As one of the leading blockchain systems in operation, Ethereum has numerous smart contracts deployed to implement a variety of functions. Unfortunately, speculators introduce scams such as Ponzi scheme in the traditional financial sector into some of these smart contracts, causing millions of dollars of losses to investors. At present, there are a few of quantitative identification methods for new fraud modes under the background of Internet finance, and detection methods for the Ponzi scheme contracts on Ethereum are even less. In this paper, we propose an improved convolutional neural network as a detection model for Ponzi schemes in smart contracts. We use real smart contracts to evaluate the feasibility and usefulness of our mode. Results show that our improved convolutional neural network can overcome difficulties in training caused by different length of smart contracts' bytecodes. Compared with the state-of-the-art methods, the precision and recall rate of our model for Ponzi scheme detection are improved by 3.2% and 24.8% respectively.
João Paulo de Brito Gonçalves, Roberta Lima Gomes, Rodolfo da Silva Villaça, Esteban Municio · 5 authors
Service Level Agreements (SLAs) are used in contracts between two parts, which can be, as an example, between service providers or between customers and service providers. SLA clauses represent key aspects in the relationship between them. In order to enforce service reliability and SLA compliance, a continuous monitoring of Quality of Service metrics is required. Since policy breach is usually subject to expensive penalties, using external entities acting as trustful references is a common practice in order to avoid frequent legal disputes, external entities are usually required to verify it. However, coordination between different actors to agree in one transaction is difficult, because it can open up possibilities for multiple fraud attempts. We argue that this can be done more efficiently using Smart Contracts, programs that are executed in a blockchain. Such data is stored in a distributed structure without the need of an external entity to ensure data integrity and reliability. Smart contracts can also makes easy the charging or possibly compensating SLA violations. In this paper we propose a solution empowered by smart contracts in order to simplify, and to automate the process of SLA validation, i.e, verify if the contract is being respected. We perform some experiments and evaluate a proof of concept using data from a real network infrastructure in Brazil.
A legal contract is something that is in spoken or in written form, which binds a party or multiple parties into given terms and conditions. On the other hand, a smart contract is also a contract which is a computer program that binds parties into given terms and conditions but unlike a legal contract, it is self-executable, efficient, and unambiguous. Almost all legal contracts are complex while reading because of its ambiguous nature. In this paper, we take a real-world ambiguous legal contact as a test contract, and generate various interpretations from it, convert all those interpretations into the smart legal contracts and identify the most ambiguous and accurate smart legal contract by performing various measurements such as transaction fees and ambiguity index for each interpretation. We came to the conclusion that the most ambiguous legal contract would be the contract with general interpretation as it was more complex when written in the smart contract and had many possible interpretations due to ambiguity than the rest of the interpretations.
Smart contracts on the Ethereum blockchain can be utilized as secure places to store cryptocurrency if they are designed carefully. However, while cryptocurrency is kept in smart contracts, such as being paid to a blockchain service, no extra profit is generated. The time value of cryptocurrency serves only as collateral, which is an issue of capital inefficiency. Therefore, we propose to maximize the time value of cryptocurrency in smart contracts by supplying it to decentralized money markets of Compound to earn supply interest. Furthermore, by utilizing the interest generated, we can mitigate the liquidity risk of Compound and thus do not diminish the flexibility of the original service much. Experiments are conducted to testify the proposed method, and the implementation cost is estimated to be 2.1 US dollars. We also discuss the potential systemic risk in the decentralized finance system.
Tamara Brandstätter, Stefan Schulte, Jürgen Cito, Michael Borkowski
On many blockchain platforms, gas fees have to be paid for deploying and executing smart contracts. These fees depend on the size of the contract code as well as the needed computational steps and required storage space of a smart contract. Because of the large amount of gas cost paid each day, there is an inherent motivation to optimize smart contract code in order to reduce these cost. Within this paper, we discuss the application of 25 strategies for code optimization to Solidity smart contracts. A prototype is developed which detects potential optimizations and partially automatically optimizes the code accordingly. The optimization strategies are evaluated based on 3,018 verified open source smart contracts from etherscan.io. We find 471 rule violations in the test data spread across 204 different contract files.
