Jan 1, 2017·Proceedings of the ... Annual Hawaii International Conference on System Sciences/Proceedings of the Annual Hawaii International Conference on System Sciences
Juho Lindman, Virpi Kristiina Tuunainen, Matti Rossi
Blockchain technologies offer new open source-based opportunities for developing new types of digital platforms and services. While research on the topic is emerging, it has this far been predominantly focused to technical and legal issues. To broaden our understanding of blockchain technology based services and platforms, we build on earlier literature on payments and payment platforms and propose a research agenda divided into three focal areas of 1) organizational issues; 2) issues related to the competitive environment; and 3) technology design issues. We discuss several salient themes within each of these areas, and derive a set of research question for each theme, highlighting the need to address both risks and opportunities for users, as well as different types of stakeholder organizations. With this research agenda, we contribute to the discussion on future avenues for Information Systems research on blockchain technology based platforms and services.
Objective: The main purpose of the paper is to show that blockchain technology may disrupt the existing business models and to explore how this may occur. Research Design & Methods: This is a theory development paper which relies on a literature review and desk re-search. The discussion of the reviewed sources leads to the formulation of three re-search propositions. Findings: The paper provides a short overview of key literature on business models and business model innovation, indicating, among others, that new technologies may be one of the drivers of business model innovation. This study also provides an overview of blockchain technology and a range of its business applications showing how it can disrupt business models. It is shown that blockchain technology may affect many dimensions of business models. We propose that there are three crucial ways in which blockchain technology can affect and disrupt business models: by authenticating traded goods, via disintermediation and via lowering transaction costs. Implications & Recommendations: This study shows that blockchain technology may affect diverse dimensions of business models in diverse industries. It is recommended that mangers should follow developments in this field in order to prepare for possible disruptions in their industries. Contribution & Value Added: This study provides an analysis of the possible impact of blockchain technology on business model innovation. Blockchain technology is gaining momentum with more and more diverse applications, as well as increasing numbers of actors involved in its applications. This paper contributes to our understanding of the possible applications of blockchain technology to businesses, and in particular to its impact on business models.
Summary This paper investigates alternative configurations of different blockchain architectures that can be used for gathering and processing transactions in a range of different settings, including accounting, auditing, supply chain and other types of transaction information. Although there has been substantial focus on the peer‐to‐peer and public versions of blockchain, this paper focuses primarily on cloud‐based and private configuration versions of blockchains and investigates use configurations, advantages and limitations as firms bring blockchain‐based market mechanisms into their organizations. In addition, this paper investigates some emerging issues associated with blockchain use in consortium settings. Finally, this paper relates some proposed uses of blockchain for transaction processing to other technologies, such as data warehouses and databases.
Zhetao Li, Jiawen Kang, Rong Yu, Dongdong Ye · 6 authors
In industrial Internet of things (IIoT), peer-to-peer (P2P) energy trading ubiquitously takes place in various scenarios, e.g., microgrids, energy harvesting networks, and vehicle-to-grid networks. However, there are common security and privacy challenges caused by untrusted and nontransparent energy markets in these scenarios. To address the security challenges, we exploit the consortium blockchain technology to propose a secure energy trading system named energy blockchain. This energy blockchain can be widely used in general scenarios of P2P energy trading getting rid of a trusted intermediary. Besides, to reduce the transaction limitation resulted from transaction confirmation delays on the energy blockchain, we propose a credit-based payment scheme to support fast and frequent energy trading. An optimal pricing strategy using Stackelberg game for credit-based loans is also proposed. Security analysis and numerical results based on a real dataset illustrate that the proposed energy blockchain and credit-based payment scheme are secure and efficient in IIoT.
This paper is placed in the context of a growing number of social and political critiques of blockchain technologies. We focus on the supposed potential of blockchain technologies to transform political institutions that are central to contemporary human societies, such as money, property rights regimes, and systems of democratic governance. Our aim is to examine the way blockchain technologies canbring about - and justify - new models of governance. To do so, we draw on the philosophical works of Hobbes, Rousseau, and Rawls, analyzing blockchain governance in terms of contrasting social contract theories. We begin by comparing the justifications of blockchain governance offered by members of the blockchain developers’ community with the justifications of governance presented within social contract theories. We then examine the extent to which the model of governance offered by blockchain technologies reflects key governance themes and assumptions located within social contract theories, focusing on the notions of sovereignty, the initial situation, decentralization and distributive justice.
