digitalization. These changes offer the possibility to entrench the idea of sustainability and build a platform-based ecosystem for a sustainable smart district. This research aims to identify guidelines in form of preliminary design principles (PDPs) for sustainable smart districts. To achieve this, we conduct a structured literature review. On this basis, we derive and develop PDPs with the help of semi-structured interviews and a non-representative sample of the German population. The resulting nine PDPs describe a first insight into the design of sustainable smart districts. [less ▲]

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See detailFraming Microgrid Design from a Business and Information Systems Engineering Perspective
Sachs, Thomas; Gründler, Anna; Rusic, Milos et al

in Business and Information Systems Engineering (2019), 61(6), 729--744

Microgrids are decentralized distribution networks that integrate distributed energy resources and balance generation and loads locally. The introduction of microgrids can help overcome challenges of ... [more ▼]

Microgrids are decentralized distribution networks that integrate distributed energy resources and balance generation and loads locally. The introduction of microgrids can help overcome challenges of global energy systems. Despite this potential, in the information systems domain, research on microgrids has been limited. The paper on hand studies the design of microgrids for electric energy. Experts we interview state that technological microgrid solutions have been solidly developed; yet, lack of economic and business consideration is stalling their deployment. We argue that research in business and information systems engineering can provide integrated perspectives bridging from technology to markets. Therefore, from an extensive interdisciplinary literature review, we derive a framework that structures microgrid design and may guide information systems researchers. The framework comprises four layers: energy technology and infrastructure, information and communication infrastructure, application systems, and governance. We evaluate the framework in interviews with 15 experts from industry and 3 from academia. The given feedback and examples allow us to iteratively refine the framework, instantiate it, and point out research directions on microgrids in business and information systems engineering. [less ▲]

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See detailBlockchain in der öffentlichen Verwaltung - Unterstützung der Zusammenarbeit im Asylprozess
Guggenmos, Florian; Lockl, Jannik; Rieger, Alexander UL et al

in Informatik-Spektrum (2019)

Due to Germany's federal structures, IT architects in German authorities are often faced with major challenges. A large number of regionally different process variants must be mapped on heterogeneous IT ... [more ▼]

Due to Germany's federal structures, IT architects in German authorities are often faced with major challenges. A large number of regionally different process variants must be mapped on heterogeneous IT infrastructures. In addition, the exchange of information between authorities is not fully digitized and only partially standardized. One of the technologies that could create added value in this area of ​​conflict is blockchain. Together with the Federal Office for Migration and Refugees, the applicability of the technology in the asylum area was examined in a proof-of-concept project. The central finding from the proof-of-concept is that a cross-agency blockchain solution in the asylum process is superior to central solutions in terms of integrity, performance, security and transparency. [less ▲]

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See detailÜberprüfung der Machbarkeit eines offenen und dezentralen Mobilitätssystems (OMOS)
Fridgen, Gilbert UL; Röhlen, Jörg; Guggenberger, Tobias et al

Report (2019)

The customer requirements for mobility systems are changing. Travelers increasingly expect a carefree travel experience with any starting or destination point ("Seamless Mobility as a Service") - and that ... [more ▼]

The customer requirements for mobility systems are changing. Travelers increasingly expect a carefree travel experience with any starting or destination point ("Seamless Mobility as a Service") - and that with a single booking and billing for all means of transport used. In order to meet this need, the idea of ​​an open and decentralized mobility system is increasingly being discussed, which can integrate the offers of various mobility providers through a common, neutral system. Before such a system can take a concrete form, however, a clear understanding of the opportunities and risks as well as the specific requirements of end customers and mobility providers on such a system is required. The aim of this study is to identify and evaluate the general opportunities and risks of a corresponding system, as well as the general feasibility of the requirements placed on such a system. A multi-method approach was chosen for this purpose. This makes it possible to examine a holistic picture of the requirements of end customers as well as mobility providers and other stakeholders (e.g. technology providers). Records from a workshop with the (associated) partners in the OMOS project and the results of a literature analysis were used as the basis for data collection. To examine the end customer needs, two surveys were carried out with a total of 352 participants, whose questions were derived from practical workshops (survey I) and theoretical models (survey II). In addition, an interview study was carried out with 15 experts to discuss the requirements of various stakeholders, on the basis of which general topics in the field of seamless mobility were also asked. [less ▲]