<em>The birth of "smart contracts" has based on developments in the emerging field of Blockchain application: computerized transaction protocols that autonomously execute the terms of a contract. With a lot of advantages which I will analyze below, Smart contracts are really offering the promise of increased commercial efficiency, lower transaction and legal costs, and anonymous transacting.</em>
Land Registration is a use case which involves lot of middlemen and central authorities in the process which then puts trust in the system. Keeping traces of who owns which part of land is challenging when there are hundreds or thousands of land records to maintain. Using Blockchain will remove the middlemen in the system and also will reduce corruption and increase speed of the process. Land Registration is a simple decentralized application which is build using the Ethereum Blockchain principals. We can use this registration procedure as an substitute to bypass the existing system flaws. Here the user who owns the land registers his land details and also enters market value of the land by providing all the necessary proofs. A government authority who traditionally looks into land registry is assigned as a super admin can do the registration process. Lands coming under a particular village can be registered to the system only through the super admin who is assigned to that village. The smart contract used here is written in such a way that the owner has to transfer his property completely to the buyer and no transaction of the land can be partial. Even we allow a government authority is involved in registration process, the entire process is transparent and the transaction happens only between the two clients.
Giuseppe Martino Di Giuda, Paolo Ettore Giana, Giulia Pattini
The research aims to implement Blockchain in Smart Contract in the design phase to reduce the financial exposition of SMEs. The adoption of Smart Contract, streamlining and accelerating the payments, shows up as a potential revolution of the traditional contractual framework. However, due to the increasing fragmentation and project complexity, the AECO sector is accused of slowness in accommodating and propagating new technologies. The Smart Contract can embed a Blockchain protocol that executes the predefined and agreed clauses by the contracting parties automatically and autonomously. It is a smooth and predictable data-driven process in which, at the after each clause, the payment is automatically issued, ensuring the shortening of payments. In the construction sector, the transaction delay represents a relevant problem that is responsible for disputes and economic disadvantages for the SMEs. Therefore, the paper investigates the process of digitalization starting from Smart Contract. The research is applied to the design phase developed in a BIM environment, pointing out both the advantages and the limitations, especially in the actual legislation. The Smart Contract features allow the entire supply chain to be protected against insolvencies due to late payments, improving process efficiency, and reducing payout times. From the results obtained in this research, the approach could be applied to a real case study and extended to the overall construction process.
There has been a widespread use of blockchain-based smart contracts in various financial and property sectors, gaining popularity in recent years. By greatly simplifying the economic turnover, the potential efficiency and profitability arises from the fact that smart contracts use software to perform certain tasks through automated processes, minimizing the involvement of intermediaries and, therefore, significantly reducing transaction costs. The wide spread of new technologies always gives rise to various problems, and legislation is often not adapted to the pace of socio-economic changes in the state. Despite the positive side of such technological development, the consequences may entail certain dangers for the participants of this kind of relationship. The absence of the very concept of smart contract in the legislation of most states gives rise to undoubted difficulties in determining their legal essence. The presented study examines the current state of smart contracts in Malaysia, examines the viability of the Malaysian legal framework in relation to the practice of using smart contracts and blockchain technology, and analyzes legislation and policy documents in force in Malaysia.
Scarce and niche in the literature just a few years ago, the blockchain topic is now the main subject in conference papers and books. However, the hype generated by the technology and its potential implications for real-world applications is flawed by many misconceptions about how it works and how it is implemented, creating faulty thinking or overly optimistic expectations. Too often, characteristics such as immutability, transparency, and censorship resistance, which mainly belong to the bitcoin blockchain, are sought in regular blockchains, whose potential is barely comparable. Furthermore, critical aspects such as oracles and their role in smart contracts receive few literature contributions, leaving results and theoretical implications highly questionable. This literature review of the latest papers in the field aims to give clarity to the blockchain oracle problem by discussing its effects in some of the most promising real-world applications. The analysis supports the view that the more trusted a system is, the less the oracle problem impacts.
