Purpose In Korea and abroad, this paper investigates the use of blockchains in the financial sector. This study aims to examine how blockchains are applied to the financial sector and how to respond to the Korean conditions. Design/methodology/approach This paper investigates the movements of the financial sector and related services using the blockchain in the current market. Findings First, as a result of examining domestic and foreign cases, it can be seen that the areas where blockchains are most actively applied in the financial sector are expanding into settlement, remittance, securities and smart contracts. Also, in Korea, many of the authentication procedures based on the equipment possessed by the consumers are used so that introduction of the blockchain in the authentication part is prominent. Second, the move to introduce a closed (private) distributed ledger that does not go through the central bank is accelerating in payments between banks. Third, domestic financial institutions also need joint action by financial institutions through a blockchain consortium to apply blockchain technology to the financial sector. Fourth, consumer needs and technological developments are changing. At the same time, as the opportunity to infringe on the information held by individuals has expanded, the need for blockchain technology is strongly emerging because of the efforts of the organizations to defend it. Originality/value This paper contributes to understanding the changes in the financial sector using the blockchain.
This paper introduces some of the interdependent components within the multifaceted solution our team is developing towards accelerating the functionality, complexity and versatility of blockchain-enabled services. The focus here is particularly on introducing and bringing together selected individual components of the solution to achieve a synergistic effect in expanding the functionality of blockchain-enforced smart contracts. The contributions of this paper include: (i) proposing a method for automated management of contracts with hierarchical conditionality structures through an hierarchy of intelligent agents and the use of hierarchical cryptographic key-pairs; (ii) proposing a method for efficient and secure matching and transfer of smart-contract underlyings (entities) among disparate smart contracts/subcontracts; (iii) proposing a method for producing an hierarchy of common secrets to facilitate hierarchical communication channels of increased security, and applying this method both in the context of method (i) and method (ii); and (iv) proposing the use of distributed hash tables DHT in building secure and optimized repositories in the context of method (i) and in the context method (ii), where the former involves a DHT repository of smart contracts and the latter involves a DHT repository of entities underlying smart contracts that are being exchanged among different smart contracts and subcontracts. The smart-contract focused methods introduced in this paper contribute to the overall goal towards a sustainable adaptive mechanism for processing evolving volumes, versatility, and complexity of blockchain transactions, traffic, and services. Blockchain-enabled services are efficient, secure, automated, and allowing worldwide distribution of resources. They present a more efficient and sustainable alternative to current service infrastructures within a range of domains, particularly the legal and financial domains. They also set a sustainable infrastructure for emerging Internet-of-things services.
We compare two Demand Side Management (DSM) mechanisms, introduced\nrespectively by Mohsenian-Rad et al (2010) and Baharlouei et al (2012), in\nterms of efficiency and fairness. Each mechanism defines a game where the\nconsumers optimize their flexible consumption to reduce their electricity\nbills. Mohsenian-Rad et al propose a daily mechanism for which they prove the\nsocial optimality. Baharlouei et al propose a hourly billing mechanism for\nwhich we give theoretical results: we prove the uniqueness of an equilibrium in\nthe associated game and give an upper bound on its price of anarchy. We\nevaluate numerically the two mechanisms, using real consumption data from Pecan\nStreet Inc. The simulations show that the equilibrium reached with the hourly\nmechanism is socially optimal up to 0.1%, and that it achieves an important\nfairness property according to a quantitative indicator we define. We observe\nthat the two DSM mechanisms avoid the synchronization effect induced by non-\ngame theoretic mechanisms, e.g. Peak/OffPeak hours contracts.\n
Adán Sánchez de Pedro, Daniele Levi, Luis Iván Cuende
Witnet is a decentralized oracle network (DON) that connects smart contracts to the outer world. Generally speaking, it allows any piece of software to retrieve the contents published at any web address at a certain point in time, with complete and verifiable proof of its integrity and without blindly trusting any third party. Witnet runs on a blockchain with a native protocol token (called Wit), which miners-called witnesses-earn by retrieving, attesting and delivering web contents for clients. On the other hand, clients spend Wit to pay witnesses for their Retrieve-Attest-Deliver (RAD) work. Witnesses also compete to mine blocks with considerable rewards, but Witnet mining power is proportional to their previous performance in terms of honesty and trustworthiness-this is, their reputation as witnesses. This creates a powerful incentive for witnesses to do their work honestly, protect their reputation and not to deceive the network. The Witnet protocol is designed to assign the RAD tasks to witnesses in a way that mitigates most attack vectors to the greatest extent. At the same time, it includes a novel 'sharding' feature that (1) guarantees the efficiency and scalability of the network, (2) keeps the price of RAD tasks within reasonable bounds and (3) gives clients the freedom to adjust certainty and price by letting them choose how many witnesses will work on their RAD tasks. When coupled with a Decentralized Storage Network (DSN), Witnet also gives us the possibility to build the Digital Knowledge Ark: a decentralized, immutable, censorship-resistant and eternal archive of humanity's most relevant digital data. A truth vault aimed to ensure that knowledge will remain democratic and verifiable forever and to prevent history from being written by the victors.
