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IFAC PapersOnLine 55-10 (2022) 1834–1839
Blockchain
Blockchain adoption for SMEs:
Blockchain adoption
adoption for
for SMEs:
SMEs:
opportunities
Blockchain and
adoption
opportunities and challenges
for SMEs:
challenges
opportunities and challenges
opportunities and challenges
Y.
Y. Idel
Idel Mahjoub,
Mahjoub, M. M. Hassoun
Hassoun & & D.D. Trentesaux
Trentesaux
Y. Idel Mahjoub, M. Hassoun & D. Trentesaux
∗ Y. Idel Mahjoub, M. Hassoun & D. Trentesaux
∗ Univ. Polytechnique Hauts-de-France, LAMIH, CNRS, UMR 8201,
∗ Univ. Polytechnique Hauts-de-France, LAMIH, CNRS, UMR 8201,
∗
Univ. Polytechnique Hauts-de-France,
F-59313
F-59313 Valenciennes,
Valenciennes, LAMIH,
France CNRS,
France UMR 8201,
Univ. Polytechnique Hauts-de-France,
F-59313 Valenciennes, LAMIH,
France CNRS, UMR 8201,
F-59313 Valenciennes, France
Abstract:
Abstract: Small Small and and medium-sized
medium-sized enterprises
enterprises (SMEs)
(SMEs) are are the
the backbone
backbone of of economies
economies and and
Abstract:
are recognized Smallas andengine
an medium-sized
of sustainableenterprises
economic(SMEs) are the in
development backbone
developed of and
economies
developing and
are recognized
Abstract: Smallas an engine
andengine of
medium-sizedsustainable economic
enterprises development
(SMEs) areduethetoinin developed
backbone and
of and developing
economies and
are recognized
countries. as an
Nonetheless, SMEs of sustainable
still face economic
many development
challenges developed
market developing
globalization and
countries.
are recognized Nonetheless,
as an SMEs
engine of still face many
sustainable challenges
economic developmentdue toin marketdeveloped globalization
and developing and
countries.
escalating Nonetheless,
competition. SMEs
Thanks still
to its face
salientmany challenges
features, blockchaindue to
is market globalization and
escalating
countries. competition.
Nonetheless, Thanks
SMEs to its face
still salient features,
many blockchain
challenges istoaa market
duechallenges.
promising technology
promising technology that
globalization that
and
escalating
could competition.
provide Thanks
cost-efficient and to its salient
transparent features,
solutions blockchain
to these is a promising This technology
paper that
could
escalatingprovide cost-efficient
competition. Thanks and transparent
to its salient solutions
features, to these
blockchain challenges.
is a promising This paper provides
technology provides
that
could provide
insights and cost-efficient and transparent solutions of toincorporating
these challenges. This paper provides
insights
could and explores
provide explores the
the opportunities
cost-efficient opportunities
and transparent
and
and challenges
challenges
solutions of
toincorporating
these challenges.
Blockchain
Blockchain
This and
technology
technology
paper provides
in
in
insights
SMEs. and explores
Further, we the opportunities
present some and challenges
established SME-focusedof incorporating
projects, Blockchain
initiatives, technology
blockchain in
SMEs.
insights Further,
and we present
explores the some established
opportunities and SME-focused
challenges of projects, initiatives,
incorporating Blockchain and blockchain
technology in
SMEs. Further,
platforms. Finally, wewe present
point some
out established
some open SME-focused
research issues projects,
and outline initiatives,
future and blockchain
research directions.
platforms.
SMEs. Finally,
Further, we we point some
present out some open research
established issues and
SME-focused outlineinitiatives,
projects, future research and directions.
blockchain
platforms.
Copyright ©Finally,2022 The weAuthors.
point out some
This is anopen
openresearch issues
access article andthe
under outline future research
CC BY-NC-ND license directions.
platforms. Finally, we point out some open research issues and outline future research directions.
(https://creativecommons.org
Keywords:
Keywords: Blockchain,
Blockchain, Small Small /licenses/by-nc-nd/4.0/)
and
and Medium-sized
Medium-sized Enterprises,
Enterprises, Digitization,
Digitization, Automation,
Automation,
Keywords:
Cost-efficient,
Cost-efficient, Blockchain,
Tokenization
Tokenization Small and Medium-sized Enterprises, Digitization, Automation,
Keywords:
Cost-efficient, Blockchain,
Tokenization Small and Medium-sized Enterprises, Digitization, Automation,
Cost-efficient, Tokenization
1.
