Blockchain Papers

Simon Gleeson

No abstract is available for this record.

Dirk Otto Beerbaum, Seppo Ikäheimo, Julia M. Puaschunder, David Derichs

No abstract is available for this record.

Efstathios Papanikolaou, Jannis Angelis, Vassilis Moustakis

The significance of supply chain collaboration, communication and data exchange along with the importance of the relationships established among interconnected parties in a digital connected world, indicates the power of Distributed Ledger Technology (DLT) to transform the business model. In our study we set out to advance our understanding on how DLT impacts the business model. Since DLT is in its primitive stage of development, most studies focus into the implementation aspect of the technology and limited research has been done into the business model implications. Our research closes that knowledge gap in the literature by answering the question of “What are the secondary effects in business model that stem from DLT adoption?” Due to the inherent characteristics of the DLT, in respect to its network facet and the network effects created, we argue for a business ecosystem approach for our research. The main contributions of this paper are twofold. It presents implicit effects on business model beyond the direct trust and data openness aspects, and it also provides managers and scholars a process model for assessing how each implicit effect impacts the various business model dimensions.

Moutaz Haddara, Julie Norveel, M. Langseth

This paper surveys the current status of blockchain technologies integration and its potentials with enterprise systems’ (ES). The blockchain technology has received substantial attention since the recent cryptocurrency-boom. The corporate world seeks to stay on the blockchain-train by exploring how they can benefit from the evolving technology and platforms. Hence, this research explores the capabilities and potentials of blockchain technology illustrated in the extant literature and investigates how it can reinforce, and be integrated with enterprise systems through semi-structured interviews with subject matter experts. The literature and collected data were classified into four components of blockchain technologies; identity, assets, logistics, and transactions. Our main findings suggest that there is scarce literature on blockchain integration with ES. Nevertheless, there is a huge potential for this integration, specifically on the transactions, identity, and logistics dimensions. In addition, our interview results suggest that blockchains can reinforce ES by accomplishing a single source of truth, and a common environment for shared information amongst a larger scope of actors and organizations.

Jan Kregel

No abstract is available for this record.

Daniel Beverungen, Sebastian Overhage, Albert Gorlick', Pascal Moerchel · 5 authors

A blockchain features an immutable, encrypted, and distributed ledger that enables transactions even if trust and trusted intermediaries are absent. Despite research on their technological properties, few papers are on record to demonstrate (a) what business scenarios blockchains can enable and (b) under which circumstances they outperform rival technologies. This shortfall of design knowledge obscures blockchains’ value proposition, its conceptual limitations, and its positioning towards rival classes of IT artifacts. We set out to design a blockchain-based IS that enables pay-per-use business models for industrial equipment—a business model that suffers from high transaction costs and complex agency dilemma caused by asymmetric information. We demonstrate how smart contracts deployed in a blockchain can level these information asymmetries. However, we also find that blockchains will only outperform rival technologies if the business scenario fulfils a set of specific properties, narrowing down the scope of application scenarios for applying blockchains substantially.

Elena Sinelnikova-Muryleva

No abstract is available for this record.

Katrin Tinn, Christophe Dubach

No abstract is available for this record.

Wei Du, Zhaoli Jia, Lei Zhu

No abstract is available for this record.

Jingjing Jiang, Aobo Lyu

This study aims to solve the credit problems in the supply chain commodity and currency circulation links from the perspective of the ledger, while the game model method has been adopted. The research firstly reviews the relationship between distributed ledger technology and the essential functions of currency. Then, by constructing two-agent single-period and multi-period game models in the entire supply chain, the researchers analysed the incentive mechanism and equilibrium solution of distributed nodes of Central Bank Digital Currency (CBDC). The results of this study include the incentive mechanism and optimization of distributed nodes based on licensed distributed ledger technology, which is an important issue that CBDC faces when performing currency functions. The implications of this study mainly cover the limitations of the underlying technology of the public chain and its reward mechanism in the supply chain management and provide support for the rationality of the CBDC issuance mechanism based on state-owned commercial banks, which provides a reference for the CBDC practice. The main value of the research not only serves the decision-making department of the CBDC issuance but also provides ideas on the operation mode of digital currency for the field of digital currency research.