The adoption of blockchain-based distributed computation platforms is growing fast. Some of these platforms, such as Ethereum, provide support for implementing smart contracts, which are envisioned to have novel applications in a broad range of areas, including finance and Internet-of-Things. However, a significant number of smart contracts deployed in practice suffer from security vulnerabilities, which enable malicious users to steal assets from a contract or to cause damage. Vulnerabilities present a serious issue since contracts may handle financial assets of considerable value, and contract bugs are non-fixable by design. To help developers create more secure smart contracts, we introduce FSolidM, a framework rooted in rigorous semantics for designing con- tracts as Finite State Machines (FSM). We present a tool for creating FSM on an easy-to-use graphical interface and for automatically generating Ethereum contracts. Further, we introduce a set of design patterns, which we implement as plugins that developers can easily add to their contracts to enhance security and functionality.
The adoption of blockchain-based distributed computation platforms is growing\nfast. Some of these platforms, such as Ethereum, provide support for\nimplementing smart contracts, which are envisioned to have novel applications\nin a broad range of areas, including finance and Internet-of-Things. However, a\nsignificant number of smart contracts deployed in practice suffer from security\nvulnerabilities, which enable malicious users to steal assets from a contract\nor to cause damage. Vulnerabilities present a serious issue since contracts may\nhandle financial assets of considerable value, and contract bugs are\nnon-fixable by design. To help developers create more secure smart contracts,\nwe introduce FSolidM, a framework rooted in rigorous semantics for designing\ncon- tracts as Finite State Machines (FSM). We present a tool for creating FSM\non an easy-to-use graphical interface and for automatically generating Ethereum\ncontracts. Further, we introduce a set of design patterns, which we implement\nas plugins that developers can easily add to their contracts to enhance\nsecurity and functionality.\n
Temporary work is an employment situation useful and suitable in all occasions in which business needs to adjust more easily and quickly to workload fluctuations or maintain staffing flexibility. Temporary workers play therefore an important role in many companies, but this kind of activity is subject to a special form of legal protections and many aspects and risks must be taken into account both employers and employees. In this work we propose a blockchain-based system that aims to ensure respect for the rights for all actors involved in a temporary employment, in order to provide employees with the fair and legal remuneration (including taxes) of work performances and a protection in the case employer becomes insolvent. At the same time, our system wants to assist the employer in processing contracts with a fully automated and fast procedure. To resolve these problems we propose the D-ES (Decentralized Employment System). We first model the employment relationship as a state system. Then we describe the enabling technology that makes us able to realize the D-ES. In facts, we propose the implementation of a DLT (Decentralized Ledger Technology) based system, consisting in a blockchain system and of a web-based environment. Thanks the decentralized application platforms that makes us able to develop smart contracts, we define a discrete event control system that works inside the blockchain. In addition, we discuss the temporary work in agriculture as a interesting case of study.
Recent advancements in artificial intelligence systems can be justified by the success in the field of machine learning. This is due to increase in knowledge (data) which leads to increase in intelligence. Similarly, the blockchain has a power to transform the artificial intelligence systems. The blockchain can be defined as a peer-to-peer transaction database which maintains the integrity of information through the distributed open ledger. It is a decentralized way to store value transactions across the nodes in the network. Every node in the network has access to the ledger. The blockchain has a wide range of applications including digital currency or crypto-currencies, smart assets, contracts, voting, etc. When it comes to artificial intelligence, the smart contract can be used to create an artificial intelligence system or it can be helpful in reaching a consensus during a dilemma through voting. A peer-to-peer model training can also be implemented using a blockchain network. The blockchain database can be helpful in improving the quantity and quality of data.
