A significant increase in the cash value of Bitcoin in the beginning of 2017 led to growth in people’s interest in cryptocurrency. The uniqueness of this type of money is that the transaction occurs only with the approval of a network of participants, and the funds themselves are beyond the control of any state. At the same time, the Russian government, represented by the Ministry of Finance, did not approve a cryptocurrency until 2018. Despite the large number of studies that reveal the main advantages and disadvantages of cryptocurrency, as well as the motivation of the participants, the issue of building trust in cryptocurrencies remains relevant. The main goal of this study is to identify the mechanisms of trust building among the participants of the cryptocurrency market. The research information base was based on 15 semi-structured interviews with active participants of the cryptocurrency market. Based on collected data, a typology of cryptocurrency users was made, and ways of managing risks in interacting with the market and insight into the role of the state in this market were examined. Cryptocurrency users can be divided into those who use it for consumption of various goods (including those who are prohibited in the territory of the Russian Federation) and those who seek to derive financial benefit from the current market situation. Although both groups exist in the same market, they have different expectations: consumers strive to ensure that the cryptocurrency exchange rate remains stable, whereas the other group hopes for a long period of high exchange-rate volatility to increase their own earnings. The position that the local state should take is an important factor of trust for each of the groups represented. Cryptocurrencies are still at an early stage of development. A large group of people on the market is trying to monetize the weaknesses that exist at the moment. Over time, the situation on the cryptocurrency market stabilizes, and it can then move to a qualitatively different stage of development.
It should be recognized that the monetary authorities in all countries of the world were not ready for the emergence and rapid development of digital currencies and their virtual diversity, regardless of the development level of national economy and domestic financial market. Minimization of the threats and risks of crypto-currency spread based only on their smaller issue volume comparing to fiat money is at any rate a shortsighted position. The interpretation of this phenomenon by a central bank has a decisive influence on its policy, which is especially important in the context of financial system globalization. The article provides the analysis of approaches to interpretation of the virtual (digital) currency concepts in central banks of different jurisdictions, as well as a wide range of scientific publications. These data led to the conclusion that it is necessary to develop a common understanding of state regulation in this field at the global level. According to the author, the most reasonable method is the interpretation of digital currencies as an asset, which is due to the inferiority of these financial instruments in terms of money key functions in the classical sense. The author notes the significant progress of central bankers in understanding the nature and capacity of a crypto currency with dominant tendency to strengthen control and supervision over operations with these financial instruments. However, there is also a significant divergence in the development of restrictive, permissive or supportive measures. The article concludes that it is necessary to coordinate the efforts of central banks with governments, other financial bodies and international organizations in this direction in order to adequately and homogeneously react to the development of the crypto currency as a kind of financial innovation without violation of the healthy competition rules in the payment services market and to prevent investors' exposure to excessive risk.
The technology of the distributed registry creates new opportunities for changing the management system, which are discussed in the article. The use of the blockchain allows building a decentralized autonomous commercial organization on a network basis. With the help of p2p technology, it is possible to radically reorganize the structure of organization and management, and reduce the management and transaction costs inherent in the traditional hierarchical structure of the firm. The analysis of the steps by means of which real enterprises can be transferred to the blockchain is provided, and the role of smart contracts is analyzed.
The article is devoted to research of reliability and security of distributed ledger technology.A distributed ledger is a replicated database operating on the basis of decentralized networks.A vivid example of using distributed ledger technology is blockchain technology.Data protection against spoofing in using distributed ledgers is ensured by sequential hashing, asymmetric cryptography, and a decentralized network.
Field of study: Blockchain technology, decentralized autonomous organizations, smart contract and their resistance to attacks and failures. Theoretical and practical significance: Due to the fact that such a form of organization is experimental, participants often face problems of attacks on the organization, the consequences of incorrectly written rules and of fraud. The task of creating decentralized autonomous organizations that are resistant to failures and attacks, and research on the causes of such problems has become relevant for software developers and architects. Goals and objectives of work: Investigation of attack algorithms and development of methods for ensuring the sustainability of decentralized autonomous organizations for attacks on the basis of analysis of the subprocesses of border events and logs using the methods of Process Mining. The methods to be developed should promptly identify and prevent inconsistencies between the alleged and actual behavior of smart contracts that lead to such errors in the operation, such as the content of spam contracts, empty transactions, increased block processing time, etc.
Open access
Economic and Technological Systems Analysis
Advanced Research in Systems and Signal Processing
A mathematical model for smart contracts for deployment of the initial coin offering (ICO), widely used on the Ethereum platform, is proposed. The analysis of dependence of the network capacity on such parameters as the transaction buffer size, the average transaction processing time, is performed. Evaluations are obtained of which parameters have the greatest impact on the capacity of Ethereum within the developed model.
Bitcoin is an electronic monetary system, where transactions are carried out without a third party . The Bitcoins network is not dependent on the central organization .Bitcoin is based on an open cryptographic protocol. The Bitcoin network is distributed between a computer connected to the network. Bitcoin allows you to pay through a computer or smartphone without financial organizations. In this article, we analyzed the scientific-theoretical and practical issues in the Bitcoin network, attacks on the Bitcoin network, security and anonymity issues in the Bitcoin e-wallet .
