Abstract A zero-knowledge proof or protocol is a cryptographic technique for verifying private data without revealing it in its clear form. In this paper, we evaluate the potential for zero-knowledge distributed ledger technology to alleviate asymmetry of information in the asset-backed securitization market. To frame this inquiry, we conducted market data analyses, a review of prior literature, stakeholder interviews with investors, originators and security issuers and collaboration with blockchain engineers and researchers. We introduce a new system which could enable all market participants in the securitization lifecycle (e.g. investors, rating agencies, regulators and security issuers) to interact on a unique decentralized platform while maintaining the privacy of loan-level data, therefore providing the industry with timely analytics and performance data. Our platform is powered by zkLedger (Narula et al. 2018), a zero-knowledge protocol developed by the MIT Media Lab and the first system that enables participants of a distributed ledger to run publicly verifiable analytics on masked data.
Sami Ben Mariem, Pedro Casas, Matteo Romiti, Benoßt Donnet · 6 authors
Blockchains are typically managed by peer-to-peer (P2P) networks providing the support and substrate to the so-called distributed ledger (DLT), a replicated, shared, and synchronized data structure, geographically spread across multiple nodes. The Bitcoin (BTC) blockchain is by far the most well known DLT, used to record transactions among peers, based on the BTC digital currency. In this paper, we focus on the network side of the BTC P2P network, analyzing its nodes from a purely network measurements-based approach. We present a BTC crawler able to discover and track the BTC P2P network through active measurements, and use it to analyze its main properties. Through the combined analysis of multiple snapshots of the BTC network as well as by using other publicly available data sources on the BTC network and DLT, we unveil the BTC P2P network, locate its active nodes, study their performance, and track the evolution of the network over the past two years. Among other relevant findings, we show that (i) the size of the BTC network has remained almost constant during the last 12 months - since the major BTC price drop in early 2018, (ii) most of the BTC P2P network resides in US and EU countries, and (iii) despite this western network locality, most of the mining activity and corresponding revenue is controlled by major mining pools located in China. By additionally analyzing the distribution of BTC coins among independent BTC entities (i.e., single BTC addresses or groups of BTC addresses controlled by the same actor), we also conclude that (iv) BTC is very far from being the decentralized and uncontrolled system it is so much advertised to be, with only 4.5% of all the BTC entities holding about 85% of all circulating BTC coins.
With the recent popularity of Blockchain and other Distributed Ledger Technologies (DLT), blockchain enabled smart contract applications has attracted increased research focus. However, the immutability of the blocks, where the smart contracts are stored, causes conflicts with the traditional Software Development Life Cycle (SDLC) models usually followed by software engineers. This clearly shows the unsuitability of the application of SDLC in designing blockchain enabled smart contract based applications. This research article addresses this current problem by first exploring the six traditional SDLC models, clearly identifying the conflicts in a table with the application of smart contracts and advocates that there is an urgent need to develop new standard model(s) to address the arising issues. The concept of both block immutability and contract is introduced. This is further set in a historical context from legacy smart contracts and blockchain enabled smart contracts extending to the difference between "shallow smart contracts" and "deep smart contracts". To conclude, the traditional SDLC models are unsuitable for blockchain enabled smart contract-based applications.
The ShariÊża Law has a comprehensive vision of all human activities, including commerce. The peculiarities of the commercial legal system that derives from the legal principles of ShariÊża emanates from the concepts of forbidden or Haram and permissible or Halal. These principles are applied today to breakthrough commercial developments such as the Blockchain/Digital Ledger Technologies. On the other hand, there is a growing debate about the possibility of the application of ShariÊża Law in the Member States of the European Union, either for social reasons or for commercial reasons. The controversy and opportunities created in the smallest State of the Union, Malta, serves as a sample.
A decade long thrive of cryptocurrency has shown its potential as a source of alternative-finance and the security and the robustness of the underpinning blockchain technology. However, most cryptocurrencies fail to show inimitability and their meanings in the real world. As a result, they usually start off as favourites but quickly become the outcasts of the digital asset market. The blockchain society attempts to anchor the value of cryp-tocurrency with real values by employing smart contracts and link it with computation resources and the digital-productivity that have value and demands in the real world. But their attempts have some undesirable effects due to a limited number of practical applications. This limitation is caused by the dilemma between high performance and decentralisation (universal join-ability). The emerging of blockchain sharding models, however, has offered a possible solution to address this dilemma. In this paper, we explore a financial model for blockchain sharding that will build an active link between the value of cryptocurrency and computation resources as well as the market and labour behaviours. Our model can adjust the price of resources and the compensation for maintaining a system based on those behaviours. We anchor the value of cryptocurrency by the amount of computation resources participated in and give the cryptocurrency a meaning as the exchange between computation resources globally. Finally, we present a working example which, through financial regularities, regulates the behaviour of anonymous participants, also incents/discourages participation dynamically.