Open access
Blockchain Technology Applications and Security
FinTech, Crowdfunding, Digital Finance
Advanced Steganography and Watermarking Techniques
Blockchain applications begin to transform both companies and company law. At Member State level, for example, the German government has recently commissioned a study to examine the suitability and need for reform of company law in view of blockchain applications. The European Commission also takes a close look at the intersection of blockchain and company law, and is currently considering “additional company law measures to facilitate cross-border expansion and scale-up by SMEs”. At the same time, the High-Level Forum on Capital Markets Union is discussing company law measures to make internal company processes more efficient with the help of distributed ledger technologies. Digitalization is likely to trigger further reform steps under company law, and blockchain and distributed ledger technologies represent fundamental challenges for this field of law. The present paper therefore tries to shed some light on the intersection of blockchain and corporate law. A brief explanation of the technology lays the ground for measuring the potential for its use in company law practice.
Abstract With the development of Internet finance, existing financial platforms have gradually formed a large-scale, dynamic operating environment. How to ensure information security and realize personal credit evaluation is an urgent problem to be solved in the development of Internet financial platforms. The rise of blockchain technology has provided new solutions for the management of Internet financial platforms and information security. In view of the shortcomings of the current Internet financial credit evaluation, this article discusses the key standards of personal credit evaluation. With the help of blockchain, decision tree, and other technologies, this paper designs the credit evaluation process and establishes personal credit evaluation technology. Experiments and analyses show that this technology can effectively improve the transparency of personal credit information in Internet finance. This technology is used to study credit risk assessment factors and provide new solutions for the intelligent transformation and upgrading of Internet finance.
The present research article shall outline how blockchain technology could be combined with insurance solutions against political risks. Through the definitions and the characterization of the key concepts of traditional insurance law and blockchain technology using case examples of specific political risks, it will be shown, how the insurance coverage of political risks could be achieved through smart insurance contracts in the future.
Flash Loan, as an emerging service in the decentralized finance ecosystem, allows traders to request a non-collateral loan as long as the debt is repaid within the transaction. While providing convenience, it brings considerable challenges that Flash Loan allows speculative traders to leverage vulnerability of deployed protocols with vast capital and few risks and responsibilities. Most recently, attackers have gained over $15M profits from Eminence Finance via exploiting Flash Loans to repeatedly swap tokens (i.e., EMN and DAI). To be aware of foxy actions, we should understand what is the behavior running with the Flash Loan by traders. In this work, we propose ThunderStorm, a 3-phase transaction-based analysis framework, to systematically study Flash Loan on the Ethereum. Specifically, ThunderStorm first identifies Flash Loan transactions by applying observed transaction patterns, and then understands the semantics of the transactions based on primitive behaviors, and finally recovers the intentions of transactions according to advanced behaviors. To perform the evaluation, we apply ThunderStorm to existing transactions and investigate 11 well-known platforms. As the result, 22,244 transactions are determined to launch Flash Loan(s), and those Flash Loan transactions are further classified into 7 categories. Lastly, the measurement of financial behaviors based on Flash Loans is present to help further understand and explore the speculative usage of Flash Loan. The evaluation results demonstrate the capability of the proposed system.
Neoliberalism initially invoked the authority of competitive markets as the ideal epistemic mechanism for socio-economic coordination. Yet, the rise of neoliberal ‘market society’ in Western advanced economies since the 1970s has been underpinned by a normative political theory that advocates the reconfiguration of society and politics around the authority of economic theory and knowledge in both production, but especially finance. Conversely, the reform-era development of China’s ‘socialist market economy’ has been underpinned by an insistence on retaining centralized political power over the allocation of financial capital. This article argues that the rise of digital algorithmic technologies constitutes one means by which these contrasting politico-economic visions are being more closely reconciled. It investigates the ways in which China’s ongoing construction of an explicitly authoritarian capitalism is being facilitated by the deployment of complementary financial technologies that enable the Chinese Communist Party to embrace the micro-level epistemic coordinative function of markets without relinquishing macro-level political power and juridical sovereignty over these markets. Following a comparative historiography of the praxis of ‘neoliberal’ and ‘neostatist’ political theory in contemporary capitalism, two case studies of blockchain-enabled currency and big-data driven credit scoring in China illustrate the emergent Fintech foundations of Chinese authoritarian capitalism. The findings contribute to our understanding of how markets are being reshaped by new algorithmic technologies, as well as illuminate some of ideological contradictions in existing conceptions of markets as (neo)liberal institutions at the centre of capitalist political economy.
