Ferenc Béres, István András Seres, András A. Benczúr
Lightning Network (LN) is designed to amend the scalability and privacy issues of Bitcoin. It's a payment channel network where Bitcoin transactions are issued off chain, onion routed through a private payment path with the aim to settle transactions in a faster, cheaper, and private manner, as they're not recorded in a costly-to-maintain, slow, and public ledger. In this work, we design a traffic simulator to empirically study LN's transaction fees and privacy provisions. The simulator relies on publicly available data of the network structure and generates transactions under assumptions we attempt to validate based on information spread by certain blog posts of LN node owners. Our findings on the estimated revenue from transaction fees are in line with widespread opinion that participation is economically irrational for the majority of large routing nodes who currently hold the network together. Either traffic or transaction fees must increase by orders of magnitude to make payment routing economically viable. We give worst-case estimates for the potential fee increase by assuming strong price competition among the routers. We estimate how current channel structures and pricing policies respond to a potential increase in traffic, how reduction in locked funds on channels would affect the network, and show examples of nodes who are estimated to operate with economically feasible revenue. Even if transactions are onion routed, strong statistical evidence on payment source and destination can be inferred, as many transaction paths only consist of a single intermediary by the side effect of LN's small-world nature. Based on our simulation experiments, we quantitatively characterize the privacy shortcomings of current LN operation, and propose a method to inject additional hops in routing paths to demonstrate how privacy can be strengthened with very little additional transactional cost.
Blockchain is believed to bring new opportunities to dynamic spectrum management (DSM). With features of blockchain, the traditional spectrum management method, such as the spectrum auction, can be improved. It can also help to overcome the challenges about the security or the lack of incentive mechanisms for collaboration in DSM. Moreover, with blockchain, spectrum usage of the DSM system can be recorded in a decentralized manner. In this chapter, we will discuss the potentials of blockchain for spectrum management in a systematic way and using multiple case studies.
Abstract The purpose of this research is to identify the development of e-commerce technology in the business world, and the benefits of the application of e-commerce in the online business. The method used in this research was the descriptive method to present a complete overview of the situation related to some variable situations examined. The result of this research is to give clear identification of how far the development of e-commerce technology in the world of online business, as well as the benefits provided by the application of e-commerce in the world of online business. In the end, bitcoin gives mutual connection to expand the business of E-commerce.
Francis Berenger, Marcia Penna, Sandra Regina da Rocha-Pinto, Leonardo Lima
A transformação digital está redefinindo práticas organizacionais. Tecnologias emergentes vêm possibilitando novos desenhos de processos nas empresas. Novos arranjos organizacionais produzem fenômenos inéditos que necessitam ser explorados. O estudo da sociomaterialidade permite compreender essas novas configurações a partir dos artefatos tecnológicos criados por meio de interações sociais. Esse ensaio apresenta a análise do modelo DAO (Decentralized Autonomous Organization) sob o olhar da sociomaterialidade, analisando os elementos constituintes desta organização que tem o smart contract como o principal artefato tecnológico. A principal conclusão do estudo é a constatação de que novas tecnologias e, consequentemente, novos artefatos tecnológicos trazem aspectos inéditos e importantes no papel constitutivo da organização e das práticas organizacionais. Sugere-se o avanço de estudos sociomateriais na intenção de se obter uma maior compreensão sobre novos modelos organizacionais que empregam tecnologias digitais emergentes.
Distributed ledger technology (DLT) has the potential to disrupt many financial service domains. Aiming to explore the use of DLT to enhance financial system efficiency and resiliency, the Bank of Thailand (BOT) launched the Project Inthanon and Project DLT scripless bond initiatives in 2018. Project Inthanon is a proof-of-concept for wholesale domestic and cross-border funds transfer using central bank digital currency. The Project DLT scripless bond is an initiative to increase efficiency for the saving bond registration and sales processes. With these two projects, the BOT aims to catalyze an industry-wide effort to innovate digitally by exploring and assessing the potentials and applications of DLT. In addition, the BOT focuses on cultivating people's way of thinking and redesigning work processes to accommodate decentralized settings. In this paper, we discuss the project design, key findings, and future considerations of both projects. In brief, we find that DLT demonstrates promise for enhancing the financial infrastructure by enabling digital value direct transfers among parties, along with immutable record keeping, and programmable automation using smart contracts. However, further explorations of technology capacity, governance arrangement, and regulatory issues are needed as a prerequisite before moving these proofs-of-concept into production.
