Non-Fungible Tokens (NFTs) have garnered remarkable investor attention recently, with some NFTs securing selling prices that may have seemed unthinkable for a non-fungible virtual asset. This raises fascinating questions about “value” and “scarcity” with respect to blockchain technology, through a prism of non-fungibility of a digital asset, and this paper aims to draw attention to these questions insofar as they may shape an alternative space of blockchain development and exchange going forward. We find that NFT submarkets are cointegrated and feature various causal short-run connections between them. The success or adoption of younger NFT projects is influenced by that of more established markets. At the same time, the success of newer markets has an impact on the more established projects. The results contribute to the overall understanding of the NFT phenomenon and suggest that NFT markets are immature or even inefficient. This article will tackle these questions from a UK perspective, specifically looking at cases from England and Wales and Scotland, while also covering a few relevant CJEU decisions. This is a relatively recent technology, which will require a lengthier technical explanation to analyse the legal issues that are raised. In some instances, the public perception will be dealt with as well, as it has become evident that there is considerable misunderstanding not only about what an NFT really is, but about the ownership and copyright issues that surround the technology. While NFTs are not entirely related to copyright, and in some way they’re trying to bypass legal transactions in favour of technical solutions, this paper will concentrate on the copyright questions, but it will also tackle some of the emerging issues about the technology. A quick note about balance. This work will take a generally neutral approach to the study of NFTs, but this is a subject that is not devoid of controversy. There have been concerns raised about the viability of this model from various perspectives, but it is not the remit of the work to tackle these, and the approach will be to view non-fungible tokens at face value. The concerns range from the environmental cost of running blockchain technology,9 to the use of tokens for money laundering,10 to the existence of often crippling transaction fees that could make it difficult for artists to profit from their work.11 It is important to highlight these here, although they will not be the subject of further analysis.
Central Bank Digital Currency (CBDC) is a digital version of domestic currency with the unit of account equivalent to its domestic currency. Blockchain can be used to implement CBDC to execute and settle peer-to-peer transactions. With the emergence of private money such as cryptocurrencies and stable coins and the growing use of digital payments to lessen the global pandemic spread, CBDC is an active research area among the central banks worldwide. Many central banks started their CBDC projects by building proofs of concept (PoCs) to replicate wholesale payment systems and expand their investigation into other use cases such as delivery versus Payment (DvP) and cross-border remittance. PBoC, China Central Bank, has already started a pilot testing of their digital currency. This paper discusses the application of blockchain for CBDC by presenting CBDC projects by central banks. Moreover, this paper analyses issues, identify challenges, and discusses future works in this rapidly evolving field.
Ulrich Gallersdörfer, Lena Klaaßen, Christian Stoll
The energy consumption and related carbon emissions of cryptocurrencies such\nas Bitcoin are subject to extensive discussion in public, academia, and\nindustry. As cryptocurrencies continue their journey into mainstream finance,\nincentives to participate in the networks and consume energy to do so remain\nsignificant. First guidance on how to allocate the carbon footprint of the\nBitcoin network to single investors exist, however a holistic framework\ncapturing a wider range of cryptocurrencies and tokens remains absent. This\nwhite paper explores different approaches of how to allocate emissions caused\nby cryptocurrencies and tokens. Based on our analysis of the strengths and\nlimitations of potential approaches, we propose a framework that combines key\ndrivers of emissions in Proof of Work and Proof of Stake networks.\n
The increasing popularity of cryptocurrencies has raised many questions with regard to their regulation. Issues such as taxation and its role in criminal activities are of central importance to the way in which cryptocurrency will continue to develop and occupy space in society. In this paper, such regulatory aspects are explored, and South Africa’s response is addressed. With cryptocurrency growing worldwide at increasing rates, regulators are left having to respond quickly to this aspect of financial technology and while some have banned its use outright, others have taken the stance to embrace the use of cryptocurrencies to ensure it has a space for use in the future of the financial world.
Supply Chain Finance (SCF) faces the complex problem of implementing inventory, purchase order and accounts receivable financing automation in terms of transaction data trust and validation. This paper aims to explore how blockchain technology adoption solves the SCF problem using a multi-case method based on the Technological Acceptance Model (TAM). With purposive sampling, 30 cases were selected on the criteria of perceived usefulness and perceived ease of use in solving SCF problems. The results show that trust, validity and distributed ledger transaction data as perceived usefulness are the main drivers of blockchain adoption because it provides solutions to SCF automation problems such as Know Your Customer (KYC), accounting, and transaction settlement. Smart contracts offer easy and fast transactions such as in L/C export processing as perceived ease to use. Of the 30 blockchain projects, 21 offer the usefulness of automated accounts receivable financing, 15 offer easy-to-use purchase order financing and 8 offer easy-to-use inventory financing processes. This study provides the current state of blockchain technology adoption by exploring 30 real application cases in SCF globally. Blockchain advantages provide automation solutions in global supply SCF practices with smart contracts, transparency and security of distributed ledger data feature.
