Blockchain Papers

Wulf A. Kaal

No abstract is available for this record.

Andrés Guadamuz

No abstract is available for this record.

Stephen H. Fuller, Ariel Markelevich

Abstract The use of blockchain technology has increased tremendously over the last decade. Blockchain continues to evolve and new features and capabilities are developed continuously. Although the use of the technology started in cryptocurrency (specifically, Bitcoin), it has expanded to other areas that can benefit from a shared, secure, ledger. This article investigates the potential impact of blockchain technology on the accounting profession. This article analyzes data security and privacy considerations, technology, adoption, and implementation considerations, and some considerations that relate specifically to accounting and auditing. We find that the unique needs of an accounting information system may not be a good match for blockchain as it currently exists. While we explain that blockchain may deliver many benefits, particularly in the areas of data reliability and the financial statement audit, we identify several factors, which raise significant questions about whether blockchain will ever be significantly integrated in the accounting function. Chief among those concerns is the scalability of the technology at an acceptable cost. While significant investment has and will be made for further development of blockchain business applications, it is our assessment that proponents of blockchain integration in accounting have not yet made the economic case for it. We also have significant concerns about whether blockchain technology can adequately address risks associated with data security and privacy. Addressing all these issues will be a minimum requirement for gaining widespread acceptance by firms and their accountants.

C. Vijai, S M Suriyalakshmi, Daniel Joyce

Blockchain is one of the emerging technology in global. Blockchain is fundamentally an accounting and finance technology. In this paper, we discuss Blockchain technology in accounting and Distributed ledger technology (DLT), Triple-Entry Accounting and the Benefits of Blockchain-based accounting, a negative impact on Blockchain-based accounting. The focus on this paper is to explain an overview of the current Blockchain market size, leading countries in Blockchain technology, major companies using Blockchain Technology, Blockchain formation, types of Blockchain, and core components of Blockchain.

Philipp Brüne

Cryptocurrencies, blockchain technology and smart contracts could fundamentally change the way how financial products and financial services are implemented and operated. While many frameworks for implementing such blockchain applications already exist, these are usually implemented using languages either considered “fancy” today, like e.g. Go, or are traditionally used for system software, such as C++. On the other hand, the core business applications e.g. in financial services are typically implemented using enterprise platforms such as Java Enterprise Edition (EE) and/or COBOL. Therefore, to improve the integration of blockchain technology in such applications, in this paper we argue in favor of a legacy-friendly distributed ledger solution by introducing QWICSchain, an implementation build on web services using established open-source enterprise technologies such as Java EE and PostgreSQL. It supports the parallel execution of transactions on the blockchain and in existing legacy applications, thus enabling the blockchain-based modernization of existing IT infrastructures.

Nadia Pocher

This research project focuses on the impacts exerted by the tech schemes behind virtual currencies on the EU framework to prevent the misuse of the financial system and it aims to explore legal challenges posed in the IoM landscape by the double-edged nature of DLTs as both transparency and privacy-oriented. On the one hand, it plans to identify effective legislative and regulatory measures to ensure crypto accountability from an AML/CFT standpoint, as well as to assess the relevant role of pseudonymity. On the other hand, it pursues to discover innovative legal approaches to secure AML/CFT active cooperation in the crypto ecosystem(s), to the end of mitigating anonymity and traceability concerns while respecting both the value of publicity and transparency in the law and the conceptual origin of the crypto economy.