1. INTRODUCTION tions,
INTRODUCTION
1. INTRODUCTION tions, such
such asas supply
supply chainchain (Treiblmaier,
(Treiblmaier, 2018), 2018), healthcare
healthcare
tions, such asetsupply
(Hasselgren al., chain
2020), (Treiblmaier, (Yuan
transportation 2018), andhealthcare
Wang,
1. INTRODUCTION (Hasselgren
tions, such etsupply
as al., 2020),chain transportation
(Treiblmaier, (Yuan
2018), and Wang,
healthcare
Small and Medium-sized Enterprises (hereafter SMEs) (Hasselgren
2016),
2016), energy
energyet al., 2020),
(Andoni
(Andoni transportation
et
et al.,
al., 2019),
2019), (Yuan
and
and and
lately
lately Wang,
enter-
enter-
Small and Medium-sized Enterprises (hereafter SMEs) (Hasselgren et al., 2020), transportation (Yuan and Wang,
areSmall
a and
vital Medium-sized
part of most Enterprises
thriving (hereafter
economies SMEs)
around 2016),
tainment energy
industry(Andoni (e.g., etmetaverse,
al., 2019), and lately tokens
Non-fungible enter-
areSmall
a vital
and part of
Medium-sized most thriving
Enterprises economies
(hereafter around
SMEs) tainment
2016), industry
energy (Andoni (e.g., metaverse,
etmetaverse,
al.,the2019), Non-fungible
and andlately tokens
enter-
are
the a
worldvital part
(Prasanna of most
et al., thriving
2019). economies
Despite their around
small- tainment
(NFT)) industry
(Jeon et al.,(e.g.,
2022), as Non-fungible
industry tokens
academia
the
are world
a vital(Prasanna
part of et
mostal., thriving
2019). Despiteeconomies small- (NFT))
their around tainment (Jeon et al.,(e.g.,
industry 2022), as the industry
metaverse, and academia
Non-fungible tokens
(NFT))
SMEs recognized (Jeon
that et al., 2022), as the industry and academia
the
scaleworld
scale
the
output
output
world
(Prasanna
and
(Prasanna
et al.,lower
and relatively
relatively 2019).
et al.,lower
2019).
Despite
scale
scale their small-
economies,
economies,
Despite SMEs
their small- recognized
(NFT)) thatetit
(Jeon
could
ital.,
could improve
improve
2022),
their efficiency.
as thetheir efficiency.
industry and academia
scale
are
are output
known
known to and
toandbe relatively
significant
be relatively lower scale
contributors
significant lower
contributors economies,
to SMEs
employment
to employment recognized that it could improve their efficiency.
scale output scale economies, SMEs The
The research study in the field of blockchain and
recognizedresearch
that study
it could in the
improvefield of
their blockchain
efficiency. and other
other
are
growth
growthknownand to
and be significant
innovation
innovation (Cocco
(Cocco contributors
et al.,
et al., 2021).
2021).to Nonetheless,
employment
Nonetheless, The research study in the field(e.g., of blockchain and DAG,other
are known to be significant contributors to employment distributed
distributed ledger
ledger technologies
technologies (e.g., Hashgraph,
Hashgraph, DAG,
growth
subject
subject and
to
to innovation
the
the trends
trends (Cocco
of
of economic
economicet al., 2021).
globalization,
globalization,Nonetheless,
market
market The research
distributed ledgerstudy in the
technologies field of
(e.g.,blockchain
Hashgraph, and other
DAG,
growth and innovation (Cocco et al., 2021). Nonetheless, Holochain)
Holochain) adoption
adoption for SMEs
for SMEs (e.g., is still
is still in its infancy.
in its infancy.
subject
expansion,
expansion, to the
and
and trends
escalating
escalating of economic
competition,
competition, globalization,
SMEs are
SMEs are becom- market
becom- distributed
Holochain) ledger technologies Hashgraph, DAG,
subject
moretoarduous
expansion,
ing the trends
and
arduous escalating of economic toglobalization,
competition,
and challenging
challenging SMEs and
manage market
control While
are becom-
and
While
Holochain)most adoption
most people
people relate
adoption
for blockchain
relate
for
SMEs is still
blockchain
SMEs is still
to in its
to large
large
in its
infancy.
companies,
companies,
infancy.
ing more and to manage control While
blockchainmost opens
peoplenew relate blockchain
opportunities to
to large
SMEs companies,
in
expansion,
ing
(Prasanna and
more arduous
et al.,escalating competition,
and challenging
al., 2019).