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See detailSupporting communication and cooperation in the asylum procedure with Blockchain technology : A proof of concept by the Federal Office for Migration and Refugees
Fridgen, Gilbert UL; Guggenmos, Florian; Lockl, Jannik et al

Report (2019)

The proof of concept showed that the use of Blockchain technology could support cross-organisational communication and cooperation in the asylum procedure. In addition, Blockchain could provide an ... [more ▼]

The proof of concept showed that the use of Blockchain technology could support cross-organisational communication and cooperation in the asylum procedure. In addition, Blockchain could provide an important foundation for the establishment of digital identities and allow an asylum seeker’s procedure to be tracked based on this identity. Admittedly, not all applicable data protection regulations were fully implemented in the proof of concept. However, the findings gained as part of the project provide a promising basis for the development of a Blockchain-based solution for the asylum procedure that complies with data protection requirements. Moreover, the developed concept could scale beyond Germany’s borders. Blockchain-based, transnational management of asylum procedures could therefore become a joint project of the European member states to strengthen cooperation while safeguarding federal structures. This means that Blockchain technology could be the start of digital federalism in Europe (including the asylum procedure). [less ▲]

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See detail(How) Can Blockchain Contribute to the Management of Systemic Risks in Global Supply Networks?
Fridgen, Gilbert UL; Körner, Marc-Fabian; Sedlmeir, Johannes et al

in 14. Internationale Tagung Wirtschaftsinformatik (2019)

Even though globalization has led to larger, faster, and more efficient supply chains, at the same time the new worldwide interconnection has also resulted in major challenges with respect to hidden ... [more ▼]

Even though globalization has led to larger, faster, and more efficient supply chains, at the same time the new worldwide interconnection has also resulted in major challenges with respect to hidden systemic risks. In particular, there is a lack of a holistic perspective on the entire supply network. This missing global view prohibits the anamnesis and management of underlying risks. Against this backdrop, in this paper we discuss the potential contributions of Blockchain technology to systemic risk management in global supply chains and networks. Given the increasing number of recent initiatives of businesses in the context of Blockchain, we argue that Blockchain technology can lower the hurdle for the use of secure multiparty computation. Ultimately, it may be possible to implement a corresponding monitoring mechanism for systemic risks without (i) the need of a central authority and (ii) revealing competition relevant, confidential information to other supply network participants. [less ▲]

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See detailAffordance-Experimentation-Actualization Theory in Artificial Intelligence Research : a Predictive Maintenance Story
Keller, Robert; Stohr, Alexander; Fridgen, Gilbert UL et al

in 40th International Conference on Information Systems (2019)

Artificial intelligence currently counts among the most prominent digital technologies and promises to generate significant business value in the future. Despite a growing body of knowledge, research ... [more ▼]

Artificial intelligence currently counts among the most prominent digital technologies and promises to generate significant business value in the future. Despite a growing body of knowledge, research could further benefit from incorporating technological features, human actors, and organizational goals into the examination of artificial intelligence-enabled systems. This integrative perspective is crucial for effective implementation. Our study intends to fill this gap by introducing affordance-experimentation-actualization theory to artificial intelligence research. In doing so, we conduct a case study on the implementation of predictive maintenance using affordance-experimentation-actualization theory as our theoretical lens. From our study, we find further evidence for the existence of the experimentation phase during which organizations make new technologies ready for effective use. We propose extending the experimentation phase with the activity of ‘conceptual exploration’ in order to make affordance-experimentation-actualization theory applicable to a broader range of technologies and the domain of AI-enabled systems in particular. [less ▲]

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See detailBuilding a Blockchain Application that Complies with the EU General Data Protection Regulation
Rieger, Alexander UL; Guggenmos, Florian; Lockl, Jannik et al

in MIS Quarterly Executive (2019), 18(4), 263--279

Complying with the EU General Data Protection Regulation (GDPR) poses significant challenges for blockchain projects, including establishing clear responsibilities for compliance, securing lawful bases ... [more ▼]

Complying with the EU General Data Protection Regulation (GDPR) poses significant challenges for blockchain projects, including establishing clear responsibilities for compliance, securing lawful bases for processing personal data, and observing rights to rectification and erasure. We describe how Germany’s Federal Office for Migration and Refugees addressed these challenges and created a GDPR-compliant blockchain solution for cross-organizational workflow coordination. Based on the lessons learned, we provide three recommendations for ensuring blockchain solutions are GDPR-compliant. [less ▲]

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