Sin Kuang Lo, Yue Liu, Su Yen Chia, Xiwei Xu · 7 authors

The Internet of Things (IoT) aims at connecting things to the Internet in a peer-to-peer paradigm for data collecting and data sharing in our daily life. A blockchain is an immutable append-only ledger maintained by a peer-to-peer network, where the whole network needs to reach a consensus on the transactional data stored on the ledger. With the decentralization nature, the design of IoT and blockchain aligns with each other well. Blockchain has been integrated with the IoT to solve the existing IoT problems. Our research focuses on analyzing the solutions proposed in academia and the methodologies used to integrate blockchain with the IoT. Through conducting a systematic literature review (SLR) on peer-reviewed, published articles on blockchain-based solutions for IoT, we gather the knowledge on current technical approaches implemented to integrate blockchain into the IoT. Majority of the research in this space is either at a conceptual level or at a very early stage. However, we only found 35 published papers with the real implementation of blockchain in the IoT platforms. We elicit the challenges of the IoT that were being addressed, and the detailed design of the blockchain-based solutions from two perspectives, namely data management and thing management. The evaluation methods and metrics used by those works are also being recorded and analyzed. In addition to the analysis of the literature, we provide our insights on improving the existing solutions and research methodology based on our expertise and experience on the blockchain.

Stéphane Blémus, Dominique Guégan

... This interdisciplinary article discusses the potential consequences due to distributed ledger technology (DLT), tokenization as well as the emergence of new kinds of firm stakeholders, ie the crypto-assets holders, on the governance of small and medium-sized enterprises (SMEs) as well as of publicly traded companies. Since early 2016, a new way of issuing assets and raising funds has rapidly emerged as a major issue for FinTech founders and financial regulators. Frequently referred to as initial coin offerings, initial token offerings (ITO), token generation events (TGE) or simply ‘token sales’, we use in our article the terminology initial crypto-asset offerings (ICO), as it describes more effectively than ‘initial coin offerings’ the vast diversity of assets (utility tokens, security tokens, crypto-currencies) that could be created and which goes far beyond the sole payment instrument issue. An ICO can be summarized as follows: a new method to issue assets, frequently to raise funds, through the offer and sale by a group of developers or a company to a crowd (ie investors or contributors) of ad hoc crypto-assets (also coined as ‘tokens’) specifically created and issued on a distributed ledger, sometimes preceded by an early sale of the crypto-assets called ‘pre-sale’, for the purpose of launching a business or of developing ad hoc asset functions/features and/or governance of projects based, in several cases, on the distributed ledger technology, typically in exchange for pre-existing ‘mainstream’ crypto-assets, such as Bitcoin and Ether among others, or fiat currencies. Perceived by several entrepreneurs as a less burdensome way of fundraising, at least 25 billion dollars have been raised between March 2016 and August 2018 through ICOs only.1

Sven Riva

Building on the architecture of smart contracts, new forms of entities similar to companies are now emerging from the blockchain environment, called Decentralized Autonomous Organizations (DAOs). DAOs let participants manage resources in a decentralized manner through predefined governance rules inscribed on a series of smart contracts deployed on a blockchain. Taking the Swiss legal order as a framework, the author has attempted to determine whether the activities of a DAO have legal effects in Switzerland. The answer to this question depends on their recognition in the Swiss legal order. While the recognition of foreign DAOs governed by the laws of a State does not raise particular legal issues, DAOs that live on the Internet independently from any jurisdiction upset existing legal principles, which generates legal uncertainty. Legal scholars have traditionally dealt with the issue of the recognition of DAOs by attempting to transform them into known legal concepts, either as a form of company of Swiss substantive law, or as a set of contractual relationships. The author suggests that DAOs should instead be recognized as foreign companies through private international law. This preferred pathway could possibly let DAOs exist in their present construct, while recognizing their legal effects within the Swiss legal order. However, a strict interpretation of the private international law Act (PILA) leads to a dead-end for a majority of DAOs as, under the law, a company must be validly constituted under the law of the State it is governed by in order to exist in Switzerland. Building on the functional equivalence theory, the author introduces the concept of an online jurisdiction ruled by its code as a means to grant legal existence to DAOs living exclusively on the Internet. This new legal construct recognizes the code of a DAO as its governing law and the online space as its jurisdiction. As such, DAOs could be recognized in Switzerland as foreign companies and be subjects of rights and obligations.

