Blockchain Papers

Dan M. Marcotte, Linda Tissaoui, Joyling Liu

No abstract is available for this record.

Maxfield Chance Christian Lehman

No abstract is available for this record.

Parwat Singh Anjana, Sweta Kumari, Sathya Peri, Sachin Rathor · 5 authors

No abstract is available for this record.

Dan Awrey

Derivatives are the “bad boys” of modern finance: exciting, dangerous, and fundamentally misunderstood. These misunderstandings stem from the failure of scholars and policymakers to fully appreciate the unique legal and economic structure of derivative contracts, along with the important differences between these contracts and conventional equity and debt securities. This Article seeks to correct these misunderstandings by splitting derivative contracts open, identifying their constituent elements, and observing how these elements interact with one another. These elements include some of the world’s most sophisticated state-contingent contracting, the allocation of property and decision-making rights, and relational mechanisms such as reputation and the expectation of future dealings. The resulting hybridity essentially splits every derivative into two separate contracts: one that governs under normal market conditions, and another that governs under conditions of fundamental uncertainty. In good times, derivative contracts contemplate the almost automatic determination and performance of each counterparty’s obligations. In bad times, these contracts include various mechanisms designed to provide counterparties with the flexibility to incorporate new information, fill contractual gaps, and promote efficient renegotiation.\nThe process of splitting derivative contracts open yields a number of important policy insights. First, the bundling of contract, property, decision-making rights, and relational mechanisms makes derivatives look far more like commercial loans than publicly traded shares or bonds. The regulatory treatment of derivatives as “securities”—and the resulting emphasis on market transparency—is thus somewhat misguided and serves to distract attention from the significant prudential risks posed by the widespread use of derivatives. Second, the flexibility associated with the relational mechanisms embedded within many derivative contracts can play a useful role in promoting both institutional and broader financial stability. This has important implications in terms of the desirability of the recent push toward mandatory central clearing of derivative contracts. It also exposes the potential perils of recent proposals to use distributed ledger technology and smart contracts to execute, clear, and settle these contracts. By the same token, the widespread breakdown of these relational mechanisms can be a source of financial instability. This provides a compelling rationale for authorizing central banks to act as “dealers of last resort” during periods of fundamental uncertainty.

Mustapha Mekki

International audience

Jim Mason, Hollie Escott

Smart contracts and blockchain technology are at the forefront of technological advancement in the financial services industry. The basic premise involves the creation of an automated contract capable of satisfying common conditions and reducing the need for intermediaries in the process. The blockchain is a means by which the transactions can be recorded on a distributed ledger. 
\nThe enquiry carried out in this paper discusses whether these technologies are capable of being transposed into the United Kingdom’s (UK) construction industry and whether this is a desirable outcome. Technological progression is much slower in construction than in other industries as evidenced by the slow take up of UK government-backed initiatives such as the introduction of Building Information Modelling (BIM) and collaborative working agendas. 
\nA survey questionnaire was designed and distributed to investigate attitudes towards technology and collaborative working. A variety of professions across various organisations including clients, main contractors, consultants and law firms returned 117 responses mainly from senior management or commercial staff. There were divisions between participants believing technology and innovation are important, exciting and the future and those who believe automation is an impossible task in such a complex industry as construction. 
\nKey findings reveal a fear of the unknown and the overwhelming doubt from participants that full automation is possible. There was an acknowledgement that the technology could benefit simple supply-type contracts and that it would be beneficial to reduce the amount of paperwork involved in contract administration. There is a view throughout the industry that disputes cannot be solved with a computer. Opinions were further split along the lines of whether human interaction and relationships are key and technology would detract from or enhance the position.

Siti Rohaya Mat Rahim, Zam Zuriyati Mohamad, Juliana Abu Bakar, Farhana Hanim Mohsin · 5 authors

This study examines the two important aspect of latest technology issues in Islamic finance that related to artificial intelligence (AI) and smart contract. AI refers to the ability of machines to understand, think, and learn in a similar way to human beings, indicating the possibility of using computers to simulate human intelligence. Smart contract is a computer code running on top of a block-chain containing a set of rules under which the parties to that smart contract agree to interact with each other. The main objectives of this article are to evaluate the operations of AI and smart contract, to make comparison between the operations of AI and smart contract. This article concludes that AI and smart contract will have a huge impact in future for Islamic Finance industry.

Julian Yu, Benjamin Yen

Modern insurance has been operating in the same business model since its inception while its recent IT improvement is mainly for specific functions without overall structural review. This paper is to incorporate the concept of a cryptocurrency, called Risk Coin, as the foundation of a new model to enhance the risk financing efficiency with capital market. Risk Coin is 1) a shareholding token of the premium fund with benefits from law-of-large-numbers, and 2) a cryptocurrency with benefits from seigniorage as fiat currency anchored at value of coin fund formed by collected premium and refund from loss payments. Applications in current insurance environment of pipeline model as well as in an innovative environment of platform model are simulated. Both results show a self-balancing mechanism that higher coin value from less coin preference, therefore, encouraging coin receivers to keep coins. Overall the new model will enhance the effectiveness of risk funding by keeping risk coins and also turn insurance deal to a win-win situation form zero-sum game through premium payment as gaining ownership of risk fund.