Pablo de Andrés, David Arroyo, Ricardo Correia, Álvaro Rezola
This article analyzes the main problems and the solutions adopted in the market for Initial Coin Offerings (ICO), to anticipate the future of this market and determine implications for issuers, investors and regulators. ICOs represent an alternative and innovative financing solution that has experienced spectacular growth and notoriety in recent years. ICOs rely on Blockchain protocols and the ICO market is, therefore, characterized as decentralized, disintermediated and unregulated. Our results show that although the ICO market is innovative, it already displays many of the problems of traditional financial markets, and that these problems were at the genesis of the last financial crisis. Our analysis of the problems and solutions adopted shows a tension between what the Blockchain technology offers, and the problems associated with the financing of innovation. Considering the problems and solutions adopted, we no longer expect the ICO market to be characterized as disintermediated, unregulated or even decentralized in the near future. Furthermore, it is a real possibility that ICOs may end up being a progressor model eventually replaced by similar but more specialized financing models, some of which may already exist. With respect to the particular solutions of the ICO market, while some represent the realization of the potential of Blockchain, others such as forks have important Governance implications with the potential to create as many problems as the ones they address.
Adeel Nasir, Kamran Shaukat, Kanwal Iqbal Khan, Ibrahim A. Hameed · 6 authors
The contemporary innovations in financial technology (fintech) serve society with an environmentally friendly atmosphere. Fintech covers an enormous range of activities from data security to financial service deliverables that enable the companies to automate their existing business structure and introduce innovative products and services. Therefore, there is an increasing demand for scholars and professionals to identify the future trends and directions of the topic. This is why the present study conducted a bibliometric analysis in social, environmental, and computer sciences fields to analyse the implementation of environment-friendly computer applications to benefit societal growth and well-being. We have used the ‘bibliometrix 3.0’ package of the r-program to analyse the core aspects of fintech systematically. The study suggests that ‘ACM International Conference Proceedings’ is the core source of published fintech literature. China leads in both multiple and single country production of fintech publications. Bina Nusantara University is the most relevant affiliation. Arner and Buckley provide impactful fintech literature. In the conceptual framework, we analyse relationships between different topics of fintech and address dynamic research streams and themes. These research streams and themes highlight the future directions and core topics of fintech. The study deploys a co-occurrence network to differentiate the entire fintech literature into three research streams. These research streams are related to ‘cryptocurrencies, smart contracts, financial technology’, ‘financial industry stability, service, innovation, regulatory technology (regtech)’, and ‘machine learning and deep learning innovations’. The study deploys a thematic map to identify basic, emerging, dropping, isolated, and motor themes based on centrality and density. These various themes and streams are designed to lead the researchers, academicians, policymakers, and practitioners to narrow, distinctive, and significant topics.
In the last decade patient management systems or eHealth has gained huge attraction with researchers. eHealth spans from the remote access of medical records to actual data exchange of remote patient's data of their body sensors. In this paper we propose a decentralized application model that uses Ethereum private Blockchain, Inter-Planetary File System (IPFS), and associated web technologies that aim to help healthcare providers, policymakers, and research organizations in Nepal. It presents the outcome of a survey conducted among the general public and a focus group discussion with medical doctors in relation to their current practices and limitations in storing and sharing patients' medical histories for examinations or treatments. The paper concludes with why blockchain technologies can be a better option for public and private healthcare institutions as well as medical practitioners to store and share patient records to deliver timely and quality healthcare services in a resource-poor country like Nepal.
In recent years, one of the most frequently discussed aspects in the world of economics has been the use of blockchain technology in economic life and the growing popularity of cryptocurrencies. Both blockchain and cryptocurrencies have incredible potential, and it is only a matter of time before they become part of daily life. The world's largest companies regularly invest in projects related to cryptocurrencies and blockchain. On the other hand, some countries have decided to ban all private cryptocurrencies and instead develop their own concepts of a digital currency issued by a central bank. This paper aims to discuss the issues related to the potential and threats posed by the development of cryptocurrencies and blockchain technology. The analysis involves technical, social and legal aspects linked to the development of virtual money. All the considerations in the paper are based on a critical analysis of the literature on the subject and the descriptive method.
