Yingli Wang, Catherine Huirong Chen, Ahmed Zghari-Sales
While blockchain technologies are gaining momentum within supply chains, academic understanding of concrete, real-life design and implementation is still lagging, hence offering very limited insights into the true implications of blockchain technology on supply chains. This paper reports a two-year design science research (DSR) study of a smart contract initiative piloted by a consortium in the UK’s construction sector. We seek answers to the research question, ‘How should a blockchain enabled supply chain be designed?’ Guided by the theory of business model, we explore how a group of supply chain actors collectively designs and pilots a blockchain solution that addresses the supply chain transparency and provenance problem. Our research is one of the very few longitudinal empirical studies to offer in-depth evidence about how blockchain is deployed in complex multi-tier supply chain networks. In compliance with DSR research paradigm, we make contributions at three levels: designing and instantiating the blockchain architect and proving its utility in addressing the target problem; developing a set of design principles as a mid-range theory that can be applied and tested in different blockchain supply chain contexts; and refining and extending the kernel theory of business value at supply chain network level.
Despite the past decade’s rapid innovation in adapting blockchain technology to new uses, financial intermediation remains elusive except in basic and highly collateralized forms. We introduce the concept of the technical frontier to delimit the kinds of interactions that can feasibly be structured algorithmically among pseudonymous agents, as on a blockchain, and show that lending and financial intermediation – unlike monetary exchange – lie outside it, even in simple forms. The path forward for truly blockchain-native financial applications, therefore, must involve the integration of real-world identity information in order to disincentivize defection. We discuss several potential technologies for doing so, and conclude that such integration is possible without compromising pseudonymity, provided real-world identity is available in the breach.
Decentralized finance has evolved as a major contender for traditional banking systems over the last few years. Evolution in blockchain and cryptography technologies are the driving forces for decentralized finance’s growth. The emergence of Bitcoin in the finance system was a major driving force toward the tremendous growth of decentralized finance. However, with various platforms merging every day, the decentralized finance sector is still in its early, unorganized stages. The current decentralized finance market is chaotic. With a new “coin” being introduced almost every month, standardization is highly lacking in the system. DeFi already has several different applications available. For instance, one can purchase stable coins, or assets pegged to a national currency, on decentralized exchanges, move the assets to a lending platform that is also decentralized to earn interest, and then add the interest-earning instruments to a decentralized liquidity pool or an on-chain investment fund. DeFi enterprises frequently aim at decentralized decision-making, or governance, in everything from the user fees to the products they provide. A decentralized program may be started by one person or a small number of individuals, but as the project gathers traction, its leaders frequently try to step down and cede control to the user base. A decentralized autonomous organization that has its rules and regulations written into computer code and that may issue governance tokens, which allow its holders a voice in decisions rather than allowing the decision-making to a centralized government authority as in case of traditional finance, could represent this transition. While on one side, world governments are still trying to grasp and regulate the sector, on the other side, the technology’s reach has been very limited. Undoubtedly, the emergence of blockchain-based decentralized finance is massively influencing our current finance technology industry. In this chapter, we discuss the current growth in the FinTech industry and the blockchain-based decentralized finance sector. Furthermore, we discuss how decentralized finance can be used in the current FinTech industry.
Since first coined by Google in 2012, knowledge graph has received extensive attention from both industry and academia, and has been widely used in many scenarios with success, e.g. information retrieval, online recommendation, question-answering, and so on. However, traditional centralized construction of knowledge graph faces many challenges, such as laborious and time-consuming, vulnerable to manipulation or tampering, lacking scrutiny, among others. Therefore, in this paper, we propose a novel decentralized knowledge graph construction method by means of crowdsourcing, and the business logic of crowdsourcing is implemented by blockchain-powered smart contracts to guarantee the transparency, integrity, and auditability. On this basis, the decentralized knowledge graph is used for a deep recommender system, and case studies validate the effectiveness of the system. This paper is aimed at providing a novel decentralized approach for constructing knowledge graph and serving as reference and guidance for future research and practical applications of knowledge graph.