Murdoch J. Gabbay, Arvid Jakobsson, Kristina Sojakova

Once you have invented digital money, you may need a ledger to track who owns what -- and an interface to that ledger so that users of your money can transact. On the Tezos blockchain this implies: a smart contract (distributed program), storing in its state a ledger to map owner addresses to token quantities, and standardised entrypoints to transact on accounts. A bank does a similar job -- it maps account numbers to account quantities and permits users to transact -- but in return the bank demands trust, it incurs expense to maintain a centralised server and staff, it uses a proprietary interface ... and it may speculate using your money and/or display rent-seeking behaviour. A blockchain ledger is by design decentralised, inexpensive, open, and it won't just bet your tokens on risky derivatives (unless you ask). The FA1.2 standard is an open standard for ledger-keeping smart contracts on the Tezos blockchain. Several FA1.2 implementations already exist. Or do they? Is the standard sensible and complete? Are the implementations correct? And what are they implementations \emph{of}? The FA1.2 standard is written in English, a specification language favoured by wet human brains but notorious for its incompleteness and ambiguity when rendered into dry and unforgiving code. In this paper we report on a formalisation of the FA1.2 standard as a Coq specification, and on a formal verification of three FA1.2-compliant smart contracts with respect to that specification. Errors were found and ambiguities were resolved; but also, there now exists a \emph{mathematically precise} and battle-tested specification of the FA1.2 ledger standard. We will describe FA1.2 itself, outline the structure of the Coq theories -- which in itself captures some non-trivial and novel design decisions of the development -- and review the detailed verification of the implementations.

Geoffrey Goodell, Hazem Danny Al-Nakib, Paolo Tasca

Objective : to present the new approach to perform monetary transactions with digital currency. Methods : abstract-logical, analytical methods. Results : in recent years, electronic retail payment mechanisms, especially e-commerce and card payments at the point of sale, have increasingly replaced cash in many developed countries. As a result, societies are losing a critical public retail payment option, and retail consumers are losing important rights associated with using cash. To address this concern, we propose an approach to digital currency that would allow people without banking relationships to transact electronically and privately, including both e-commerce purchases and point-of-sale purchases that are required to be cashless. The article shows the advantages of cash payments compared to non-cash ones and defines the possibility to transform these advantages into the central bank digital currencies. The disputable issues of commercial banks development under the spread of digital currencies are discussed. The architecture of digital currencies is described, including distributed ledgers technology. It was shown that, for the digital currency to function effectively, it is necessary to include the privacy of end-users into its architecture; measures to achieve that are determined. Scientific novelty : the approached proposed in the article should be used to develop the digital currencies infrastructure. It should be government-backed, privately-operated and ensure that every transaction is registered by a bank or money services business, relying upon non-custodial wallets backed by privacy-enhancing technology, such as blind signatures or zero-knowledge proofs, to ensure that transaction counterparties are not revealed. This approach can also facilitate more efficient and transparent clearing, settlement, and management of systemic risk. We argue that our system can restore and preserve the salient features of cash, including privacy, owner-custodianship, fungibility, and accessibility, while also preserving fractional reserve banking and the existing two-tiered banking system. Practical significance : the proposed approach can be applied in the practical organization of perform monetary transactions using digital currencies. The article was first published in English language by Future Internet. For more information please contact the editorial office. For original publication: Goodell G., Al-Nakib H. D., Tasca P. A Digital Currency Architecture for Privacy and Owner-Custodianship, Future Internet, 2021, 13, 130. https://doi.org/10.3390/fi13050130 Publication URL: https://www.mdpi.com/1999-5903/13/5/130

William Lehr

No abstract is available for this record.

Hugo Benedetti, Christian Caceres, Luis Álvaro Abarzúa

Abstract Utility tokens are digital currencies that serve as the only accepted means of payment for services and products provided through a blockchain-based platform. They finance the development of their product or service, reward and incentivize early adopters and network promoters, align economic incentives between supply, demand, and the marketplace, and enhance network effects among all participants. Their tokenomic design consists of the rules and regulations governing a token’s issuance, distribution, allocation, and potential destruction. The chapter describes utility tokens, compares them with other types of cryptoassets, and discusses their value creation process and role in network economics. It also reviews common tokenomic designs, discusses different regulatory approaches, and provides examples of current utility token applications in decentralized applications such as decentralized finance and virtual reality platforms (metaverses).

