The potential for blockchain to transform how organizations produce and capture value is very real, but so are the challenges to its broad implementation.

After eluding close inspection by most business leaders outside of the tech and financial sectors, blockchain technology has recently taken center stage in the conversation about management’s digital makeover. Indeed, many believe the impact of blockchain on the ways organizations function and produce value may be greater than the technologies that have grabbed most of our recent attention — data and analytics, the cloud, even artificial intelligence.

As with any emerging technology, it can be difficult to separate promise from probability. That is among the reasons why a new working paper from MIT Sloan School of Management professor Christian Catalini and University of Toronto Rotman School of Management professor Joshua S. Gans is so valuable: It offers a balanced analysis of blockchain through an economic lens.

Catalini discussed several of the study’s key findings and their relevance for managers in a written exchange with MIT Sloan Management Review editor in chief Paul Michelman, and what follows is an edited version of their conversation.

MIT Sloan Management Review: What prompted you to look at blockchain through an economics of innovation lens? What was it that you felt you knew — or suspected — before you began your investigation?

Catalini: There is substantial hype around blockchain and cryptocurrencies. As often happens when a breakthrough technology is on the horizon and uncertainty about its use cases is high, it becomes tempting to overstate its benefits and ignore the fact that technological change takes time to unfold and often requires entire ecosystems to adapt. Architectural changes in how value is created and appropriated within a given market do not happen overnight. They will generate resistance from regulators, who are trying to assess the risks the new technology involves, and from incumbents, who are worried about new entrants cannibalizing their revenue models.

In this phase, you often see strong polarization in opinions: On one side, you have detractors who highlight the current limitations of the technology (e.g., the fact that bitcoin can only process a small number of transactions per second or that bitcoin mining is highly concentrated in China) and use them to support their view that nothing will change. On the other side, you have the utopians who believe that the technology on its own can solve all of the problems of our financial system. The truth, of course, is somewhere in the middle.