Abstract Cryptocurrencies have experienced an exponential growth trend in the past 24 months, followed by a big crash. In the early years of the Internet, inspired entrepreneurs such as Jeffrey Bezos realized that, when something grows exponentially, it becomes ubiquitous within a short time span. Similarly to the Internet in 1994, cryptocurrencies have recently been growing at a dazzling rate, thus one can expect them to be used on a global scale very soon, in spite of the last bubble which has already burst. Alternative currencies are greeted with great enthusiasm, due to their potential to return financial power back to the people, especially in the context of general dissatisfaction and disappointment with the banking sector. They bring about several advantages, such as financial innovations, lower fees as well as increased availability to developing populations. At the same time, their high volatility and lack of supervision might imply that they only serve as complementary financing and not as a substitute of traditional banking. This article discusses the development of cryptocurrencies, including aspects related to Bitcoin, financial technology and the blockchain. Using historical data from Coinmarketcap.com between April 2013 and February 2018, I run a quantitative analysis of the distributions and evolution over time for all listed cryptocurrencies with known market capitalization. I look at the interplay between number of cryptocurrencies and market value, at growth rates, cumulative shares and volatility. I find a phenomenon of exponential growth and violent volatility, which I explain in light of cryptocurrencies’ strengths and weaknesses, as identified in the literature. I emphasize the importance of cryptocurrencies in the context of the global digital economy and I discuss future implications.
Dirk Andreas Zetzsche, Ross P. Buckley, Douglas W. Arner
One of the oft-noted benefits of distributed ledger technology is its security. Many commentators seem to believe that because the Bitcoin blockchain has not been hacked, somehow this means all blockchains are secure. This paper draws on recent examples to explore how risk persists when financial services are provided via distributed ledgers. We analyse the kinds of risk, how they arise and their possible legal consequences. While some technologists want to believe using blockchain will not give rise to legal liability, we demonstrate how this is not so. These liability consequences raise significant questions about how distributed ledgers should be structured, owned and, ultimately, regulated.
Christopher S. Henry, Huynh, Kim, Nicholls, Gradon
Bitcoin, digital currencies and FinTech have been the subject of vigorous discussion. There has, however, been limited empirical evidence of its adoption and usage. This paper proposes a methodology to collect a nationally representative sample via the Bitcoin Omnibus Survey (BTCOS) in order to track the ubiquity and usage of Bitcoin in Canada. The paper reveals that about 64 per cent of Canadians have heard of Bitcoin, but only 2.9 per cent own it. Awareness of Bitcoin is strongly associated with men, and those with college or university education; additionally, Bitcoin awareness is more concentrated among unemployed individuals. On the other hand, Bitcoin ownership is associated with younger age groups and a high school education. Furthermore, the current authors have constructed a test of Bitcoin characteristics to attempt to gauge the level of knowledge held by respondents who were aware of Bitcoin, including actual owners. Knowledge is positively correlated with Bitcoin adoption. This paper attempts to reconcile the difference in awareness and ownership by deconstructing the transaction and store-of-value motive for holding Bitcoin. The paper concludes with some suggestions to improve future digital currency surveys, in particular to achieve precise estimates from the hard-to-reach population of digital currency users.
Pradeep Murugan, Suraj Subramanian, Mr. V Pandarinathan Dr. D. Rajinigirinath
A new model for building massively scalable and profitable applications is emerging. Bitcoin paved the way with its cryptographically stored ledger, scarce asset model, and peer-to-peer technology. These features provide a starting point for building a new type of software called decentralized applications, or dapps. They are more flexible, transparent, distributed, resilient, and have a better incentivized structure than current software models. Centralized systems are currently the most widespread model f software applications. Centralized systems directly control the operation of the individual units and flow of information from a single center. Blockchain, a massively replicated database of transactions that's able to avoid Sybil attacks. For the first blockchain lets us achieve decentralized consensus without the use of a centralized server.
Cryptocurrencies’ popularity has surged during the last few years. This isespecially the case of bitcoin, one among cryptocurrencies which price has soaredfrom USD1,000 in the first quarter of 2017 to USD20,000 by the end of 2017. Ithas now being used by merchants as a medium of exchange. Upon realizing itspopularity, the CME Group that owns the Chicago Mercantile Exchange launcheda futures contract on bitcoin. Yet, there are cases where bitcoin is banned bythe country. This article examines the implication of bitcoin on Islamic financeand questions its acceptance as a medium of exchange (money) based on itscompliancy with shari’ah. By analyzing its nature and characteristics, the paperconcludes that, strictly speaking, cryptocurrencies that are not backed with realassets are not shari’ah-compliant. However, the majority of shari’ah scholarsare leaning towards approving bitcoin on maslahah basis. Bitcoin is neither fiatmoney nor real money. The absence of an intrinsic value coupled with lack orzero supervision by the central bank will result in misusing bitcoin. Furthermore,we content that it has the elements of maysir and gharar. This can contributetowards socio-economic injustices, thereby jeopardizing the maqasid al-shari’ah.Hence, based on a thorough analysis, we conclude that fiat cryptocurrencies arenot shari’ah compliant. However, gold-backed cryptocurrencies are argued to bedesirable and consistent with the maqasid al shari’ah.
