The adjective “frugal” denotes efficient or economical use, “not wasteful” or “at little expense.“ Frugal innovations are often associated with variations of existing products or services, whose features are reduced to their core functionalities to serve a specific need. Academia has addressed the topic, investigating the characteristics of innovations and products that are said to be frugal. Three characteristics have been identified: (1) substantial cost reduction, (2) concentration on core functionalities, or (3) improved performance.
Intuitively, blockchain technology is an obvious candidate for a frugal innovation. It differentiates from other payment systems by substantial cost reduction and concentration on core functionalities. Not only does blockchain technology’s potential include applications in unserved markets. But the technology potentially disrupts traditional infrastructure in western civilizations. However, it can’t keep up with traditional payment systems’ performances, does require a significant amount of energy and does not result from an existing product or service.
A differentiated view on existing blockchain- and DLT-concepts and their respective features and shortcomings eventually discloses frugal innovation within the blockchain ecosystem. Consequently, frugal innovation can potentially be associated to specific projects. Frugal concepts might include browser-based blockchains, improved scaling solutions or less energy-intensive consensus mechanisms.
Potential research topics:
- Mapping the characteristics of blockchain technology and frugal innovations
- An Assessment of frugal innovation within the blockchain ecosystem
- Identifying truly frugal applications for blockchain technology