2019). Some recent to manage
recent SMEs
disruptions, are becom-
and such
control
such blockchain
as While most opens
people new
relateopportunities
blockchain to large
to in every
SMEscompanies, every
(Prasanna et Some disruptions, as blockchain
industry opens new opportunities to SMEs in every
ing more
(Prasanna
the COVID-19arduous
et al., and challenging
2019).
outbreak, Some
have to manage
recent
exposed disruptions,
many and control
such
vulnerabil- as industry to
blockchain
solve
solve existing
to opens existing
new
challenges
challenges and
opportunities and
to
enable
enable in
SMEs
them
them every
to
to
the COVID-19
(Prasanna et outbreak,
al., 2019). have
Some exposed
recent many
disruptions, vulnerabil-
such as industry
optimize to solve
their existing
business and challenges
develop and
new enable
business them
models. to
the
ities COVID-19
and outbreak,
weaknesses, namelyhave exposed
lack of many
end-to-end vulnerabil-
visibil- optimize
industry their
to business
solve existingand develop
challenges new
and business
enable models.
them to
ities
the and weaknesses,
COVID-19 outbreak, namelyhave lack
exposedof end-to-end
many visibil- optimize
vulnerabil- Furthermore, theirthere
business is a and
lack develop
of researchnewstudies
business models.
highlight-
ities
ity, and weaknesses,
information namely
traceability andlack of end-to-end
transparency, cashvisibil-
flow Furthermore,
optimize their there
business is a and
lack develop
of research new studies
business highlight-
models.
ity, information traceability and transparency, cash flow ing Furthermore, there is a and lack suitability
of researchof
ities
ity, and weaknesses,
information
issues, namely
traceability
an insufficiency
insufficiency of andlack
collaboration of between
end-to-end
transparency, cashvisibil-
flow ing
stakehold-
(i)
(i) the
the adaptation
Furthermore, adaptation
there is a and suitability
lack andof research ofstudies
this highlight-
this technology
technology
issues,
ity, an
information of
traceabilitycollaboration
and between stakehold-
transparency, cash flow ing
for (i) the (ii)
SMEs, adaptation
the and
benefits suitability
challengesofstudies
this
of highlight-
technology
such adap-
issues,
ers, and an insufficiency
security issues of collaboration
(Frizzo-Barker between
et al., stakehold-
2020). Such for SMEs,
ing (i) the (ii) the benefits
adaptation and and challenges
suitability of of such
this adap-
technology
ers, andansecurity
issues, issuesof(Frizzo-Barker
insufficiency collaboration et al., 2020).
between Such for
stakehold- SMEs,
tation, and (ii) the (iii)
finally benefits and challenges
SME-focused projects, of such adap-
initiatives,
ers,
issuesand security
highlight issues
the need(Frizzo-Barker
for SMEs to et
be al., 2020).
digitally Such
trans- tation,
for SMEs, and finally
(ii) the (iii) SME-focused
benefits and projects,
challenges of initiatives,
such adap-
issues
ers, andhighlight
security the need(Frizzo-Barker
issues for SMEs to et be al.,
digitally
2020). trans-
Such tation,
and and finallyalready
frameworks (iii) SME-focused
deploying projects,
this initiatives,
technology. For
issues
formed, highlight
based onthe need for
opportunities SMEsof to be
advanced digitally trans-
information and
tation,frameworks
and finally already
(iii) deploying this
SME-focused technology.
projects, initiatives,For
formed,
issues based on
highlight the opportunities
need for SMEsof advanced
to be information
digitally trans- and
these frameworks
reasons, this already
paper deploying
aims to thispotential
identify technology. benefitsFor
formed,
systems based
and on
digital opportunities
technologies of advanced
(Bekrar et al.,information
2021). theseframeworks
and reasons, thisalreadypaper aims to identify
deploying this potential
technology. benefitsFor
systems
formed, and
based digital
on technologies (Bekrar
opportunities of advanced et al.,information
2021). these reasons,
blockchain
blockchain this paper
adoption
adoption could
could aimsbring
bringto identify
to
to SMEs
SMEs potential
as
as well
well benefits
as
as some
some
systems and digital technologies (Bekrar et al., 2021). these reasons,
blockchain this
adoption paper
could aimsbringto identify potential
to SMEs as well benefits
as some
The world
systems
The world landscape
and digital has witnessed
technologies
landscape has witnessed
(Bekrar etan anal.,exponential
exponential
2021). challenges
challenges that
that could
couldcould hinder
hinderbring small
small businesses
businesses from
fromas solving
solving
blockchain
challenges
many adoption
that
traditional could hinder smalltobusinesses
business-related SMEs as well
problems. from
Some some
solving
limits
The
growth
growth world
of new landscape
digital
of new landscape has
technologies
digital technologies witnessed
and an exponential
innovations
and innovations such
such many traditional business-related problems. from Somesolving
limits
The world has witnessed an exponential challenges
many that
traditional could hinder
business-related small businesses
problems. Some limits
growth
as of new
as artificial
artificial digital technologies
intelligence,
intelligence, big data,
big and innovations
data, internet
internet things, such
of things,
of and of
and of these
these blockchain-based
blockchain-based solutions are
are discussed,
solutionsproblems. discussed, given
given
growth
as of new
artificial digital technologies
intelligence, big data, and
internet innovations
of things, such
and many
of
thatthesetraditional
adopting business-related
blockchain-based
blockchain solutions
for SMEs isare
not thatSome
discussed,
easy limits
given
(Ma,
blockchain
blockchain technology.
