Blockchain Papers

Paul P. Momtaz

No abstract is available for this record.

Mark Schaub

On January 4, 2021 the Office of the Comptroller of the Currency (OCC), a major regulator of financial institutions in the United States, announced that federally chartered banks and thrifts were now allowed to utilize stablecoins as payment instruments. Much research and many discussions have revolved around policies of governments worldwide in how to handle the new cryptocurrency phenomenon. The purpose of this short study was to observe the valuation impact of that announcement on the three largest cryptocurrencies and two others. Research findings show the altcoins with valuations not tied to the dollar had substantial increases in value while the stablecoins, which the announcement specified are now allowed to be used by banks, changed very little. Specifically, Bitcoin and Etherium increased over 20% in value within 5 days of the announcement while the stablecoins Tether and USDCoin changed in value by no more than 0.10% for the same event window. This shows that stablecoins lived up to their name even though they were promoted as an acceptable payment system in the US.

Randy Priem

No abstract is available for this record.

Joel Crank

No abstract is available for this record.

Eva Micheler

Abstract This chapter explores the English law as an example of a particular model for the analysis of intermediated securities. It analyzes the rights of investors through the lens of trust law rather than through bailment and highlights the advantages and disadvantages of the no-look-through model. It also reviews cases where individuals hold a relatively small number of securities through a financial service provider, including the Duomatic principle that gives license to the court to override the formal requirements for shareholder decisions contained in the Companies Act. The chapter demonstrates why the intermediated holding structure that has evolved across the world does not sit comfortably with English law. It cites the recent scoping study conducted by the UK Law Commission combined with the UK Government’s ambition to attract a global pool of investors, which suggests that the UK Government is motivated to address the problem with the English law.

Mieszko Mazur

The risk and return characteristics of NFT-based companies listed on the cryptocurrency market are investigated in this study. The current spike in NFT activity among creators, investors, and traders has prompted our inquiry. The study start by proposing a new classification system for existing NFTs, ranging from NFT blockchains to NFT metaverses to NFT. Next, the study show that NFTs. Earn 130 percent on the first day of trading; Have a long-term investment multiple of 40 (approximately 4,000 percent), which is four times larger than bitcoin; and have positive and strong alpha and above-average beta. The research also show that following the mid-2021 meltdown, the NFT portion of the cryptocurrency market leads market recovery and generates a return of about 350 percent. The paper's conclusion is that integrating NFT infrastructure into current blockchains increases the market value of these networks. Keywords: NFT, Cryptocurrency, Blockchain, Digital Currency, Binance.

De-Rong Kong, Tse‐Chun Lin

No abstract is available for this record.

Wulf A. Kaal

Venture capital (VC) models can be optimized with emerging decentralized technology. There are many disadvantages that come with traditional VC fundraising including illiquidity and ownership struggles, as well as timing. This paper will discuss alternative funding mechanisms that may be available and advantageous to emerging businesses. After discussing the shortcomings of the existing VC market and the rise of alternative early round funding mechanisms, the paper highlights the evolution of VC businesses that are operated by a Decentralized Autonomous Organization (DAO). More specifically, models discussed in this article contribute to the much-needed experimentation with venture capital reputation models.

Christian Fisch, Michele Meoli, Silvio Vismara

Initial coin offerings (ICOs) are one of the major innovations that characterize the digital revolution of financial markets. Among the expectations created by the digital revolution is the democratization of entrepreneurial finance, defined in terms of the creation of more equality regarding the access to financial resources by categories known to be underrepresented among potential entrepreneurs. Following this line of research, we investigate, through two complementary empirical studies, whether gender, ethnicity, and geography affect the choice of ICOs vs. traditional financing alternatives. Additionally, we assess whether these characteristics increase the amount of money an entrepreneur can raise. In Study I, we compare 390 ICO ventures to a sample of 1,078 VC-backed blockchain ventures, identifying a negative correlation between the choice of an ICO (vs. VC-backing) and a location in an urban area. In Study II, we compare 160 ICO ventures to 163 real estate investment trusts (REITs), reaffirming the results of Study I. The findings show significant participation and likelihood of successful campaigns for ethnical minorities in ICOs, with the latter also being able to collect, ceteris paribus, larger amounts of funding. In contrast, female entrepreneurs do not have higher chances to participate nor raise funds in ICOs.