Pascal Favrod-Coune, Kévin Belet

No abstract is available for this record.

Authors unavailable

No abstract is available for this record.

Mthokozisi Moyo

No abstract is available for this record.

Debajani Mohanty

As mentioned in Chapter 2 , Solidity is the most widely used language for writing smart contracts with Ethereum. Basic Solidity programming is quite easy to learn. It’s similar to JavaScript and yet has some features of object-oriented languages such as Java and C++. Hence, some programming experience is desirable before jumping to development in Solidity, although it’s not mandatory. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Weiping He

This chapter discusses the decentralization of China’s securities markets and the regulatory roles and ambitions of local governments. Multi-level financial market regulation is an intrinsic part of the Chinese regulatory system, and the chapter looks at the effects and implications of decentralization of financial markets regulation. The powers of local governments to regulate credit companies, financing guarantor companies, private capital management companies, and regional markets are reviewed, as are the economic and political tensions between local and central government objectives, and the possible distorting effects of local government competition for financial services business and private local investment.

Christian Fries, Peter Kohl-Landgraf

No abstract is available for this record.

Charlotte R. Young

Society is progressing at a rapid pace. As math and science evolve, new technologies begin to utilize these advances and create something novel. These technological changes are revolutionizing not only the science-oriented industries, but also the humanities. One such example falls within the legal arena. More specifically, the exciting advent of smart contracts and their use of technological changes are altering the way law is processed and practiced. However, as is often the case, new technological innovations spur certain growing pains. The implementation of smart contracts is proving no different. Some view the smart contract as the start of a more ideal society. With the aid of smart contracts and blockchain technology, machines can finally be equipped to fulfill some of the most basic human functions. Not only would business transactions always occur in a timely, seamless, and cost-effective manner, but also more mundane life tasks, such as ordering laundry detergent, could soon be done via smart contract technology. As exciting as these changes may be, smart contracts and the blockchain technology behind them are still immature. Before this legal phenomenon is widely accepted, there needs to be more advancement in not only the code that creates the technology, but also in the law and its regulations. As it stands today, smart contracts are most likely to be accepted only in part, and heavily tailored to meet each contracting party’s needs. This Note will start by giving an overview of the technology needed to implement smart contracts—blockchain technology—and an explanation of how smart contracts fit within the framework of a blockchain. Next, this Note will discuss some of the major issues smart contracts face. Such issues include: the need to translate natural language into computer code, the traditional concept of contracting in conjunction with the effect of smart contracts on traditional legal notions, and reoccurring enforcement issues. After discussing smart contracts and the current issues barring wide-spread acceptance, this Note will explore the future of smart contracts in the legal arena by analogizing such an electronic contracting change to the now-widely accepted electronic clickwrap agreements. Additionally, this Note will explore recently enacted state statutes that create favorable legal conditions for smart contracts and what impact, if any, these statutes may have upon federal legislation. Furthermore, this Note will analyze the lack of and potential need for regulations regarding smart contracts. In an attempt to make smart contracts acceptable, this Note will suggest future regulations focus on two components of smart contracts. As it will be discussed, regulations should require smart contracts to utilize a permissioned ledger and focus on ensuring the legal requirement of mutuality between the two contracting parties. Lastly, this Note will conclude that although the publicity surrounding smart contracts is exciting and innovative, this form of contracting is likely to remain in a controlled business environment with implementation under select circumstances.

Christian Fries, Peter Kohl-Landgraf

No abstract is available for this record.

Christian Fries, Peter Kohl-Landgraf

No abstract is available for this record.

Donggun Lee, Taekyoung Kwon

No abstract is available for this record.

Francesco Di Ciommo

No abstract is available for this record.

Χαρίτων Μαντελάκης

No abstract is available for this record.

Habil Kantur

The world is becoming more and more digitized. Recently many industries have started to research the blockchain technology and particularly smart contracts. One industry that so far has not adopted new technology in the same pace as other industries, is the insurance industry so this interview study aims at finding opportunities and challenges for insurance companies that want to learn about smart contracts and its use cases.By doing a literature review and performing interviews with blockchain experts and insurance company employees, this study found that both IT companies working with smart contracts and the insurance companies have limited knowledge of the legal aspect of smart contracts. The lack of standards and regulations allows IT companies to freely create smart contracts without much quality control. The insurance companies must innovate themselves in order to not be disrupted. The blockchain technology will offer many new insurance types and if the insurance industry fails to adopt the blockchain technology they may face market disruption.There is much room for future research following this study. It would be beneficial to research how contract theory could be used in practice during the creation of legally binding smart contracts. Furthermore, research around fraud prevention in smart contracts would be interesting as would an in-depth exploration of the ecosystem of third party software and services around smart contracts.