Chika A. Anisiuba, Obiamaka P. Egbo, Felix C. Alio, Chuka Uzoma Ifediora · 7 authors

We analyzed cryptocurrency dynamics in the global U.S. dollar–denominated market and the emerging market economies (EMEs) with a view to ascertaining whether activities in these markets are predominantly shaped by reinforcement or substitution effect. Cryptocurrencies analyzed include the Bitcoins, Ethereum, Litecoin, Steller, Bitcoin Cash, and USD Tether. The results suggest that, on average, correlation between digital assets in the cryptocurrencies’ ecosystem is positive. However, there is evidence of an outlier with respect to the USD Tether (USDT) in the global market, revealing that the USDT is negatively associated with all other cryptocurrencies. This is supported by the dynamic regression results that provided evidence of reinforcement effect in favor of the USDT in the global crypto market, thus confirming the status of the USDT as “Stablecoin” as it is pegged 1:1 to USD. In the global market context, the results also revealed that USDT/USD returns had identical outliers that could portend lesser chances of extreme gains or losses compared with suggestions of extreme gains or losses in the EMEs. Furthermore, USDT did not seem to have similar evolution in the EMEs where it had relatively marginal influence in the markets. The vector error correction (VEC) estimate showed mixed results between Altcoins in all the markets; moreover, our finding showed that reinforcement effects hold in favor of Steller (XLM) both in the Russian ruble and Indian rupee crypto markets, whereas the Chinese yuan crypto market was predominantly characterized by substitution effect in favor of Bitcoin.

Xiaotong Sun

No abstract is available for this record.

Kentaro Sako, Shin’ichiro Matsuo, Sachin Meier

Fairness is an important trait of open, free markets. Ethereum is a platform meant to enable digital, decentralized markets. Though many researchers debate the market's fairness, there are few discussions around the fairness of automated markets, such as those hosted on Ethereum. In this paper, using pilot studies, we consider unfair factors caused by adding the program. Because CryptoKitties is one of the major blockchain-based games and has been in operation for an extended period of time, we focus on its market to examine fairness. As a result, we concluded that a gene determination algorithm in this game has little randomness, and a significant advantage to gain profit is given to players who know its bias over those who do not. We state incompleteness and impact of the algorithm and other factors. Besides, we suppose countermeasures to reduce CryptoKitties' unfairness as a market.

John Crawford, Lev Menand, Morgan Ricks

We are entering a new monetary era. Central banks around the world— spurred by the development of privately controlled digital currencies as well as competition from other central banks—have been studying, building, and, in some cases, issuing central bank digital currency (“CBDC”). Although digital fiat currency is one of the hottest topics in macroeconomics and central banking today, the discussion has largely overlooked the most straightforward and appealing strategy for implementing a U.S. dollar-based CBDC: expanding access to bank accounts that the Federal Reserve already offers to a small, favored set of clients. These accounts consist of entries in a digital ledger—like other digital currencies—and are extremely desirable, offering high interest, instant payments, and full government backing with no limit. But U.S. law restricts these accounts to an exclusive clientele consisting primarily of banks. Privileged access to these accounts creates a striking asymmetry at the core of our monetary framework: government-issued physical currency is available to all, but government-issued digital currency (in the form of central bank accounts) is not. This dichotomy is unwarranted. Congress should authorize the Federal Reserve to give everyone—individuals, businesses, and institutions—the option to maintain accounts at the central bank. We call these accounts FedAccounts. Unlike the CBDC approaches currently under discussion, which would use complicated and inefficient distributed ledger technology and be walled off from the existing system of money and payments, FedAccounts would be seamlessly interoperable with the mainstream payment system, relying on technologies that the Federal Reserve has used for decades.