Blockchain and Distributed ledger Technologies are increasingly becoming key\nenablers for vital innovation in financial services, manufacturing, government\nand other industries. One of the biggest challenges though is the level of\nsupport for semantics by most of the Block Chain and Distributed Ledger\ntechnologies. This paper reviews and categorises common block chain and DLT\napproaches and introduces a new approach to Blockchain / DLT promising to\nresolve the semantic problems inherent in other Blockchain / DLT approaches\n
Arlindo Flávio da Conceição, Flávio Soares Corrêa da Silva, Vladimir Rocha, Angela Locoro · 5 authors
Data privacy refers to ensuring that users keep control over access to information, whereas data accessibility refers to ensuring that information access is unconstrained. Conflicts between privacy and accessibility of data are natural to occur, and healthcare is a domain in which they are particularly relevant. In the present article, we discuss how blockchain technology, and smart contracts, could help in some typical scenarios related to data access, data management and data interoperability for the specific healthcare domain. We then propose the implementation of a large-scale information architecture to access Electronic Health Records (EHRs) based on Smart Contracts as information mediators. Our main contribution is the framing of data privacy and accessibility issues in healthcare and the proposal of an integrated blockchain based architecture.
Since the invention of internet, identity has become a significant aspect for nearly every interaction that occurs online. In this position paper, we demonstrate and discuss current limitations of centralised Identity Management (IdM) systems by drawing from the cases of two of world’s largest biometric ID systems: India’s Unique Identification System Aadhar and China’s Social Credit system, Sesame Credit. This paper explores self-sovereign identity through innovative application from blockchain 3.0. We then identify some key characteristics of blockchain technologies to address the challenges centralised IdM services face and present opportunities for furthering HCI research around de-centralised IdM services to provoke workshop discussion.
Chris Elsden, Kate Symons, Chris Speed, John Vines · 5 authors
Abstract The OxChain project is investigating the design of blockchain applications in partnership with a large and traditionally trusted institution, Oxfam. We outline some of the potential opportunities that distributed ledger technologies could offer the charity and development sector as a whole, but focus on the challenges of undertaking co-design work in the context of large institutions. We suggest the need to leverage existing trusted relationships and understand the unique value that such institutions offer.
Francesco Parino, Mariano G. Beiró, Laëtitia Gauvin
As the first decentralized digital currency introduced in 2009 together with\nthe blockchain, Bitcoin offers new opportunities both for developed and\ndeveloping countries. Bitcoin peer-to-peer transactions are independent of the\nbanking system, thus facilitating foreign exchanges with low transaction fees\nsuch as remittances, with a high degree of anonymity. These opportunities\ntogether with other key factors led the Bitcoin to become extremely popular and\nmade its price skyrocket during 2017. However, while the Bitcoin blockchain\nattracts a lot of attention, it remains difficult to investigate where this\nattention comes from, due to the pseudo-anonymity of the system, and\nconsequently to appreciate its social impact. Here we make an attempt to\ncharacterize the adoption of the bitcoin blockchain by country. In the first\npart of the work we show that information about the number of Bitcoin software\nclient downloads, the IP addresses that act as relays for the transactions, and\nthe Internet searches about Bitcoin provide together a coherent picture of the\nsystem evolution in different countries. Using these quantities as a proxy for\nuser adoption, we identified several socio-economic indexes such as the GDP per\ncapita, freedom of trade and the Internet penetration as key variables\ncorrelated with the degree of user adoption. In the second part of the work, we\nbuild a network of Bitcoin transactions between countries using the IP\naddresses of nodes relaying transactions and we develop an augmented version of\nthe gravity model of trade in order to identify socio-economic factors linked\nto the flow of bitcoins between countries. In a nutshell our study provides a\nnew insight on the bitcoin adoption by country and on the potential\nsocio-economic drivers of the international bitcoin flow.\n
Muhammad Mansab Uzair, Emadul Karim, Shair Sultan, Syed Sheeraz Ahmed
The block chain technology has been in the topic of much discussion due to its successful application in the crypto currency known as “Bitcoin" which has investment experts, economists, billion dollar financial institutes, big banks as well as governments taking sides on whether it should be legitimized and used as a currency or make it illegal to be used as a means of exchange. However, experts from different field like supply chain management and even from the medical field are more interested in how the block chain technology’s decentralized record keeping and numerous other benefits can be of use to them in their fields of work. This study concentrates on the block chain being used for real estate record keeping, since most geography’s have different procedures for record keeping, this study focuses on Defence Housing Authority in Karachi to check what the impact of applying the block chain technology to this area in Karachi would have on investors, real estate agents, residents and the government.