One of the purported benefits of blockchain technologies is the ability to house what have been termed ‘smart’ contracts. Such contracts are potentially self-executing depending on the state of information recorded on a blockchain ledger. This paper examines the capabilities of smart contracts from an economic perspective. It is demonstrated that by improving observability and reducing the costs of verification of contract obligation performance, the space of feasible contracts can be enlarged. Moreover, by providing commitments to various monetary payments, a blockchain can potentially create a foundation to house certain mechanisms that have been shown to overcome difficulties of contractual incompleteness. This is demonstrated using a simple international trade environment. Thus, even though smart contracts must respect the incentives of decision-makers in their obligations, they have the potential to use easily verifiable elements to create incentives to reduce hold-up and other contractual difficulties.
This essay investigates the potential of smart contracts to replace the legal system as an infrastructure for transactions. It argues that (contract) law remains relevant for most transactions even if they are entirely structured by way of smart contract. The reason for this is that the power of smart contracts to create and enforce obligations against attempts by the legal system to thwart their execution is limited. These limitations are most relevant for obligations to perform certain actions outside the blockchain, but also apply to other obligations contingent on facts outside the records stored on the blockchain.
Ngoc Tien Thanh Le, Quoc Nghiep, Nguyen Ngoc, Nghia Duong‐Trung · 7 authors
The adoption of decentralized cryptocurrency plat-forms is growing fast, thanks to the implementation of Blockchain technology and smart contracts. It encourages the novel frame-works in a wide range of applications including finance and payment methods such as cash on delivery. However, a large number of smart contracts developed for cash on delivery suffer from fraudulent transactions which enable malicious participants to break the signed contracts without sufficient penalties. A shipper will involve in the system and place a mortgage to ensure reliability. A buyer also pledges an amount of money when making the order. Our process not only ensures the interests of a seller but also prevents a fraud shipper. The penalties will be made in two scenarios: (i) the buyer refuses to receive the commodities without any reliable reasons; and (ii) the shipper attempts to make any modification on the delivered goods during transportation. To help developers create more secure and reliable cash on delivery system, we introduce double smart contracts, a framework rooted in Blockchain technology and Ethereum, to tackle those mentioned problems. We also contribute our solution as an open source software that developers can easily add to their implementation to enhance functionality.
Smart contracts turn blockchains into distributed computing platforms. This paper studies whether smart contracts as implemented by a state-of-the-art blockchain technology may serve as a component technology for a computing paradigm like service-oriented computing in the blockchain, in order to foster reuse and increase cost-effectiveness.
There are two traditional data trading modes, the hosting mode, and the aggregation mode, which depend on the trusted third parties to a large extent. The hosting mode is that the data are completely hosted in the data trading center, so the data trading center retains the data. On the surface, the aggregation mode is that the data trading center is not to retain the data of trading, but actually, it has the ability to retain the data. There is a fundamental difference between the ability to retain the data and the inability to retain the data. These two trading modes cause the data owners to be afraid to share data trading. In this paper, we propose a solution to the data trading mode based on the smart contract using blockchain and machine learning. Our solution takes advantage of the immutability, tamper-proof and traceability of blockchain, the programmability of smart contract, and the verification of data availability by the similarity learning to propose a challenge response mechanism between the data purchaser and the data owner, an off-chain download mechanism between the data purchaser and the data storage service provider, and an arbitration mechanism for the controversy resolution of the data trading. The challenge response mechanism is used to authenticate and authorize the data owner, the off-chain download mechanism is used to authenticate and authorize the data purchaser to download the purchased data, and the similarity learning is used to deal with the controversy over the data availability in the data trading. The design and implementation of data trading smart contract successfully achieved the goal of removing the trusted third party in the data trading, and thus, the problem that the data trading center has the ability to retain the data in the process of the data trading is solved, as well as the automatic payment by using the Ethereum encrypted currency among the trading participants is realized. This paper presents the whole process of smart contract from the design and implementation to the test completion and provides the security analysis and performance evaluation. The full code of smart contract and the ABI interface have been uploaded to the GitHub for the public release.