Gregor Schmitt, Andreas Mladenow, Christine Strauß, Michaela Schaffhauser‐Linzatti

The spread and success of Internet of Things (IoT) is based on the rapidly growing number of applications, and smart contracts may play a pivotal role in IoT. In this paper, we (i) identify the key-determinants of smart contracts in IoT, and (ii) analyze the opportunities and challenges from a management viewpoint. We performed a qualitative content analysis, and used the structure of the Technology-Organization-Environment framework as categorization scheme. Out of four expert-interviews we were able to extract 84 statements, which provided the basis for the identification of 13 key-determinants for the integration of smart contracts and IoT. Furthermore, the findings revealed that the combination of the two technological concepts promises significant opportunities, however, some technical and environmental challenges need to be overcome.

Shangping Wang, Xixi Tang, Yaling Zhang, Juanjuan Chen

With the rapid development of electronic information technology, online transaction will gradually surpass traditional market transaction, among which online payment and asset delivery become the focus of attention. But in fact, due to the incomplete third-party payment mechanism and the intrusion risk of various charging Trojan, it is easy to cause a trust crisis. The existing centralized framework often leads to information asymmetry between the two parties. Therefore, how to realize the fairness of payment and the auditability of assets in the distributed system is a challenging problem. The emerging blockchain technology provides a new method with its openness, transparency and verifiability. Existing researches do not provide a complete shopping model for consumers, most of which focuses on payments or only on asset delivery. In this paper, we propose an auditable fair payment and physical asset delivery protocol based on smart contracts. Three types of smart contracts are designed to achieve reliable and fair payment among merchants, consumers and logistics companies. The traceability and auditability of blockchain provide an effective method to audit assets and data sharing in the whole transportation. In view of the phenomenon of goods being switched, the way of ”pre-verification” is added. In order to prevent the illegal elements to fake pickup code, induce consumers to conduct illegal operations, cause property loss, in our system the pickup codes are generated by consumers to reduce the risk of fraud. In addition, our plan designs a complete return process for the first time, providing better service experience and higher efficiency for consumers. Finally, all the contracts involved in the scheme are implemented and deployed on the ethereum test network. The results of security analysis and evaluation showed that our scheme was improved in cost, with high security and availability.

Ha Xuan Son, Minh Ha Hoang, Nguyen Ngoc, Hai Trieu · 8 authors

In emerging economies, with the explosion of e-commerce, payment methods have increasingly enhanced security. However, Cash-on-Delivery (COD) payment method still prevails in cash-based economies. Although COD allows consumers to be more proactive in making payments, it still appears to be vulnerable by the appearance of a third party (shipping companies). In this paper, we proposed a payment system based on “smart contract” implemented on top of blockchain technology to minimize risks for parties. The platform consists of a set of rules that each party must follow including specific delivery time and place, cost of delivery, mortgage money; thereby, forcing parties to be responsible for their tasks in order to complete the contract. We also provided a detailed implementation to illustrate the efficiency of our model.

Adarsh Vijayakumaran

No abstract is available for this record.

Dominique Lammer, Tobin Hanspal, Andreas Hackethal

No abstract is available for this record.

Michael Fröwis, Rainer Böhme

Efficient transfers to many recipients present a host of issues on Ethereum. First, accounts are identified by long and incompressible constants. Second, these constants have to be stored and communicated for each payment. Third, the standard interface for token transfers does not support lists of recipients, adding repeated communication to the overhead. Since Ethereum charges resource usage, even small optimizations translate to cost savings. Airdrops, a popular marketing tool used to boost coin uptake, present a relevant example for the value of optimizing bulk transfers. Therefore, we review technical solutions for airdrops of Ethereum-based tokens, discuss features and prerequisites, and compare the operational costs by simulating 35 scenarios. We find that cost savings of factor two are possible, but require specific provisions in the smart contract implementing the token system. Pull-based approaches, which use on-chain interaction with the recipients, promise moderate savings for the distributor while imposing a disproportional cost on each recipient. Total costs are broadly linear in the number of recipients independent of the technical approach. We publish the code of the simulation framework for reproducibility, to support future airdrop decisions, and to benchmark innovative bulk payment solutions.