Christopher D. Clack, Vikram A. Bakshi, Lee Braine
Smart Contract Templates support legally-enforceable smart contracts, using operational parameters to connect legal agreements to standardised code. In this paper, we explore the design landscape of potential formats for storage and transmission of smart legal agreements. We identify essential requirements and describe a number of key design options, from which we envisage future development of standardised formats for defining and manipulating smart legal agreements. This provides a preliminary step towards supporting industry adoption of legally-enforceable smart contracts.
The practice of securities holding, transfer, and collateral has changed significantly over the past 200 years—moving from paper certificates and issuer registers, to an intermediated environment, and from there to computerization and globalization. These changes have made transacting more efficient and thus rendered markets more liquid. However, the law has lagged behind and is now itself an obstacle to efficiency because international securities transactions are subject to considerable legal uncertainty. The latest global market development, a cryptographic transfer process commonly called the blockchain, is the most recent efficiency-enhancing change. It offers a unique possibility to create a consistent legal framework for securities from scratch, on the basis of a legal concept that, to some extent, resembles bearer securities. This article shows what the new international legal framework could look like in the light of experience gained from earlier developments.
In this article, the authors assess the benefits of blockchain/distributed ledger technology for the holding, clearing and settlement of securities currently held in intermediated holding structures and consider the steps needed to facilitate an efficient market. The recommendation is that investors should receive full disclosure of the custody and sub-custody arrangements associated with their investments
Leif-Nissen Lundbæk, Andrea Callia D’Iddio, Michael Huth
We propose the formal study of governed blockchains that are owned and controlled by organizations and that neither create cryptocurrencies nor provide any incentives to solvers of cryptographic puzzles. We view such approaches as frameworks in which system parts, such as the cryptographic puzzle, may be instantiated with different technology. Owners of such a blockchain procure puzzle solvers as resources they control, and use a mathematical model to compute optimal parameters for the cryptographic puzzle mechanism or other parts of the blockchain. We illustrate this approach with a use case in which blockchains record hashes of financial process transactions to increase their trustworthiness and that of their audits. For Proof of Work as cryptographic puzzle, we develop a detailed mathematical model to derive MINLP optimization problems for computing optimal Proof of Work configuration parameters that trade off potentially conflicting aspects such as availability, resiliency, security, and cost in this governed setting. We demonstrate the utility of such a mining calculus by solving some instances of this problem. This experimental validation is strengthened by statistical experiments that confirm the validity of random variables used in formulating our mathematical model. We hope that our work may facilitate the creation of domain-specific blockchains for a wide range of applications such as trustworthy information in Internet of Things systems and bespoke improvements of legacy financial services.
Equity crowdfunding via the Internet is a new channel of raising money for startups. It features low barriers to entry, low cost, and high speed, and thus encourages innovation. In recent years, equity crowdfunding in China has experienced some developments. However, some problems remain unsolved in practice. Blockchain is a decentralized and distributed ledger technology to ensure data security, transparency, and integrity. Because it cannot be tampered with or forged, the technology is deemed to have great potential in the finance industry. This study examines current problems in the practice of equity crowdfunding in China. Based on the analysis of the characteristics of blockchain technology, this study further explores its practical applications in equity crowdfunding. 1) Blockchain technology may be a secure, efficient, low-cost solution for the registration of stocks and shares of a firm financed by crowdfunding; 2) Blockchain technology simplifies the transaction and transfer of crowdfunding equities, and thus facilitates their circulation; 3) Blockchain technology enables peer to peer transactions between investors and entrepreneurs, and solves the problems of regulatory compliance and security of fund management; Blockchain technology can be used to develop a voting system for crowdfunders, which enables them to be involved in corporate governance. This helps protect the rights and interests of small investors; 5) Blockchain technology helps regulators know about market conditions, and supports regulatory activities such as managing investors and fighting money laundering.
David C. Mills, Kathy Wang, Brendan Malone, Anjana Ravi · 14 authors
Digital innovations in finance, loosely known as fintech, have garnered a great deal of attention across the financial industry. Distributed ledger technology (DLT) is one such innovation that has been cited as a means of transforming payment, clearing, and settlement (PCS) processes, including how funds are transferred and how securities, commodities, and derivatives are cleared and settled. DLT is a term that has been used by the industry in a variety of ways and so does not have a single definition. Because there is a wide spectrum of possible deployments of DLT, this paper will refer to the technology as some combination of components including peer-to-peer networking, distributed data storage, and cryptography that, among other things, can potentially change the way in which the storage, recordkeeping, and transfer of a digital asset is done.