technology. This
This latter is
latterinternet considered
is considered as an
as and that adopting blockchain for SMEs
an of these blockchain-based solutions are discussed, given is not that easy (Ma,
as artificial
blockchain
emerging and intelligence,
technology.
potentially big
This data,
latter
disruptive is of things,
considered
technology that as an
could that
2022). adopting
Further, blockchain
some for SMEs
initiatives and is not that
projects easy (Ma,
conducted in
emerging
blockchain and potentially
technology. disruptive
This technology
latter technology
is considered that could
as an that2022). Further,
adopting some
blockchain initiatives
for paper
SMEsand projects
is nothelp conducted
that easy (Ma, in
emerging
transform and potentially
societies, social disruptive
organizations, and that
economies could
by 2022).
this Further,
field are some initiatives
presented. This andwould
projects conducted
researchers in
transform
emerging societies,
and social
potentially organizations,
disruptive and
technology economies
that by
could this
2022).field are
Further, presented.
some This
initiatives paper would
andwould
projects help researchers
conducted in
transform
providing societies,
cost-efficient social
and organizations,
transparent and economies
solutions to SMEs by this
and field are presented.
practitioners discoverThis thepaper
benefits and help researchers
drawbacks of
providing
transform cost-efficient
societies, andorganizations,
social transparent solutions
and to SMEs
economies by and field
this practitioners
are presented. discoverThis the benefits
paper would and helpdrawbacks
researchers of
providing
(Frizzo-Barkercost-efficient
et al., and
2020; transparent
Treiblmaier solutions
and to
Beck, SMEs
2019; and practitioners
applying
applying discover
blockchain-based
blockchain-based the benefits
solutions
solutions for
for and
SMEs
SMEs drawbacks
and
and identify
identify of
(Frizzo-Barker
providing et al., 2020;
cost-efficient and Treiblmaiersolutions
transparent and Beck, to 2019; and practitioners discover the benefits and drawbacks of
SMEs
(Frizzo-Barker
Rakshit et al., et al.,
2022). 2020;
Satoshi Treiblmaier
Nakamoto and
first Beck,
implemented2019; applying
future blockchain-based
research directions. solutions for SMEs and identify
Rakshit
Rakshit
it in
in 2009
2009
et al., 2022).
(Frizzo-Barker
et al.,
during et al.,
2022).
Satoshi
2020;
theSatoshi
Nakamoto first
globalTreiblmaier
Nakamoto andimplemented
first
financial crisis
crisis Beck,
implemented2019; future
(Nakamoto,
applying research
future research
directions. solutions for SMEs and identify
blockchain-based
directions.
it
Rakshit during
et al., 2022).the global
Satoshi financial
Nakamoto first (Nakamoto,
implemented The
future rest
The research of the
the paper
rest of directions. paper is is organized
organized as as follows:
follows: Sec- Sec-
it in
2008),
2008), 2009
which
which during
laid
laid the
out
out global
the
the financial
mathematical
mathematical crisis (Nakamoto,
foundation
foundation for
for The rest of the paper is organized as follows: Sec-
it in
2008), 2009
which during
laid the
out global
the financial
mathematical crisis (Nakamoto,
foundation for tion
tion 2
2 provides
provides some
some background
background and
and basic
basic concepts
concepts of
of
the first
the first cryptographic
cryptographic currency,
currency, Bitcoin.
Bitcoin. Blockchain
Blockchain was was tion The resttechnology.