Willi Brammertz, Allan I. Mendelowitz

Nick Szabo defined smart contracts as, “….a set of promises, specified in digital form, including protocols within which the parties perform on the other promises.” The essence of a smart contract is that it is self-executing and has a protocol to effect this, i.e. the mechanism for communicating with the smart contract. In addition, Szabo distilled four basic objectives of any contract that should be fulfilled by smart contracts. Two of these, verifiability and enforceability, are given more attention in this paper. Szabo, however, did not address what types of contracts would be most suited to be executed as smart contracts. This paper describes first the unique aspects of financial contracts that make them the most promising candidates for implementation as smart contracts. Secondly, we analyze the conditions under which the use of distributed ledgers and smart financial contracts are most likely to prove successful. This analysis concludes that unless a distributed ledger is combined with an algorithmic financial contract standard and a standard protocol, the potential benefits of smart contracts will not be realized. The corollary to this conclusion is that it is essential for FinTech to adopt such a standard in order to be able to realize its promise of a paradigm shift in finance. The combination of distributed ledger technology and an open, well documented and well tested algorithmic financial contract standard is the next logical step in the development of FinTech.

Ayushi Sharma, Shashwat Tiwari, Nitin Arora, S. C. Sharma

Blockchain is an emerging technology that can radically improve transactions security at banking, supply chain, and other transaction networks. It's estimated that Blockchain will generate $3.1 trillion in new business value by 2030. Essentially, it provides the basis for a dynamic distributed ledger that can be applied to save time when recording transactions between parties, remove costs associated with intermediaries, and reduce risks of fraud and tampering. This book explores the fundamentals and applications of Blockchain technology. Readers will learn about the decentralized peer-to-peer network, distributed ledger, and the trust model that defines Blockchain technology. They will also be introduced to the basic components of Blockchain (transaction, block, block header, and the chain), its operations (hashing, verification, validation, and consensus model), underlying algorithms, and essentials of trust (hard fork and soft fork). Private and public Blockchain networks similar to Bitcoin and Ethereum will be introduced, as will concepts of Smart Contracts, Proof of Work and Proof of Stack, and cryptocurrency including Facebook's Libra will be elucidated. Also, the book will address the relationship between Blockchain technology, Internet of Things (IoT), Artificial Intelligence (AI), Cybersecurity, Digital Transformation and Quantum Computing. Readers will understand the inner workings and applications of this disruptive technology and its potential impact on all aspects of the business world and society. A look at the future trends of Blockchain Technology will be presented in the book.

Timothy Nielsen

A DAO does not fit well within the current landscape of recognized organizational structures and, rather than shoehorning it into one, states should recognize a new hybrid entity. This Note’s proposed Cryptocorporation form, with rules and protections better suited to the unique qualities of a DAO, could allow for the most appropriate tax treatment of shared profits, limit personal liability, and allow for an appropriate voting structure as articulated in the White Paper. The proposed Cryptocorporation would also protect investors and give the SEC more presumptive jurisdiction over the token-based-stock that is issued and represented exclusively through blockchain tokens. Cryptocorporations can actively attempt to preserve the pseudonymity which exists on a relevant blockchain network, because of the capabilities of electronic communication and the security of blockchain-based recordkeeping. In sum, by borrowing from and building upon the attributes of partnerships, LLCs, and corporations, the concept of the Cryptocorporation has the potential to foster the productive use and development of smart contract technology for decentralized organizations, while mitigating the risks to investors and facilitating a more frictionless secondary market.

