In a novel model of an endowment economy, we analyze coexistence and competition between traditional fiat money (Dollar) and another intrinsically worthless medium of exchange, not controlled by a central bank, such as Bitcoin. Agents can trade consumption goods in either currency or hold on to currency for speculative purposes. A central bank ensures a Dollar inflation target, while Bitcoin mining is decentralized via proof-of-work. We analyze Bitcoin price evolution and interaction between the Bitcoin price and monetary policy which targets the Dollar. We obtain a fundamental pricing equation, which in its simplest form implies that Bitcoin prices form a martingale. We derive conditions, under which Bitcoin speculation cannot happen, and the fundamental pricing equation must hold. We show that the block rewards are not a tax on Bitcoin holders: they are financed by Dollar taxes imposed by the Dollar central bank. We discuss monetary policy implications and characterize the range of equilibria.
Cryptocurrencies such as Bitcoin are establishing themselves as an investment asset and are often named the New Gold. This study, however, shows that the two assets could barely be more di?erent. Firstly, we analyze and compare conditional variance properties of Bitcoin and Gold as well as other assets and ?nd di?erences in their structure. Secondly, we implement a BEKK-GARCH model to estimate time-varying conditional correlations. Gold plays an important role in ?nancial markets with ?ight-to-quality in times of market distress. Our results show that Bitcoin behaves as the exact opposite and it positively correlates with downward markets. Lastly, we analyze the properties of Bitcoin as portfolio component and ?nd no evidence for hedging capabilities. We conclude that Bitcoin and Gold feature fundamentally di?erent properties as assets and linkages to equity markets. Our results hold for the broad cryptocurrency index CRIX. As of now, Bitcoin does not re?ect any distinctive properties of Gold other than asymmetric response in variance.
ABSTRACT This paper investigates whether Tether, a digital currency pegged to the U.S. dollar, influenced Bitcoin and other cryptocurrency prices during the 2017 boom. Using algorithms to analyze blockchain data, we find that purchases with Tether are timed following market downturns and result in sizable increases in Bitcoin prices. The flow is attributable to one entity, clusters below round prices, induces asymmetric autocorrelations in Bitcoin, and suggests insufficient Tether reserves before month‐ends. Rather than demand from cash investors, these patterns are most consistent with the supply‐based hypothesis of unbacked digital money inflating cryptocurrency prices.
Industry 4.0 will enable the development of hyper-efficient plants, which facilitate the implementation of emerging production models such as Made-to-Order and Configure-to-Order. In this direction, the H2020 FAR-EDGE project has introduced a reference architecture and an accompanying platform that facilitates the implementation of digital automation solutions based on edge computing and distributed ledger technologies, which enable fast, reliable and responsive automation. In this paper, we illustrate the use of these technologies for the implementation and deployment of a practical use case in the white appliances industry. Specifically, we present how a sorter component can be automatically programmed in order to ensure that items arriving at a conveyor are optimally placed in various bays. The use case leverages the edge computing paradigm in order to ensure that each physical item is able to communicate its status to all the others. At the same time, distributed ledger technologies enable the modelling of the sorting process as a reliable smart contract among all physical entities. The benefits of the deployment include tangible improvements in productivity, along with a significant reduction in the effort and time needed for the reconfiguration of the sorter.
The advent of Industry4.0 has given rise to a large number of digital manufacturing systems, which are currently used to digitize industry and transform industrial processes like automation, maintenance and quality control. The present paper introduces a first-of-a-kind reference architecture for developing industrial automation systems based on edge computing and blockchain technologies. It also presents the design of a platform that implements this reference architecture with a view to providing functionalities in three complementary domains, namely automation, production systems’ virtualization and data analytics. The presented platform is destined to provide some distinct performance and reliability advantages, based on its edge computing and blockchain foundations.
