Blockchain Papers

Fernando Zunzunegui

No abstract is available for this record.

Peter Vinella, Jeanette Jin

No abstract is available for this record.

Zhixuan Zhou, Bohui Shen

Cryptocurrency has been extensively studied as a decentralized financial technology built on blockchain. However, there is a lack of understanding of user experience with cryptocurrency exchanges, the main means for novice users to interact with cryptocurrency. We conduct a qualitative study to provide a panoramic view of user experience and security perception of exchanges. All 15 Chinese participants mainly use centralized exchanges (CEX) instead of decentralized exchanges (DEX) to trade decentralized cryptocurrency, which is paradoxical. A closer examination reveals that CEXes provide better usability and charge lower transaction fee than DEXes. Country-specific security perceptions are observed. Though DEXes provide better anonymity and privacy protection, and are free of governmental regulation, these are not necessary features for many participants. Based on the findings, we propose design implications to make cryptocurrency trading more decentralized.

Luis Angel D. Bathen, Divyesh Jadav

Abstract The emergence of crypto currencies such as Bitcoin and Ethereum have shown the value in decentralized technologies. The idea of having 24/7 access to programmable money peaked the interest in the field, and as a by-product, came the realization that the same core technologies that enable programmable dog money, can enable highly-available DNS services, highly-available storage services, 24/7 asset exchanges, and peer-to-peer marketplaces to name a few. This paper explores the use of smart contracts in multi-cloud environments in order to facilitate business processes across multiple providers speaking different languages in terms of policies, best practices, APIs, and SLAs.

Michelle Pfister, Niclas Kannengießer, Ali Sunyaev

Abstract Token economy instances can be built on a variety of protocols, such as distributed ledger technology (DLT) protocols. DLT protocols are used to operate DLT systems that perform, in a decentralized way, several tasks (e.g., the prevention of double-spending) that are usually handled by central actors, such as banks. Using DLT can be subject to challenges in terms of interoperability between DLT systems (e.g., due to incompatible interfaces), limiting the dynamics in token economy instances, for example, regarding collaboration between organizations operating on separate distributed ledgers. Cross-ledger interoperability (CLI) systems can connect DLT systems. However, it is unclear how the degree of decentralization (i.e., technical and political) of CLI systems affects token economy instances that comprise multiple DLT systems. To better understand such effects, we describe patterns for the implementation of CLI systems and present our notion of political decentralization in token economy instances using CLI. We describe potential implications of CLI patterns and governance mechanisms on token economy instances. Drawing from those implications, we discuss balancing centralization and decentralization in token economy instances that comprise multiple DLT and CLI systems.

Davit Marikyan, Savvas Papagiannidis, Omer Rana, Rajiv Ranjan

The adoption of blockchain-based technologies by organisations can bring benefits in terms of firms' profitability, productivity and efficiency, making companies rethink their existing business models. However, as the technology is still developing and the research on the implications of the different types of blockchain networks (i.e. public, private, consortium) is scarce, their role in business model innovation requires closer attention. To address this gap, the paper provides a conceptual insight into the role of blockchain technology in companies with different value configurations by examining the technological conditions that can impact business models and probing the role of technology benefits in driving company value. The analysis contributes to the literature by discussing the business implications of innovative technologies and uncovering their positive and negative consequences for the value creation, delivery and capture activities. Such analysis sheds light on the functions of blockchains that have a differentiating impact on business processes. Also, the paper puts forward managerial implications by discussing the paths of business model innovation using blockchain technologies.

Manuel Ammann, Tom Burdorf, Luca J. Liebi, Sebastian Stöckl

No abstract is available for this record.

Hong Zhang, Hongchang Wang, Amit Mehra, Eric Zheng

No abstract is available for this record.

Vicki Wei Tang, Qingquan Zhang

No abstract is available for this record.

Kristof Lommers, Jack Kim, Mohamed Baioumy

No abstract is available for this record.

Kevin Mei, Michael Sockin

We study a token-based platform where users choose between adopting the platform’s service and speculating on its native token. While both adopters and speculators earn the token’s capital gain, adopters also incur a participation cost to obtain a noisy service benefit enhanced by network effects. This tension between adoption and speculation can suppress participation, halt learning, and trigger collapse even when expected fundamentals are strong. We characterize the participation threshold, show how token-price volatility expands the collapse region, and identify the resulting learning traps. The model implies that inflation and adopter-targeted incentives support participation, whereas subsidies to speculators increase fragility.

Eric Budish

No abstract is available for this record.

Jun Aoyagi, Yuki Ito

No abstract is available for this record.