2 provides
blockchain of the somepaper is organized
background
Section 3 and basic
presents as follows:
concepts
blockchain Sec-
ben-of
2008),
the
mainly which
firstused inlaid
cryptographic
the out the
financial mathematical
currency,
sector Bitcoin.
and foundation
Blockchain
digital assets for
was
such blockchain
tion 2 technology.
provides some Section 3 presents
background and blockchain
basic concepts ben-of
mainly
the firstused in the financial
cryptographic sectorBitcoin.
currency, and digital assets such
Blockchain was blockchain
efits and technology.
solutions for Section
SMEs 3 presents
as well as blockchain
some ben-
challenges
mainly
as used
digital in the
currencies financial
(e.g., sector
Bitcoin, and digital
Ether). assets
However, such
its efits and solutions
blockchain technology. for Section
SMEs as 3 well as some
presents challenges
blockchain ben-
as digital currencies (e.g., Bitcoin, Ether). However, its facing
efits and
mainly
as used
digital
benefits insoon
the financial
currencies
were sector
(e.g., Bitcoin,
recognized and digital
Ether).
by other
other assets
However,
domain such
applica-its facing
efits andthissolutions
this integration.
integration.
solutions
for SMEs
for
Further,
Further,
SMEs
as discussion
as
well as some
discussion
well Section
as some and challenges
and future
future re- re-
benefits
as digital were soon recognized
currencies (e.g., by
Bitcoin, Ether). domain applica-
However, its facing
search this integration.
direction are Further,
explored. discussion
Lastly, and4 challenges
future
concludes re-
benefits were soon recognized by other domain applica- search facing
search
direction
this are
integration.
direction
explored.
Further,
are explored.
Lastly, Section
discussion
Lastly, Section
4 concludes
and4 future
concludes re-
benefits
 were soon recognized by other domain applica- the paper.
the paper.
 email.
email.
damien.trentesaux@uphf.fr; melissa.hassoun@uphf.fr &
damien.trentesaux@uphf.fr; melissa.hassoun@uphf.fr & search
the direction are explored. Lastly, Section 4 concludes
paper.
 email. damien.trentesaux@uphf.fr; melissa.hassoun@uphf.fr &
yassine.idelmahjoub@uphf.fr
yassine.idelmahjoub@uphf.fr
 email. damien.trentesaux@uphf.fr; melissa.hassoun@uphf.fr & the paper.
yassine.idelmahjoub@uphf.fr
2405-8963 Copyright © 2022 The Authors. This is an open access article under the CC BY-NC-ND license.
yassine.idelmahjoub@uphf.fr
Peer review under responsibility of International Federation of Automatic Control.
10.1016/j.ifacol.2022.09.665
 Y. Idel Mahjoub et al. / IFAC PapersOnLine 55-10 (2022) 1834–1839
2. BACKGROUND AND BASIC CONCEPTS
Blockchain is a distributed ledger that stores transactions
in blocks chained together with cryptographic mechanisms
in a peer-to-peer network (Nakamoto, 2008). Blockchain
was designed to operate without a central authority (i.e.,
with no bank or regulator controlling the network), but
transactions still have to be authenticated. This is done
using cryptographic key-pair: public and private keys
(Nakamoto, 2008). The public key can be considered as
a bank account where the value transaction is addressed,
and the private key is like a password or a signature to
authorize the transaction (Ilbiz and Durst, 2019). Using
them both creates a secure digital identity to authenticate
peers via digital signatures and unlock the transaction.
Main blockchain characteristics are presented in Table 1.
Table 1. Blockchain characteristics
Immutable Cannot be changed or modified
Transparent Nodes have a copy (full/part) of the ledger
Decentralized There is no single controlling entity
Anonymous Using public and private keys
Authentic Accurate, timely, and complete data
Fault tolerant failure of one or more components does not
cause failure of the entire system
No intermediaries By the means of smart contracts
Faster settlement faster settlement compared to traditional
banking systems
Once the transaction is agreed upon between the peers,
it needs to be approved (or authorized) before adding it
to a block. The decision to add a transaction to the chain
is made by consensus (Mingxiao et al., 2017), i.e., the
majority of nodes (e.g., computers in the network) must
agree that the transaction is valid. This will guarantee
that there will be no corrupt branches and divergences
(e.g., forks). Nodes maintain a full or partial copy of
the blockchain. The more nodes a blockchain contains,
the more decentralized and more resistant to threats it
becomes (Androulaki et al., 2018). Different consensus
mechanisms have been elaborated to reach a consensus
between network nodes: Proof-of-work (PoW), Proof-of-
Stake (PoS), Proof-of-Authority (PoA), to name a few
(Mingxiao et al., 2017). Once a transaction is placed in the
blockchain, it is difficult to alter with. To make a simple
modification, an attacker must change the transactions
in the latest block and in previous blocks linked with
each other with hash functions. In today’s standards, such
attacks are extremely hard and less likely to be achieved,
making blockchains highly secure value transaction sys-
tems.