Asset tokenisation can generally be described as the digital representation of physical assets on distributed ledgers (also referred to as digital twins) or the issuance of native tokens on the blockchain. Although initially associated with mostly non-compliant initial coin offerings over the period 2017-18, currently tokenisation represents one of the most prominent cases of distributed ledger technologies in financial markets. This Going Digital Toolkit note identifies the different approaches that policy makers have adopted around tokenised assets and the markets for such instruments, and provides examples of these approaches. These approaches are not mutually exclusive and policy makers may differ in the way they address asset tokenisation, participants of tokenised markets, and risks arising in these markets. This Toolkit note does not classify approaches into categories, but rather describes elements and characteristics of different jurisdictional approaches to asset tokenisation, some of which can co-exist.
A significant advancement has been contributed by the break-through technologies like smart contracts and blockchain in banking industry, healthcare industry, and construction industry (Zhang 2020). Blockchain can be defined as the distributed public ledger that records all data transaction that is exchanged and shared between the parties within the systems (CEMEX Ventures 2020). The blockchain offers various opportunities and advantages for all the involved parties within an enterprise (Penzes 2018). A synchronized and secure record of transactions are provided to the involved parties. The confirmation of all participants within the system is required in order to finalize the data transaction (Nicosia 2019). Every sequence of transaction is recorded by the blockchain ledger, from beginning to end, in certain irreversible and verifiable records of all transactions which are ever made. There are abundant areas of application of blockchain technology. Smart contract has an important role in the digitalization of conventional paper contracts and provides grounds for the application of blockchain technology (Strategy 2019). This research intends to evaluate the use and application of smart contract, via blockchain technology, in the construction and infrastructure industry of the COVID-19 pandemic. Current COVID-19 pandemic condition has resulted in wider range of negative impacts on the construction sector in UAE, thereby affecting large parts of UAE economy (Gupta et al., 2020). There has been identified significant need of development and implementation of effective digital tools for data management that require least resources. In doing so, the concept of blockchain technology has emerged and investigated by the scholars in construction sector (Salama & Salama 2018). By employing the concepts of smart contracts under blockchain technology, the construction sector in UAE can be improved (Constructible 2020). This may also result in alleviating the negative impacts of COVID-19 in construction sector of UAE. The research findings will be important for the professionals in construction sector of UAE and in delivering the concept of blockchain technology for construction industry.
Xing Hu, Zhipeng Gao, Xin Xia, David Lo · 5 authors
Smart contracts have obtained much attention and are crucial for automatic financial and business transactions. For end-users who have never seen the source code, they can read the user notice shown in end-user client to understand what a transaction does of a smart contract function. However, due to time constraints or lack of motivation, user notice is often missing during the development of smart contracts. For end-users who lack the information of the user notices, there is no easy way for them to check the code semantics of the smart contracts. Thus, in this paper, we propose a new approach SMARTDOC to generate user notice for smart contract functions automatically. Our tool can help end-users better understand the smart contract and aware of the financial risks, improving the users’ confidence on the reliability of the smart contracts. SMARTDOC exploits the Transformer to learn the representation of source code and generates natural language descriptions from the learned representation. We also integrate the Pointer mechanism to copy words from the input source code instead of generating words during the prediction process. We extract 7,878 〈function, notice〉 pairs from 54,739 smart contracts written in Solidity. Due to the limited amount of collected smart contract functions (i.e., 7,878 functions), we exploit a transfer learning technique to utilize the learned knowledge to improve the performance of SMARTDOC. The learned knowledge obtained by the pre-training on a corpus of Java code, that has similar characteristics as Solidity code. The experimental results show that our approach can effectively generate user notice given the source code and significantly outperform the state-of-the-art approaches. To investigate human perspectives on our generated user notice, we also conduct a human evaluation and ask participants to score user notice generated by different approaches. Results show that SMARTDOC outperforms baselines from three aspects, naturalness, informativeness, and similarity.
