Andrew Miller, Iddo Bentov, Ranjit Kumaresan, Christopher Cordi · 5 authors
Bitcoin, Ethereum and other blockchain-based cryptocurrencies, as deployed\ntoday, cannot scale for wide-spread use. A leading approach for cryptocurrency\nscaling is a smart contract mechanism called a payment channel which enables\ntwo mutually distrustful parties to transact efficiently (and only requires a\nsingle transaction in the blockchain to set-up). Payment channels can be linked\ntogether to form a payment network, such that payments between any two parties\ncan (usually) be routed through the network along a path that connects them.\nCrucially, both parties can transact without trusting hops along the route.\n In this paper, we propose a novel variant of payment channels, called\nSprites, that reduces the worst-case "collateral cost" that each hop along the\nroute may incur. The benefits of Sprites are two-fold. 1) In Lightning Network,\na payment across a path of $\\ell$ channels requires locking up collateral for\n$\\Theta(\\ell\\Delta)$ time, where $\\Delta$ is the time to commit an on-chain\ntransaction. Sprites reduces this cost to $O(\\ell + \\Delta)$. 2) Unlike prior\nwork, Sprites supports partial withdrawals and deposits, during which the\nchannel can continue to operate without interruption.\n In evaluating Sprites we make several additional contributions. First, our\nsimulation-based security model is the first formalism to model timing\nguarantees in payment channels. Our construction is also modular, making use of\na generic abstraction from folklore, called the "state channel," which we are\nthe first to formalize. We also provide a simulation framework for payment\nnetwork protocols, which we use to confirm that the Sprites construction\nmitigates against throughput-reducing attacks.\n
This paper critiques blockchain-based “smart contracts,” which aim to automatically and securely execute obligations without reliance on a centralized enforcement authority. Though smart contracts do have some features that might serve the goals of social justice and fairness, I suggest that they are based on a thin conception of what law does, and how it does it. Smart contracts focus on the technical form of contract to the exclusion of the social contexts within which contracts operate, and the complex ways in which people use them. In the real world, contractual obligations are enforced through all kinds of social mechanisms other than formal adjudication—and contracts serve many functions that are not explicitly legal in nature, or even designed to be formally enforced. I describe three categories of contracting practices in which people engage (the inclusion of facially unenforceable terms, the inclusion of purposefully underspecified terms, and willful nonenforcement of enforceable terms) to illustrate how contracts actually “work.” The technology of smart contracts neglects the fact that people use contracts as social resources to manage their relations. The inflexibility that they introduce, by design, might short-circuit a number of social uses to which law is routinely put. Therefore, I suggest that attention to the social and relational contexts of contracting are essential considerations for the discussion, development, and deployment of smart contracts.
Simone Porru, Andrea Pinna, Michele Marchesi, Roberto Tonelli
The Blockchain technology is reshaping finance, economy, money to the extent that its disruptive power is compared to that of the Internet and the Web in their early days. As a result, all the software development revolving around the Blockchain technology is growing at a staggering rate. In this paper, we acknowledge the need for software engineers to devise specialized tools and techniques for blockchain-oriented software development. From current challenges concerning the definition of new professional roles, demanding testing activities and novel tools for software architecture, we take a step forward by proposing new directions on the basis of a curate corpus of blockchain-oriented software repositories, detected by exploiting the information enclosed in the 2016 Moody's Blockchain Report and teh market capitalization of cryptocurrencies. Ensuring effective testing activities, enhancing collaboration in large teams, and facilitating the development of smart contracts all appear as key factors in the future of blockchain-oriented software development.
Thomas Dickerson, Paul Gazzillo, Maurice Herlihy, Eric Koskinen
Modern cryptocurrency systems, such as Ethereum, permit complex financial transactions through scripts called smart contracts. These smart contracts are executed many, many times, always without real concurrency. First, all smart contracts are serially executed by miners before appending them to the blockchain. Later, those contracts are serially re-executed by validators to verify that the smart contracts were executed correctly by miners. Serial execution limits system throughput and fails to exploit today's concurrent multicore and cluster architectures. Nevertheless, serial execution appears to be required: contracts share state, and contract programming languages have a serial semantics. This paper presents a novel way to permit miners and validators to execute smart contracts in parallel, based on techniques adapted from software transactional memory. Miners execute smart contracts speculatively in parallel, allowing non-conflicting contracts to proceed concurrently, and "discovering" a serializable concurrent schedule for a block's transactions, This schedule is captured and encoded as a deterministic fork-join program used by validators to re-execute the miner's parallel schedule deterministically but concurrently. Smart contract benchmarks run on a JVM with ScalaSTM show that a speedup of of 1.33x can be obtained for miners and 1.69x for validators with just three concurrent threads.