Jessica Schmeiss, Katharina Hoelzle, Robin P. G. Tech
The paradox of openness is inherent to all platform ecosystems—the tension in enabling maximum openness to create joint innovation while guaranteeing value capturing for all actors. Governance mechanisms to solve this paradox are embedded into the technical architecture of the platform, addressing the dimensions of access, control, and incentives. Blockchain technology offers unique ways to design novel governance mechanisms through the standardization of interactions. However, the design of such an architecture requires careful consideration of the cost associated with it.
Purpose The purpose of this paper is to examine the institutional context of the entrepreneurial discovery of blockchain applications. Design/methodology/approach This paper draws on institutional and entrepreneurial theory to introduce the economic problem entrepreneurship in the early stages of new technologies, examines the diversity of self-governed hybrid solutions to coordinating entrepreneurial information and draws policy implications. Findings To perceive a valuable and actionable market opportunity, entrepreneurs must coordinate distributed non-price information under uncertainty with others. One potential class of transaction cost economising solution to this problem is private self-governance of information coordination within hybrids. This paper explores a diverse range of entrepreneurial hybrids coalescing around blockchain technology, with implications for innovation policy. Originality/value This paper points to the problem of how the defining of the innovation problem as either choice-theoretic or contract-theoretic changes the remit of innovation policy. Innovation policy and blockchain policy should extend beyond correcting sub-optimal investments or removing barriers to action, to incorporate how polices impact entrepreneurial choices over governance structures to coordinate information.
Henry Kim, Marek Laskowski, Michael Zargham, Hjalmar Turesson · 6 authors
The study of how to set up cryptocurrency incentive mechanisms and to operationalize governance is token economics. Given the $250 billion market cap for cryptocurrencies, there is compelling need to investigate this topic. In this paper, we present facets of the token engineering process for a real-life 80-person Swiss blockchain startup, Insolar. We show how Insolar used systems modeling and simulation combined with cryptocurrency expertise to design a mechanism to incentivize enterprises and individual users to use their new MainNet public blockchain network. The study showed subsidy pools that incentivize application developers to develop on the network does indeed have the desired positive effect on MainNet adoption. For a startup like Insolar whose success hinge upon how well their model incentivizes various stakeholders to participate on their MainNet network versus that of numerous alternatives, this token economics simulation analysis provides invaluable insights.
Sina Rafati Niya, Sebastian Allemann, Arik Gabay, Burkhard Stiller
Data leaks and privacy scandals have been a growing concern of the last decade. While most traditional, i.e., centralized, online platforms require users to register with their personal data, they potentially expose the user's identity and data to be used for unintended purposes. This work proposes TradeMap as an integrated architecture, designing and enabling an online end-to-end (e2e) trading market place, while supporting anonymous management features. TradeMap addresses the Swiss Financial Market Supervisory Authority (FINMA) regulations by designing a FINMA-complaint Know Your Customer (KYC) platform. Additionally, TradeMap is based on blockchains and employs Ethereum Smart Contracts (SC). Thus, trust and anonymity between the market place and the KYC system relies on zero knowledge proof-based SCs used for user identification processes. With this management approach proposed, the user authentication is only verified within the KYC platform, providing a legally valid and fully anonymous online trading platform.
With the advancement of digitization, digital ecosystems are playing an increasingly important role in value creation. The mechanism by which digital ecosystems create value, however, has been generally deemed to be a mixed effect due to various factors. On the basis of signaling theory, this paper explores the effect of information transmission on the value creation capability of a digital ecosystem from two dimensions: the scale and sustainability of value creation. Taking a sample of weekly transaction data from Ethereum during August 2015–August 2018, our research proposes an integrated framework of information transmission in value creating, and discusses the diffusion process of the network effect within the digital ecosystem. As a generally accepted exchange medium, digital currency traffic acts as an observable proxy of information flow in a crypto-digital ecosystem, where the effects of heterogeneity in transaction attributes are filtered. Empirical results show that information transmission positively influences the scale and sustainability of value creation activities in a digital ecosystem by affecting user number and transaction frequency. Further research reveals that user number is the initial driving force of the network effect and a critical factor for the overall ecosystem market capitalization. This research provides a new insight into the design of sustainable value creation mechanisms under digital circumstances.
