Blockchain Papers

Susannah Wilkinson, Jacques Giuffre

No abstract is available for this record.

Evripidis Rizos

No abstract is available for this record.

Stylianos Tsarsitalidis, Marcelo Corrales Compagnucci, George Kousiouris, Alan Dahi

This chapter investigates the broad range of real-world applications of smart contracts and relevant rules associated with them by examining the requirements coming from supply chain management and the current technical landscape. Issues such as copyright protection, product delivery etc., have been enforced through various technological means. However, more dynamic means are now needed. The modern supply chain is a complex network of suppliers and creators and it has become increasingly difficult to control and track abnormal conditions occurring during manufacturing, delivery, sale, and management. This chapter will use the AffectUs:TagItSmart semantic and event detection framework as a use case example to demonstrate how the aforementioned concepts could be implemented with relevant pseudo-code that can be used as triggering logic or core rules in potential smart contracts for supply chains. The transformation of these rules and use of semantics will provide a more effective and multi-layered end-to-end supply chain solution that can aid in the integration with a smart contract rationale.

Marcelo Corrales Compagnucci, Mark Fenwick, Stefan Wrbka

Smart contracts-self-executed, autonomous agreements in the form of computer code hosted on a blockchain-are, according to many observers, poised to disrupt the theory and practice of contracting. The perceived advantages of smart contracts are manifold. They can facilitate the performance and execution of agreements without the necessity of intermediaries and are said to provide better security, enforcement and verification systems than traditional contracts. Moreover, they seem to be immutable, irrevocable and cost-efficient. This makes smart contracts an attractive and convenient option for many different types of agreement, particularly in a business context. <br/><br/>A smart contract is a tamper-proof, digital agreement that runs on a decentralised blockchain. As such, smart contracts have two obvious advantages over traditional arrangements. First, smart contracts are shared records, meaning that the parties do not need to keep a personal copy. This is a significant advantage, especially for modern companies where departments operating as silos may have conflicting working procedures resulting in no single or reliable record of truth. <br/><br/>Second, smart contracts are reliable, and execution can be relied upon to a greater degree than in the past. In traditional agreements, the deal might not be implemented as initially agreed by the parties, either due to a choice or mistake. Smart contracts operate in the blockchain environment where they are executed exactly as written and do not require any approval at each step. If the predetermined conditions are fulfilled, then the agreement is performed automatically. <br/><br/>Today, many transactions include a third party to handle the counter party risk that another party defaults on their obligations. The parties may be reluctant to perform their obligations if there is no guarantee that the counter party will reciprocate. One way to think about the emergence of platforms, such as Uber or Airbnb, is that they provide structural mechanism to solve this problem of counter party risk. <br/><br/>Blockchain's decentralised infrastructure, however, generates and guarantees trust without the need for intermediaries. According to advocates of these technologies, blockchain replaces trusted third parties with an open and secure protocol that all parties can trust. And, crucially, neither party can control or change the contents of the blockchain ledger as it is decentralised. Central servers are replaced with a decentralised network of computers that record all transactions in the shared ledger. In this way, distributed computing ensures the ledger is always accurate, and the decentralised network keeps the ledger secure. <br/><br/>As such, smart contracts are a scripting language overlaid on the blockchain that enables transactions on a blockchain that mirror 'real life' contracts by defining if/then conditions. For example, if an asset hits a certain price on a specific date, then a payout should be made to the other party (or parties) to the contract. A smart contract developer could programme the contract conditions according to any specifications. The if/then parameters are then tied to inputs and outputs of the smart contract. To take a simple example, consider a smart contract in the case of a car loan. If the borrower misses a payment (tracked via a blockchain-like technology) then the contract/code would not allow the use and operation of the car, ie, the contract would be automatically 'enforced ' via network technologies that disable the vehicle, rather than through the use of a third party. Such contracts may produce efficiency, timing and performance improvements as a result of the automation of the contract's terms. This automation is achieved by computer code, which controls the automated performance in the context of an Internet of Things environment where digital devices are interconnected. <br/><br/>As this simple example shows, a smart contract utilises code to execute an agreement. In addition, the term 'smart contract ' is also often used to refer to traditional text-based contracts in which the ordinary language text references the use of such a 'code-only contract' to effect some (but not necessarily all) of the provisions. <br/><br/>While smart contracts can be applied in many different situations, they are still in an early phase of development-they are a relatively new and untested technology and the range of possible and effective use cases is still being worked out. At present, the actual tasks that smart contracts can perform are relatively basic and straightforward. However, as the adoption of blockchain-based platforms and applications accelerates, the expectation is that smart contracts will become increasingly sophisticated and capable of handling more complex and diverse transactions. <br/><br/>However, the deployment of smart contracts in the real world still needs further testing. The relative immaturity of the technology makes them potentially vulnerable to hacking. The lack of regulation is also a bottleneck for the development of more sophisticated forms of contract. This means that we need a more integrated or interdisciplinary approach to such contracts. There are still multiple concerns to be resolved relating to the technology, business models, appropriate markets, consumers and the law. Moreover, such contracts inevitably raise regulatory issues that need to be addressed by policymakers. Several countries have already started to develop new regulatory approaches, as legal commentators identify issues with such agreements. <br/><br/>Addressing the many challenges created by smart contracts requires going beyond a single disciplinary perspective or frame of reference. In particular, integration of technological, business and legal issues is crucial. This edited volume brings together a series of contributions by leading scholars and practitioners currently working in this space to examine the main issues that are driving the development of smart contracts, as well as the current response of key stakeholders in technology, business, government and the law. As such, the book explores the critical technical, business and legal challenges created by these potentially game-changing technologies and attempts to devise sound practical solutions in a broader scope regarding the functional and non-functional requirements of such contracts.