Naoyuki Yoshino, Tim Schloesser, Farhad Taghizadeh–Hesary
To achieve the sustainable development goals (SDGs) as well as the Paris Agreement major investments in renewable energy (RE) production are necessary worldwide. In particular, decentralized, small-scale projects offer copious potential to create energy access as well as to contribute to an affordable, reliable and sustainable energy supply system. However, in developing countries such projects often face issues in finding funding. Direct private investment tools like the community-based hometown investment trust (HIT) fund address this issue and offer a way of financing for those projects. Technical developments in the sphere of distributed ledger technologies (DLTs) provide the opportunity to increase the fund's transparency and thus to improve its functioning. On that basis, this paper contributes to the literature in two ways: First, it delineates a concrete application of DLTs in the field of green financing, which offers the potential to increase social welfare. Second, the decision problem of investors is modeled, which illustrates through which channel the use of DLTs impacts the investors' behavior.
Blockchain is a form of distributed ledger technology (DLT) that has grown in prominence, although its full potential and possible downsides are not yet fully understood, especially with respect to Operations Management (OM). This manuscript contributes to filling in this gap. We identify three research themes in applying Blockchain technology to OM, illustrated through several applications to OM problems. Elsewhere, in a companion article, (Babich and Hilary (2018)), we provide a conceptual framework for the role of Blockchain and other DLT in OM, along with specific examples of research questions, and we demonstrate how research in economics can inform research in OM on Blockchain applications. Finally, we discuss possible future uses for the technology.
Abstract This article outlines the benefits and risks of the distributed ledger technology (DLT) for the clearing and settlement of exchange-traded and OTC securities, followed by a description of the technology’s potential role for central counterparties and central securities depositories. Although the industry and scholars are attempting to solve the technological and operational issues that DLT systems still face, outstanding legal risks are such that the financial industry is asking for more regulatory guidance and intervention. This article wants to contribute to the public policy debate by presenting potential regulatory barriers that may have to be removed for DLT to be fully adopted. In addition, it identifies areas requiring an update of the legal framework in order to address certain prudential and conduct risks that this technology could introduce.
This paper describes how Distributed Ledger Technologies can be used to design a class of cyber-physical systems, as well as to enforce social contracts and to orchestrate the behaviour of agents trying to access a shared resource. The first part of the paper analyses the advantages and disadvantages of using Distributed Ledger Technologies architectures to implement certain control systems in an Internet of Things (IoT) setting, and then focuses on a specific type of DLT based on a Directed Acyclic Graph. In this setting we propose a set of delay differential equations to describe the dynamical behaviour of the Tangle, an IoT-inspired Directed Acyclic Graph designed for the cryptocurrency IOTA. The second part proposes an application of Distributed Ledger Technologies as a mechanism for dynamic deposit pricing, wherein the deposit of digital currency is used to orchestrate access to a network of shared resources. The pricing signal is used as a mechanism to enforce the desired level of compliance according to a predetermined set of rules. After presenting an illustrative example, we analyze the control system and provide sufficient conditions for the stability of the network.
Traditional centralized commerce on the Internet relies on trusted third parties to process electronic payments. It suffers from the weakness of the trust-based model. A pure decentralized mechanism called blockchain tackles the above problem and has become a hot research area. However, since each node in a blockchain system needs to store all transactions of the other nodes, as time continues, the storage room required to store the entire blockchain will be huge. Therefore, the current storage mechanism needs to be revised to cater to the rapidly increasing need for storage. Network coded (NC) distributed storage (DS) can significantly reduce the required storage room. This paper proposes a NC-DS framework to store the blockchain and proposes corresponding solutions to apply the NC-DS to the blockchain systems. Analysis shows that the proposed scheme achieves significant improvement in saving storage room.
James Brogan, Immanuel Baskaran, Navin Ramachandran
The on-demand digital healthcare ecosystem is on the near horizon. It has the potential to extract a wealth of information from "big data" collected at the population level, to enhance preventive and precision medicine at the patient level. This may improve efficiency and quality while decreasing cost of healthcare delivered by professionals. However, there are still security and privacy issues that need to be addressed before algorithms, data, and models can be mobilized safely at scale. In this paper we discuss how distributed ledger technologies can play a key role in advancing electronic health, by ensuring authenticity and integrity of data generated by wearable and embedded devices. We demonstrate how the Masked Authenticated Messaging extension module of the IOTA protocol can be used to securely share, store, and retrieve encrypted activity data using a tamper-proof distributed ledger.