Stefan Kitzler, Friedhelm Victor, Pietro Saggese, Bernhard Haslhofer
We present a measurement study on compositions of Decentralized Finance (DeFi) protocols, which aim to disrupt traditional finance and offer services on top of distributed ledgers, such as Ethereum. Understanding DeFi compositions is of great importance, as they may impact the development of ecosystem interoperability, are increasingly integrated with web technologies, and may introduce risks through complexity. Starting from a dataset of 23 labeled DeFi protocols and 10,663,881 associated Ethereum accounts, we study the interactions of protocols and associated smart contracts. From a network perspective, we find that decentralized exchange (DEX) and lending protocol account nodes have high degree and centrality values, that interactions among protocol nodes primarily occur in a strongly connected component, and that known community detection methods cannot disentangle DeFi protocols. Therefore, we propose an algorithm to decompose a protocol call into a nested set of building blocks that may be part of other DeFi protocols. This allows us to untangle and study protocol compositions. With a ground truth dataset that we have collected, we can demonstrate the algorithm’s capability by finding that swaps are the most frequently used building blocks. As building blocks can be nested, that is, contained in each other, we provide visualizations of composition trees for deeper inspections. We also present a broad picture of DeFi compositions by extracting and flattening the entire nested building block structure across multiple DeFi protocols. Finally, to demonstrate the practicality of our approach, we present a case study that is inspired by the recent collapse of the UST stablecoin in the Terra ecosystem. Under the hypothetical assumption that the stablecoin USD Tether would experience a similar fate, we study which building blocks — and, thereby, DeFi protocols — would be affected. Overall, our results and methods contribute to a better understanding of a new family of financial products.
Technological advancements are often adopted to financial markets to improve their operations and safety. Blockchain technology has been recognized as one of the potential technologies to be utilized in capital markets. The goal of this article is to evaluate the applicability of using the blockchain technology in securities settlement process. First, the theoretical background of blockchain technology is reviewed and the current financial market infrastructure is examined. Then Central Securities Depositories Regulation and the current securities settlement processes are examined. Blockchain applicability framework designed by Gourisetti, Mylrea and Patangia is applied to assess the blockchain technology’s applicability to securities settlement. The results suggest that blockchain technology can be applied to securities settlement, and the used blockchain type should be a private blockchain with Proof-of-Authority consensus mechanism. A blockchain architecture model, based on a model provided by Zhuang, Chen, Shae and Shyu, and potential node structure for securities settlement are developed, taking into account the existing literature on blockchain technology, financial markets, and Central Securities Depositories Regulation. The proposed blockchain architecture model and node structure are then evaluated against scholar expected benefits and drawbacks of using blockchain for securities settlement and cross-border settlement efficiency. The evaluation reveals that the proposed blockchain technology model can potentially improve some of the current securities settlement issues, such as costly reconciliation and difficult cross-border securities settlement. At the same time, using blockchain technology in securities settlement would be challenging because the practical implementation time would be long and would require market-wide commitment. The main artefacts of this article are the proposed blockchain architecture model and node structure that would allow securities settlement processes to be executed using blockchain technology.
The latest trend in Blockchain formation is to utilize decentralized autonomous organizations (DAO) in many verticals. To date, little attention has been given to address the global research domain due to the difficulty in creating a comprehensive framework that can marry the cutting edge of academic grade scientific research with a decentralized governance body of researchers. A global research decentralized autonomous organization (GR-DAO) would have a profound impact on the research community academically, commercially, and the public good. In this paper, we propose the GR-DAO as a global community of researchers committed to collectively creating knowledge and sharing it with the world. Scientific research is the means for knowledge creation and learning. The GR-DAO provides the guidance, community and technological solutions for the evolution of a global research infrastructure and environment. Through its design, the GR-DAO embraces, enhances and extends the model of research, research on decentralization and DAO as a model for decentralised and autonomous organizing. This design, in turn, improves most of the uses for and applications of research for the greater good of society. The paper examines the core motivation, purpose and design of the GR-DAO, its strategy to embrace, enhance and extend the research ecosystem, and the GR-DAO design uses across the DAO ecosystem
Stefan P. M. Chantrel, Arne Surmann, Thomas Erge, Jessica Thomsen
Distributed solar photovoltaic generation is less expensive than the retail price of electricity from the grid in most parts of Europe. Growing shares of variable generation place a focus on Renewable Energy Communities (REC) to increase the economic benefits of local energy systems. Civil society could play an influential and necessary role in the development of such communities, the expansion of renewable energy capacity and the provision of flexibility. However, current RECs models still confine tenants to their role as non-participating consumers. This article provides a concept to enable participative RECs within the German regulatory framework through collective self-consumption by including consumers for a fair allocation of renewable electricity using the blockchain technology.