Célio Gil Gouveia Rodrigues

No abstract is available for this record.

Ashish Kumar Saini

The rapid expansion of financial technology (fintech) across international markets has introduced unprecedented innovation in financial services, improving access, efficiency, and user experience. However, this growth also presents significant regulatory challenges for governments and oversight bodies worldwide. Diverse regulatory frameworks, inconsistent cross-border compliance requirements, and evolving fintech business models make it difficult to ensure consumer protection, data security, and financial stability. Emerging issues such as digital currencies, decentralized finance (DeFi), and algorithmic decision-making further complicate the regulatory landscape. This paper explores key regulatory hurdles faced by global fintech ecosystems, including jurisdictional fragmentation, regulatory arbitrage, and the need for agile, technology-aware governance. It also highlights efforts toward international regulatory cooperation and proposes strategies for fostering innovation while ensuring responsible and inclusive financial systems.

Amy Whitaker, Roman Kräussl

A core challenge in studying the real return on artist' work is the extreme difficulty accessing private records from when an artwork was first sold and thus relying on public auction data. In addition, artists do not typically receive proceeds after the initial sale. This paper, for the first time, uses archivally sourced primary market records to model returns on art and introduces a novel fractional equity structure for artists. We first model what would happen if the American artists Jasper Johns and Robert Rauschenberg had retained 10% equity in their work when it was first sold. Second, we model a portfolio return using data from the Betty Parsons Gallery and the Green Gallery. To add a portfolio analysis to the performance of “star” artists, we model the galleries as a fund invested in all of artworks sold, using auction sales as the realization event. We find that the individual Johns and Rauschenberg works would have vastly outperformed equities markets. The gallery portfolio still substantially outperforms the S&P, even including 20% transaction costs. Beyond the art market, our larger conceptual framework for retained fractional equity has broad implications for compensation of early-stage creative work in any field and for potential applications of blockchain technology. This paper was accepted by Karl Diether, finance.

Loha Hashimy, Philipp Sandner

There is disagreement in the literature concerning the impact of regulations on firms’ development. While some researchers believe that regulation impedes companies’ development (Poel et al., 2014; Jalilian et al., 2007), others argue that regulations enable companies’ development (Peck et al., 2018; Mayson et al., 2014). This paper aims to contribute to a better understanding of the impact of financial regulations on development of Distributed Ledger Technology (DLT) firms. In-depth semi-structured open-ended interviews have been conducted with 20 Small Medium Enterprise (SME) DLT companies in Europe during April and May 2019. Our results show that the expected impact of financial regulation can be ambiguous as it can both enable and constrain a firm’s development. This is in line with Kitching et al. (2015) theory of regulation as a dynamic force.

Morten Linnemann Bech, Jenny Hancock, Tara Rice, Amber Wadsworth

Innovative technologies, such as distributed ledgers, allow securities to be issued or represented in a new form known as digital tokens. Such "tokenisation" of securities will alter post-trade clearing and settlement, and could improve efficiency in some dimensions. But the fundamental trade-offs involving credit risk and liquidity remain in a tokenised world. To succeed, tokens will need to interoperate with account-based systems, at least in the interim.

Nipun Agarwal

An early stage funding platform using cryptocurrency smart contracts can potentially provide an equity and debt capital raising platform for new ventures compared to crowdfunding, initial coin offerings (ICOs) and seed funding. The existing capital raising methods are less transparent, have limited depth of funding and less diversification. Utilising a cryptocurrency smart contract-based early stage funding platform will allow new ventures to obtain a staged funding environment, starting from seed funding. Each stage of funding can be represented by a smart contract that is aligned to a formal standardised legally binding contract between the venture and investors through the platform. Competition for funds and a transparent smart contract-based platform should allow free markets to price investments in the new venture in a more efficient fashion. Additionally, such a platform should provide more funding opportunities to new ventures that weren't available prior.