Nowadays, the modern supply chain is facing the new threats and opportunities due to quality, safety, ethics, environmental impact and other serious problems aroused by the opacity of supply chain. On the contrary, a transparent and traceable supply chain can help suppliers minimize fraud and errors, enhance inventory management, reduce courier costs, lower waste and delay. Consequently, transparency and traceability are essential to the sustainable development of industrial supply chain in the future. \n \n \nDriven by growing demand for transparency and traceability from consumers, companies, and governments, some fundamental labeling technologies (e.g. RFID, QR code, NFC tag, etc.) have been already combined with web technology and applied in logistics system to identify a product with origin information. Even though, those traditional technologies fail to provide a trusted and cost-efficient system to record provenance and share information. \n \n \nThis thesis aims to find an approach to improve transparency and traceability of supply chain in a secure and cost-efficient way. To achieve this goal, an approach with an emerging technology is presented in this thesis: blockchain, a shared, distributed and permissioned ledger that records every transaction information associated with asset through supply chain, which is synchronized and verified in real time with all entities in the supply chain but can be accessed only by authorized participants. \n \n \nThe result of this research work not only provides in-depth research of blockchain technology but also proposes a concrete solution with an implementation of blockchain technology to shape a transparent and traceable supply chain network. This solution can track provenance and trajectory of an asset through the complex supply chain in real time, at the same time, provides unprecedented visibility and confidentiality. Finally, this thesis also shows a possibility to integrate the blockchain system with other web service and traditional enterprise resource planning system.
The article presents the prospects for using distributed registry technologies (blockchain) in various socio-economic spheres related to state and municipal administration. Provided examples and forecasts of the use of blockchain technologies in the provision of state and municipal services for individuals and legal entities in the following areas: - formation of a unified register containing the history of the placement of the state, municipal order, as well as procurement of corporations with state participation and / or control; - registers of documents (diplomas, certificates, lost and disavowed passports, policies for movable and immovable property insurance, health, etc.); - database of court decisions and executive proceedings; - portals of public participation of citizens in the affairs of the district - city - country. The fact that the blockchain technology is, first of all, the principles, and not the only possible way of implementing them, allows us to count on maximum openness and multivariate application in a dynamically changing digital world .
Natalia G. Vovchenko, А. В. Андреева, A.S. Orobinskiy, Y.M. Filippov
Modern economy is developing in a process able format, gradually turning into a virtual economic system. Digital economy serves as the new paradigm of economic development and reformats business relationship on the basis of the use of information.New information and network technologies are becoming major factors of globalizing economy production and contribute to rapid transition of economic agents from real sector to a network one, ensuring digital economy development and innovative business processes formation.The blockchain technology implements competitive advantages of financial contracts based on reduction of the costs on economic agents' interaction, provision of information transparency and effective control over operational risks. The blockchain technology contributes to financial security of the modernization operations of business processes and high organized centralized structures of the blockchain technology.The blockchain application for financial transactions allows providing high quality of the contracts implementation between the digital economy's economic agents.
The development of robotics, the Internet of Things concept, big data processing techniques, automation, and distributed digital ledgers leads to the fourth industrial revolution. One of the main issues of new industry is interaction between the "smart factory" components both internally and with other factories based on the Internet of Things. This interaction should provide trust between the participants of the Internet of Things; control over the distribution of resources (such as maintenance time, energy, etc.) and finished products. The paper describes one of the possible ways of integrating Internet of Things and blockchain technologies to solve these issues. For this purpose, an architecture has been developed that combines Smart-M3 information sharing platform and blockchain platform. One of the main features of the proposed architecture is the use of smart contracts for processing and storing information related to the interaction between smart space components.
The article deals with issues related to digital supply chains in a joint economy. A supply chain is a term that describes the planning, search, production, distribution and delivery of products or services from the place of origin to consumption. Effective and reasonable supply management is necessary to ensure the availability of the right product at the right time and in the right place at the right price. This article focuses on the analysis of business relations and their integration into the supply chains, which are built through electronic data circulating on the Internet between business partners and value-added service providers working in the paradigm of a shared digital economy using blockchain technologies.
This article presents a distributed ledger technology (blockchain) development analysis in throughout different socioeconomic spheres of the society. The highlight is the generalization and systematization of already known data, the main stages of blockchain technology development are classified, the blockchain technology implementation projections are presented in terms of new so-called «Digital economy» markets development. The paper describes a controversial situation when the blockchain is started to be used by banks to increase their efficiency and thereby indirectly contribute to the growth of popularity of crypto-currencies, which, in turn, creates an alternative to the existing financial infrastructure.
Open access
Economic and Technological Developments in Russia
Digitalization and Economic Development in Agriculture
A comparative study across the most widely known blockchain technologies is conducted with a bottom-up approach. Blockchains are disentangled into building blocks. Each building block is then hierarchically classified in main and subcomponents. Then, alternative layouts for the subcomponents are identified and compared between them. Finally, a taxonomy tree summarises the study and provides a navigation tool across different blockchain architectural configurations.