PSC Business against Corruption under the Commissioner for Rights, Elena V. Prudius

The rapid spread of digital technologies, namely – innovative technologies, has set the trajectories for the development of a new stage in the economy of the information society. Such growth is closely related to the emergence of new ways of doing business, new ways of concluding contracts and fulfilling contractual obligations, new forms of existence of contracts and new contractual structures. Thus, there is a need to form a new regulatory environment that provides a favorable legal regime for the emergence and development of modern technologies, as well as for the implementation of economic activities related to their use. Of particular importance in this case is the conclusion of transactions in electronic form. One of the varieties of such transactions can be called a smart contract, which has long been actively distributed in foreign countries, but is not used so often in the Russian Federation. The main reason for the low number of such «smart» contracts is that the legislator has practically not paid attention to the legal regulation of this category. The purpose of the work is to analyze smart contracts, identify problems in their application and propose solutions to the current situation. The following methods were used: historical, comparative law, induction and deduction, analysis and synthesis. The author came to the conclusion that there is no legal definition of smart contracts and the specifics of its conclusion in the current legislation. Cryptocurrency is also closely related to smart contracts, which is also not fully regulated. In this regard, the author suggests ways to solve the identified problems.

Volodymyr Marchenko, Alla Dombrovska

The rapid development of the use of information and communication technologies, in particular smart contracts, necessitates legal regulation of the latter. The principle and mechanism of operation of smart contracts are of great legal interest, and although certain programmers the idea is expressed that a reasonable contract is software and is not a legal term, I do not agree with this possible, because a reasonable contract falls under the generally accepted definition of the contract, promotes monetary turnover and has real material consequences for the parties. The purpose of the smart contract is to transfer information and ensure that all participants fulfill the conditions set in the code. The potential of smart contract technology is capable of changing approaches to contract law no less than the advent of computers and the Internet has changed the way lawyers work. Taking into considerationthe diversity of scientific views on the legal nature of the smart contract, the lack of established scientific approaches, the considerable scientific interest of the topic requires its proper theoretical justification.

Emma Macfarlane

Despite the ubiquity of cryptocurrency, no international uniform regulatory system exists. State-by-state regulation of cryptocurrencies has problematic implications for cross-border investigations and predictability in application. Moreover, this regulatory framework leaves open opportunities for actors worldwide to violate international sanctions with impunity. This Note posits that an international regulatory framework is necessary to combat the evasion of financial sanctions on practical and theoretical grounds. It further argues that the best way to structure this new framework is through the enactment of a new multilateral treaty. A formal international regulatory mechanism for cryptocurrencies would have numerous benefits, foremost among them limiting the evasion of international sanctions. An international regulatory mechanism would also promote predictability in the regulation of cryptocurrencies. This would in turn entice institutional investors to build out the field of crypto users and encourage stability in an otherwise volatile marketplace. The proposal outlined within this Note goes beyond standard legal justifications for a multilateral mechanism. It drills down into the substantive mechanisms that an effective treaty must include, such as public key cryptography; an international public key directory; prosecution guidelines; and foreign fine credits. The levels of specificity to this end are perhaps uncommon in a typical legal proposal. However, this analysis is essential to explain why a new, multilateral treaty is required. The current structures in place cannot begin to grapple with the complex underlying issues which are so crucial to the regulation of cryptocurrency. The substantive components of the proposed treaty undergird the very reason why a new multilateral treaty is necessary.