A smart contract is an electronic transaction protocol intended to digitally facilitate, verify, or enforce the negotiation and execution of the terms of an underlying legal contract designed to fulfil common contractual conditions comprising payments, legal obligations, and enforcement without third parties. Thus, by following the traditional perception, smart contracts target to reduce transaction costs including arbitration and enforcement costs by realising trackable and irreversible transactions by using blockchain technology for distributed databases. However, the potential of smart contracts goes far beyond cost reductions by facilitating the entrepreneurial collaboration of cross-organisational business-processes that are characteristic for smart supply chains. A closer look to existing or ongoing smart contract projects reveals that the majority of smart-contract applications in business life are linked to supply chain management, Internet of Things and Industry 4.0 solutions. The author participated in several EU projects related to transnational entrepreneurial networks and smart supply chains. Thus, the paper discusses the research question of how and to which extent smart contracting and blockchain technology can facilitate the implementation of collaborative business structures for sustainable entrepreneurial activities in smart supply chains. The research is based on expert interviews, surveys and case studies, which took place in the context of the EU projects with a focus on the Baltic Sea Region.
Blockchain is the promising technology of recent years, which has attracted remarkable attention in both academic studies and practical industrial applications. The smart contract is a programmable transaction that can perform a sophisticated task, execute automatically, and store on the blockchain. The smart contract is the key component of the blockchain, which has made blockchain a technology beyond the scope of the cryptocurrencies and applicable for a variety of applications such as healthcare, IoT, supply chain, digital identity, business process management, and more. Although in recent years the progress toward improving blockchain technology with the focus on the smart contract has been impressive, there is a lack of reviewing the smart contract topic. This paper systematically reviews the key concepts and proposes the direction of recent studies and developments regarding the smart contract. The research studies are presented in three main categories: 1) security methods and tools; 2) performance improvement approaches; and 3) decentralized applications based on smart contracts.
This article investigates the socio-demographic characteristics that individual cryptocurrency investors exhibit and the factors that go into their investment decisions in different Initial Coin Offerings (ICOs). We conducted a web-based revealed preference survey among Australian and Chinese blockchain and cryptocurrency followers, and applied a Multinomial Logit model to inferentially analyze the characteristics of cryptocurrency investors and the determinants of their choice of investment in “cryptocurrency coins” versus other types of ICO tokens. The results showed differences in the determinant of these two choices among Australian and Chinese cryptocurrency folks. The significant factors of these two choices included age, gender, education, occupation, and investment experience, and they aligned well with the behavioral literature. Furthermore, in addition to differences in how they ranked the attributes of ICOs, there was further variance between how Chinese and Australian investors ranked deterrence factors and investment strategies. <b>TOPICS:</b>Currency, emerging markets, in markets <b>Key Findings</b> • The significant factors of the choice of investment in cryptocurrency include age, gender, education, occupation, and previous investment experience. • Chinese and Australian investors rank the ICO attributes differently. • The deterrence factors and investment strategies vary between Chinese and Australians investors.
Georgios A. Panos, Tatja Kärkkäinen, Adèle Atkinson
We examine the relationship between financial literacy and attitudes to cryptocurrencies, using microdata from 15 countries. Our financial literacy proxy exerts a large negative effect on the probability of currently owning cryptocurrencies. The financially literate are also more likely to be aware of cryptocurrencies, and more likely to report that they do not intend to own them. We confirm the external validity of our financial literacy proxy and findings using data from a second novel survey of retail investors in 3 Asian countries. More financially literate retail investors are more likely not to have held any cryptocurrencies. We show that the relationship between financial literacy and attitudes to cryptocurrencies is moderated by a different perception of the financial risk involved in cryptocurrencies versus alternative instruments by the more financially literate. Our findings shed light on the demand for cryptocurrencies among the general population and suggest that it is largely driven by unsophisticated users.