Cansu Şarkaya İçellioğlu, Merve Büşra Engin Öztürk
Güvenlik açısından kriptoloji (şifreleme) bilimini kullanan, dijital ve sanal bir para birimi anlamına gelen kriptopara, son yıllarda en çok tartışılan ekonomik kavramlardan biri olmuştur. Kriptopara, herhangi bir döviz kuruna ya değerli bir madene bağlı olmamakla birlikte, herhangi bir yasal otorite tarafından da kontrol edilememektedir. En başarılı kriptopara olarak değerlendirilen Bitcoin, ilk çıktığı yıldan bu yana çok yüksek bir oranda değerlenmesinden ötürü cazip bir yatırım aracı olarak görülmekte, ancak taşıdığı belirsizlik ve risklerden ötürü çeşitli endişeleri de beraberinde getirmektedir. Bu çalışmada Bitcoin’in özellikleri ve işleyişi ele alınarak, Bitcoin ile seçili döviz kurları arasındaki ilişki araştırılmaktadır. Araştırmada birim kök testleri uygulanmış, seriler arasındaki uzun dönemli ilişki Engel-Granger Eşbütünleşme testi ve Johansen Testi ile ve kısa dönemli ilişki Granger nedensellik testi ile sınanmıştır. Çalışmanın sonucunda Bitcoin ile Dolar, Euro, Sterlin, Yen ve Yuan arasında uzun ve kısa dönemli bir ilişkinin varlığına rastlanamamıştır.
Blockchain, the rapid developing technology behind Bitcoin, is increasingly becoming popular. Blockchain is a distributed ledger technology that distributes digital transactions peer-to-peer to a decentralized network of nodes that verify the transactions and keep a cryptographic secured copy of the entire history of transactions. The network automatically reaches consensus about the correct history of records, which makes the database transparent and immutable. This consensus role makes it possible to take away the third party in certain processes, such as the bank or the notary. Blockchain also enables digital payments and smart contracts. Smart contracts are digital contracts that can be executed automatically by the blockchain. This enables digital registration of for example identity, birth certificates and votes. But smart contracts have many more automation applications that can be coded in computer code, which has the potential of making many processes in both the public as the private sector more efficient and less costly. Governmental services are especially applicable for blockchain, as they could become more efficient and can even be made obsolete in some cases. <br/><br/>Project teams that develop blockchain powered smart contract applications have to work with nascent tools and technology, and a lack of real life use cases. This leads to a lack of empirical knowledge on how to implement smart contracts in governmental services. An overview of guidelines that assist developing project teams is non-existent, which slows down the implementation process. Blockchain technology is not well-researched and smart contract implementation research is even more scarce. A comprehensive overview that shows design phases, design principles and design dilemmas is non-existent, but could greatly assist project teams that implement smart contract applications. Such an overview would speed up the implementation process and can lead to an acceleration of use cases. Therefore, this research focused on answering the main research question: “How can blockchain powered smart contracts be implemented in governmental services?”. <br/><br/>We used the design science approach in order to answer the main research question. The design science approach allowed us for using several sub methods. We started with a literature review and desk research to understand and analyze blockchain technology and smart contracts, followed by a literature review in order to draft the first version of design principles. These were improved by conducting four case studies. With the second version of the design principles, we built the first version of the design framework. These were assessed by six experts, which allowed us to refine the design principles and design framework into a final version. <br/><br/>The 36 design principles are guidelines to aid project teams that implement smart contracts in governmental services. We incorporated these design principles in a framework, that shows which design principles are applicable in the following five phases of smart contract implementation: exploration, conceptualization, testing, implementation and expansion. Each of these phases has its own results and applicable design principles, which is comprehensively indicated in the framework. However, various pairs of principles affect each other, which we call design dilemmas.
Financial innovation has entered a new era in which a digitalized system and cryptocurrency have been created. This paper examines the factors that influence the price movement of bitcoin. This is not a legal currency in Indonesia; the Indonesian government has not made any regulations legalizing bitcoin’s use, but it has also not issued any new laws to prohibit the trade in bitcoins and other digital currencies. The demand for, and price growth of, bitcoin are interesting matters to study, especially for Indonesians who still have questions about the progress of Bitcoin transactions and the factors that influent them. In Indonesia itself, without any protection from the government, the bitcoin price on December 14, 2017 had already reached more than IDR224.5 million, compare to IDR60 million in October 2017. Bitcoin is the first peer-to-peer currency, and was introduced by Satoshi Nakamoto in 2008. Since its inception, bitcoin has served more than 17 million users, including Indonesians. Bitcoin behaves in a different manner, compared to traditional currencies and the one that affects bitcoin’s price is its attractiveness for investors. The Vector Error Correction Model (VECM) is applied to analyze the short-term and long-term influences. VECM is used in this research because the data is stationary in the first difference and has a cointegration relationship. To make the interpretation clearer, the impulse response function and variance decomposition also are included in this research. The result indicates that the macroeconomic indicator, represented by the Dow Jones Industrial Average (DJIA), the demand for bitcoins and the gold price influence bitcoin’s price fluctuations in the short-run and long-run. Bitcoin’s supply does not influence its price fluctuation in the long-run but does influence it in the short-run. The implication of this research is bitcoin could compete as an alternative investment compared to the capital markets and gold.