Blockchain technology is a core, underlying technology with promising application prospects in the banking industry. On one hand, the banking industry in China is facing the impact of interest rate liberalization and profit decline caused by the narrowing interest-rate spread. On the other hand, it is also affected by economic transformation, Internet development, and financial innovations. Hence, the banking industry requires urgent transformation and is seeking new growth avenues. As such, blockchains could revolutionize the underlying technology of the payment clearing and credit information systems in banks, thus upgrading and transforming them. Blockchain applications also promote the formation of “multi-center, weakly intermediated” scenarios, which will enhance the efficiency of the banking industry. However, despite the permissionless and self-governing nature of blockchains, the regulation and actual implementation of a decentralized system are problems that remain to be resolved. Therefore, we propose the urgent establishment of a “regulatory sandbox” and the development of industry standards.
According to the World Economic Forum, by 2025 10% of global GDP will be stored on blockchains, a type of decentralised database and distributed shared ledger. Smart contracts are automated computable contracts that are executed in blockchains, with the benefit of removing intermediaries and reducing costs. The use cases in finance include: in cross-border payments, to capture obligations, minimize operational errors and expedite transfers; for property and casualty claims in insurance, to automate claims processing through third-party data sources and codification of business rules; for deposits and lending in syndicated loans, to facilitate real-time loan funding and automated servicing activities without intermediaries; for deposits and lending in trade finance, to automate the creation and management of credit facilities ultimately eliminating correspondent banks; for contingent convertible bonds in capital raising, to alert regulators when loan absorption needs to be activated, minimizing need for point-in-time stress tests; for compliance in investment management, to execute reporting and facilitate the automated creation of periodic filings; for proxy voting in investment management, to automate end-to-end confirmation by the validation of votes, increasing transparency; for asset rehypothecation in market provisioning, to enable the real-time reporting of asset history and the enforcement of regulatory constraints, including facilitating clearing and settlement to eliminate need for intermediaries and reduce settlement time; for equity post-trade in market provisioning, to simultaneously transfer equity and cash in real time, reducing the likelihood of errors impacting settlement.The policy implications introduced by decentralization require that economists and lawyers understand this technological shift, and more importantly, the risks related to tangible (e.g consensus selection as a security choice) and intangible (e.g contract incompleteness/code errors) factors. We demonstrate a decision making method where utility is measured by “levels of trust” using artifacts from fields finance applied to a portfolio of institutional smart contract companies. Expected utility is measured by mapping a demand vector field (the attention level), and funding by plotting a scalar field (the investment level); the associated risk exposure is implicit in the consensus mechanism tradeoffs, according to the progression of firms represented in the system of coordinates. The goal is to provide a device for portfolio analysis and construction. The data comes from a panel of 200 million internet users, and investment databases. The result is a comprehensive and scalable view of decentralised portfolios, inspired in the methods of behavioural finance.
Marco Conoscenti, Antonio Vetrò, Juan Carlos De Martin
In the Internet of Things (IoT) scenario, the block-chain and, in general, Peer-to-Peer approaches could play an important role in the development of decentralized and dataintensive applications running on billion of devices, preserving the privacy of the users. Our research goal is to understand whether the blockchain and Peer-to-Peer approaches can be employed to foster a decentralized and private-by-design IoT. As a first step in our research process, we conducted a Systematic Literature Review on the blockchain to gather knowledge on the current uses of this technology and to document its current degree of integrity, anonymity and adaptability. We found 18 use cases of blockchain in the literature. Four of these use cases are explicitly designed for IoT. We also found some use cases that are designed for a private-by-design data management. We also found several issues in the integrity, anonymity and adaptability. Regarding anonymity, we found that in the blockchain only pseudonymity is guaranteed. Regarding adaptability and integrity, we discovered that the integrity of the blockchain largely depends on the high difficulty of the Proof-of-Work and on the large number of honest miners, but at the same time a difficult Proof-of-Work limits the adaptability. We documented and categorized the current uses of the blockchain, and provided a few recommendations for future work to address the above-mentioned issues.