Henrik Axelsen, Johannes Rude Jensen, Omri Ross

The IS discourse on the potential of distributed ledger technology (DLT) in the financial services has grown at a tremendous pace in recent years. Yet, little has been said about the related implications for the costly and highly regulated process of compliance reporting. Working with a group of representatives from industry and regulatory authorities, we employ the design science research methodology (DSR) in the design, development, and evaluation of an artefact, enabling the automated collection and enrichment of transactional data. Our findings indicate that DLT may facilitate the automation of key compliance processes through the implementation of a "pull-model", in which regulators can access compliance data in near real-time to stage aggregate exposures at the supranational level. Generalizing our preliminary results, we present four propositions on the implications of DLT in compliance. The findings contribute new practical insights on the topic of compliance to the growing IS discourse on DLT.

Christos Makridis, Gordon Liao

There is a large body of empirical and theoretical literature on the effects of technological change on individuals, labor markets, and overall economic activity. Theories of skill-biased technical change (SBTC) suggest that technology increases the earnings power of skilled workers, but substitutes for less skilled workers. Distributed ledger technologies (DLTs) provide a new context for examining and understanding the impact of technology change on labor, competition, and economic outcomes. This paper explores the theoretical frameworks through which DLTs could enhance economic mobility and provides examples from several areas, including: i) the creation of new jobs and higher value-added jobs, and the modularization of complex tasks; ii) improvements in the way people learn and acquire human capital; iii) increased competition in the marketplace; and iv) more inclusive access to financial services with fewer intermediaries.

Christoph Müller-Bloch, Jonas Valbjørn Andersen, Jason Spasovski, Jungpil Hahn

Blockchain systems allow for securely keeping shared records of transactions in a decentralized way. This is enabled by algorithms called consensus mechanisms. Proof-of-work is the most prominent consensus mechanism, but environmentally unsustainable. Here, we focus on proof-of-stake, its best-known alternative. Importantly, decentralized decision-making power is not an inherent feature of blockchain systems, but a technological possibility. Numerous security incidents illustrate that decentralized control cannot be taken for granted. We therefore study how key parameters affect the degree of decentralization in proof-of-stake blockchain systems. Based on a real-world implementation of a proof-of-stake blockchain system, we conduct agent-based simulations to study how a range of parameters impact decentralization. The results suggest that high numbers of initial potential validator nodes, large transactions, a high number of transactions, and a very high or very low positive validator network growth rate increase decentralization. We find weak support for an impact of changes in transaction fees and initial stake distributions. Our study highlights how blockchain challenges our understanding of decentralization in information systems research, and contributes to understanding the governance mechanisms that lead to decentralization in proof-of-stake blockchain systems as well as to designing proof-of-stake blockchain systems that are prone to decentralization and therefore more secure.

Alessio Castello, Grégory Gadzinski

The benefits offered by cryptocurrencies are a great many: transaction cost and speed, security and transparency, to name a few. Yet, there is also a major drawback represented by their extremely high volatility. Stablecoins offer an ideal solution since they preserve all the advantages of blockchain-based currencies, while reducing considerably the volatility issue. Currently, stablecoins are almost exclusively pegged to the US Dollar and secured by non-crypto assets held in account at custodial institutions. In this article, we present the design of a decentralized organization aimed at issuing stablecoins backed by crypto-assets stored on-chain and pegged to assets different from fiat money. Our model offers several advantages, in particular, it allows the issuance of stablecoins in a trustless, permission-less and non-custodial environment.

Michael Zargham, Kelsie Nabben

The concept of "Decentralized Autonomous Organization" has been popularized as part of the "Web 3.0" movement. This movement is characterized by digital infrastructures that are 'decentralized' in network architecture and permissionless to use. Decentralized autonomous organizations, referred to as DAOs, are a digital expression of the political will to self-organize. The granular entanglement of social and technical concepts makes it challenging to identify a historical precedent for DAOs. Yet, literature review and analysis reveals that this particular entanglement of information systems and self-organization is consistent with longstanding conceptual development and practice in the field of cybernetics. Drawing on Stafford Beer's Viable Systems Model, this piece bridges DAOs and cybernetics via two main principles of organization: viability and purpose. Viability is a property of a system such that it has sufficient adaptive capacity to thrive in the face of change; adaptive capacity is characterized according to Ross Ashby's concept of 'variety'. Purpose is the ability to define and collectively pursue a goal in the sense of feedback control systems. Building on the control theoretic concepts of observability, controllability, and reachability, we examine the 'governance surface' of an organization and the associated trade-offs between resilience and robustness that emerge in governance surface design. We propose that this trade-off can be addressed with a constitutional archetype whereby an organization's ability to update its code is constrained but not eliminated. A case study from a DAO known as '1Hive' is explored to demonstrate this archetype in action. We consider the limitations of the cybernetics perspective by emphasizing the subjectivity of the governance designer. Finally, we conclude with future research directions.