Blockchain technology is not only limited to simple
value transactions between two peers, but it provides a
framework (or ecosystem) enabling value transaction on
the fulfillment of some conditions (Ilbiz and Durst, 2019).
This innovation is maintained by adding a new layer,
called smart contracts (Szabo, 1997). Smart contracts
are self-executed programs stored on a blockchain that
run when predetermined conditions are met (by following
simple ”if/when.then.” statements). They permit trusted
transactions and agreements to be carried out among
disparate, anonymous peers without needing a central
1835
authority or legal system. First implemented by Ethereum,
smart contracts have led recently to the introduction of
Defi (Decentralized finance), DApp (Decentralized Appli-
cation), Decentralized Autonomous Organizations (DAO),
NFT (Non-fungible tokens), and lately web 3.0 and meta-
verse narratives (Jeon et al., 2022). This new version of
blockchains improves various business processes by remov-
ing third parties, along with faster, cheaper, more efficient
transactions (Kamilaris et al., 2019).
Depending on the use case and requirements, blockchains
have been categorized into three types of architectures:
public, private, and consortium. Public blockchains are
permissionless and non-restrictive, where all participants
connected to the internet can read, write and verify the
network transactions and contribute to the consensus pro-
cess. Examples of such types are Bitcoin, Ethereum, and
Terra (Kamilaris et al., 2019). Unlike the public, a private
blockchain is a permissioned, restrictive, and more cen-
tralized blockchain that operates in a closed network. It is
mainly owned, operated, and controlled by a single entity
that makes its own rules for access and use. For these
reasons, it is best suited for enterprises and businesses
as they require significant control over the participants
who can access data (Dutta and Saini, 2021). Hyperledger
Fabric is an example of such a blockchain (Androulaki
et al., 2018). Finally, consortium blockchain is best suited
for organizations with a need for both types of blockchains,
i.e., public and private. Copies of the blockchain are only
distributed among the consortium. IBM Food Trust and
Corda are examples of such blockchain.
3. BLOCKCHAIN ADOPTION FOR SME
3.1 Blockchain benefits and solutions for SME
There are immense benefits the blockchain technology
provides (Treiblmaier and Beck, 2019). This section out-
lines how efficiently this technology can address various
SME challenges, by having multiple network nodes main-
tain a copy of the ledger. In particular, blockchain appli-
cations can help SME overcome security and transparency
issues, reduce costs, improve productivity by the means
of smart contracts and tokenization, and access to a new
financial infrastructure (DeFi).
Security & transparency Blockchain is at its core
a secure and transparent shared ledger. It provides three
main advantages for SMEs. First, the integrity, confiden-
tiality, and availability of the data that has been placed
on the blockchain will be guaranteed and secured, thanks
to its advanced cryptography and consensus algorithms.
Second, transactions and information are maintained in
network blockchain forever and can be viewed and audited
by any participant at any step of production. Third, in
today’s SMEs, the data is mainly stored and in each entity
data silos. Each time the data is transformed, it opens up
chances for data loss and errors. The blockchain ledger is
replicated, shared, and synchronized across participants;
failure of one or more network components does not cause
the failure of the entire system (Idel et al., 2021). Neverthe-
less, full transparency may risk revealing some private data
(e.g., who is doing business with whom) to the blockchain.
In this case, private permissioned blockchains (e.g., Hy-
1836 Y. Idel Mahjoub et al. / IFAC PapersOnLine 55-10 (2022) 1834–1839
perledger) provide concrete solutions to these issues by
creating some private channels.
Costs reduction There are many reasons to implement
blockchain for SMEs, but one is most prominent; cost re-
duction. SMEs have to reduce their costs to compete with
bigger rivals and large companies. Based on the literature,
blockchain offers a reduction of SMEs overhead costs by:
(i) bringing autonomy and removing intermediaries (e.g.,
bank fees and margin), (ii) automation of key services
by using smart contracts and oracles (e.g., accounting,
payroll, invoicing, external services) and (iii) lower the cost
of transaction authentication (Gausdal et al., 2018; Al-
Jaroodi and Mohamed, 2019). For instance, the blockchain
implementation of a large company as Saudi Aramco has
been projected to create cost savings of at least 5%. Nev-
ertheless, removing the intermediary every time might not
be the ideal solution for SMEs (Ilbiz and Durst, 2019).