Ashby Monk, Soh Young In

No abstract is available for this record.

Mooney, W Charles

Publicly traded securities generally are held by investors in securities accounts with intermediaries such as stockbrokers and central securities depositories — intermediated securities. For many investors this is the only practical means of holding and dealing with securities. These intermediated holding systems (IHSs) impose a variety of risks and costs. Investors are exposed to intermediary risk (default or insolvency of an intermediary holding securities) as well as impediments to the exercise of rights such as voting and asserting claims against securities issuers. The nontransparency of IHSs imposes other social costs, such as obstacles to anti-money laundering enforcement. The emergence of FinTech and the potentially disruptive effects of distributed ledger technology (blockchain) now present realistic opportunities for reforms of securities holding infrastructures that would increase transparency and allow investors to hold securities directly on the books of their issuers. This article proposes a “New Platform System” (NPS) for the direct holding of securities that would connect issuers and investors and also connect both with trading and settlement systems (which would remain intact, at least for now). Unlike other recent transparency and direct holding proposals, the NPS would cover both equity and debt securities and would flexibly accommodate beneficial aspects of current IHSs, such as margin lending, securities lending, and rehypothecation. The article presents a broader menu of problems that the NPS could resolve. The NPS addresses the probable objections that the intermediaries who benefit from the status quo would make to any transparency or direct holding proposals. Disintermediation likely would require regulatory intervention by the SEC in the United States. By offering reforms that would minimize the disruption of current market practices, the NPS could encourage intervention and blunt opposition. It also could provide a “primordial soup” for future, more extensive reforms of trading and settlement systems.

Kirill Shakhnov, Luana Zaccaria

No abstract is available for this record.

Sebastiaan Niels Hooghiemstra

No abstract is available for this record.

Marco Bareis

Aufgrund des Hypes um Bitcoin und Cryptocurrencys haben Blockchains in den letzten Jahren viel Aufmerksamkeit erhalten. Aber Cryptocurrencys sind bei weitem nicht die einzige Anwendung der Blockchaintechnologie. Smart Contract, also Applikationen die nach vordefinierten und unveränderbaren Regeln agieren, stellen eine weitere Anwendung dar. Solche Smart Contracts benötigen jedoch spezielle Platformen um ausgeführt werden zu können: so gennante Smart Contract Platforms. Die momentan meistverwendete Plattform is Ethereum, aber es gibt weitere Plattformen die interessante Alternativen darstellen. Eine vielversprechende dieser möglichen Alternativen is NEO. NEO ist in vielen Belangen ähnlich zu Ethereum, aber verspricht gleichzeitig einige Probleme zu lösen, mit denen sich Ethereum momentan konfroniert sieht wie zum Beispiel die schlechte Skalierbarkeit. Literatur, die sich mit den Unterschieden zwischen Ethereum and NEO befasst, ist spärlich. Vor allem NEO wird in der Literatur selten berücksichtigt, und falls NEO behandelt wird, dann passiert dies in der Regel nur oberflächlich. Außerdem haben die meisten Vergleiche und Evaluierungen von Smart Contract Plattformen beziehungsweise von Blockchains keine strukturierte Herangehensweise, sondern verwenden unterschiedliche Kriterien für unterschiedliche Plattformen. Das bedeutet, dass die meiste Literatur zu diesem Thema eine Übersicht der Plattformen darstellt, aber wenig Hilfe bei der Auswahl von Smart Contract Plattformen liefert. Diese Arbeit schließt diese Lücke, indem sie einen detalierten Vergleich von Ethereum und NEO durchführt. Um eine strukturierte Herangehensweise zu gewährleiten, wird in dieser Arbeit ein Kriterienkatalog basierend auf Kritierien in wissenschaftlicher Literatur abgeleitet. Dieser Kriterienkatalog wird anschließend auf die beiden Plattformen Ethereum und NEO angewandt um die für den Vergleich notwendigen Daten zu erhalten, die dazu dienen, die relevanten Gemeinsamkeiten und Unterschiede zwischen Ethereum und NEO zu identifieren. Des weiteren ermöglicht dies eine Diskussion über die Auswirkungen dieser Unterschiede. Die Ergebnisse der Arbeit zeigen, dass obwohl Ethereum und NEO auf den ersten Blick sehr ähnlich zu sein scheinen, diese doch markante Unterschiede aufweisen. Die Unterschiede reichen vom allgemeinen Ziel der Plattform über die Reife der Dokumentation und Plattformfeatures bis hin zu praktischen Kritierien wie den Kosten für die Erstellung von Smart Contracts.