Smart contracts are technically defined as an event-driven programs, with state, that run on a distributed, decentralized, shared and replicated ledger (blockchain) and that can take custody over and transfer assets on the ledger. This new invention enables declarations of will to be expressed as self-executing computer code. The fact that smart contracts can transfer assets without the need for judicial system creates many questions about their place in the civil law. Also, it raises a question about their legality. This paper explores some basic concepts related to smart contracts and tries to set boundaries to their legality in the framework of civil law in scope of form and interpretation.
Pietro Danzi, Anders E. Kalør, Čedomir Stefanović, Petar Popovski
Blockchain is a technology uniquely suited to support massive number of transactions and smart contracts within the Internet of Things (IoT) ecosystem, thanks to the decentralized accounting mechanism. In a blockchain network, the states of the accounts are stored and updated by the validator nodes, interconnected in a peer-to-peer fashion. IoT devices are characterized by relatively low computing capabilities and low power consumption, as well as sporadic and low-bandwidth wireless connectivity. An IoT device connects to one or more validator nodes to observe or modify the state of the accounts. In order to interact with the most recent state of accounts, a device needs to be synchronized with the blockchain copy stored by the validator nodes. In this work, we describe general architectures and synchronization protocols that enable synchronization of the IoT endpoints to the blockchain, with different communication costs and security levels. We model and analytically characterize the traffic generated by the synchronization protocols, and also investigate the power consumption and synchronization trade-off via numerical simulations. To the best of our knowledge, this is the first study that rigorously models the role of wireless connectivity in blockchain-powered IoT systems.
The development of robotics, the Internet of Things concept, big data processing techniques, automation, and distributed digital ledgers leads to the fourth industrial revolution. One of the main issues of new industry is interaction between the "smart factory" components both internally and with other factories based on the Internet of Things. This interaction should provide trust between the participants of the Internet of Things; control over the distribution of resources (such as maintenance time, energy, etc.) and finished products. The paper describes one of the possible ways of integrating Internet of Things and blockchain technologies to solve these issues. For this purpose, an architecture has been developed that combines Smart-M3 information sharing platform and blockchain platform. One of the main features of the proposed architecture is the use of smart contracts for processing and storing information related to the interaction between smart space components.
Simplicity is a typed, combinator-based, functional language without loops and recursion, designed to be used for crypto-currencies and blockchain applications. It aims to improve upon existing crypto-currency languages, such as Bitcoin Script and Ethereum's EVM, while avoiding some of the problems they face. Simplicity comes with formal denotational semantics defined in Coq, a popular, general purpose software proof assistant. Simplicity also includes operational semantics that are defined with an abstract machine that we call the Bit Machine. The Bit Machine is used as a tool for measuring the computational space and time resources needed to evaluate Simplicity programs. Owing to its Turing incompleteness, Simplicity is amenable to static analysis that can be used to derive upper bounds on the computational resources needed, prior to execution. While Turing incomplete, Simplicity can express any finitary function, which we believe is enough to build useful ``smart contracts'' for blockchain applications.
Permissionless blockchains protocols such as Bitcoin are inherently limited in transaction throughput and latency. Current efforts to address this key issue focus on off-chain payment channels that can be combined in a Payment-Channel Network (PCN) to enable an unlimited number of payments without requiring to access the blockchain other than to register the initial and final capacity of each channel. While this approach paves the way for low latency and high throughput of payments, its deployment in practice raises several privacy concerns as well as technical challenges related to the inherently concurrent nature of payments that have not been sufficiently studied so far. In this work, we lay the foundations for privacy and concurrency in PCNs, presenting a formal definition in the Universal Composability framework as well as practical and provably secure solutions. In particular, we present Fulgor and Rayo. Fulgor is the first payment protocol for PCNs that provides provable privacy guarantees for PCNs and is fully compatible with the Bitcoin scripting system. However, Fulgor is a blocking protocol and therefore prone to deadlocks of concurrent payments as in currently available PCNs. Instead, Rayo is the first protocol for PCNs that enforces non-blocking progress (i.e., at least one of the concurrent payments terminates). We show through a new impossibility result that non-blocking progress necessarily comes at the cost of weaker privacy. At the core of Fulgor and Rayo is Multi-Hop HTLC, a new smart contract, compatible with the Bitcoin scripting system, that provides conditional payments while reducing running time and communication overhead with respect to previous approaches. Our performance evaluation of Fulgor and Rayo shows that a payment with 10 intermediate users takes as few as 5 seconds, thereby demonstrating their feasibility to be deployed in practice.
