Blockchain Papers

Jeppe Hallgren, Malte Hallgren, S. S. Fisher, Nicolai Garhøj Larsen · 5 authors

No abstract is available for this record.

Rafael Pass, Elaine Shi

Consensus, or state machine replication is a foundational building block of distributed systems and modern cryptography. Consensus in the classical, "permissioned" setting has been extensively studied in the 30 years of distributed systems literature. Recent developments in Bitcoin and other decentralized cryptocurrencies popularized a new form of consensus in a "permissionless" setting, where anyone can join and leave dynamically, and there is no a-priori knowledge of the number of consensus nodes. So far, however, all known permissionless consensus protocols assume network synchrony, i.e., the protocol must know an upper bound of the network's delay, and transactions confirm slower than this a-priori upper bound. We initiate the study of the feasibilities and infeasibilities of achieving responsiveness in permissionless consensus. In a responsive protocol, the transaction confirmation time depends only on the actual network delay, but not on any a-priori known upper bound such as a synchronous round. Classical protocols in the partial synchronous and asynchronous models naturally achieve responsiveness, since the protocol does not even know any delay upper bound. Unfortunately, we show that in the permissionless setting, consensus is impossible in the asynchronous or partially synchronous models. On the positive side, we construct a protocol called Hybrid Consensus by combining classical-style and blockchain-style consensus. Hybrid Consensus shows that responsiveness is nonetheless possible to achieve in permissionless consensus (assuming proof-of-work) when 1) the protocol knows an upper bound on the network delay; 2) we allow a non-responsive warmup period after which transaction confirmation can become responsive; 3) honesty has some stickiness, i.e., it takes a short while for an adversary to corrupt a node or put it to sleep; and 4) less than 1/3 of the nodes are corrupt. We show that all these conditions are in fact necessary - if only one of them is violated, responsiveness would have been impossible. Our work makes a step forward in our understanding of the permissionless model and its differences and relations to classical consensus.

Morten Linnemann Bech, Yuuki Shimizu, Paul T. P. Wong

This feature looks at technology in payment systems. It compares the diffusion of real-time gross settlement (RTGS) systems for wholesale payments with that of faster systems for retail payments (fast payments). RTGS systems emerged in the 1980s and were adopted globally within a span of 30 years. Fast payments followed in the early 2000s, offering instant payments on a 24-hour, seven-day basis. So far, the diffusion of fast payments mirrors that of RTGS, and it is primed to take off. Yet even while adoption of fast payments is under way, the next generation of payment systems, such as those based on distributed ledger technology, is under development.

Jari Kreku, Visa Vallivaara, Kimmo Halunen, Jani Suomalainen

No abstract is available for this record.

Rogier Vrooman

Within the phenomenon known as the Internet of Things (IoT), an enormous growth is taking place. IoT systems exist in different ways, ranging from industrial applications to user focused systems. A specific subset of a user-focused IoT system is found as Smart Home environments. At Smart Homes, themultiple Smart Objects or Smart Devices are working together, frequently based on sensor input, to increase the comfort and user experience of the home inhabitant(s) and guest(s). Smart Objects can have automated tasks, home security enabling functions or efficiency improving functionality. Apart from great applications of Smart Home devices, threats from a cyber security perspective are present: cyber risks arise due to a variety of threats on such IoT systems. We show that in the development of new Smart Home products or systems, vendors fail to meet requirements for security and privacy are not met. Comparing the current state of the market, the four most used Smart Home ecosystems (Samsung Smartthings, Apple Homekit, Amazon Echo and IFTTT) are surveyed based on three key focus areas: 1. The regulatory compliance of the systems according to the upcoming General Data Protection Regulation (GDPR). 2. The commercial threats due to data profiling. 3. The risk of data leaks due to insufficient security. This analysis results in four key observations: 1. Security- and Privacy-By-Design is usually not in place due to the fact that the focus lies on launching a product as soon as possible, e.g. due to market competition; 2. Vendors process (meta)data on the vendors locations resulting in data profiling, which can compromise user privacy; 3. Smart Home ecosystems are not ready for the GDPR; 4. A trade off between privacy, security and utility usually results to the detriment of the first two and favors the latter. We propose a new design for a Smart Home ecosystem. In this design, the focus lies at the privacy of the end-user. We design a network for device-fitting encrypted communication between Smart Devices and User Devices and the Privacy Enforcing Arbiter (or Peter). Peter functions like a hub in the network, managing among others all traffic, user privileges and key distribution. With Peter, the centralized cloud party (vendor) for data storage and data analysis is replaced with a decentralized personal storage and computation entity at home. With our network design, we facilitate the use of IoT devices in home in a privacy-friendly way. Within the network, devices are authenticated using PhysicallyUnclonable Function technology and users are authenticated with a Zero Knowledge Proof. We analyze the privacy and security of our proposed network, based on a series of possible cyber attacks and the upcoming GDPR. Furthermore, we analyze the computational complexity and scalability of the network, based on market conform device power.