Being a decentralized system makes Blockchain a suitable technology solution in many cases. The Smart Energy domain has the potential to benefit from the use of Blockchain, by improving data and transaction management, through applications such as peer-to-peer energy trading, grid enhancement, and electric vehicle support. Many researchers have proposed models and prototypes of blockchain-based applications, which are expected to improve the performance of smart energy systems. In this report, a qualitative literature review was performed to look into a sample of these application proposals and to try to identify the impacts of blockchain technology in Smart Energy. This resulted in the discovery of both positive and negative factors. The beneficial factors include increased security, improved data privacy, data transparency and immutability, removal of third-party control and trust, ubiquitous solution, and greater data accessibility. The list of challenges includes limited scalability and speed, off-chain support requirement, high establishment and maintenance cost, and requiring further practical tests. One of the interesting findings is that the impact of Blockchain technology as to whether it may increase or decrease transaction costs is still unclear. Finally, the paper recommends that a future study may focus on economic feasibility and transaction costs, and ascertain which Smart Energy cases and application designs are more appropriate for Blockchain technology.
Venkata Marella, Bikesh Raj Upreti, Jani Merikivi, Virpi Kristiina Tuunainen
Abstract Contemporary cryptocurrencies lack legal, monetary, and institutional backing that traditional financial services employ. Instead, cryptocurrencies provide trust through technology. Despite the plethora of research in both trust and cryptocurrencies, the underlying attributes of the technologies that drive trust in cryptocurrencies are not well understood. To uncover these attributes, we analyze the corpus of 1.97 million discussion posts related to Bitcoin, the oldest and most widely used cryptocurrency. Based on earlier research, we identified functionality, reliability, and helpfulness as the focal constructs with which to evaluate usersâ trust in technology. In our analysis, we discovered 11 different attributes related to three technology constructs that are significant in creating and maintaining usersâ trust in Bitcoin. The findings are discussed in detail in the article.
Amid pressing demands to tackle critical sustainable development goals, governments in developing countries face the additional complex task of embracing new digital technologies such as blockchains. This paper takes a conceptual approach and presents a framework that interlinks development, technology, and governments while highlighting the relevance of state capacity and democratic governance in such dynamics. With this in hand, blockchain technology is revisited from the perspective of governments in the Global South, identifying in the process key traits and presenting a new typology. Research gaps regarding the relationship between this technology and both development and developing country government are also identified. A closer look at some on the ground blockchain implementations yields some early evidence on the advantages and risks involved in the process. The paper closes with a discussion of the results within the proposed framework suggesting additional research themes. It also provides some basic guidance for development practitioners interested in enhancing current programs using blockchains as an enabler.
Moneyâs materiality produces an ontological conundrum for social theory: should the analysis of money foreground the objects used as money, or the abstract relations that underpin it? Provoked by the emergence of cryptocurrencies, this paper develops a conceptualization of money as a technological and social infrastructure which directly addresses this theoretical impasse. Cryptocurrenciesâ sole form of material existence coincides with their underpinning infrastructure of records, accounting and payments. In the past decade, cryptocurrencies have skyrocketed in number, and they have been applied to a host of use cases. This paper focuses on cross-border payments through the example of the fintech company Ripple, the cryptocurrency XRP, and the design of the XRP Ledger. Combining literatures from the social theory of money, science and technology studies and new materialisms, this article develops steps towards an ecological conceptualization of money infrastructures. Infrastructures, understood ecologically, include devices, active forms, and imaginaries in seamless webs of mutual relations of co-evolution. These ecologies are always potentially prone to slippage, dissolution, disassembling, reassembling and reappropriation, dependence, and competition.
Marco Valeri, Rosario Fondacaro, Cinzia De Angelis, Andrea Barella
This paper aims to evaluate where the application of new fintech solutions like blockchain and cryptocurrencies can be considered as an opportunity to build bridges between Islamic and western culture in order to create a trusted money transfer with low commission and a big transparency and trust. The research question is: Can an Hawala systems based on DLT technologies be considered compliant both with anti-money laundry regulations and with Sharia values? This is a conceptual paper relying upon an understanding of the literature in the fields of technology, sociology, anthropology, criminology and regulatory, as applied to the topic of Islamic practice known as Hawala and emerging new disruptive technologies like Distributed Ledger Technology. The research has been conducted by a literature reviewing on Scopus data base by searching the following keywords: Islamic finance, cryptocurrencies, hawala, stablecoin, globalcoin, money laundering, blockchain. The searching period was set on the last 10 years. The paper discusses some scenarios to define new fintech Hawala system in an evolving scenario of cryptocurrencies, social network commitments and different type of blockchain where it can be digitally transformed by using new fintech technologies while became compliance with anti-money laundering regulations with the respect of Islamic values. As practical implications, this paper could help to encourage researcher and entrepreneurs to evaluate and propose a digital transformation approach with the aim to maintain ancient tradition and, at the same time, apply new technology that improve the life of citizens. As social implications this paper expands upon the understanding of how new fintech solution can be easily be integrated in the real life by using common devices like a mobile phone to be used as wallet for the daily expenses and to receive money from relatives from western countries. The originality/value of this paper is that it covers the literature gap in the field of new fintech solutions applied to Islamic finance by providing a likely proposal by integrating popular tradition, regulations and new technologies. The research limitations and implications are related to that this is a conceptual paper; case studies havenât been treated, so it is not able to say definitively if the outcomes discussed can be defined as an effective solution and can be developed in the real global society, in a future prospective itâll be possible to continue to make researches in this field of application with fintech technologies and Islamic Finance.