Karsten Schulz, Marian Feist

The rapid development of digital technologies such as blockchain and distributed ledger-based systems holds transformative potential for the financial sector. Promising applications include asset management as well as peer-to-peer networks for the transparent exchange of data and information. International climate finance stands to benefit in particular ways from these new opportunities in financial technology. Distributed ledger technologies could be leveraged to support climate action, for example by facilitating transparent and standardized transactions, or by enabling more efficient monitoring and accreditation processes. In view of these promising opportunities, we focus our inquiry on the case of the Green Climate Fund to explore how distributed ledger technologies can be used for innovative climate finance. Based on our analysis of different digital system models and potential use cases, we then discuss some of the technical and political challenges that may arise, for example with regard to standards and safeguards, governance processes, country ownership, and further capitalization. Our findings show that distributed ledger-based systems could benefit the work of the fund in key areas such as multi-stakeholder coordination and impact assessment. However, our analysis also points to the concrete limitations of technology driven solutions. Digital technologies are not a standalone solution to persistent resource allocation and governance challenges in international climate finance, especially because the design and deployment of these digital systems is inherently political.

Ghulam Mustafa

This study aims to explore cryptocurrency investment experiences from an emerging market context. This study investigates the lived experiences of cryptocurrency investors, the potential risks and benefits of the cryptocurrency investment, and the potential prospects from cryptocurrency investors' perspectives. The current study intends to adopt a qualitative research approach to address the phenomenon of the study. The qualitative study employs interviews as a data collection tool that allows researchers to seek people's stories from their lived experiences. In this regard, the interpretivism paradigm is employed as it indicates that people determine the reality around events rather than other factors. Moreover, the purposive sampling technique is adopted to discover and recruit the current study respondents, which were in alignment with the proposed research questions. The interviews were terminated at the point of saturation, where a total of twelve cryptocurrency investors participated in the survey.

Gildércia Silva Guedes de Araújo, Katyusco de Farias Santos

Este artigo trata de busca de anterioridade e análise quantitativa sobre a evolução do tema smart contracts, usando o depósito de patentes como principal indicador tecnológico. Para o levantamento dos dados utilizaram-se as plataformas Questel Orbit®, Lens e Patent Inspiration, aplicando como entrada as palavras-chaves “smart contract” ou “smart contracts” para as buscas nos títulos e nas reivindicações. Foram realizadas análises Macro e Meso, com o objetivo de identificar os indicadores quantitativos das patentes relacionadas aos smart contracts. As investigações foram realizadas até abril de 2019 e trouxeram o quantitativo de 968 invenções de patente pelo Questel Orbit®, um resultado de 1.935 depósitos de patentes pelo Lens e 660 depósitos pelo Patent Inspiration. Em todas as plataformas, houve uma predominância de depósitos realizados pelo setor privado (Empresas) e a área de maior relevância, quanto ao domínio tecnológico dos smarts contracts é o modelo de gestão, representando 49% das patentes verificadas.

Galia Kondova, Geremia Simonella

This paper provides a comparative analysis of the new blockchain-based start-up and small companies funding methods, namely, initial coin offerings (ICOs) and security token offerings (STOs) against the backdrop of traditional fundraising methods like venture capital and private equity building on the experience of Switzerland. In particular, the comparative analysis is based on a theoretical overview of the nature of these blockchain applications, the relevant legislative framework as well as recent market developments with a focus on Switzerland. The paper concludes that both ICOs and STOs are characterized by lower entry barriers for investors and higher cost efficiency as compared to traditional start-up fundraising methods. However, STOs provide more security to investors than ICOs due to their wider regulation.