Hongru Yu, Haiyang Sun, Danyi Wu, Tsung-Ting Kuo

Blockchain and smart contracts (i.e., computer code that can be run on blockchain) are increasingly popular for healthcare applications. However, only very few implementations exist because of the complexity of the technologies. Although there are tutorials and reviews to introduce blockchain and smart contracts, a pragmatic comparison of such platforms is needed. In this study, we addressed practical considerations while building a healthcare blockchain and smart contract system, by (1) comparing technical features of platforms, (2) selecting three platforms, (3) constructing blockchain networks, (4) testing the blockchains, and (5) summarizing the experience and time used for implementation by students. We evaluated Ethereum, Hyperledger Fabric, and MultiChain, and confirmed that the selection of a proper platform depends on the requirements of the application. The findings of our study can accelerate the process and reduce the risk of adopting blockchain technology in biomedical and healthcare domain.

Dianhui Mao, Fan Wang, Yalei Wang, Zhihao Hao

Smart contract applications based on Ethereum blockchain have been widely used in many fields. They are developed by professional developers using specialized programming languages like solidity. It requires high requirements on knowledge of the specialized field and the proficiency in contract programming. Thus, it is hard for normal users to design a usable smart contract based on their own demands. Most current studies about smart contracts focus on the security of coding while lack of friendly tools for users to design the specialized templates of contracts coding. This paper provides a visual and user-defined smart contract designing systems. It makes the development of domain-specific smart contracts simpler and visualization for contract users. The system implements the domain-specific features extraction about the crawled data sets of smart contract programs by TF-IDF and K-means++ clustering algorithm. Then, it achieves the automatic generation of unified basic function codes by Char-RNN (improved by LSTM) based on the domain-specific features. The system adopts Google Blockly and links the generated codes with UI controls. Finally, it provides a set of specialized templates of basic functions for users to design smart contracts by the friendly interface. It reduces the difficulty and costs of contract programming. The paper offers a case study to design contracts by users. The designed contracts were validated on the existing system to implement the food trading and traders' credit evaluation. The experimental results show that the designed smart contracts achieve good integration with the existing system and they can be deployed and compiled successfully.

Claire Wilson

Since 2009, more than 1600 cryptocurrencies have entered into circulation. The rapid development of the cryptocurrency market has raised questions about whether cryptocurrencies will challenge the existing order of traditional financial institutions. Opinion remains divided. Some commentators predict that they will cause massive disruptions to the current financial system. Others claim that they are unlikely to represent the “future of money”. Opponents have expressed concern over the association between cryptocurrencies and serious crimes, resemblance to Ponzi-schemes and the increasing incidence of crypto-scams. Supporters advocate that they offer a revolutionary system of payment, an alternative investment method or an alternative means of raising funds. The legal treatment of cryptocurrencies is, however, one of the most decisive factors that will determine their future. Currently, there is no governmental consensus on how, or if, cryptocurrencies should be regulated. Some governments are issuing outright bans on specific cryptocurrency activity; others are taking positive steps by introducing legislation to legitimize their use; the remainder are undecided whether to act or not. The methodology adopted in this research is a simple SWOT analysis to assess the durability and competitive positioning of cryptocurrencies. This chapter concludes that cryptocurrencies will cause disruptions to the future of money. It is expected that they will become a permanent new institution; however, they will be far more advanced than the current generation, be heavily governed by regulation and are likely to be state-issued.

Klaus Grobys, Niranjan Sapkota

We examine all available 146 Proof-of-Work-based cryptocurrencies that started trading prior to the end of 2014 and track their performance until December 2018. We find that about 60% of those cryptocurrencies were eventually in default. The substantial sums of money involved mean those bankruptcies will have an enormous societal impact. Employing cryptocurrency-specific data, we estimate a model based on linear discriminant analysis to predict such defaults. Our model is capable of explaining 87% of cryptocurrency bankruptcies after only one month of trading and could serve as a screening tool for investors keen to boost overall portfolio performance and avoid investing in unreliable cryptocurrencies.

Usman W. Chohan

No abstract is available for this record.

Thomas Conlon, Richard McGee

No abstract is available for this record.