Radical changes in the technological environment have been forcing service providers to consider whether, if so, how to automate any aspects of their services with robots and other emerging technologies. Some service providers have been adopting robotic service assistants, and even creating organizations partially or fully automated by robots. However, some service providers have not been able to fully take advantage of RSAsâ benefits in a way that enhances customer service experiences. We review those challenges of RSAs and discuss the potential application of blockchain technology in governing a robotic service organization, the concept we propose in this study. Drawing on transaction cost theory and resource-based theory, we discuss theoretical implications of the impact of blockchain technology on the governance of a robotic service organization. Our study represents one of the first theoretical research to evaluate the impact of blockchain technology in a robotic service economy.
The digital finance revolution, which is often termed the âFinTech Revolutionâ, is currently changing the financial services industry through innovative solutions, often developed by startup and Big Tech companies. The financial sector is one of the key pillars of all economic transactions in general and sustainability specifically. As is so often the case: money is power. Innovative examples range from digital supply chain finance enabled agricultural and fashion value chains bridging Western and African as well as Asian countries, digital currency fueled smart meters for schools in Africa, digital investment marketplaces for forest tokens to crowdfunding enabled entrepreneurship in Asia and South America. Digital innovation in financial services is changing the way how financial resources can be accessed, distributed, and managed. This paper analyzes approaches from the emerging field of FinTech, InsurTech and blockchain at the intersection of sustainability. By reading through almost one-hundred and fifty papers from academia and practice as well as analyzing hundreds of start-ups in this field, the major building blocks were derived and a future research and innovation agenda was developed. The Appendix which is mentioned in this paper is downloadable online: www.sustainable-digital-finance.org. The results indicate that the topic is of great emerging interest. The areas of the focus are energy management, financial services, governments/NGOs, and transportation as well as some other relevant sectors that hold great potential and in which the combination of business and sustainability benefits is more obvious than ever enabled through innovative technology. The analysis reveals that future research and innovation areas might be fruitful in (1) novel ways for an integrated measuring of business and sustainability benefits, (2) novel sustainable cross-industry ecosystems and business models relying on new FinTech, InsurTech and blockchain enabled products and services, (3) new forms of organizational designs such as autonomous distributed organizations and processes built on new governance mechanisms and (4) novel FinTech, InsurTech, and blockchain applications for Sustainable Digital Finance Ecosystems.
Jan 1, 2020·Proceedings of the ... Annual Hawaii International Conference on System Sciences/Proceedings of the Annual Hawaii International Conference on System Sciences
Nico Abbatemarco, Leonardo Maria De Rossi, Aakanksha Gaur, Gianluca Salviotti
New digital technologies are changing the way organizations create and capture value. In particular, blockchain is bringing up opportunities for organizations in terms of transparency and security, and at the same time threatening the position of intermediaries such as banks and notaries. Therefore, intermediaries need to design new business models to generate value from blockchain. Little academic re-search has been conducted to identify the business models that intermediaries could exploit to leverage a disintermediation technology such as blockchain. Employing a qualitative research based on focus group and interviews, this study highlights how a specific intermediary, the Italian notaries, tried to design appropriate business models to derive value from blockchain ecosystems. Specifically, drawing on the key concepts of value configuration, value creation and business model dimensions, this paper identifies three different business models that Italian notaries can implement to create and capture value from permissionless blockchain ecosystems.
Shuai Wang, Xiaojun Tu, Hongfeng Chai, Quan Sun · 7 authors
As a new FinTech innovation regulation tool, regulatory sandbox effectively balances financial innovation and risk, so it is adopted by many regulatory authorities around the world. However, until now, regulatory sandbox is still at the stage of manually submitting data, and artificial intelligence has not been applied to it. Hence, in this paper, we propose the framework of Parallel FinTech Regulatory Sandbox based on the ACP approach (Artificial systems + Computational experiments + Parallel execution). Then, we talk about how to combine the emerging blockchain technology with intelligent regulatory sandbox, thus solving problems such as poor data flow and regulation sluggish. This paper is aimed at providing helpful guidance and reference for the development of FinTech regulatory sandbox.