In this paper, we engage in a philosophical investigation of how blockchain technologies such as cryptocurrencies can mediate our social world. Emerging blockchain-based decentralised applications have the potential to transform our financial system, our bureaucracies and models of governance. We construct an ontological framework of “narrative technologies” that allows us to show how these technologies, like texts, can configure our social reality. Drawing from the work of Ricoeur and responding to the works of Searle, in postphenomenology and STS, we show how blockchain technologies bring about a process of emplotment: an organisation of characters and events. First, we show how blockchain technologies actively configure plots such as financial transactions by rendering them increasingly rigid. Secondly, we show how they configure abstractions from the world of action, by replacing human interactions with automated code. Third, we investigate the role of people’s interpretative distances towards blockchain technologies: discussing the importance of greater public involvement with their application in different realms of social life.
Juri Mattila, Timo Seppälä, Catarina Naucler, Riitta Stahl · 7 authors
To encourage public discourse on blockchain use case development, this paper provides a pragmatic view on how to develop and to describe blockchain use cases. We approach the issue by developing a tentative use case for autonomous machine-to-machine transactions of electricity in a housing society environment through an iterative process with stakeholders in the energy industry. We proceed by evaluating the outlined concept and its technical specifications against six criteria for a sensible blockchain use case, as identified by blockchain industry specialists. Finally, we conclude with observations and discussion on the use case development process, and its future steps.
Blockchain is a decentralized transaction and data management technology developed first for Bitcoin cryptocurrency. The interest in Blockchain technology has been increasing since the idea was coined in 2008. The reason for the interest in Blockchain is its central attributes that provide security, anonymity and data integrity without any third party organization in control of the transactions, and therefore it creates interesting research areas, especially from the perspective of technical challenges and limitations. In this research, we have conducted a systematic mapping study with the goal of collecting all relevant research on Blockchain technology. Our objective is to understand the current research topics, challenges and future directions regarding Blockchain technology from the technical perspective. We have extracted 41 primary papers from scientific databases. The results show that focus in over 80% of the papers is on Bitcoin system and less than 20% deals with other Blockchain applications including e.g. smart contracts and licensing. The majority of research is focusing on revealing and improving limitations of Blockchain from privacy and security perspectives, but many of the proposed solutions lack concrete evaluation on their effectiveness. Many other Blockchain scalability related challenges including throughput and latency have been left unstudied. On the basis of this study, recommendations on future research directions are provided for researchers.
Bitcoin is a decentralised currency and payment system that seeks to eliminate the need for trusted authorities. It relies on a peer-to-peer network and cryptographic protocols to perform the functions of traditional financial intermediaries, such as verifying transactions and preserving the integrity of the system. This article examines the political economy of Bitcoin, in light of a recent dispute that divided the Bitcoin community with regard to a seemingly simple technical issue: whether or not to increase the block size of the Bitcoin blockchain. By looking at the socio-technical constructs of Bitcoin, the article distinguishes between two distinct coordination mechanisms: governance by the infrastructure (achieved via the Bitcoin protocol) and governance of the infrastructure (managed by the community of developers and other stakeholders). It then analyses the invisible politics inherent in these two mechanisms, which together display a highly technocratic power structure. On the one hand, as an attempt to be self-governing and self-sustaining, the Bitcoin network exhibits a strong market-driven approach to social trust and coordination, which has been embedded directly into the technical protocol. On the other hand, despite being an open source project, the development and maintenance of the Bitcoin code ultimately relies on a small core of highly skilled developers who play a key role in the design of the platform.
Abstract During the last decade, the development of Information and Communication Technologies (ICT) has led the world into a new era of innovative technologies that can provide effective responses to human concerns. In developed countries, the profitability motivation has imposed Service‐Oriented Architectures (SOA) in enterprises as a better way to design information systems capable of taking into account inter‐organizational cooperation mechanisms while preserving autonomy of the latter. Those Service‐Oriented Architectures did not stop at the doors of public administrations. Thus, several specifications have been made to adapt them to the peculiarities of public governance. But these models are not always able to respond effectively to the concerns of governments in developing countries particularly when they are structurally and territorially decentralized. Therefore, we propose a more suitable model to this type of e‐governance. We will later see how our model can be more suitable for the organization of remote and secured fairground courts in Cameroon to address constraints related to finance, time and security that these courts currently impose.