F. Richard Yu, Jianmin Liu, Ying He, Pengbo Si · 5 authors
Recently, with the tremendous development of crypto-currencies, distributed ledger technology (DLT) (e.g., blockchain) has attracted significant attention. The traditional Internet was originally design to handle the exchange of information. With DLT, we will have the Internet of value. Although, DLT has a great potential to create new foundations for our economic and social systems, the existing DLT has a number of drawbacks (e.g., scalability) that prevent it from being used as a generic platform for distributed ledger across the globe. In this paper, we present a novel virtualization approach to address the challenges in the existing DLT systems. Specifically, in the proposed virtualization for DLT (vDLT), the underlying resources (e.g., hardware, compute, storage, network, and so on) are abstracted. By providing a logical view of resources, vDLT can significantly improve the performance, facilitate system evolution, and simplify DLT management and configuration. Several use cases of vDLT are presented to illustrate the effectiveness of the proposed vDLT.
Michel Rauchs, Andrew Glidden, Brian Gordon, Gina Pieters · 8 authors
The DLT ecosystem is plagued with the use of incomplete and inconsistent definitions and a lack of standardised terminology, creating a needlessly complicated landscape for everyone from experienced policymakers and developers to individuals venturing into the field for the first time. This study sets out to contribute to international discussions to create a shared, common language around DLT systems to clarify terminology and concepts.
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Open Source Software Innovations
Transportation and Mobility Innovations
Innovative Approaches in Technology and Social Development
Blockchain is considered one of the most disruptive technologies of our time. Numerous cities around the world are launching blockchain initiatives as part of the overall efforts toward shaping the urban future. However, the infancy stage of the blockchain industry leads to a severe gap between the knowledge we have and the actions urban policy makers are taking. This paper is an effort to narrow this rift. We provide a systematic literature review on concrete blockchain use cases proposed by the research community. At the macro-level, we discuss and organize use cases from 159 selected papers into nine sectors recognized as crucial for sustainable and smart urban future. At the micro-level, we identify a component-based framework and analyze the design and prototypes of blockchain systems studied in a subset of 71 papers. The high-level use case review allows us to illustrate the relationship between them and the four pillars of urban sustainability: social, economic, environmental, and governmental. The system level analysis helps us highlight interesting inconsistencies between well-known blockchain applicability decision rules and the approaches taken by the literature. We also offer two classification methodologies for blockchain use cases and elaborate on how they can be applied to stimulate cross-sector insights in the blockchain knowledge domain.
David Rozas, Antonio Tenorio-Fornés, Silvia Díaz-Molina, Samer Hassan
Blockchain technologies have generated enthusiasm, yet their potential to enable new forms of governance remains largely unexplored. Two confronting standpoints dominate the emergent debate around blockchain-based governance: discourses characterized by the presence of techno-determinist and market-driven values, which tend to ignore the complexity of social organization; and critical accounts of such discourses which, while contributing to identifying limitations, consider the role of traditional centralized institutions as inherently necessary to enable democratic forms of governance. In this article, we draw on Ostrom’s principles for self-governance of communities to explore the transformative potential of blockchain beyond such standpoints. We approach blockchain through the identification and conceptualization of six affordances that this technology may provide to communities: tokenization, self-enforcement and formalization of rules, autonomous automatization, decentralization of power over the infrastructure, increasing transparency, and codification of trust. For each affordance, we carry out a detailed analysis situating each in the context of Ostrom’s principles, considering both the potentials of algorithmic governance and the importance of incorporating communities’ social practices into blockchain-based tools to foster forms of self-governance. The relationships found between these affordances and Ostrom’s principles allow us to provide a perspective focused on blockchain-based commons governance.
Ioannis Karamitsos, Maria Papadaki, Nedaa Baker Al Barghuthi
Blockchain is a fast-disruptive technology becoming a key instrument in share economy. In recent years, Blockchain has received considerable attention from many researchers and government institutions. This paper aims to present the Blockchain and smart contract for a specific domain which is real estate. A detailed design of smart contract is presented and then a use case for renting residential and business buildings is examined.
