Blockchain-Enabled Economic Transactions: Recurring Financial Accruals and Payments

Abstract

Economic transactions are based upon implicit or explicit contracts that set out the rights and obligations of the parties to the transactions. Blockchain technology can address fundamental financial, economic, and accounting challenges. We propose a blockchain-based prototype capable of capturing the essence of recurring economic transactions. For this purpose, we have devised an asset rental contract to show how economic transactions are recorded and tracked more effectively, efficiently, and in quasi-real-time, thus changing the traditional way of account keeping and auditing. We use the Ethereum blockchain as the most evolved and widely used smart contract platform. We showcase a significant discovery related to current blockchain technology limitations to making automatic non-custodial recurring payments. We show how the prototype can be extended to a range of recurring transactions.