Massimiliano Vatiero

No abstract is available for this record.

Jan Veuger

Purpose The real estate world finds itself at a tipping point of a transition: a dramatic and irreversible shift in (real estate) systems in society. This paper is a State of the art of Disruption, Blockchain and Real Estate in the Netherlands and international. Design/methodology/approach The following questions were asked to all those involved: What do you think is the essence of Blockchain for real estate? What is the most current situation with respect to Blockchain and real estate from your perspective? Which publications are important from your perspective? What do you expect with respect to the impact of Blockchain on real estate for (social) real estate? What are questions for the future for real estate and Blockchain? In addition, interviews, exploratory conversations and correspondence took place, and the content was peer reviewed. Findings Changes in value concepts affect the valuation of real estate and the thinking about it. The orientation of changing users and owners of real estate affects innovativeness, values and flexibility in managing that property. Orientation on disruption must be seen as proof that the real estate world is able to actually innovate the accumulated assets and consolidate this. The financial and real estate markets are markets that exaggerate through irrational behaviour. Fear of “eat or be eaten” determines people’s behaviour. Financial and thus real estate markets are always unstable and must always be regulated by people and organizations. Research limitations/implications The question that remains is whether it is important to look at disruptive innovations in existing markets or newcomers in the real estate market and Blockchain. The question is whether Blockchain is only a technological disruption, or a real game changer, and whether the entire value chain of the real estate market will embrace it. No two disruptions are the same. Trust in Blockchain is a prerequisite for guiding the predictable form of that disruption where start-up companies use new technology to offer cheaper and inferior alternatives to real estate in the market. You could also talk about anti-fragile value: “Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors and love adventure, risk, and uncertainty. Yet, in spite of the ubiquity of the phenomenon, there is no word for the exact opposite of fragile. Let us call it antifragile” (Taleb, 2012), in other words: attention to disruption and Blockchain creates a viable real estate economy. Practical implications The true meaning of the Blockchain technology for real estate still needs to be investigated. The author is still curious to understand and clarify the value of Blockchain for real estate processes. Doubt continues to exist and is therefore a feeding ground for further research, because we do not know what we have not seen. Social implications Looking at the impact of Blockchain on real estate, a number of conclusions can be drawn. First of all, the relationship between Blockchain and real estate has not yet been proven in practice. It is expected to develop further in the form of registering transaction processes and the DNA passport of a real estate object. Secondly, completeness and transparency are the basic ingredients for trust in the system. Third, real estate wants to remain viable. For this reason, taking the offense is necessary for real estate and management to connect with social demand. Behaviour also leads to new earnings models of the social and economic spin-off of disruptive real estate. If the Dutch real estate sector embraces Blockchain and is able to realize innovations, there are opportunities for real estate entrepreneurs to exploit the disruptive character to provide those new services. Originality/value The way in which disruption, Blockchain and real estate will develop in the coming years are not the only obvious characteristics of a particular era but also its social impact and user behaviour. This also applies to how this real estate transition can best be tracked, guided and utilized in society at the international, national and regional level. Disruptive organizations clearly respond to the viability of the (built) environment and therefore determine competitive strength. This affects the current and future valuation of real estate.

Willi Brammertz, Allan I. Mendelowitz

Abstract Purpose This paper aims to demonstrate the importance of a cash flow generating standard for individual financial contract level data and the ability to create such a standard. Design/methodology/approach The authors analyze the importance for such a standard of software that turns natural language contracts into cash flow generating algorithms; a data dictionary that standardizes contract terms; and access to variables that represent the state of the world (e.g. market risk, counterparty risk, etc.) that affect contractual obligations. Findings The ability to realize benefits from the use of such a contract level algorithmic standard depends on the following: making the standard's software open source; fully testing the software to have complete confidence in its accuracy; and enabling the software to use of a wide range of models of various sources of risk (market, credit and behavior risk) to support forward-looking analysis. Such a standard would solve the disconnect that exists in financial firms between the representation of financial contracts for transaction processing and analysis. The ACTUS Financial Research Foundation is building, testing and making available such a standard that represents almost all financial contracts extant in markets. Practical implications The adoption of such a standard would reduce the costs of operations of financial firms, provide the computational infrastructure for more effective regulatory oversight, reduce regulatory reporting costs and improve financial market transparency. It would also enable the assessment of systemic risk by directly quantifying the interconnectedness of firms. Originality/value This is a new approach to financial analytics that clearly separates the deterministic components of finance, which can be standardized from the stochastic elements that cannot be standardized.