Blockchain eliminates the need for trusted third-party intermediaries in business by enabling decentralised architecture design in software applications. However, the vulnerabilities in on-chain autonomous decision-makings and cumbersome off-chain coordination lead to serious concerns about blockchain's ability to behave in a trustworthy and efficient way. Blockchain governance has received considerable attention to support the decision-making process during the use and evolution of blockchain. Nevertheless, the conventional governance frameworks do not apply to blockchain due to its distributed architecture and decentralised decision process. These inherent features lead to the absence of a clear source of authority in blockchain ecosystem. Currently, there is a lack of systematic guidance on the governance of blockchain. Therefore, in this paper, we present a comprehensive blockchain governance framework, which elucidates an integrated view of the degree of decentralisation, decision rights, incentives, accountability, ecosystem, and legal and ethical responsibilities. The above aspects are formulated as six high-level principles for blockchain governance. We demonstrate a qualitative analysis of the proposed framework, including case studies on five extant blockchain platforms, and comparison with existing blockchain governance frameworks. The results show that our proposed framework is feasible and applicable in a real-world context.
In recent times, Blockchain has emerged as a transformational technology with the ability to disrupt and evolve multiple domains. As a decentralized, immutable distributed ledger, Blockchain technology is one of the most recent entrants to the comprehensive ideology of Smart Cities. The rise of urbanization and increased citizen participation have led to various technology integrations in our present-day cities. For cities to become smart, we need standard frameworks and procedures for integrating technology, citizens and governments. In this paper, we explore the potential of Blockchain technology as an enabler for e-governance in smart cities. We examine the daily challenges of citizens and compare them with the benefits being offered by Blockchain integration. On the basis of a comprehensive literature review, we identified four key areas of e-governance wherein Blockchain can provide monumental advantages. In the context of Blockchain integration for e-governance, the paper presents a survey of prominent published works discussing various urban applications.
Zeshun Shi, Cees de Laat, Paola Grosso, Zhiming Zhao
In recent years, blockchain has gained widespread attention as an emerging technology for decentralization, transparency, and immutability in advancing online activities over public networks. As an essential market process, auctions have been well studied and applied in many business fields due to their efficiency and contributions to fair trade. Complementary features between blockchain and auction models trigger a great potential for research and innovation. On the one hand, the decentralized nature of blockchain can provide a trustworthy, secure, and cost-effective mechanism to manage the auction process; on the other hand, auction models can be utilized to design incentive and consensus protocols in blockchain architectures. These opportunities have attracted enormous research and innovation activities in both academia and industry; however, there is a lack of an in-depth review of existing solutions and achievements. In this paper, we conduct a comprehensive state-of-the-art survey of these two research topics. We review the existing solutions for integrating blockchain and auction models, with some application-oriented taxonomies generated. Additionally, we highlight some open research challenges and future directions towards integrated blockchain-auction models.
In this paper the author’s interpretation of essence and applicability of smart-contracts in economics. Examples are given along with critical view on wrong statements, found in publications on examined topic. Repeating of certain theses from similar papers won’t be redundant, because it will help to observe the topic from different point of view. In general, author gives positive valuation of applicability of smart-contracts technology in economics (both, financial and real sector, despite of some obvious inherent disadvantages of current implementation in Ethereum. In author’s opinion, integration of smartcontracts and blockchain with IoT can give synergetic effect and consider real cyber-social interaction. Certain value to this paper is added by author’s practical experience of coding and adopting smart-contracts. Smart-contracts are mentioned by Bank of Russia with implementation of CBDC (Central Bank Digital Currency) concept in the form of digital rubble and receive additional significance in current trend of dematerialization and virtualization of money. In paper essential terms and author’s point to ability to change contract terms after deploy are given.
Today there is considerable interest in deploying blockchains and\ndecentralized ledger technology as a means to address the deficiencies of\ncurrent financial and digital asset infrastructures. The focal point of\nattention in many projects on digital asset and cryptocurrency is centered\naround blockchain systems and smart contracts. Many projects seek to make the\nblockchain as the centerpiece of the new decentralized world of finance.\nHowever, several roadblocks and challenges currently face this predominant\nblockchain-centric view. In this paper we argue that the proper and correct\nperspective on decentralized economy should be one that is asset-centric, where\nthe goal should be the consistent lifecycle management of assets in the\nreal-world with their digital representation on the blockchain. We introduce\nthe notion of the digital twin to capture the relationship between a real-world\nasset and its on-chain representation. A digital twin container is utilized to\npermit off-chain state persistence and on-chain state traceability, where the\ncontainer can be deployed on the blockchain as well as on traditional\napplication servers. The digital twin container becomes the bridge between\nlegacy infrastructures and the newly emergent blockchain infrastructures,\npermitting legacy systems to interoperate consistently with blockchain systems.\nWe believe this asset-centric view to be the correct evolutionary direction for\nthe nascent field of blockchains and decentralized ledger technology.\n