Mudassir Khan, Mohammad Mazhar Nezami, Rajesh Dey, Tanveer Ahmad
Initially introduced to support programming cryptocurrencies, blockchain technology has evolved quickly to be considered fundamental for secure, transparent, and decentralized systems in and across industries. This chapter attempts to illustrate how blockchain system rests on the cornerstones of distributed ledger technology, immutability, and consensus mechanisms and provides case studies in areas like healthcare, real estate, and urban infrastructure to illustrate how blockchain can be used to strengthen trust, enhance efficiency, and automate processes; it also goes on to address the challenges of security concerns and standardization. The role of artificial intelligence (AI) also strengthens the application of blockchain in the field, developing cybersecurity solutions for a smart governance system. Through insight into general-use scenarios and experimental work, this chapter defines a field vision over a variety of scholarly perceptions of blockchain. It also suggests governance, interoperability, and intelligent systems as significant elements for the scaling of blockchain solutions. The narrative ultimately reflects on the future convergence of blockchain, AI, and digital governance to pave the way for resilient and intelligent communities connected throughout sustainable digital landscapes.
Wolfgang Gräther, Sabine Kolvenbach, Rudolf Ruland, Julian Schütte · 6 authors
Certificates play an important role in education and in professional development in companies. Individual learning records become essential for people’s professional careers. It is therefore important that these records are stored in long-term available and tamper-proof ledgers. A blockchain records transactions in a verifiable and permanent way, therefore it is very suitable to store fingerprints of certificates or other educational items. Blockchain reveals forgery of certificates and it supports learning histories. In this paper, we present the Blockchain for Education platform as a practical solution for issuing, validating and sharing of certificates. At first, we describe the conceptual system overview and then we present in detail the platform implementation including management of certification authorities and certificates, smart contracts as well as services for certifiers, learners and third parties such as employers. Finally, we describe use cases and first evaluation results that we gathered from end user tests with certifiers and conclude with a discussion.
Jing-Zhong Wang, Mengru Li, Yunhua He, Hong Li · 6 authors
Crowdsensing applications utilize the pervasive smartphone users to collect large-scale sensing data efficiently. The quality of sensing data depends on the participation of highly skilled users. To motivate these skilled users to participate, they should receive enough rewards for compensating their resource consumption. Available incentive mechanisms mainly consider the truthfulness of the mechanism, but mostly ignore the issues of security and privacy caused by a “trustful” center. In this paper, we propose a privacy-preserving blockchain incentive mechanism in crowdsensing applications, in which a cryptocurrency built on blockchains is used as a secure incentive way. High quality contributors will get their payments that are recorded in transaction blocks. The miners will verify the transaction according to the sensing data assessment criteria published by the server. As the transaction information can disclose users’ privacy, a node cooperation verification approach is proposed to achieve$k$-anonymity privacy protection. Through theoretical analysis and simulation experiments, we show the feasibility and security of our incentive mechanism.
The amount of computational power devoted to anonymous, decentralized blockchains such as Bitcoin’s must simultaneously satisfy two conditions in equilibrium: (1) a zero-profit condition among miners, who engage in a rent-seeking competition for the prize associated with adding the next block to the chain; and (2) an incentive compatibility condition on the system’s vulnerability to a “majority attack”, namely that the computational costs of such an attack must exceed the benefits. Together, these two equations imply that (3) the recurring, “flow”, payments to miners for running the blockchain must be large relative to the one-off, “stock”, benefits of attacking it. This is very expensive! The constraint is softer (i.e., stock versus stock) if both (i) the mining technology used to run the blockchain is both scarce and non-repurposable, and (ii) any majority attack is a “sabotage” in that it causes a collapse in the economic value of the blockchain; however, reliance on non-repurposable technology for security and vulnerability to sabotage each raise their own concerns, and point to specific collapse scenarios. In particular, the model suggests that Bitcoin would be majority attacked if it became sufficiently economically important — e.g., if it became a “store of value” akin to gold— which suggests that there are intrinsic economic limits to how economically important it can become in the first place.
Roberto Casado‐Vara, Javier Prieto, Fernando De la Prieta, Juan M. Corchado
Current supply chain is a linear economy model that directly or indirectly fulfills supply needs. But this model has some disadvantages, such as the relationships between the members of the supply chain or the lack of information for the consumer about the origin of the products. In this paper we propose a new model of supply chain via blockchain. This new model enables the concept of circular economy and eliminates many of the disadvantages of the current supply chain. In order to coordinate all the transactions that take place in the supply chain a multi-agent system is created for this paper.