Özet— Tarihin ilk yıllarından itibaren alım-satım gibi güvene dayalı ekonomik işlemler merkezi otoriteler tarafından kayıt altına alınmaktadır. Kağıdın icadı ile kayıt işlemleri daha düzenli ve detaylı bir şekilde yapılmaya başlanmıştır. Son yıllarda da bilgisayarların yaygınlaşması ile birlikte kayıt işlemleri dijital olarak yapılarak kayıtların yönetimi kolaylaştırılmıştır. Yaşanan her teknolojik gelişme veri kayıt işlemlerinde kolaylık ve hız sağlamıştır. Gelişen teknoloji ile birlikte işlemler hızlanmış ancak kayıtların yönetim merkezi otoritelerin kontrolünde kalmıştır. Dağıtık defter teknolojisi kayıtların merkezi otoritelerin kontrolünden çıktığı yeni bir yaklaşım sunmaktadır. Dağıtık defter teknolojisi merkezi bir veritabanı veya merkezi yönetimi olmayan verilerin katılımcılarda dağıtık olarak tutuldğu eşler arası ağdır. İlk dağıtık defter uygulaması 2008 yılındaki ekonomik krizin ardından ortaya çıkan Bitcoin ödeme sistemi ve kripto parasıdır. Bitcoin’in ortaya çıkmasında merkezi otoritelerin verdiği kötü ekonomik kararlar etkili olmuştur. Bitcoin ile amaç mevcut finansal sistemleri merkezi otoritelerin kontrolünden çıkarmaktır. Bitcoin’in popüler hale gelmesiyle birlikte arkasındaki blok zinciri teknolojisi dikkat çekmeye başlamıştır. Başlangıçta Bitcoin nedeniyle blok zinciri teknolojisi finans sektörü ile özdeşleştirilse de tedarik zinciri, sağlık, tarım, enerji gibi farklı sektörde kullanımına yönelik çalışmalar yapılmaya başlanmıştır. Blok zinciri teknolojisinin farklı sektörlerde kullanılabilmesi için Hyperledger, Ethereum ve Corda gibi blok zinciri altyapıları geliştirilmiştir. Ancak yapılan geliştirme çalışmalarında blok zinciri teknolojisinin hız ve ölçeklenebilirlik açısından eksiklikleri olduğu görülmüştür. Bu nedenle hız ve ölçeklenebilirlik açısından gelişmiş yeni dağıtık defter teknolojileri geliştirilmiştir. Yeni geliştirilen popüler dağıtık defter teknolojisi türleri Directed Acyclic Graph, Hashgraph, Tempo ve Holochain’dir. Yeni nesil dağıtık defter teknolojilerinin öne çıkan farklı özellikleri bulunmaktadır. Yapılan çalışmada blok zinciri ile yeni nesil dağıtık defter teknolojileri karşılaştırılmıştır.
Ajay Kumar Shrestha, Julita Vassileva, Ralph Deters
We propose a new platform for user modelling with blockchains that allows users to share data without losing control and ownership of it and applied it to the domain of travel booking. Our platform provides solution to three important problems: ensuring privacy and user control, and incentives for sharing. It tracks who shared what, with whom, when, by what means and for what purposes in a verifiable fashion. The paper presents a case study of applying the framework for a hotel reservation system as one of the enterprise nodes of Multichain which collects users’ profile data and allows users to receive rewards while sharing their data with other travel service providers according to their privacy preferences expressed in smart contracts. The user data from the repository is converted into an open data format and shared via stream in the blockchain so that other nodes can efficiently process and use the data. The smart contract verifies and executes the agreed terms of use of the data and transfers digital tokens as a reward to the user. The smart contract imposes double deposit collateral to ensure that all participants act honestly. The paper also presents a performance evaluation of the platform by analyzing latency and memory consumption with selected three test-scenarios and measuring the transaction cost for smart contracts deployment. The results show that the node responded quickly in all our cases with a befitting transaction cost.