The paper discusses the future development of the cryptocurrency in the Russian Federation. At present, it can be defined as a new financial instrument based on distributed registry technology (Blokchein). It is the lack of server storage and a single issuer, the relative anonymity (pseudonymity) and mobility calculations allow us to consider financial cryptocurrency to be a technology of the future. Evaluation of the prospects for the development of the regulatory and protective law of the Russian Federation, the author begins with an assessment of the world's leading strategies for regulating the virtual currency: permissive, prohibitive and observant. The author argues the problem of searching for the optimal model of the cryptocurrency legalization, considering it to be a kind of a computer program: means of exchange, a monetary symbol, a cashless cash, an electronic money and a security, a commodity, other property, property right, etc. Particular attention is paid to the critical analysis of the draft federal law on the declaration of a crypto currency by a surrogate and the introduction of a new composition in the Criminal Code of the Russian Federation - article 187.1 "Turnover of money surrogates" with the establishment of responsibility in the form of a fine of up to 500 thousand rubles or imprisonment for up to four Years for production, purchase for sale, as well as the sale of money surrogates. As one of the developers of the draft law on legalization of the cryptocurrency in the Russian Federation, the author of this paper identifies the most important aspects that need in legal control. They are identification of exchange sites and the user, verification of transactions based on documents, data and information (validation), determination of the beneficial owner, Relations and monitoring of transactions with the cryptocurrency in accordance with the risk profile.
This paper aims to identify the business models used by blockchain-based initiatives and\nprojects in the electricity market and identify how they affect it. This research examines the\nmarket trends within the electricity market as well as general socioeconomic and\ntechnological developments.\nThis paper is based on a conceptual analysis of case studies that utilise blockchain\ntechnology in the electricity market and an empirical evaluation of considerations that have\nto be made when implementing a peer-to-peer energy-trading platform. For the conceptual\nanalysis, a four-dimensional business model framework has been defined. To specify the\ndimensions of the business model, categories and characteristics have been identified that\nhave been determined to be characteristic to the 22 analysed case studies. Seven business\nmodel archetypes were subsequently derived from the initial four-dimensional review of the\ncase studies.\nThis paper adds value to both research and practice in three ways. First, it facilitates\ndiscussions about blockchains in the electricity market and their practical use. Second, it\nsheds light on the implications of their use on the electricity market and its participants.\nThird, it highlights what factors need to be considered when implementing a blockchainbased\nP2P energy-trading platform.\nWhile the first energy blockchain project was introduced in 2015, at the time this paper was\nsubmitted it was the first publication that analysed blockchain-based business models in the\nelectricity market. In writing this paper, the author has assumed that readers have only little\nknowledge of blockchain technologies and the opportunities for their application in the\nenergy market.
Current construction engineering management suffers numerous challenges in terms of the trust, information sharing, and process automation. Blockchain which is a decentralised transaction and data management technology, has attracted increasing interests from both academic and industrial aspects since 2008. However, most of the existing research and practices are focused on the blockchain itself (i.e. technical challenges and limitations) or its applications in the finance service sector (i.e. Bitcoin). This paper aims to investigate the potential of applying blockchain technology in the construction sector. Three types of blockchain-enabled applications are proposed to improve the current processes of contract management, supply chain management, and equipment leasing, respectively. Challenges of blockchain implementation are also discussed in this paper.
Distributed ledger technology (DLT) that stores data (usually immutable and sequenced transaction records) in a decentralized way through cryptography and consensus algorithms. The first widely recognized implementation of the blockchain took place in 2009 on the Bitcoin public blockchain. Since then, other types of blockchain have been developed for a wide range of applications and features built on common principles such as decentralization, encryption, consensus, and immutability. In particular, blockchain technology is most widely used in transaction settlement and digital currency banks and the financial sector, as well as in supply chain applications that help participants solve problems quickly and efficiently. Other use cases continue to be developed. As a form of information management, blockchain and related DLTs offer advantages over traditional databases and may help develop certain new technologies such as the Internet of Things. Blockchain regulation is currently restricted at the international and federal levels, but state-level legislation provides support and awareness of aspects of blockchain technology. Most of the current regulations are in the form of self-regulation by blockchain developers and related communities, but many challenges and risks such as data privacy and security need to be addressed in the near future.
The aim of the article was to evaluate the risks of investing in Bitcoin cryptocurrency. Particular attention was paid to the risk of investment on the Polish exchanges: Bitcurex, BitBay, BitMarket.pl and LocalBitcoins. To evaluate the risk there was used VaR measure. There were compared the risk of investing in Bitcoin cryptocurrency and the risk of investing in the selected "traditional" currencies. There was also paid attention to the effect of day of the week on the Bitcoin’s exchanges. The investment in cryptocurrency was characterized by higher risk than investing in “traditional” currencies. The Polish Bitcoin exchange LocalBitcoins was characterized by the highest risk and highest average daily rate of return.