This thesis aims to clarify type and potential of blockchain as an innovation and potential social and economic impacts it may have. The thesis was conducted as a literature review. Blockchain is often referred to as a disruptive innovation, however, other types of definitions such as foundational innovation and radical innovation have been used as well. Typology around technological innovations in literature is not consistent. This thesis came to conclusion that blockchain is close to a definition of foundational innovation, such as, TCP/IP-protocol that enabled internet to grow to its current form. Blockchain has potential to change many things in future, yet, it is still likely many years away. The development and broader usage of the technology are still in early phase. Diffusion of the technology is divided in four parts; single use, localization, substitution and transformation. Single use refers to a situation where technology is being used in single use case. Localization refers to a situation where technology is being used in local environment. Substitution refers to a situation where technology replaces traditional ways to do things and transformation refers to a situation where technology fundamentally changes large-scale operations and enables completely new things to do. Blockchain technology has potential to go through all these phases, though, currently it is used mainly in single use cases and locally.