Smart contracts are full-fledged programs that run on blockchains (e.g., Ethereum, one of the most popular blockchains). In Ethereum, gas (in Ether, a cryptographic currency like Bitcoin) is the execution fee compensating the computing resources of miners for running smart contracts. However, we find that under-optimized smart contracts cost more gas than necessary, and therefore the creators or users will be overcharged. In this work, we conduct the first investigation on Solidity, the recommended compiler, and reveal that it fails to optimize gas-costly programming patterns. In particular, we identify 7 gas-costly patterns and group them to 2 categories. Then, we propose and develop GASPER, a new tool for automatically locating gas-costly patterns by analyzing smart contracts' bytecodes. The preliminary results on discovering 3 representative patterns from 4,240 real smart contracts show that 93.5%, 90.1% and 80% contracts suffer from these 3 patterns, respectively.
A coordinated trading process is proposed as a design for an electricity market with significant uncertainty, perhaps from renewables. In this process, groups of agents propose to the system operator (SO) a contingent buy and sell trade that is balanced, i.e. the sum of demand bids and the sum of supply bids are equal. The SO accepts the proposed trade if no network constraint is violated or curtails it until no violation occurs. Each proposed trade is accepted or curtailed as it is presented. The SO also provides guidance to help future proposed trades meet network constraints. The SO does not set prices, and there is no requirement that different trades occur simultaneously or clear at uniform prices. Indeed, there is no price-setting mechanism. However, if participants exploit opportunities for gain, the trading process will lead to an efficient allocation of energy and to the discovery of locational marginal prices (LMPs). The great flexibility in the proposed trading process and the low communication and control burden on the SO may make the process suitable for coordinating producers and consumers in the distribution system.
<ns4:p>Clinical trial consent for protocols and their revisions should be transparent for patients and traceable for stakeholders. Our goal is to implement a process allowing the collection of patients’ informed consent, which is bound to protocol revisions, storing and tracking the consent in a secure, unfalsifiable and publicly verifiable way, and enabling the sharing of this information in real time. For that, we will built a consent workflow using a rising technology called Blockchain. This is a distributed technology that brings a built-in layer of transparency and traceability. From a more general and prospective point of view, we believe Blockchain technology brings a paradigmatical shift to the entire clinical research field. We designed a Proof-of-Concept protocol consisting of time-stamping each step of the patient’s consent collection using Blockchain; thus archiving and historicising the consent through cryptographic validation in a securely unfalsifiable and transparent way. For each revision of the protocol, consent was sought again. We obtained a single document, in a standard open format, that accounted for the whole consent collection process: timestamped consent status with regards to each version of the protocol. This document cannot be corrupted, and can be checked on any dedicated public website. It should be considered as a robust proof of data. However, in a live clinical trial, the authentication system should be strengthened in order to remove the need for third parties, here the trial stakeholders, and give participative control to the peer-to-peer users. In the future, we think that the complex data flow of a clinical trial can be tracked using Blockchain, that a blockchain core functionality, named Smart Contract, could help prevent clinical trial events not to happen in the right chronological order: for example including patients before they consented or analysing case report forms data before freezing the database. Globally, we think Blockchain will help with reliability, security, and transparency, and could be a consistent step towards reproducibility.</ns4:p>
Open access
4 source records
Ethics in Clinical Research
Biomedical Ethics and Regulation
Artificial Intelligence in Healthcare and Education
Ethereum contracts can be designed to function as fully decentralized applications called DAPPs. Many DAPPs have already been fielded, including an online marketplace, a role playing game, a prediction market, and an Internet service provider. Unfortunately, DAPPs can be hacked, and the assets they control can be stolen. A recent attack on an Ethereum decentralized application called The DAO demonstrated that smart contract bugs are more than an academic concern. Ether worth tens of millions of US dollars was extracted by an attacker from The DAO, sending the value of its tokens and the overall exchange price of ether tumbling. We present a market-based technique for insuring the ether holdings of a DAPP using futures contracts indexed by the trade price of ether for DAPP tokens. Under fairly general circumstances, our technique is capable of recovering the majority of ether lost from theft with high probability even when all of the ether holdings are stolen; and the only cost to DAPP token holders is an adjustable ether withdrawal fee. If the probability of a margin call in $d$ days is $p$ for a futures contract with 20 times leverage, then our approach will allow for the recovery of half the stolen ether with probability $p$ and a withdrawal fee of 5%. A higher withdrawal fee of 25% allows for more than 80% of the ether to be recovered with probability $p$.