George Milunovich

Major cryptocurrencies such as bitcoin and etherium rely on the computationally expensive and energy inefficient Proof of Work (PoW) consensus mechanism to validate transactions and secure their networks. In response to such concerns digital coins that implement more energy efficient algorithms, e.g. Proof of Stake (PoS), have started to grow in popularity and some PoW based coins are planning to switch to PoS. We investigate linkages and transmission of price shocks across fourteen PoW and PoS/Other powered digital assets. PoW cryptocurrencies appear to be more strongly connected within the network of digital coins than are PoS/Other digital currencies. On average PoW coins export more uncertainty to other cryptocurrencies, while assets in both groups import similar levels of risk. PoS/Other cryptocurrency stakeholders need to be aware of the impact that PoW cryptocurrencies can exert on the riskiness of their assets.

Gergana Varbanova, Gergana Varbanova

Are the technologies advanced enough to replace lawyers and the judiciary in the negotiation and enforcement process? Is it possible for a program code to be a contract that binds the parties named in it? What is a smart contract and what challenges does it pose to the law? The present study aims to clarify and show the advantages and disadvantages of using smart contracts in civil law.

Amélie Favreau

International audience

Mangal Chauhan

Smart Contracts and Smart Dispute Resolution: Just Hype or a Real Game Changer? This article explains the functioning of smart contracts and technology underlying blockchain. This contribution aims to compare smart contracts with traditional contracts and discuss their situation under the present contract law. It further discusses possible issues that may arise out of the application of smart contracts, for instance, coding errors and programming defects. It studies the possible application of smart contracts to specific fields, such as e-commerce and consumer transactions and possible disputes arising out of this application. It divides the smart contracts into categories based on their form and discusses legal issues in regard to their application. Against the common perception that smart contracts will replace the judicial enforcement of traditional contracts, it argues that smart contracts will not replace the system but are rather another form of contracts to be governed by it. In fact, the interplay of smart contracts and contractual law creates possible legal issues as to their validity, recognition and enforcement. It provides possible solutions as to the legal issues arising out of the application of smart contracts under present contract law. The study concludes that a robust and ‘smart’ dispute resolution mechanism is required for dealing with disputes arising out of the application of new technology. Online or blockchain arbitration and other online dispute resolution mechanisms are argued to be better suited to dealing with such disputes.

Д. А. Качан, U. А. Vishniakou

The purpose of this article is to analyze methods, approaches, and tools of distributed ledger technology (DLT) for working with documents in education. The objectives of the article are to analyze problems with the authentication of educational documents, develop new structural solutions using block chain technology, consider two models, and evaluate their use for educational documents. Authentication of educational documents is carried out using state registers, which is a complex and resource-intensive process. There is an increase in the number of forged documents in the world, which calls into question the effectiveness of modern mechanisms. Distributed ledger technology (block chain) is a sustainable technological trend that affects the development and quality of the digital economy. The existence of a mechanism for verifying the authenticity of educational documents that is resistant to malicious manipulation is an urgent task that goes beyond the sphere of education, possible solutions to which are proposed to be considered in this paper. The article provides a brief description of DLT and considers the approach of using the technology to authenticate educational documents. It consists of two main stages: the issue of a digital educational document and its verification. The role of a trusted third party in the issue and validation process is considered. The paper presents the models for issuing and validating digital documents based on distributed ledger technology, which allows one to eliminate the limitations and shortcomings of existing approaches. The effectiveness of the approach based on the proposed models is revealed. The formulated approaches can be applied in various socio-economic areas and public administration to work with similar documents.

Eugene Lim

Dr Eugene C Lim is a faculty member at the City University of Hong Kong School of Law. This article Artificial intelligence (AI) technologies have, in recent years, triggered a dramatic paradigm shift in how we conceive of authorship and creation. Intelligent machines, such as those powered by the new GPT-3 neural network technology, are capable of generating expressions, composing text, performing translations and producing other ‘creative’ outputs once thought to be beyond the ability of computers. This article will focus on intelligent AI applications (or ‘creative avatars’) that are programmed to replicate the ‘style’ of a human author (such as Shakespeare, Rembrandt or JK Rowling), and the regulatory challenges flowing from the generation of...

