Bitcoin has gained more recognition than ever before, and the interest in cryptocurrencies seems to grow exponentially. Without any central government regulating Bitcoin, a global user group has adopted this new technology, which is designed to be used as a currency for trading without banks. Empirical studies focus on revealing the true characteristic of cryptocurrencies. Are they a currency, an asset or something else? This paper explores the potential of Bitcoin as a financial asset when used for hedging and portfolio diversification. A regression analysis will be performed to analyse if Bitcoin can be used as a hedge against OMXS30. This analysis yields insignificant values, which leads to a complication in the conclusion. The result imply that Bitcoin is an inadequate hedge, but may possess diversification properties. Studying Bitcoin in relation to OMXS30, Dow Jones, Nikkei 225, Gold and Oil results in correlation values close to zero. By using the mean-variance optimization method, two portfolios are created, one including and one excluding Bitcoin. We show that by including Bitcoin in the portfolio the risk can be decreased on a given return rate. Considering the low and insignificant correlation values with other assets and the better riskreturn ratio when Bitcoin is included in a portfolio, we conclude that Bitcoin can be a suitable diversification tool.
A blockchain is a public ledger for recording transactions, maintained by many nodes without central authority through a distributed cryptographic protocol. All nodes validate the information to be appended to the blockchain, and a consensus protocol ensures that the nodes agree on a unique order in which entries are appended. Distributed protocols tolerating faults and adversarial attacks, coupled with cryptographic tools are needed for this. The recent interest in blockchains has revived research on consensus protocols, ranging from the proof-of-work method in Bitcoin's "mining" protocol to classical Byzantine agreement. Going far beyond its use in cryptocurrencies, blockchain is today viewed as a promising technology to simplify trusted exchanges of data and goods among companies. In this context, the Hyperledger Project has been established in early 2016 as an industry-wide collaborative effort to develop an open-source blockchain. This talk will present an overview of blockchain concepts, cryptographic building blocks and consensus mechanisms. It will also introduce Hyperledger Fabric, an implementation of blockchain technology intended for enterprise applications. Being one of the key partners in the Hyperledger Project, IBM is actively involved in the development of this blockchain platform.
Blockchain, the technology behind Bitcoin, promises to be nothing less than Internet 2.0. The financial services industry, in particular, is preparing for the disruption blockchain/distributed ledger technology promises to cause. In the current business environment, the majority of startups and small businesses have to look for alternative sources of funding given that ‘going public’ is increasingly expensive. The crowdfunding space has seen tremendous growth as an alternative way to raise capital by businesses. However, these crowdfunded shares cannot be traded for 7-10 years on average on any given platform in the U.S. currently. To build a trading platform on the blockchain which is completely P2P, immutable, fully transparent and low cost presents some key design issues. In particular, the issue of liquidity - and price discovery - on the blockchain continues to be a puzzle. At the same time, the proposition of removing middlemen from equities trading is a very attractive one, streamlining the process of capital formation with higher market efficiency. The current paper addresses the following key questions: How can a DLT trading platform ensure adequate liquidity? What would be the process of price discovery? While some recent studies hail blockchain technology as a boom for market liquidity, it is not immediately clear what the impact of P2P trading would be on the prices of various stocks. There are no ‘solutions’ just yet. At the same time, the lack of regulation around trading on the blockchain creates an environment of uncertainty for all players. In particular, the implementation of such a platform can revolutionize capital formation and build robust markets in both developing and developed countries where crowdfunding has proven to be a successful model. While my research is targeted at solving a very specific pain point for both researchers and companies working on distributed ledger technology, ultimately, it would be a significant step forward towards onboarding underserved communities across the world who don’t have access to financial services.