IntroductionStewart Macaulay’s seminal 1963 article “Non-Contractual Relations in Business” explored why merchants and manufacturers often fail to plan their commercial relationships and why they seldom resort to legal sanctions to settle disputes. Macaulay found that, in many business exchanges, detailed planning and legal sanctions play only a small role. His tentative
Muhamed Turkanović, Marko Hölbl, Kristjan Košič, Marjan Heričko · 5 authors
Blockchain technology enables the creation of a decentralized environment, where transactions and data are not under the control of any third party organization. Any transaction ever completed is recorded in a public ledger in a verifiable and permanent way. Based on the blockchain technology, we propose a global higher education credit platform, named EduCTX. This platform is based on the concept of the European Credit Transfer and Accumulation System (ECTS). It constitutes a globally trusted, decentralized higher education credit, and grading system that can offer a globally unified viewpoint for students and higher education institutions (HEIs), as well as for other potential stakeholders, such as companies, institutions, and organizations. As a proof of concept, we present a prototype implementation of the environment, based on the open-source Ark Blockchain Platform. Based on a globally distributed peer-to-peer network, EduCTX will process, manage, and control ECTX tokens, which represent credits that students gain for completed courses, such as ECTS. HEIs are the peers of the blockchain network. The platform is a first step toward a more transparent and technologically advanced form of higher education systems. The EduCTX platform represents the basis of the EduCTX initiative, which anticipates that various HEIs would join forces in order to create a globally efficient, simplified, and ubiquitous environment in order to avoid language and administrative barriers. Therefore, we invite and encourage HEIs to join the EduCTX initiative and the EduCTX blockchain network.
Tran Cong Thang, Dang Kim Khoi, Do Huy Thiep, Thai Van Tinh · 5 authors
This study assesses the economic, social, and environmental impacts of Large Field Models (LFMs) and their potential for promoting Climate-Smart Agriculture (CSA). In Vietnam, the government introduced the Large Field Model (LFM), a type of production organization, in which enterprises or cooperatives establish a cooperative relationship with farmers to apply a unification production procedure by providing production inputs (including material and technical support) and/or buying outputs from producers. These LFMs can be classified under three different forms based on the extent of those linkages: (1) farmers contribute land and/or labour to farmer cooperatives; (2) farmers sign contracts with cooperatives or enterprises and receive inputs; and (3) farmers lease out/sell their land to cooperatives or enterprises. Although the key objectives of constructing LFMs come from requirements in improving rice quality and rice production efficiency, these models also have potential for applying CSA to achieve three CSA pillars: productivity, resilience and mitigation. Productivity: the LFMs ensure integration between enterprises and farmers, wherein rice production is promoted, given that the output is sold at a more stable price. Therefore, farmers confidently manage their business to increase productivity. In addition, higher output price and lower production cost is observed from LFMs’ production. Better output price comes from the commitments of enterprises and higher rice quality produced from LFMs. The reduction in production costs is also achieved by taking advantage of economy of scale to apply modern agricultural machinery (such as tractors) and thus reduce labour costs. Resilience: this CSA pillar is created indirectly from LFMs. In general, as farmers use LFMs, they have a better chance to access certified seeds and follow the production procedures of enterprises under the direct support from technicians, and they are less likely to be exposed to disease epidemics than non-participant farmers. In addition, farmers who sign contracts with enterprises/cooperatives or work in LFMs tend to share their knowledge and discuss weather issues with technicians before deciding when to sow or harvest to reduce climate risks. Mitigation: the LFM production contributes to reduced GHG emissions. LFMs created a foundation to apply advanced cultivation methods and to follow strictly modern techniques such as: One Must Five Reductions (1M5Rs), Three Reductions Three Gain (3R3G), 4 Alternate Wetting and Drying (AWD), System of Rice Intensification (SRI), and Deep Fertilizer Placement (DPF). The synchronized irrigation timing or flattened surface field of LFMs also contributes more efficient water use. Moreover, this model changes farmer behaviours toward more efficient and environmentally friendly paddy straw treatment to mitigate environmental impacts. In sum, there are potentials for promoting CSA application in LFMs. The integration developed through LFMs will produce friendly and mutually beneficial networks of farmers to share knowledge and modern techniques. This also encourages farmers to improve cultivating skills and output quality to sustain their contracts with better enterprises in the long run. In addition, the pressure from climate risks will push farmers to act collectively to adapt and mitigate environmental impacts. These potentials should be accompanied by the strong support from the government through its response to climate changes in the Nationally Determined Contribution (NDCs). However, there are still many constraints for expanding CSA application into LFMs. First, traditional cultivation and small landholding habits make it difficult for enterprises to accumulate land to form LFMs. Even when farmers agree to contribute their land to cooperatives, this model is still struggling to establish the appropriate benefit-sharing method in order to keep it working smoothly in the long run, especially due to land price fluctuations. Second, there are infrastructure-related issues. Some types of CSA practices require infrastructure support, for example irrigation systems for applying Alternate Wetting and Drying (AWD). Finally, there is a need for a legal mechanism to bind contracts between enterprises and farmers, especially under high price volatility. Vietnam’s policy system to enhance CSA application and expand LFMs is still characterized by limitations related to effectiveness, validation and public-private participation. This requires a change to attract the participation of local government, enterprises, and farmers. For example, experience from other countries shows that in the case of small scale production, legal measures would not be feasible because of high transaction costs. Therefore, using community value to bind farmers to contracts is the most feasible measure that has been proven. In addition, support for developing agricultural insurance and infrastructure investment is important. However, before expanding CSA application into LFMs, detailed studies of LFMs in each region are required because each model might be more efficient for one specific region with a specific crop.