Paolo Bertoli

No abstract is available for this record.

B. Cappiello, Gherardo Carullo

No abstract is available for this record.

Amedeo Santosuosso

No abstract is available for this record.

Michele Nastri

No abstract is available for this record.

V. M. Kamalyan

In this work author compares smart-contract to letter of credit. Discovering technological and law aspects of smart-contract. The author underlines indivisibility of these aspects, which consolidate in unique symbiosis of digital solutions and law constructions. Moreover, technical and law nature are to be discovered in this paper, particularly, program and law mechanism of smart-contract. Comparing smart-contract to letter of credit, author concludes that smart-contract is one of types of letter of credit as a payment instrument.

M. Suresh Kumar

The advancement in information technology has changed our life significantly. No doubt, the Internet, smartphones, and social media have connected people and society. It has contributed to various aspects of our daily life. However, there is also a dark side of cyberspace, that is, cybercrime. It is becoming a global threat and needs technological solutions to combat. Whenever there is a crime, there is a law to curb the crime. The role of digital forensics is to understand the ‘Who, What, Where and Why’ of the incident. Digital forensics is a scientific process to collect, analyze, and present the evidence in a court of law. As it is used to link the person with criminal activities, it is crucial that the entire process of investigation be trustworthy. Managing the digital evidence and maintaining the chain of custody and integrity of digital evidence are utmost important. This chapter discusses the applications of blockchain technology to address the challenging issues faced by the digital investigation process and forensic readiness. The chapter also discusses the legal issues and admissibility of blockchain-based evidence in a court of law.

L. G. Efimova

The paper carries out a legal analysis of three models of settlements by letters of credit with the use of distributed ledger technology. First, this refers to the model of settlements that uses blockchain as a way of transferring documents under the letter of credit. Second, the author investigates the model of settlements where two smart contracts are used. In the author’s view, such smart contracts should be seen as a way of executing the contracts that, in practice, form the settlement procedure with the use of letters of credit. Third, the most interesting is the settlement model where the payer and the recipient of funds (payee) enter into one smart contract that provides non-cash settlements between them with the use of the P2P service. There is no financial intermediary that organizes non-cash settlements in this settlement model. This difference makes it possible to conclude that settlements similar to settlements with the use of letters by credit via blockchain technology and carried out on the principle of P2P, should be considered as a new form of non-cash settlements. The peculiarity of this form of non-cash settlements is the opportunity given to direct participants of the settlement to fulfil their monetary obligations without using cash and without any assistance of financial intermediaries.

Aleksey Yu. Churilov

No abstract is available for this record.

Tega Edema

The growing use of smart contracts in a wide range of transactions has raised a deluge of legal issues, including allocation of liability in such transactions. In many circumstances, using smart contracts involves a range of legal risks that might be distributed beyond the contractual parties to other parties, such as the developers of the smart contract code. While smart contracts have the potential to disrupt the current legal and transactional status quo, notorious occurrences such as attacks on Ethereum or Bitcoin platforms highlight the need to properly dissect the issue of liability and rightly apportion liability where it falls. This also includes working on any lapses in the existing legal and transactional framework to cater for these issues. This article sets out to examine the validity of smart contracts in the light of existing contract law principles. It examined the legal regime and development of smart contracts in Nigeria. It further discussed the problem of allocation of liability associated with smart contracts. It made certain propositions on how these issues could be tackled including the amendment of existing legal framework to aptly provide for and regulate the smart contracts era particularly in Nigeria. The doctrinal method of research was employed to dissect the issues raised and discussed in the article. Relevant texts were scrutinized and analyzed to arrive at the findings and recommendations contained in the article.

Michael Becker, Kevin M. Merz, Rüdiger Buchkremer

Summary We provide a high‐level view on topics addressed in scientific articles about regulatory technology (RegTech), with a particular focus on technologies used. For this purpose, we first explore different denominations for RegTech and derive search queries to search relevant literature portals. From the hits of that information retrieval process, we select 55 articles outlining the application of information technology in regulatory affairs with an emphasis on the financial sector. In comparison, we examine the technological scope of 347 RegTech companies and compare our findings with the scientific literature. Our research reveals that ‘compliance management’ is the most relevant topic in practice, and ‘risk management’ is the primary subject in research. The most significant technologies as of today are ‘artificial intelligence’ and distributed ledger technologies such as ‘blockchain’.

Sébastien Ragot, Antje Rey, Ramin Shafai

No abstract is available for this record.