Bitcoin is a peer to peer (p2p) payment cash system and an unregulated digital currency that is primarily designed and developed in 2008 without tender legal status. Bitcoin is so-called cryptocurrency because it uses the cryptographic function in order to secure the creation and transfer of money. During recent years, Bitcoin has been emerging as the well-known electronic currency and gaining popularity worldwide as well as caught the media attention in the area of volume trading. Therefore, Bitcoin will be a potential financial asset for investors due to its extraordinary returns. The purpose of this research is to find out how Bitcoin returns correlate with stock markets and to assess the risk that the electronic currency bears, to conclude whether Bitcoin is a favourable instrument for investors that want to diversify their portfolios. Therefore, daily data from 2013 to 2017 is used to measure correlations with major global stock markets and analyse in a regression to what extend Bitcoin is integrated into financial systems. In addition, Bitcoin’s risk has been measured by estimating value at risk, as well as the volatility and a regression analysis with explanatory variables has been performed to identify the driving factors of the unusually high volatility. Finally, the researchers constructed models to forecast expected returns to identify whether Bitcoin is rather a short or long term instrument. The researchers came to the conclusion that Bitcoin is a favourable instrument to diversify a portfolio as it correlates negatively with most of the analysed stock market indices and the research result showed that Bitcoin is not yet integrated into financial systems. It has however been paid attention to the new types of risk and the questionable image the electronic currency has as it is often used to support criminal activities. The fact that no authority, clearing house or central bank's involvement is present, creates uncertainty for many investors.
This article gives a very general introduction to the technology, promises and limitations of blockchain technology --- popularized by the digital currency Bitcoin and a key force behind the surge of cryptocurrencies. Blockchain acts as a distributed database or joint global register of all transactions --- a decentralized digital ledger --- and has the potential to become a disruptive force in the financial industry and elsewhere, bypassing traditional, centralized channels such as banks.
p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 10.0px Helvetica} Blockchain is a distributed ledger technology enabling digital transactions without the need for central governance. Once transactions are added to the blockchain, they cannot be altered. One of the main challenges of blockchain implementation is how to create a scalable network meaning verifying many transactions per second. The goal of this thesis is to survey different approaches for scaling blockchain technologies. Scalability is one of the main drivers in blockchain development, and an important factor when understanding the future progress of blockchain. The energy sector is in need of further digitalisation and blockchain is therefore of interest to enhance the digital development of smart grids and Internet of Things. The focus of this work is put on a case study in the energy sector regarding a payment system for electrified roads. To research those questions a qualitative method based on interviews with blockchain experts and actors in electrified roads projects was applied. The interviews were processed and summarised, and thereafter related to map current developments and needs in the blockchain technology. This thesis points to the importance of considering the trilemma, stating that blockchain can be two of three things; scalable, decentralised, secure. Further, Greenspan’s criteria are applied in order to recognise the value of blockchain. These criteria together with the trilemma and understanding blockchain’s placement in the hype cycle, are of value when implementing blockchain. The study shows that blockchain technology is at an early stage and questions remain regarding future business use. Scalability solutions are both technical and case specific and it is found that future solutions for scaling blockchain are emerging.
Taneli Hukkinen, Juri Mattila, Juuso Ilomäki, Timo Seppälä
Abstract This report documents a blockchain application developed for the energy sector that enables distributed market coordination for decentralized energy systems. As its core element, it utilizes Ethereum-based smart contracts to facilitate market matching between individual producers and consumers of electricity. The motive for this application was to understand the process of developing blockchain applications with industrial partners. Moreover, the purpose of this exercise was to examine whether Ethereum-based smart contracts could be effectively utilized for similar applications in industry and society at large. The application and the discussions during its development indicate that similar horizontal market structures may spring up in value chains in which the dynamicity of the market is growing and in which the roles of the market actors are shifting from fixed roles towards switch-role markets.
The Blockchain can definitely be applied in the field of personal data protection, since there are many people and companies that must preserve and ensure information integrity. From this point of view, using a storage system with Blockchain technology would even be more effective than a traditional management model.