We use historical data to estimate the potential benefit of speculative techniques for executing Ethereum smart contracts in parallel. We replay transaction traces of sampled blocks from the Ethereum blockchain over time, using a simple speculative execution engine. In this engine, miners attempt to execute all transactions in a block in parallel, rolling back those that cause data conflicts. Aborted transactions are then executed sequentially. Validators execute the same schedule as miners. \nWe find that our speculative technique yields estimated speed-ups starting at about 8-fold in 2016, declining to about 2-fold at the end of 2017, where speed-up is measured using either gas costs or instruction counts. We also observe that a small set of contracts are responsible for many data conflicts resulting from speculative concurrent execution.
In this work, we perform a comprehensive empirical study of smart contracts deployed on the ethereum blockchain. The objective of the analysis is to provide empirical results on smart contracts features, smart contract transactions within the blockchain, the role of the development community, and the source code characteristics. We collected a set of more than 10000 smart contracts source codes and a dataset of meta-data regarding their interaction with the blockchain from etherscan.io. We examined the collected data computing different statistics on naming policies, smart contract ether balance, number of smart contract transactions, functions, and other quantities characterizing the use and purpose of smart contracts. We found that the number of transactions and the balances follow power-law distributions and the software code metrics display, on average, values lower than corresponding metrics in standard software but have high variances. Focusing the attention on the 20 smart contracts with the topmost number of transactions, we found that most of them represent financial smart contracts and some of them have peculiar software development stories behind them. The results show that blockchain software is rapidly changing and evolving and it is no longer devoted only to cryptovalues applications but to general purpose computation.
Abstract Bitcoin is a distributed system. The dilemma it poses to the legal systems is that it is hardly possible to regulate a distributed network in a centralized fashion, as decentralized cryptocurrencies are antithetical to the existing centralized structure of monetary and financial regulation. This article proposes a more nuanced policy recommendation for regulatory intervention in the cryptocurrency ecosystem, which relies on a decentralized regulatory architecture built upon the existing regulatory infrastructure and makes use of the existing and emerging middlemen. It argues that instead of regulating the technology or the cryptocurrencies at the code or protocol layer, the regulation should target their use-cases. Such a regulatory strategy can be implemented through directing the edicts of regulation towards the middlemen and can be enforced by the existing financial market participants and traditional gatekeepers such as banks, payment service providers and exchanges, as well as large and centralized node operators and miners.
Bitcoin as a major cryptocurrency has come up as a shooting star of the 2017 and 2018 headlines. After exploding its price twenty times just in the twelve months of 2017, the tone has changed dramatically in 2018 after major price corrections and increasing concerns about its mining power consumption and overall sustainability. The dynamics and interaction between Bitcoin price and its mining costs have become of major interest. Here we show that these two quantities are tightly interconnected and they tend to a common long-term equilibrium. Mining costs adjust to the cryptocurrency price with the adjustment time of several months up to a year. Current developments suggest that we have arrived at a new era of Bitcoin mining where marginal (electricity) costs and mining efficiency play the prime role. Presented results open new avenues towards interpreting past and predicting future developments of the Bitcoin mining framework.
Distributed ledger technology has seen its debut into communities of practice in healthcare where the reliance on knowledge sharing between participants postulates the foundations of secure and distributed knowledge, especially in some sensitive context, such as patient information. This knowledge is essential for the practice of care from patient contact to research, pharmaceutical supply chain, medication adherence and management of the plethora of bedside data into a collection of knowledge about the patient, essential to quality care. We introduce different schools of thought and implementation contexts of the distributed ledger technology or Blockchain. We provide an overview of Blockchain and Distributed Ledger Technology, focused on the Healthcare industry, as an initial assessment of the validity of an application of Distributed Ledger Technology in a specific knowledge management model to solve problems related to knowledge sharing in medical knowledge management systems. The paper summarizes some instances of most likely and unlikely uses of Blockchain in the healthcare setting. The paper also introduces a few use cases where some short-term benefits from such implementation.