Industries and old ways of doing business have been reshaped or become entirely obsolete due to the new digitalization trends. The current technology to truly revolutionize and disrupt especially industries that rely on trust, such as the financial sector, is the blockchain technology. The core idea of this technol-ogy is that it is a public, shared and tamperproof ledger that allows people who do not know or even trust in each other to share information in a trustworthy ledger, where any sorts of immaterial infor-mation of value can be stored. This thesis is a literature review that provides a theoretical framework to examine how the blockchain technology affects particularly the financial sector. As this thesis acknowledges, the blockchain technology has the ability to enhance efficiency, increase transparency, reduce risks when less assets are tied up during transactions and reduce expenditures, such as transaction costs in the financial sector. One of the most ambitious application of the blockchain technology is smart contracts, but there are other applications as well that can benefit the financial sec-tor. The technology has great potential to disrupt the current financial system, but since the technology is still in its initial stage of development, it is too early to say what the blockchain technology will exactly enable. The most extreme hypothesis is that the blockchain technology makes banks unnecessary. How-ever, this thesis argues that the financial institutions are more likely to take advantage of the blockchain technology than to become obsolete because of it.
Long Finance identifies an appetite for ‘Smart Contracts’ in wholesale insurance. Sponsored by the London Market Group and conducted by Z/Yen, this research shows there are exciting prospects for the use of smart contracts in wholesale insurance*. The research included interviews with brokers, insurers, reinsurers, regulators and trade bodies from across the sector, together with discussions with technical experts.
Smart contracts translate legal contract terms directly into executable computer code within a business process. This creates a rigorous link between the legal contract and its operational implementation. By enabling closer integration between back office, business areas, and negotiation of external contractual agreements, smart contracts can improve efficiency, reduce errors, and improve maintainability as business, regulatory, and contractual environments change.
The report identifies five broad areas where smart contracts could be applied in wholesale insurance: Process, Product, Portal, Performance, and Privacy. Processes in wholesale insurance are particularly complex, with complicated contracts managed through a network of clients, brokers, insurers, reinsurers, external providers such as loss adjusters, and central market organisations, often crossing and recrossing national boundaries. Smart contracts offer the possibility of making processes more transparent and maintainable, reducing the need for manual intervention and reducing costs and error rates. Smart contracts could also support new product features or allow new classes of products where the risk is defined using complex analysis of ‘big data’. They could support new automated distributed channels for insurers through the use of internet portals, making it economic to transact more standardised products with smaller clients. By guaranteeing confidentiality of granular data, they could facilitate sharing of aggregate data to provide aggregated industry data and indices. They could reduce barriers to sharing They could also be used in the analysis and management of risk and claims, improving overall performance of insurers. Privacy legislation is an important area where smart contracts could help provide ‘smart compliance’ – linking back office processes to the explicit wording of statute and regulation.
The report highlights examples of where individual firms, ‘coalitions of the willing’, or cross market initiatives, could drive specific smart contract applications to provide business benefits.
The following table summarises the potential benefits of each of these five areas, both to Market firms and to clients. The benefits of cost, accuracy, and speed accrue directly to the Market, although the net effects should include at least some reduction of premium costs to the client. Oversight of the market should also be simpler and more effective with better information. ‘Risk management’ refers particularly to preventing losses or mitigating the impact of losses which do occur; it should be a direct benefit both to the firms and to the client. ‘Client facility’ means that the client has the ability to purchase a policy with capabilities or at a price that was not previously available.
The large number of use cases in different areas which we found for STP and smart contracts indicates that these are technologies which could have a strong impact on the London Market over the next few years, and they should be part of the strategic debate within firms and at Market level, such as:
Commercial vehicle fleet insurance with access to client data;
Cybersecurity policy with access to client systems;
Hull insurance with access to telemetry;
Geolocation of shipping containers;
‘Follower syndicate’;
Parametric insurance;
ILWs;
Insuring intangibles with loss defined from Big Data;
War risk on demand;
Generator cover on demand;
Individualised insurance for car hire;
Cyber index and ILS.