…the more it is adopted by a mass of users, the more it is secured (Counterparty). Inwieweit, ob und welche Kryptowährung schlussendlich langfristig weltweit akzeptiert wird, ist Thema zahlreicher und vielfältiger Diskussionen. Innerhalb der verschiedenen Kryptowährungen hat das Bitcoin‐System eindeutig einen massiven Vorsprung. Vorstellbar ist jedoch auch analog des Konzepts des freien Wettbewerbs unter den Währungen vom österreichischen Ökonomen Friedrich August von Hayek ein Nebeneinander verschiedenster Kryptowährungen. Jeder dieser Kryptowährungen könnte ein Wert durch eine Gruppe von Menschen, die sich dafür entscheiden, dieser Währung zu vertrauen, beigemessen werden. Diese Gruppe kann durch gemeinsame demografische, geografische oder ethische Interessen definiert werden. Damit Kryptowährungen jedoch von der breiten Öffentlichkeit genutzt werden, bedarf es noch Vor allem aber braucht es Akzeptanz und Nutzung der Kryptowährungen in der breiten Öffentlichkeit und hier liefert die Gratis‐Bitcoin‐Ökosphäre, bestehend aus Hunderten Faucet‐Webseiten, einen großen Beitrag.
Talent hits a target others cannot hit, Genius hits a target others cannot see (Arthur Schopenhauer). Bereits 2013 begannen sich neue Kryptowährungsunternehmen zu formieren, die sich von der Wild‐West‐Mentalität der Mt. Gox und der Silk Road abgrenzen wollten. Die entstehenden Kryptowährungsdienstleister – großteils finanziert von US Venture Capital-Gebern – unterwerfen sich teils freiwillig den Know Your Customer (KYC) Bestimmungen der Finanzaufsichtsbehören. Gleichzeitig entstanden Kryptowährungsstartups, deren Gründer die Meinung vertraten, dass eine Kooperation mit den Finanzinstituten bzw. den Fiatwährungen statt Konfrontation wirtschaftlich sinnvoller wäre und damit begannen, neue Kryptotransaktionssysteme mit dieser Zielrichtung zu entwickeln (beispielsweise Ripple Lab vgl. auch Abschn. 14.2.). Zeitgleich – auch hier spielten die Interessen der investierten Venture-Capital-Geber eine wichtige Rolle – begannen Startups intensiv am Einsatz des Bitcoin‐Transaktionssystems für alternative Zwecke zu arbeiten. Dabei wird unterschieden in:
Die Möglichkeit der Programmierbarkeit des Bitcoins ist fast ein nachträglicher Einfall, auch wenn Sidechain‐Vorschläge diese Programmierbarkeit ein wenig leichter machen wollen und es bereits Altcoins mit verschiedenen spezifischen Anwendungen gibt. Im Gegensatz dazu wurde das Kryptowährungstechnologieprojekt Ethereum von Vitalik Buterin, seinem Erfinder, von Tag 1 als Software‐Entwicklungsplattform für dezentrale Applikationen konzipiert, und ihre Blockchain wurde speziell entwickelt, um die Ausführung dieser dezentralen Apps (auch Dapps genannt) zu unterstützen. Vitalik Buterin, 1994 in Russland geboren, war vor der Gründung von Ethereum auch involviert in die Entwicklungsprojekte Colored Coins und Mastercoins. Er gewann 2014 den "World Technology Award" und ein Stipendium des Risikokapitalgebers Peter Thiel. In dem Diskussionspapier zu Ethereum skizzierte Buterin vor allem die Grenzen einer Programmierbarkeit der Bitcoin‐Blockchain und schlug die Erstellung einer neuen komplett programmierbaren Blockchain mit einer turing‐vollständigen Programmiersprache vor. Anders als andere Blockchain‐Projekte soll die Ethereum Software nicht nur für einen Zweck nutzbar sein – sondern soll die Basis für die Erarbeitung aller möglichen Arten von Lösungen sein und dabei die Umsetzung intelligenter Verträge (Smart Contracts) ebenso erfassen als auch die Ethereum‐spezifische Idee von dezentralen autonomen Organisationen (DAOs).
We present a novel institutional perspective on the distributed consensus and ledger technology known as blockchain. We discuss the concept of Distributed Autonomous Institutions that are able to facilitate global interactions, contracts, and value transfers, all of which are achieved without the need for the human-based third party trust. We argue that due to its properties and design blockchain technology represents a disruptive change in the modelling paradigms of socio-technical systems. Distributed trust and consensus mechanisms offered by blockchain technology represent a novel, qualitatively different, phenomenon. We present the general design principles, stakeholders, the dynamics between those stakeholders, the incentive models, and the consensus protocols currently used in blockchains, before highlighting the potential of blockchain technology to develop distributed autonomous institutions. We conclude with a discussion of challenges associated with the adoption of blockchain technology.