This article suggests that the worldwide relevance of blockchain technology is motivated by the changes that it is expected to cause in: (i) the way that business is organised and (ii) regulated, as well as (iii) by the way that it changes the role of individuals within a society. The article presents an overview of the features of blockchain technology. It then takes a closer look into the developments within the energy sector across the world to gain a preliminary indication of whether the stated expectations are coming to reality. As a result of this review, we remain cautiously optimistic that blockchain technology could deliver the expected impact.
Shuqing Bian, Zhenpeng Deng, Fei Li, Will Monroe · 12 authors
Cryptocurrencies (or digital tokens, digital currencies, e.g., BTC, ETH, XRP, NEO) have been rapidly gaining ground in use, value, and understanding among the public, bringing astonishing profits to investors. Unlike other money and banking systems, most digital tokens do not require central authorities. Being decentralized poses significant challenges for credit rating. Most ICOs are currently not subject to government regulations, which makes a reliable credit rating system for ICO projects necessary and urgent. In this paper, we introduce IcoRating, the first learning--based cryptocurrency rating system. We exploit natural-language processing techniques to analyze various aspects of 2,251 digital currencies to date, such as white paper content, founding teams, Github repositories, websites, etc. Supervised learning models are used to correlate the life span and the price change of cryptocurrencies with these features. For the best setting, the proposed system is able to identify scam ICO projects with 0.83 precision. We hope this work will help investors identify scam ICOs and attract more efforts in automatically evaluating and analyzing ICO projects.
Blockchain serving as an unalterable ledger, has received widespread attentions recently, which allows carrying out transactions with a decentralized matter. Applications with blockchain technology are springing up. However, financial applications especially in bank liquidation system are still facing big challenges. This paper first presents a consensus combined delegated-proof-of-stake protocol and BFT algorithm together. At the same time, using parallel idea and redesigned blockchain structure make the system more efficiency.
Initial Coin Offerings (ICO) are public offers of new cryptocurrencies in\nexchange of existing ones, aimed to finance projects in the blockchain\ndevelopment arena. In the last 8 months of 2017, the total amount gathered by\nICOs exceeded 4 billion US$, and overcame the venture capital funnelled toward\nhigh tech initiatives in the same period. A high percentage of ICOS is managed\nthrough Smart Contracts running on Ethereum blockchain, and in particular to\nERC-20 Token Standard Contract. In this work we examine 1388 ICOs, published on\nDecember 31, 2017 on icobench.com Web site, gathering information relevant to\nthe assessment of their quality and software development management, including\ndata on their development teams. We also study, at the same date, the financial\ndata of 450 ICO tokens available on coinmarketcap.com Web site, among which 355\ntokens are managed on Ethereum blochain. We define success criteria for the\nICOs, based on the funds actually gathered, and on the behavior of the price of\nthe related tokens, finding the factors that most likely influence the ICO\nsuccess likeliness.\n
After comparing and contrasting with computer codes running in a central server, this paper notes that smart contracts are not in the legal sense and considers their implications for contract management and dispute prevention. It alerts that the features of are prone to generate disputes which often involve novel legal issues. The paper concludes with a brief comment on the potential use of in dispute resolution.
Several years after the inception of the most dominant cryptocurrency, bitcoin, the European Central Bank in 2015 indicated the need for establishing legal clarity by relevant authorities through explaining how the current legal framework applies to cryptocurrencies. Three years later, no meaningful step has been taken by any of the European Union (EU) institutions including the parliament. By examining the EU’s legal framework governing payments services, including the Single Euro Payment Area (SEPA) Regulation, the Electronic Money Directive, the Payment Services Directive and the proposed AML/CTF Directive, this article concludes that (a) because the existing payment services laws apply to payments effected in currencies (legal tenders) and cryptocurrencies are not defined as currencies under the EU law or the laws of member states, they do not cover cryptocurrencies. It also argues that it is impossible to design sui generis payments services law for cryptocurrencies without curbing their essential features, especially decentralization. Lastly, the article proposes centralization and the creation of state cryptocurrency as possible solutions moving forward and examines their strengths and challenges.