There is no simple way to progress smart contracts, given the multi-party nature of the Market, and this report recognises that a core recommendation is that smart contracts remain on the strategic agenda for the Market as a whole and for individual firms for the foreseeable future. Smart contracts will be important for wholesale insurance and need to be part of future discussions and gain the attention needed to be built appropriately into future Market processing architecture. We suggest further development of the ideas surrounding:
‘follower syndicate’ proposal for applying smart contracts;
opportunity for smart contracts in implementing STP for settling payments;
smart contracts for contract wordings;
governance structure for sharing data that feeds smart contracts;
geolocation information feeding smart contracts.
Hubert Ritzdorf, Karl Wüst, Arthur Gervais, Guillaume Felley · 5 authors
An internet user wanting to share observed content is typically restricted to primitive techniques such as screenshots, web caches or share button-like solutions. These acclaimed proofs, however, are either trivial to falsify or require trust in centralized entities (e.g., search engine caches). This motivates the need for a seamless and standardized internet-wide non-repudiation mechanism, allowing users to share data from news sources, social websites or financial data feeds in a provably secure manner. Additionally, blockchain oracles that enable data-rich smart contracts typically rely on a trusted third party (e.g., TLSNotary or Intel SGX). A decentralized method to transfer web-based content into a permissionless blockchain without additional trusted third party would allow for smart contract applications to flourish. In this work, we present TLS-N, the first TLS extension that provides secure non-repudiation and solves both of the mentioned challenges. TLS-N generates non-interactive proofs about the content of a TLS session that can be efficiently verified by third parties and blockchain based smart contracts. As such, TLS-N increases the accountability for content provided on the web and enables a practical and decentralized blockchain oracle for web content. TLS-N is compatible with TLS 1.3 and adds a minor overhead to a typical TLS session. When a proof is generated, parts of the TLS session (e.g., passwords, cookies) can be hidden for privacy reasons, while the remaining content can be verified.
The article deals with contemporary tendencies of the banking policy of the world. For this purpose, the key issues have been worked out: analysis of the evolution of formation, specification of the essence and main characteristics of the blockchain technology, profiling of the mechanism of the work of the block chain technology, disclosure of the main purpose and the features of the use of smart contracts in the block chain environment, formulation of the advantages and disadvantages that arise in the process of working with smart contracts, analysis of perspective directions of application of smart contracts in the banking system. The study underlines that under current conditions of broad consumption, crypto-currency payments found general application. Such payments are relatively simple: there are wallets, you can transfer money from one wallet to another or several at once. The network is built on principles that allow you to do it without a single center, but the tasks are carried out in a traditional way. Thus, it is an ordinary payment system consisting of people, money and money transfer. Under the influence of the continuous development of technologies, a payment network that allows you to write programs that not only worked with wallets was created, but they themselves would take money out of wallets and decide who and how much to send. Important conditions for smart contracts are transparency, security and universality for all users.
Abstract The exponential increase of the traffic volume makes Distributed Denial-of-Service (DDoS) attacks a top security threat to service providers. Existing DDoS defense mechanisms lack resources and flexibility to cope with attacks by themselves, and by utilizing other’s companies resources, the burden of the mitigation can be shared. Technologies as blockchain and smart contracts allow distributing attack information across multiple domains, while SDN (Software-Defined Networking) and NFV (Network Function Virtualization) enables to scale defense capabilities on demand for a single network domain. This proposal presents the design of a novel architecture combining these elements and introducing novel opportunities for flexible and efficient DDoS mitigation solutions across multiple domains.
An abundance of new technologies and new technology interactions has created the buzz surrounding ‘InsurTech’, the emerging combination of insurance and technology. Smart contracts are an increasingly popular point of discussion as people realise that computer code can be embedded in distributed ledger technology. Yet, smart contracts do not need distributed ledgers and could promote straight-through-processing (STP) in the London wholesale insurance Market with current technology.
This guide aims to give insurance executives an overview of smart contracts that should aid them in discussions about the technology future of the Market. The guide tries to explain the concept, give a taste of the technology and applications, and look to the longer-term risks and rewards.