Benjamin M. Blau, Shardul Vikram

With blockchain technology as its foundation, the rise of Web3 and associated token economics promises unprecedented and fundamental changes in areas of ownership, governance, finance and engagement. The power of true ownership of digital assets, immutability and portability across worlds, platforms, and communities is changing how individuals and companies engage. Smart contracts enable new programmable commercial constructs which provide coded guarantees without the notion of a human guarantor. These powerful concepts of immutable record-keeping, true ownership, guaranteed transaction execution lay the foundation of the future of a Decentralized Customer Experience (DCX). This paradigm shift opens-up untapped opportunities and addressable markets in the CX space such as the empowerment of consumers in decentralized autonomous organizations, new business and commercial models, brand managemet & lifetime loyalty (aka. ‘super fan’), community-intrinsic marketing, and enablement & certification. This leads to industry-specific value cases and their monetization in healthcare, insurance, retail, consumer goods, and high-tech and the software industry. This article proposes the definition of a new market category called DCX unlocked by the impact of Web3 and blockchain technology onto the customer experience space and assesses new addressable markets spanning across almost any industry.

Evelyne Bischof, Alex Botezatu, Sergey Jakimov, Ilya Suharenko · 9 authors

Decentralized autonomous organizations (DAO) launched on a blockchain and governed by a smart contract promises to bring self-organization to a new technological level. Crisis management has no standard decentralized solution within DAO yet. A central authority is a natural component due to compliance reasons in certain domains, for example, special-purpose financing, in which the DAO governance model could be reasonably applied. More generally, a centralized DAO representative could streamline implementing DAO decisions that involve interactions with legacy systems. The article presents a perspective of modern technologies for organizing a foundation for special-purpose financing and considers longevity as a model example of the purpose.

Paul P. Momtaz

No abstract is available for this record.

Darcy W E Allen, Chris Berg, Aaron M. Lane

A cryptocurrency token airdrop is a novel means of distributing rights over a blockchain project to a community of users and owners for free. The market value of these airdrop giveaways is often upwards of hundreds of millions of dollars. This paper considers why projects might choose this unusual and costly means of token distribution. It considers a diverse selection of high-profile airdrops as case studies between 2014 and 2022. This is the first comprehensive analysis of the rationales and mechanisms of Web3 token airdrops. We find that two primary rationales for airdrops are marketing (to attract new users and to maintain a community) and decentralisation of ownership and control of a project (building community, providing regulatory protection, and enhancing security). Additional rationales include creating liquid public markets and taxation treatment of token distribution. The paper contributes to an understanding of business practice and strategy in the emerging cryptocurrency and blockchain industry.

Elie Kapengut, Bruce Mizrach

On September 15, 2022, the Ethereum network adopted a proof-of-stake (PoS) consensus mechanism. We study the impact on the network and competing platforms in a two month event window around the Beacon chain merge. We find that the transition to PoS has reduced energy consumption by 99.98%. Miners have not transformed into validators, and total block reward income (in USD) has fallen by 97%, though transaction fees (in ETH) for Ether have increased nearly 10%. The Herfindahl index for the top 10 is 1,009; the network is 19% less concentrated after the merge. Ethereum supply growth has been deflationary since the merge. The time between consecutive blocks is now steady at 12 seconds and transactions per day are up 7.0%. On Polygon, Matic fees rose but token fees fell. Polygon also slows, processing 3.3% fewer transactions per day. Solana's fees fall by $0.0003, and transactions per day are down 48%. Stablecoin transfer volumes fall on Ethereum and Polygon, but rise on Solana.

Fernando Álvarez, David Argente, Diana Van Patten

A currency's essential feature is to be a medium of exchange. We leverage a quasi-natural experiment-El Salvador as the rst country to make bitcoin legal tender-to study a cryptocurrency's potential to be used in daily transactions. The government also launched and provided incentives to download and use a digital wallet named Chivo, which shares features with Central Bank Digital Currencies (CBDCs) and allows users to trade bitcoin and dollars. Were Chivo Wallet and bitcoin actually adopted after this "big push"? Conducting a representative face-to-face survey and relying on blockchain data to obtain all Chivo transactions, we document how usage of digital payments and bitcoin is low, concentrated, and has been decreasing over time. We nd that privacy concerns are key barriers to adoption, which speaks to a policy debate on crypto and CBDCs that has had anonymity at its core. We also estimate the technology's adoption cost and its network externalities.