Jan 1, 2017·Proceedings of the ... Annual Hawaii International Conference on System Sciences/Proceedings of the Annual Hawaii International Conference on System Sciences
Gianluca Miscione, Rafael Ziolkowski, Liudmila Zavolokina, Gerhard Schwabe
The blockchain technology offers a novel mode of distributed authentication, which does not depend on a central authority. We consider this novelty against established governance modes. We illustrate our argument by paying special attention to blockchain-based authentication functions in the empirical domain of land registries across the world. Based on interviews with representatives from organizations deploying blockchain, and con-tent analysis of related grey literature, we discuss established governance idealtypes against what the rivalry that cryptocurrencies and blockchains bring to digital settings. After referring to market, hierarchy, network, and bazaar, we conclude outlining the prospects of a different, blockchain-related governance mode called -˜tribal’ that better captures the -˜togetherness’ which rivalry originates.
This thesis introduces a debit card based payment system that aims to provide fast in-store payments using Bitcoin. The system introduces physical constraints to Bitcoin payments to enable stores to accept payments before they are in a block.The proposed system was tested in a proof of concept model to estimate the time itwould take to pay with the system on the real Bitcoin network. A security analysis was performed to validate system security and to point out potential problems. The security analysis was done by interviewing five experts from different organizations to receive different views on the system. The analysis of the system indicated that it could potentially be fast enough to be used in stores, however security problems exist and need to be considered.
Digital mindsets and technology transformation is an inevitable need that organizations, businesses and individuals cannot ignore anymore. Businesses worldwide are gearing up for digital transformation in their existing processes, competencies, models and transactions. Digitization of financial systems and transactions are fallout of this revolution. Bitcoin can also be called a child of this technological revolution. At the onset, bitcoins can be seen as the first pan-global medium of which have been used by people internationally and independently, i.e. without any reliance on government regulations. Of the various forms of digital currencies available today, the current bullish (rather more than bullish) rally of Bitcoin in the year 2016-17, caught my attention and motivated to examine the future of this transaction system, and analyze the two often speculated status of bitcoin - as the currency of the future or an asset worthy of investment, or a mere bubble that will eventually burst. As the most popular form of cryptocurrency (according to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin) that is used for transactions and can be recorded in a ledger, various conflicting opinion exists regarding its perceived value as the digital currency of the future. In the paper I evaluate how the value of bitcoin is created and examine its potential as a currency of future or a commodity or asset.
W artykule przedstawiono wspóÅ‚czesne zagadnienia w dziedzinie walut cyfrowych. Przeanalizowano czynniki ekonomiczne, które doprowadzily do powstania walut cyfrowych wskazujÄ…c, że jest to naturalny krok w rozwoju Å›rodków pÅ‚atniczych. Dokonano przeglÄ…du gÅ‚ów­nych typów walut cyfrowych i omówiono wplyw ich konstrukcji na popularność poszczególnych walut. Opisano zwięźle konkurencjÄ™ na rynku kryptowalut.
Analyzing 242 articles related to the study of blockchain which were published in China and abroad from 2014 to 2016, and from the aspects of literature sources, research subjects, research methods and western countries, the basic frame of blockchain research classification is put forward. Summarize the current blockchain technology progress, research limitations and future development trends. The research shows that the domestic research on the blockchain is more decentralized, non-systematic, and has not reached a certain research depth. What’s more, it is lack of quantitative analysis. Digital currency, Internet finance, and the risk of blockchain technology research will be the focus of future research.
Part I of this Article describes how the healthcare industry has arrived in this place of vulnerability, including (1) the history of the movement toward EHRs through HIPAA, (2) HIPAA’s meaningful use regulations and the background of current ransomware attacks, and (3) the distinctions between these attacks and other security breaches that have plagued large insurers and health systems within the last five years. Next, Part II will examine current industry culture when it comes to cybersecurity and review current legal and business approaches to address this growing threat. Then, Part III will argue that, while the current laws—including HIPAA and HITECH—are a good start, they do not go far enough to curb the current ransomware attacks and thus, should be amended. It will further argue that such amendments cannot be the only solution. Rather, the healthcare industry has to spur its own movement toward better and tighter security over its healthcare technology. Lastly, this Article will conclude with some suggestions and recommendations for how industry and government regulators can work together to assure that hospitals and health systems are not faced with the dilemma of having to choose between patient safety and the payment of a bitcoin ransom.