In this case, decision-makers should calculate both the
cost of an intermediary to the business and the cost of
adopting blockchain technology. Another critical issue that
needs to be addressed is regulation. Different countries
have different laws, and it is necessary to ensure that trade
transactions are in compliance.
While blockchain is viewed as a more inherently secure
distributed ledger technology, there is still a vital role
to play for automation (Javaid et al., 2021). Automation
reduces the apprehension behind the traditional methods
where there is no need for human intervention and trusted
intermediaries. All the intended parties within the process
are informed of the result, and therefore, they can trace
and monitor their assets, which increases the traceability
and transparency levels.
Tokenization and NFTs Non-fungible tokens are the
breakthrough innovation with the potential to disrupt
SMEs by blurring the boundary between the physical and
digital worlds (Bamakan et al., 2021). NFTs are digital
assets on a blockchain with unique identification codes and
metadata that distinguish them from each other. Unlike
cryptocurrencies, they cannot be traded or exchanged
at equivalency (Idel et al., 2021). The idea of digital
representation of physical assets is not novel, nor is the
use of unique identification. Nonetheless, these concepts
are now combined with some blockchain features, e.g.,
security, tamper-resistant, and smart contracts. For SMEs,
each asset (e.g., product) will have a unique ID through
NFTs stored on the blockchain. This will provide many
advantages. First, digital permanence, i.e., NFT lasts as
long as the blockchain they are built on continues to exist.
Second, assets cannot be counterfeited. Third, proof of
ownership of various assets are granted to be established.
Finally, asset end-to-end visibility and traceability will be
guaranteed given that NFTs would by default record all
transactions relating to the sale, purchase, and potentially
recalls. For instance, when a product is recalled, it can be
traced throughout the ledger, and the appropriate entities
automatically get notified using smart contracts.
Prompt payments SMEs (mainly multinational ones)
can find it difficult to collect payments promptly, given
the need for third parties. By deploying smart contracts,
payments can be automatically processed after an event
is triggered, such as the delivery of products (Idel et al.,
2021). The payments can be made rapidly (seconds instead
of days) with lower fees, using native cryptocurrencies
(e.g., Bitcoin, stablecoins (UST)) to make and receive
payments over the Internet. This will mainly decrease
costs and time of operations (including paperwork and
administrative costs) (Casino et al., 2019). An example of
prompt payment using blockchain is CHAI app (more than
3 million users) powered by Terra’s blockchain network.
CHAI substantially lowers transaction fees and instantly
settles with merchants through its blockchain technology.
Various blockchain projects and initiatives of blockchain
adoption for SMEs are presented in the next section.
3.2 SMEs-focused projects and blockchain platforms
In the last three years, a growing number of SME-focused
initiatives and platforms have been launched to deploy
efficient and reliable blockchain solutions.
SMEs-focused projects An exemple of SME-focused
project is Blockchers (European Horizon 2020 project).
The goal of this project is to facilitate the revolution
of blockchain across European SMEs, by financing real
world use cases of this technology in traditional sectors.
Moreover, Bax & Company (leading European innovation
consultancy) has set up the project Blockstart to make
sure SMEs can study the adaptability of the blockchain
for their business and which blockchain solution will help
tackle their problems. A further example is offered by
Singapore PLMP Project, which is focused on accelerating
the blockchain ecosystem for Singapore SMEs across vari-
ous industries, including health-care and logistics. Finally,
a multinational financial hub located in the UAE and
Singapore (e.g., Binance labs, Terraform labs), aim to fund
a lot of blockchain related projects for SMEs.
SMEs-focused blockchain platforms A large number of
open source collaborative blockchain platforms have been
created to increase blockchain adoption across multiple
industries. It includes Ethereum (Gavin, 2015), Hyper-
ledger (Fabric) (Dhillon et al., 2017), and Terra (Kereiakes
et al., 2019), among others. For instance, a consortium
of twelve major European banks (e.g., Deutsche Bank,
HSBC, KBC, Natixis, Rabobank, Societe Generale and
Unicredit) is working with IBM to create a blockchain-
based trade finance platform for SMEs. The platform,
based on Hyperledger, aims to make trade finance easier
by managing, tracking and securing transactions online.
Further, AgriChain (whitepaper, 2021a) is a decentralized
platform using Ethereum blockchain for the agriculture
supply chain. It allows better informed decisions, elimi-
nates unnecessary paperwork, reduces supply chain inef-
ficiency, and increases their bottom line, all on one easy-
to-use platform. Finally, FarmaTrust (whitepaper, 2021b)
provides a solid cloud-based platform that aims to track
pharmaceutical products. FarmaTrust is based on the
Ethereum public Blockchain.