Bluetooth Low Energy (BLE) has emerged as one of the most promising technologies to enable the Internet-of-Things (IoT) paradigm. In BLE-based IoT applications, e.g., wearables-oriented service applications, the Bluetooth MAC addresses of devices will be swapped for device pairings. The random address technique is adopted to prevent malicious users from tracking the victim's devices with stationary Bluetooth MAC addresses and accordingly the device privacy can be preserved. However, there exists a tradeoff between privacy and security in the random address technique. That is, when device pairing is launched and one device cannot actually identify another one with addresses, it provides an opportunity for malicious users to break the system security via impersonation attacks. Hence, using random addresses may lead to higher security risks. In this study, we point out the potential risk of using random address technique and then present critical security requirements for BLE-based IoT applications. To fulfill the claimed requirements, we present a privacy-aware mechanism, which is based on elliptic curve cryptography, for secure communication and access-control among BLE-based IoT objects. Moreover, to ensure the security of smartphone application associated with BLE-based IoT objects, we construct a Smart Contract-based Investigation Report Management framework (SCIRM) which enables smartphone application users to obtain security inspection reports of BLE-based applications of interest with smart contracts.
María Claudia Solarte-Vásquez, Katrin Nyman-Metcalf
Abstract Smart contracting (SC) is a proactive proposal to operationalize the relational contract theory for the upgrade and improvement of legally relevant exchange. The dynamic institutional environment of the European Union (EU) is a suitable framework for this proposal. SC addresses the interests of the business management, law and information technology practices with a perspective of influence in digital exchange, communication processes and other human and human-machine interactions. This position paper restates the advantages of the concept by highlighting the practical transition pathway SC offers to moderate the growing haste towards the embeddedness of exchange in automated and distributed models. This theoretical contribution supports the systematization of the proactive and legal design research field, and explains the characterization, operationalization and specification of the SC concept.
Lee Thomas, Chao Long, Pete Burnap, Jianzhong Wu · 5 authors
An electricity supply smart contract was developed and demonstrated to perform pre-time-of-use price negotiation between demand and generation and post-time-of-use settlement and payment. The smart contract was demonstrated with 1000 loads/generators with usages simulated using lognormal probability distributions. It combines payment of deposit, negotiation of price based on estimates, settlement based on actual usage and enactment of payments using crypto-currency. The settlement procedure rewards customers that adjusted to balance the system. The smart contract was written in the solidity programming language and implemented with a simulated Ethereum blockchain using testrpc and go-ethereum. In the example test case, a price was agreed, settled and payment enacted.
Blockchain technology has evolved from being an immutable ledger of transactions for cryptocurrencies to a programmable interactive the environment for building distributed reliable applications. Although, blockchain technology has been used to address various challenges, to our knowledge none of the previous work focused on using blockchain to develop a secure and immutable scientific data provenance management framework that automatically verifies the provenance records. In this work, we leverage blockchain as a platform to facilitate trustworthy data provenance collection, verification, and management. The developed system utilizes smart contracts and open provenance model (OPM) to record immutable data trails. We show that our proposed framework can efficiently and securely capture and validate provenance data, and prevent any malicious modification to the captured data as long as the majority of the participants are honest.