Aris Rusyiana, Sujarwoto Sujarwoto, Khoirul Muluk

Whether fiscal decentralization is good for reducing communal conflict is still debatable. This study examines the linkage between fiscal decentralization and communal conflict in Indonesia, administrative decentralization, and political decentralization is examined as well. Data come from the Village National Census (Podes) 2008-2014 (N=234,717). Results of twolevel logit regression show that fiscal decentralization not significantly associated with reducing communal conflict. The findings suggest that decentralization work for reducing communal conflict through better capacity of local bureaucrats rather than through financing capacity in delivering public services and the enhanced opportunities for channeling citizen participation in direct political participation.

Andreas Bjordal, Espen Opdahl

In this paper, we rigorously investigate the benefit of utilizing an active investment strategy\nbased on momentum when investing in cryptocurrencies. We also examine how including\ncryptocurrencies in a more traditional asset allocation can optimize an investment portfolio.\nFirst, we create strategies with the use of exponential moving averages and simple average\nfilters to generate a trading signal. Second, we provide evidence that the active strategies\nreceive positive return, but significantly less than the passive buy-and-hold\nalternative/benchmark. Third, we find evidence that including a portion of cryptocurrency in\na portfolio with more traditional assets will improve the risk-adjusted return, due to low\nhistorical correlation. And fourth, we look at and evaluate the extreme volatility and risk\nrelated to cryptocurrencies and the suggested cryptocurrency bubble. Our results have\nimportant implications for portfolio managers and first-time investors alike.

Timothy Peterson

No abstract is available for this record.

Science, Digital, van Rossum, Joris

This report zooms in on the potential of blockchain to transform scholarly communication and research in general.<br><br>By describing important initiatives in this field, it highlights how blockchain can touch many critical aspects of scholarly communication, including transparency, trust, reproducibility and credit. Moreover, blockchain could change the role of publishers in the future, and it could have an important role in research beyond scholarly communication. <br>The report shows that blockchain technology has the potential to solve some of the most prominent issues currently facing scholarly communication, such as those around costs, openness, and universal accessibility to scientific information. <br>

Fatjola Lubonja, Fran Brahimi

Local government and decentralization are the main challenges of the Albanian government reforms. Decentralization and urbanization are a greater pressure on local governments to finance public services and facilitate economic development. During the years, the local government responsibilities have been increased, while fiscal decentralization and transfer of funds have not progressed with the same speed, resulting in significant lack of funding. Local government budgets are generally small and cannot afford financing for major projects and infrastructure improvements. Funds from the state budget for infrastructure investments (mainly competitive grants/Regional Development Fund) have been increasing in recent years, their impact is still small compared to the needs. The main forms of financing of local government are: central government transfers and its own revenues. Vertical and horizontal transfer between different levels of governments (CG and LG) that takes place during the annual budget cycle is not based on clearly defined criteria and in a transparent way, or does not match the needs for expenditures at the local level. This creates a considerable level of instability (illogical movement) of revenues and expenses during the budget cycle units, as a result created a high degree of unpredictability of revenue and expenditure of local units.Currently, local government units funded from central government about 60 percent of local budget, which shows the low level of local autonomy. These and the other problems have made necessary by the territorial reorganization and together with the performance of a deep fiscal decentralization.This article through studding the local decentralization in the last years aims also to make a comparison to previous years and since 20016 is the first year of the complete implementation of the new Administrative and Territorial Reform and the transfer of certain new functions to the local government as well. Keywords : Local government, local finances, transfers conditional, unconditional transfers, their income, responsibility, decentralization, Administrative and Territorial Reform, funding sources etc.