Jan 1, 2020·Proceedings of the ... Annual Hawaii International Conference on System Sciences/Proceedings of the Annual Hawaii International Conference on System Sciences
Given the increasing interest in blockchain technology, we present a large-scale cross-disciplinary literature analysis of research on the blockchain using topic modelling with the goal of identifying the major research trends, research methodologies, and fruitful areas for further research. In particular, the analysis focuses on abstracting out research trends from relevant terms and topics related to the research disciplines of Business, Computer Science, Economics, Social Sciences, Engineering, Healthcare, and Law. A total of 2,125 articles published between 2008 to up until early 2019 in academic journals and conferences were analyzed. Results of our analysis reveal that research is bipartite between practical and research domains, with academic research on blockchain not clearly aligning with organizational and social benefits. Also, we found â 1) few inter-disciplinary publications, and 2) a small number of studies that use surveys, experiments, and case studies as their research method. Our findings also reveal that research on Blockchain in the social sciences and law is still in the embryonic stage, thus making it essential to develop more direct research efforts for Blockchain to thrive in all research disciplines.
The world experienced unprecedented growth in international trade in the past few decades. In this resulting environment of global competition, several new companies have spawned and are spawning. Sellers are often under immense pressure by the market players to accept open-account trade terms, shipping goods before receiving payment, leaving them exposed to increased risk. This creates working capital challenges for firms, especially small and medium enterprises. To mitigate this supply chain risk, several supplier-led and buyer-led supply chain finance solutions are facilitated by banks and financial technology companies. However, because of the new Basel III regulation framework for banks and several other Supply Chain Finance (SCF) adoption barriers, like fraudulent activities, many firms are unable to reap SCFâs full benefits. This study explains various SCF instruments, the key drivers in their growth and their adoption barriers. This study then focuses on the novel blockchain technology and smart contracts by delving deep into their history, components, limitations, risks and use cases. Using the knowledge gathered in the process, a proof-of-concept blockchain and smart contract is developed using the Ethereum platform, which can facilitate normal business, purchase order finance, reverse factoring and reverse securitization. To test the smart contract, four use cases for each SCF instrument mentioned are demonstrated. A JavaScript-based unit test is done to test the smart contractâs correct deployment and onboarding of actors along with their business and financing interactions â access controls to business documents, reverting malicious transactions and correct fund transfer. As a result of various assumptions taken in the development process, the smart contract works only as a basic proof-of-concept and lacks robustness on the ground of scalability and security. As a result, a future model is laid out which will use various software and hardware oracles for autonomous operations while using a complex system of a storage contract, a permanent contract which stores all the data, and logic contract, upgradable contract which can be changed any number of times, with a proxy contract making delegated âfunctionâ calls to logic contract to reduce the gas usage due to external function calls.
In recent years, the rapid development of blockchain technologies have attracted worldwide attention. Its application has been extended to many fields, such as digital finance, supply chain management, and digital asset transactions. For some enterprises and users, how to choose the most effective platform from many blockchains to control costs and share data is an important issue. To comprehensively evaluate the blockchain technologies, we first construct three-level evaluation indicators in terms of technical, market, and popularity indicators. Then, we propose an improved global DEA-Malmquist index without explicit inputs to assess the dynamic performance of blockchain technologies. Finally, we carry out an empirical analysis to evaluate 31 public blockchains' performance from May 2018 to April 2020. The results indicate that the overall performance of blockchain technologies is basically on the rise. Some blockchain technologies that have not yet received widespread attention have shown good dynamic performance.
The popularity and emergence of digital currency can be attributed to social media as it has a large user base for online discussion. The crypto market is highly dependent on socially constructed opinions as investors rely on online sources to acquire related information. A headline is considered as a summary of an article in a single sentence as it is the first that can gain a readerâs attention. The objective of this paper is to analyze the trend of cryptocurrency headlines in terms of positive and negative sentiment. The dataset is obtained from the Kaggle webpage containing news headlines from five online platforms. The paper will be using a lexicon-based sentiment approach to identify the binary sentiment. Support Vector Machine algorithm will be used to evaluate and optimize the sentiment results. This paper contributes to the gap in the literature by providing an empirical analysis of overview changes of the cryptocurrencies with multiple news platforms and longer periods. The findings of the paper resulting in negative sentiment for the trend of headlines, but it showed a different view in terms of positive polarity. Furthermore, the TD-IDF model outperformed the sentiment model in SVM modeling. Keywords: Cryptocurrency, Sentiment analysis, Lexicon sentiment, Natural Language Processing (NLP), Support Vector Machine (SVM).