Purpose: The study provides a recent overview of the diffusion of blockchain technology in the logistics industry. It reveals the adoption of blockchain technology at German logistics service providers (LSPs) and their expectations regarding the future relevance of the technology. Based on the TOE Framework adoption supporting and inhibiting factors are identified. Methodology: In a first step, LSPs listed in the “Die Top 100 der Logistik 2016/2017” were contacted and questioned about their blockchain activities. Based on the responses, qualitative interviews were conducted with seven participants as part of a three-stage Delphi study. Findings: In particular small and medium-sized German LSPs are currently hardly involved in blockchain technology. Larger LSPs are beginning to define their own use cases and are trying to develop them further in joint projects with partners. A systematic use is currently not taking place. Originality: The study reveals the current discrepancy between rapidly evolving theoretical approaches for the use of blockchain technology in logistics, on the one hand, and the absence of the technology in everyday operations on the other hand. It also reveals a reluctant attitude of the management towards the technology.
A.K.M. Najmul Islam, Matti Mäntymäki, Marja Turunen
This paper investigates the focal actors in a blockchain network and their heterogeneity in splits. Disagreements in blockchain communities often lead to splits in both the blockchain and the community. We use three key elements of the actor-network theory — punctualization, translation, and actor heterogeneity—and employ case study methodology to examine Bitcoin splits. We identify several human actors, such as miners, developers, merchants, and investors, as well as non-human actors, including blockchain, exchanges, hardware manufacturers, and wallets, involved in Bitcoin splits. Our results show that the consolidation of actors in homogeneous groups plays a key role in blockchain splits. We further describe how the human and non-human actors' fluid moves into micro and macro actor positions in the network affect the development of the split. In addition, we discuss the roles of these actors and their engagement in forming micro and macro agencies in blockchain splits.
This paper presents TXSC, a framework that provides smart contract developers with transaction primitives. These primitives allow developers to write smart contracts without the need to reason about the anomalies that can arise due to concurrent smart contract function executions.
Redhwan Al-Amri, Nur Haryani Zakaria, Adib Habbal, Suhaidi Hassan
In this research, a Systematic Literature Review (SLR) is performed to identify the carried-out research topics related to cryptocurrency adoption and models that have been used as well as the current adoption challenges that need to be overcome in future studies.
Payment channel networks (PCNs) are viewed as one of the most promising scalability solutions for cryptocurrencies today. Roughly, PCNs are networks where each node represents a user and each directed, weighted edge represents funds escrowed on a blockchain; these funds can be transacted only between the endpoints of the edge. Users efficiently transmit funds from node A to B by relaying them over a path connecting A to B, as long as each edge in the path contains enough balance (escrowed funds) to support the transaction. Whenever a transaction succeeds, the edge weights are updated accordingly. In deployed PCNs, channel balances (i.e., edge weights) are not revealed to users for privacy reasons; users know only the initial weights at time 0. Hence, when routing transactions, users typically first guess a path, then check if it supports the transaction. This guess-and-check process dramatically reduces the success rate of transactions. At the other extreme, knowing full channel balances can give substantial improvements in transaction success rate at the expense of privacy. In this work, we ask whether a network can reveal noisy channel balances to trade off privacy for utility. We show fundamental limits on such a tradeoff, and propose noise mechanisms that achieve the fundamental limit for a general class of graph topologies. Our results suggest that in practice, PCNs should operate either in the low-privacy or low-utility regime; it is not possible to get large gains in utility by giving up a little privacy, or large gains in privacy by sacrificing a little utility.