Sylvina Rusadi

Decentralization is one of the authorities given to the region in managing their own household. Villages are considered as areas that have an important role in assessing the success of a state. For that is needed to be a independence for the village in managing its own finance. One of the authorities is trough the village fund allocation. The village fund allocation is the financial gain of the village from the district trough the village stash. The village fund allocation is very important because the policy of the village fund allocation is in line with the regional autonomy agenda where the village is the basis of Decentralization. However, in the course of the village fund allocation still found the problems of not achieving the objectives of its in financing the empowerment and development of the village, because the village fund allocation is only used as a source of income for the village head and village apparatuses plus no control of the village community. For that, its needed the supervision of the village community itself.

Stephan Breu

No abstract is available for this record.

Marianna Stehnei, Inna Irtysheva, Maryna Myhaylivna Korol

Urgency of the research. The objective need to popularize the foundations of sustainable development is due to an increase of anthropogenic impact on the environment. An important point is the formation of financial instruments for the sustainable development of rural areas and the development of ways of environmentalizing the agrosphere. Actual scientific researches and issues analysis. The scientific works of such scholars as M. Y. Malik, M. A. Khvesyk, O. M. Alymov, I. M. Lytsur, V. V. Mykytenko, E. M. Libanova and others deal with the financial support of sustainable development of rural territories. Uninvestigated parts of general matters defining. The scientists have not yet sufficiently developed the argumentation of the implementation opportunities of the priority areas of the formation of financial instrumentation for the sustainable agricultural development innovative approach. The research objective. The aim of this article is the substantiation of innovative approaches to the formation of financial instruments for sustainable development of rural communities. The statement of basic materials. The article deals with the features of the formation of financial instruments for sustainable rural development. The key role of the financial sector in the sustainable development of local natural and economic systems has been proved. We have calculated the resource of the local budget of Mukachevo district in 2014-2016. There have been defined the directions of expansion forms and sources of financing of the processes of reproduction of natural resources and improving environmental management through the rent relations in the process of financial providing of sustainable development management of rural communities. Conclusions. The concept of sustainable development, which covers the economic, social and environmental trends, needs to be prioritized. Strengthening the progress of the priority components of the concept of decentralized sustainable development, the possibilities of modernizing economic relations will be expanded on the basis of coordination of interests of communities with the interests of the authorities. It is also necessary to strengthen the development of the concept of a mutually integrated mechanism of accumulation and use of financial resources to ensure the economic basis of environmentally-oriented growth.

Joshua D. Rothman

How Banks Worked (and Sometimes Did Not Work) in the Early Republic Trying to understand the workings of American banking and finance before the Civil War can be baffling. There was no central bank and no national currency, but rather a mostly decentralized system of banks of varying sorts that circulated thousands of different paper banknotes throughout the country. Counterfeiting was widespread, banknote values fluctuated wildly and varied from place to place, and chains of credit and debt created through promissory notes and bills of exchange easily became byzantine. Fundamental instability was endemic to the economy, and only the exigencies of the war itself led policymakers to craft an economic order that began to resemble that of the modern world.

Kartik Hegadekatti

A Company's Brand image is an intangible asset. Though Initial Public Offerings (IPOs) try to capture Brand Value, a company's share value is a result of several factors like performance, initial capital, investor identity etc. Moreover, time needed for a company to be listed runs into several months. Therefore, immediate capitalization of Brand Value is not possible. Initial Coin Offerings on the other hand deliver a wide range of possibilities not provided by IPOs. Most important among them is Brand Tokenization and Monetization. This paper explores Brand Tokenization and Monetization through ICOs (Initial Coin Offerings). Firstly, the concept of Brands and cryptocurrencies are explained. Then the concept of ICOs is discussed. I envisage a scenario where a company tokenizes its Brand and attempts to monetize it. We then evaluate the advantages that can accrue from such a venture. The paper concludes as to how Brand Tokenization and monetization can be realized through cryptocurrencies and its impact on future businesses.

Roman Beck, Christian Becker, Juho Lindman, Matti Rossi

This report documents the program and the outcomes of Dagstuhl Seminar 17132 "Opportunities and Risks of Blockchain Technologies". Blockchain-based applications such as Bitcoin or Ethereum are emerging technologies, but a dramatic increase in industrial and academic interest in the technology is evident. Start-­ups and large financial players are working intensely on blockchain-based applications, making this one of the most promising drivers of financial innovation. However, the design and implementation of blockchain-based systems requires deep technical know-how in various areas, as well as consideration of economic and societal issues. These opportunities and challenges provided the starting point for the Dagstuhl Seminar where we analyzed and synthesized the current body of knowledge on the emerging landscape of blockchain technologies. We linked cryptographic economic systems to already established research streams around trust-related issues in payment systems and digital currencies, and digital asset management.

