![]() We first add to the understanding of blockchain from the perspective of exchange technology. This study contributes to the academia and the industry. Blockchain does not assume away transaction and agency costs but pushes the transformation of the two, forming a more efficient economic entity. Finally, the transformation of costs in different stages of the blockchain transition, as described in our study, has important managerial implications for the organization structure and the role of third parties. Thus, by including blockchain in the current Internet infrastructure, the decision boundary of organization forms would extend outward. Blockchain applications provide a framework for building trust between peers through its consent mechanism, which allows organizations to construct trust and operate in a more decentralized manner. As the internet shifts hierarchies toward electronic markets, lack of trust between peers inhibits exchanges. Smart contracts improve the execution time of transactions significantly and increase transaction volume rapidly. Our study proposes that blockchain technology brings two more benefits, trust and transparency, to the existing Internet-based business services, and helps improve corporate governance. To understand the effectiveness of economic activities by blockchain intervention and facilitate strategic alignment, we use transaction cost and agency cost as theoretical lenses to explore the impacts of blockchain, discuss the transformation of those costs, and support our arguments using a case study. Costs in every economic exchange with partners are associated with two metrics: transaction costs due to market imperfections and agency costs due to conflict of interest and information asymmetry in an organization. This variance has created complex and diverse blockchain products. However, there are no unifying criteria for blockchain architecture across the organizations and business models. 2Department of Management Information System, National Chengchi University Taipei, Taiwanīlockchain supports a variety of decentralized applications enabled by its immutable, decentralized, and trustless properties.1Department of Business Administration, University of Illinois Urbana-Champaign, Champaign, IL, United States.Ruo-Ting Sun 1 * Aravinda Garimella 1 Wencui Han 1 Hsin-Lu Chang 2 Michael J.
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