Dirk Andreas Zetzsche, Linn Anker-Sørensen, Maria Lucia Passador, Andreas Wehrli

Financial law and regulation have, to date, assumed that regulated activities and functions are concentrated in a single legal entity responsible and accountable for operations and compliance. Even with regard to financial market infrastructure where the regulatory perspective acknowledges the need for interoperability of many entities as a system, each entity is subject to its own rules and regulations, and can thus meet its own compliance requirements independent of other system participants. The entity-focused regulatory paradigm is under pressure in the world of DLT-based payment arrangements where some ledgers, and thus the performance of the services as such, are distributed. DLT arrangements could provide an alternative to the traditional reliance on a mutually trusted central entity to transfer funds and enable the creation of new foundational infrastructures by distributing technical functions or linking existing systems. As such, we identify and outline concepts for use cases where DLT is potentially improving the efficiency of cross-border payments, namely a Best Execution DLT, a DLT application for a Network of Central Banks, a DLT as an AML/KYC utility, as well as DLT arrangements for an Identity Platform, a Small Payments Platform and, finally, an Interoperability Platform connecting multiple closed-loop and proprietary banking systems. Despite the wide-ranging interest in DLT-based payment systems, research so far has focused on technical concepts and lacked legal details. This article seeks to fill this gap by providing an initial analysis of the legal challenges related to DLT-based payment systems. From a legal perspective, the distribution of functions in DLTs comes with new risks created from the joint performance of services and functions as main characteristic of a distributed ledger, and the need for additional agreements, ongoing coordination across, and governance arrangements among the nodes. Further, in a cross-border context, multiple regulators and courts of various countries (asking for compliance with their own set of rules and regular reporting) will be involved. All of these must decide whether for compliance with any single rule they look at the DLT as a whole (herein called ‘the ledger perspective’) or each individual node (that is each institution participating in the DLT, herein called ‘the node perspective’). Moreover, financial and private law must provide for risk allocation, liability, responsibility and accountability for all legal obligations related to each function and activity. This article examines the extent to which the ledger perspective or the node perspective should prevail against the backdrop of a range of DLT use cases, resulting in policy recommendations for regulators. In this article, we propose the adoption of what we call an enabling approach for payment systems: ledger operators must specify in a Plan of Operations subject to regulatory approval to which rights and obligations the ledger perspective applies; in the absence of such a stipulation, rules apply based on the node perspective. However, for systemic risk controls, AML/CFT, data protection and governance, as well as DLT governance, we propose a reversed default rule in which the ledger perspective prevails in the absence of rules stipulating that the node perspective applies. Finally, in private law matters, we propose protecting consumers and SME clients through a standardised payment services contract structure, without mandating details.

Craig Calcaterra, Wulf A. Kaal

No abstract is available for this record.

Samuel Häfner

No abstract is available for this record.

Dionysis Xenakis, Anastasia Tsiota, Christos-Thrasyvoulos Koulis, Christos Xenakis · 5 authors

The new “status quo” created by the emerging integration of Multi-Access Edge Computing (MEC) and Radio Access Network (RAN) infrastructures, combined with the openness of the 5G service market, have set new standards on how the multitude of 5G service domains should be incentivized and coordinated to comply with the performance requirements set on a per session basis. In this paper, we revisit the predominant offline contract-driven mobile data access model enabling users to gain access to the infrastructure of only a few network operators and propose a new blockchain-backed mobile data access model where the key 5G stakeholders can trade, share and consume mobile edge network assets (access to the internet, spectrum, processing, storage, local content etc.) in a fully decentralized, anonymous and highly-robust fashion. Blockchain-backed mobile data access should address critical practical challenges of blockchain decentralization, scalability and security in the context of 5G and Beyond networks. Accordingly, we provide a meticulous survey of existing solutions in the aforementioned three areas and present a comprehensive holistic framework of protocols to address the key challenges identified, including a delegated Proof-of-Stake (DPoS) for distributed blockchain consensus over 5G and Beyond mobile data networks, a future-proof smart-contract enabled payment relay service enabling instant off-chain payments in a highly robust fashion as well as a hybrid mixing protocol that enables payment relays to act as anonymous payment hubs while addressing the unique challenges opposed by the joint blockchain and network level interaction of the 5G and Beyond service components. A wide range of practical implications and mitigation measures for dishonest operation of the blockchain nodes are investigated and sophisticated yet highly-robust incentive engineering mechanisms are derived. Detailed numerical results also accompany the paper, bringing to light the unique performance trade-offs and valuable design guidelines towards blockchain-backed mobile data access for 5G and Beyond mobile data networks.

Rowena Gan, Gerry Tsoukalas, Serguei Netessine

No abstract is available for this record.

Juan Ignacio Ibañez, Chris N. Bayer, Paolo Tasca, Jiahua Xu

Triple-entry accounting (TEA) is one of the novelest notions in the blockchain world. However, the lack of a consistent and comprehensive set of categories to give account of it impedes a proper apprehension of the concept, leading to contradictions and to overlooking its specificity. In order to clearly delineate the confines of TEA, we create a typology to distinguish between essential elements such as accounting and bookkeeping, as well as between decentralized systems, distributed ledgers and distributed journals.