Eva Micheler

No abstract is available for this record.

Ryan J. Davies, Erik R. Sirri

No abstract is available for this record.

Anastasiia Potekhina, Ivan Riumkin

Blockchain technology and its numerous applications have become a major catalyst of new ideas and solutions for the financial sector. A headline containing the word “blockchain” attracts tons of attention from the media and new start-ups developing something in blockchain receive huge investments. But the theoretical framework for blockchain even for financial industry remains raw and empirical evidence is insufficient. In this study, we explore the theoretical framework for blockchain applications in accounting, identify the core benefits and downside, and discuss its implications for auditing and accounting in general and for credit risk management in particular. The research methodology of this study is designed to satisfy objectivist ontological position and positivist epistemological stance as the notion researched is considered to be primarily external to affected social actors, consequently the quantitative methods are used to establish the relationships between the variables, in turn the variables are produced by a deductive approach from general theories and ideas which exist in abundance in the area but lack empirical observations. A case study was consequently chosen as a research strategy to add a real-life touch to our statistical modelling. In the case study where we use financial data of Ericsson corporation to model theoretical effects of blockchain accounting on credit scores measures we add an empirical dimension to the research in a real-life context. Then we discuss the findings and try to draw general conclusions and identify consequences of the results for different affected parties. As it is always important to do when dealing with new technologies we discuss potential ethical advantages and issues resulting from the technology’s implementation. The study aims to review the current theoretical framework for blockchain accounting in a coherent way as the current literature seems to be disjointed and multiple sources doesn’t focus solely on accounting applications. The empirical study aims to identify a measurable material effect on a very specific problem of credit risk modelling under a broader blockchain accounting paradigm. There are two primarily findings of the research. Fist is the fact that the potential material effect of blockchain accounting on credit scores measures is confined within boundaries of actual volatility of quarterly credit scores and thus the technology will have larger implications for companies with high volatility of credit measures. The second finding is that the implications will be not solely positive in the form earlier identification of financial distress and quicker reaction to resolve the troubles but also may affect the company negatively by exacerbating the economic short-termism problem, the problem that hasn’t been discussed in connection with blockchain accounting before.

Massimo Bordignon, Matteo Gamalerio, Gilberto Turati

No abstract is available for this record.

Semou Faye Papa

This paper is exploring the possibilities to use the blockchain technology in agribusiness. Nowadays, the digital transition has resolutely conquered agriculture. Blockchain technology continues to show that it can turn many markets and economies, and agriculture could be one of them. The production growth to meet the demand, lead us to a radical change in agribusiness. Technology can be an important pillar for this transformation. Blockchain management is based on transparency, security and authenticity, could we apply those principles to the new agricultural industry? This study shows that Agricultural sector has a great need for information that support traceability. Each one of the actors concerned must turn to the other part of the value chain to better understand possible external factors and disruptive emerging technologies.

Meltem KESKİN KÖYLÜ

Institutions and real people need to be able to manage the change that comes with financial technology. Finance and technology are two dynamic elements of life. Being able to execute financial operations independent of place enables direct communication between people. The basis for this kind of a financial technology can be formed by the distributed financial database (blockchain), which includes a financial technology architecture and its management strategy. The blockchain also forms the basis for the digital currency bitcoin, and brings focus to the commercial life itself, as it makes economic mediators such as banks, corporations and states obsolete. Blockchain enables transaction verification from different multiple sources and transparently keeps account records. Thus, it decentralizes the trade and enables no mediator interaction between sellers and buyers, a system that is bound to be common in markets. Existence of no authoritative corporation or mediator, no cost money transfer and the verification from multiple sources are all assets that enable trust and fast operation in the blockchain technology, as it becomes more and more popular. With this study, the digital account function called blockchain is discussed to be used in financial markets and national/international trade. To this end, how the blockchain works, data integrity that it provides, its availability and reliability, as well as its applicability to the trade are discussed.

Katrin Tinn

No abstract is available for this record.

Stavros Stavroyiannis

No abstract is available for this record.