Summary With the increasing popularity of blockchain technologies in recent years, blockchain‐based decentralized applications (DApps for short in this paper) have been rapidly developed and widely adopted in many areas, being a hot topic in both academia and industry. Despite of the importance of DApps, we still have quite little understanding of DApps along with its ecosystem. To bridge the knowledge gap, this paper presents the first comprehensive empirical study of blockchain‐based DApps to date, based on an extensive dataset of 995 Ethereum DApps and 29,846,075 transaction logs over them. We make a descriptive analysis of the popularity of DApps, summarize the patterns of how DApps use smart contracts to access the underlying blockchain, and explore the worth‐addressing issues of deploying and operating DApps. Based on the findings, we propose some implications for DApp users to select proper DApps, for DApp developers to improve the efficiency of DApps, and for blockchain vendors to enhance the support of DApps.
Since it takes time and effort to put a new product or service on the market,\none would like to predict whether it will be a success. In general this is not\npossible, but it is possible to follow best practices in order to maximise the\nchance of success. A smart contract is intended to encode business logic and is\ntherefore at the heart of every new business on the Ethereum blockchain. We\nhave investigated how to measure the success of smart contracts, and whether\nsuccessful smart contracts have characteristics that less successful smart\ncontracts lack. The appearance of a smart contract on a listing website such as\nEtherscan or StateoftheDapps is such a characteristic. In this paper, we\npresent a three-pronged analysis of the relative success of listed smart\ncontracts. First, we have used statistical analysis on the publicly visible\ntransaction history of the Ethereum blockchain to determine that listed\ncontracts are significantly more successful than their unlisted counterparts.\nNext, we have conducted a survey among more than 200 developers via an\nanonymous online survey about their experience with the listing process. A\nsignificant majority of respondents do not believe that listing a contract\nitself contributes to its success, but they believe that the extra attention\nthat is typically paid in tandem with the listing process does contribute.\nFinally, based on the respondents' answers, we have drafted 10 recommendations\nfor developers and validated them by submitting them to an international panel\nof experts.\n
The development of the cryptocurrency market and the implications for the whole economy and finance for all traders cause a keen interest in this subject. The chapter discusses the functioning of a financial system based on cryptocurrencies and its significance for economies. In this chapter, the development of the global cryptocurrency market was presented and the history of the most popular cryptocurrency, bitcoin, was analyzed. The analysis and the assessment of the state and structure of the Polish cryptocurrencies market were presented on the background of the global cryptocurrency market. Also, we presented the possible development paths for the cryptocurrencies market in Poland and in the world.
With the emergence of distributed ledger technology (DLT), numerous practitioners and researchers have proclaimed its beneficial impact on supply chain transactions in the future. However, the vast majority of DLT initiatives are discontinued after a short period. With the full potential of DLT laying far down the road, especially managers in supply chain management (SCM) seek for short-term cost-saving effects of DLT in order to achieve long-term benefits of DLT in the future. However, the extant research has bypassed grounding long-term as well as short-term effects of DLT on supply chain transaction with empirical data. We address this shortcoming, following an abductive research approach and combining empirical data from a multiple case study design with the corresponding literature. Our study reveals that the effects of DLT on supply chain transactions are two-sided. We found six effects of DLT solutions that have a cost-reducing or cost avoidance impact on supply chain transactions. In addition, we found two effects that change the power distribution between buyers and suppliers in transactions and a single effect that reduces the dependency of supply chain transactions on third parties. While cost-reducing and avoidance as well as dependency-reducing effects are positive effects, the change in power distribution might come with disadvantages. With these findings, the paper provides the first empirical evidence of the impact of DLT on supply chain transactions, which will enable managers to improve their assessment of DLT usage in supply chains.
Suhag Pandya, Murugan Mittapalli, Sri Vallabha Teja Gulla, Ori Landau
Abstract This research paper is a holistic review done on the rise of Blockchain and cryptocurrency, then elaborate about the great advantages of having a decentralized finance system. The existing scenarios from a sample of countries were reviewed in regards to their effort to adopt cryptocurrency to find some of the challenges like what are the security challenges this new monetary system faces, and limitations faced by different countries. A detailed analysis was done to answer some of the vital questions as such why cryptocurrency is banned in a few countries when other countries see cryptocurrency as a secured mode of payment transaction or what kind of security is provided by cryptocurrency compared to the traditional payments such as pay by cash, credit, or checks. Lastly, this paper also summarizes a high-level overview to propose recommended solutions to overcome the security concerns associated with the adoption of cryptocurrencies and how does the future of cryptocurrency look.