3.3 Challenges of blockchain adoption for SMEs
This section discusses the main challenges and concerns
for the adoption of blockchain and distributed ledger
technologies by SMEs.
 Y. Idel Mahjoub et al. / IFAC PapersOnLine 55-10 (2022) 1834–1839
Blockchain technology is still immature. The main chal-
lenge in adopting blockchain is scalability, throughput, and
latency issues (Idel et al., 2021; Bekrar et al., 2021). The
throughput of a given blockchain is defined by the num-
ber of transactions per second (tps). Considered as pub-
lic Blockchains, Bitcoin can only support seven tps, and
Ethereum can support fourteen tps. Such solutions cannot
be used for SMEs large-scale operations (Gavin, 2015).
Nonetheless, private blockchains are indeed far more effi-
cient with high tps. However, they have not yet reached
the required standards (Casino et al., 2019). Blockchain
ZK-rollups and sharding solutions could efficiently address
these issues (Casino et al., 2019). Therefore, a related
open area for future investigation is the development of a
blockchain that is scalable, decentralized and secure with
high throughput, fast confirmation, and low latency.
Blockchains still require broad adoption to work effec-
tively. For instance, track-and-trace capabilities would not
only require an SME to adopt a blockchain network, but
for its suppliers or clients to do so as well. Another issue is
the fear, uncertainty and doubt of the impact of blockchain
on one’s business. For these reasons, SMEs should do their
own research, regarding costing and benefit analysis, risks
analysis, to be able to see a holistic view of how useful the
technology is for their businesses.
An acute shortage of skilled developers and a lack of exper-
tise represent an important obstacle in wider deployment
of this technology. One way to counteract the skills gap
is to use Blockchain-as-a-Service (BaaS), which enables
organizations to reap the benefits of blockchain without
having to invest significantly in the technical talent behind
it. Major players in the BaaS space include open source
frameworks based on Ethereum, Hyperledger, Corda, and
PayStand, to name a few. BaaS may be the catalyst
that leads to a wider penetration of blockchain technology
across various SMEs.
Lack of interoperability between blockchain ecosystems
can represent a challenge for SMEs (Frezal and Garsous,
2020). Each blockchain has its own distinctive charac-
teristics, e.g., consensus mechanism, governance mecha-
nism, different protocols, and coding languages, which
restricts these blockchain from interacting with each other
(Frezal and Garsous, 2020). Cross Chain and highly secure
bridges are increasingly becoming a hot topic of discus-
sion for enhancing interoperability between blockchains.
There are currently some projects that offer interoperabil-
ity among different blockchain networks, such as Cosmos,
which uses the inter-blockchain communication protocol to
transfer assets between various blockchains (e.g., Cosmos,
Terra, Osmosis). With interoperable blockchains, SMEs
can work, collaborate, compete and benefit from each
other.
Due to this technology novelty, there is huge confusion on
global and national policy makers to regulate it. Due to
the lack of regulatory oversight, tax evasion, scams and
market manipulation are commonplace. Another critical
issue that needs to be addressed is privacy concerns re-
lated to data sharing and protection Idel et al. (2021).
Blockchain immutability makes it impossible to remove
transactions and data stored in the Blockchain. The data
protection regulations such as General Data Protection
1837
Regulation (GDPR) demand the users to experience the
right for their data to be forgotten. Last but not least,
huge energy consumption is another blockchain adoption
challenge, especially blockchain using PoW as consen-
sus mechanism. Such mechanisms require peers to solve
complex mathematical problems, and require tremendous
computing power to verify and validate transactions and
therefore to secure the network.
4. CONCLUSION
This article provides current blockchain opportunities and
challenges, especially for SMEs. The blockchain technol-
ogy can help SMEs overcome security challenges, reduce
costs, improve productivity and efficiency in processes, en-
hance supply chain management, accelerate digital trans-
formation, and give access to new financial infrastructure.
However, blockchain adoption for SMEs still face various
challenges such as scalability, latency, interoperability, and
regulatory issues.
Blockchain is a disruptive technology, and it needs some of
technological advancements and much work to be done to
realize its full potential. Migrating SMEs to blockchain-
based solutions is inevitable and necessary for them to
survive in today market. As blockchains become more
mature, their applications are expected to penetrate a
much larger number of industries.
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Enabling new economic and business models

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Manufacturing
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Robotics
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HAVE
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IN

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...... Internalization

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Blockchain ENABLE
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Technology Ethereum, Hyperledger, Terra, Avalanche, ...
Decentralized Autonomous Organizations (DAO)

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