Vasiljevska Julija, Jochem Douw, Anna Mengolini, Igor Nikolić
EU Regulation / /EC concerning common rules for internal market in electricity calls upon % of EU electricity consumers to be equipped with smart metering systems by , provided that a positive economic assessment of all long-term costs and benefits to the market and the individual consumer is guaranteed. Understanding the impact that smart metering systems may have on the electricity stakeholders (consumers, distribution system operators, energy suppliers and the society at large) is important for faster and e ective deployment of such systems and of the innovative services they o er. For this purpose, in this paper an agentbased model is developed, where the electricity consumer behaviour due to di erent smart metering policies is simulated. Consumers are modelled as household agents having dynamic preferences on types of electricity contracts o ered by the supplier. Development of preferences depends on personal values, memory and attitudes, as well as the degree of interaction in a social network structure. We are interested in exploring possible di usion rates of smart metering enabled services under di erent policy interventions and the impact of this technological di usion on individual and societal performance indicators. In four simulation experiments and three intervention policies we observe the di usion of energy services and individual and societal performance indicators (electricity savings, CO 2 emissions savings, social welfare, consumers' comfort change), as well as consumers' satisfaction. From these results and based on expert validation, we conclude that providing the consumer with more options does not necessarily lead to higher consumer's satisfaction, or better societal performance. A good policy should be centred on e ective ways to tackle consumers concerns.
The purpose of this paper is to provide a brief explanation regarding the authors’ current research in the field of the possible uses of smart contracts in cybercrime, focusing in particular on how the technology could provide a substitute for trust both in client-criminal transactions and in transactions taking place within criminal organizations. The authors share the conviction put forward by Alharby and Moorsel [1] in their 2017 analysis of blockchainbased smart contracts that there is a ”lack of studies on criminal activities in smart contracts”: while quality research does exist, including a paper by Juels et al. [2] detailing three types of such activities that can be facilitated by the technology, it is evident that the subject deserves a more widespread attention. Quality research, in fact, could play an important role in aiding authorities and regulators to understand the issue and react accordingly.
Two parties sign a contract but before they fully perform they modify the contract.Should courts enforce the modified agreement?The modification may enable efficient trade in response to changed circumstances, or one party may have made an efficient relationship-specific investment and then been held-up by the other.Courts have had difficulty tackling this problem because the facts required to discriminate between the two situations are non-verifiable.A private remedy is for the parties to write a contract that is robust to hold-up or that makes the facts relevant to modification verifiable.But implementing such remedies requires commitment to the provisions, i.e., they themselves are subject to non-compliance.Conventional contract technology, e.g., the use of liquidated damages, to ensure commitment are disfavored by courts and subject to renegotiation.Smart contracts written on blockchain ledgers may offer a solution.We explain the basic economics of these technologies.We argue that they can used to implement liquidated damages without court involvement and thereby obtain commitment to renegotiation design and revelation mechanisms.We address the hurdles courts may impose to use of smart contracts and argue that sophisticated parties' ex ante commitment to them may lead courts to allow their use as pre-commitment devices.
Blockchain technology has received a disproportionate share of technology news reporting in recent years. As the database technology that solves the double-transaction problem for cryptocurrencies, blockchain has conventionalised digital ledger technology thinking and is envisaged to represent the future of financial platforms. Smart contract technology, the blockchain containers for processes and rules, is positioned to expedite automation in the post-trade infrastructure of financial systems. \nFintech disruptors discern blockchainÕs potential as a mechanism for disintermediation of the insurance value chain as an opportunity for innovation. Industry counter-measures to this threat include coalitions of financial institutions to evaluate potentially disruptive technologies. The fundamental questions facing the insurance industry are the end-consumerÕs trusting beliefs and propensity to use these emerging technologies in policy servicing systems. \nWe harness technology adoption theories, trust in technology research and the task-technology fit model to measure policyholder perceptions of blockchain among consumers in the life insurance industry. Responses from a sample of life insurance policyholders (n = 199) were used to measure concepts from three IS adoption theories. Our research finds evidence of policyholder trust in the reliability of blockchain technology, an understanding of the benefits of the technology and a willingness for it to be used in policy servicing.
Taneli Hukkinen, Juri Mattila, Juuso Ilomäki, Timo Seppälä
Abstract This report documents a blockchain application developed for the energy sector that enables distributed market coordination for decentralized energy systems. As its core element, it utilizes Ethereum-based smart contracts to facilitate market matching between individual producers and consumers of electricity. The motive for this application was to understand the process of developing blockchain applications with industrial partners. Moreover, the purpose of this exercise was to examine whether Ethereum-based smart contracts could be effectively utilized for similar applications in industry and society at large. The application and the discussions during its development indicate that similar horizontal market structures may spring up in value chains in which the dynamicity of the market is growing and in which the roles of the market actors are shifting from fixed roles towards switch-role markets.