Blockchain technology represents a technological basis with which existing corporate financing processes can be supplemented. The issuance of digital tokens offers several potential advantages such as tradability, efficiency, automation, and cost benefits compared to traditional financial products. This transformation of financing processes and capital markets can allow small and medium-sized enterprises (SMEs) to access capital markets and at the same time close existing retail investment gaps. In this chapter, the challenges of SME financing are described and blockchain-based financing (initial coin offerings [ICOs] and security token offerings [STOs]) is introduced. The blockchain-based financing mechanisms are compared with conventional forms of financing and potentials and challenges are discussed. In conclusion, it is stated that potential clearly outweighs risk and that the majority of all existing challenges can be tackled through sensible and coordinated regulation.
Purpose The purpose of this paper is to examine the hitherto unexplored strategic potentialities of blockchain as an intangible resource for open and distance learning (ODL) to attain and sustain competitive advantage by creating a more learner centric learning ecosystem. Design/methodology/approach Research design included review of the literature, desk research and case analyses to conduct this study so that the hitherto unexplored strategic potentialities of blockchain, a technological innovation, for ODL could be explored adequately. Findings The findings of the paper reveal that ODL must not miss out on the opportunity of harnessing the hitherto unexplored strategic potentialities of blockchain in its quest of attaining and sustain competitiveness vis-a-vis conventional system of learning. Results of this study sufficiently hint at the possible viability of considering blockchain as a strategic resource for ODL. Practical implications Results of this study sufficiently indicate the possible viability of considering blockchain as a strategic resource for ODL which in turn make them significant for decision-makers and policymakers engaged in developing ODL. Findings hint that ODL needs to make efforts to harness the strategic potentialities of blockchain for attaining and sustaining competitiveness which would also be helpful for ODL to contribute towards achievement of sustainable development goals. This paper attempts to provide a strategic viewpoint to the use of this technological innovation as a significant intangible resource discussing primarily the strategic perspectives of blockchain helpful in the further development of ODL. Originality/value Although uses of blockchain-enabled applications in ODL are relatively new, the growth is very fast. The present paper offers originality and value by filling the gap created by the inadequacies of studies focusing on the idiosyncratic characteristics including but not limited to decentralization and security of blockchain. Findings suggest that blockchain offers huge potentialities in terms of benefits for entire ODL ecosystem comprising different stakeholders such as institutions, learners, educators, etc.
Blockchain is a technology for decentralized transactions that has been widely used with cryptocurrencies such as Bitcoin. Many studies have been conducted in the last decades, approaching cryptocurrencies, and blockchain technology, more strongly in the context of financial transactions. However, little has been done to provide a panoramic view of the current literature; as a consequence, a careful understanding of the state-of-the-art papers remains limited and inconclusive. This study, therefore, aims to classify and provide a thematic analysis of studies on the use of blockchain in the context of financial area, thus allowing to create a clear systematic map of the current literature, and identify challenges and research opportunities. To achieve these objectives a systematic mapping study (SMS) approach was performed to answer 6 research questions. In total, 1884 studies were reviewed from 6 data sources, being 23 studies selected after a careful filtering process. The main findings were: (1) Over 65% of the selected studies concentrated on adopting two blockchain platforms named Hyperledger Fabric and Ethereum; (2) Over 60% used blockchain technology to increase security; (3) Most studies did not reveal the consensus algorithm used; (4) Fintech (or Bank) and loan were the most explored application areas; (5) Over 60% focused on producing prototype rather than frameworks; and (6) most studies were published in conferences. This study can benefit research community by generating a map of the literature, serving as a starting point for future researches. Moreover, this study reports some challenges worth investigating.