Few blockchain centric projects have gone beyond their white paper or proofs-of-concept. While many have fallen below expectations and failed to address the fundamental issues of scalability, privacy, and trust distribution, there are a few “imperfect” projects that are making an impact on society. We describe the lessons learned from three projects and highlight their “improvisions” in achieving their vision of serving the underserved, and identify areas of possible improvements. Our research has shown that mass adoption of blockchain technology will accelerate in financial industry and supply chain with private permissioned blockchains, but these e-inclusion projects using “Inclusive” Blockchain will take a longer time with OnChain/OffChain complexities. A long-term view is needed to build a Noah’s Ark as the rush to build the Tower of Babel to harness short term gain may not bring net benefits to the economy and society.
James R. Barth, Hemantha S. B. Herath, Tejaswini Herath, Pei Xu
A recent and potentially profound innovation is the creation of cryptocurrencies and the underlying technology that is essential for their use in various financial transactions. Given the anonymity of a user of a cryptocurrency, such digital currencies may be used for many different types of both lawful and illicit activities. The main purpose of this paper is to examine the extent to which ethical considerations associated with the use of cryptocurrencies affect the valuations attached to such currencies. The examination is based on a text analytic approach that involves measuring the extent to which ethical and unethical words are used in a discussion related to Bitcoin on Twitter to determine if there is a connection between ethics and cryptocurrency valuations. We find the frequency of an unethical discussion about Bitcoin is negatively associated with its price. In contrast, the frequency of an ethical discussion is positively associated with its price.
Zusammenfassung Zahlreiche Zentralbanken planen innerhalb der nächsten Jahre, eigene digitale Zentralbankwährungen einzuführen. Die Blockchain-Technologie kann dafür die technologische Basis darstellen. Zentralbanken experimentieren mit dieser Technologie, um Währungen perspektivisch auf Blockchain-Basis abzubilden. Mögliche Vorteile einer digitalen Zentralbankwährung wären eine höhere finanzielle Stabilität, eine höhere Sicherheit und Effizienz im Zahlungsverkehr und ein höherer Automatisierungsgrad von Geschäftsprozessen. Risiken beständen darin, dass es nach einer Einführung zu einem digitalen Bank Run kommen könnte, dass Banken immens an Bedeutung verlieren könnten und letztlich die Datenschutzproblematik geklärt werden muss.
Block chain has an interesting support of bit coin, the digital crypto currency with an ever increasing sphere of users worldwide. But, block chain in itself is much more than just bit coin, it is the new generation security system encapsulating processes in series of blocks to provide a secure way of recording transactions and it is circulated among signatories, or any target group being the participants in the process. It draws its appeal out of the fact that it achieves this without the need of any central authority. Current banking architecture is largely centralized and therefore vulnerable to load defaults and frauds like the PNB scam, Videocon case, Kingfisher scam and many more. Banking all over the world has adopted block chain technologies and it is the need of the hour for regulation and avoidance of such scams. Thus, we are using block chain technology for the decentralized working of banks and the complete removal of authoritarian interception. The model which we are proposing includes block chain encapsulated in the process of NEFT (National Electronic Fund Transfer) using IFSC (Indian Financial System Code) incorporating the protocols set down by RBI for secure and decentralized fund transfer. Our blocks will consist of the process computed in java micro services. The ledger will be interconnected within themselves using consensus algorithms.
In den letzten Jahren sind das Internet of Things (IoT) und Blockchain-Technologien immer beliebter geworden. Blockchain-Technologien bieten die Möglichkeit, Transaktionen in einem Logbuch zu speichern, in welchem Daten nur angehängt werden können und das nur schwer manipuliert werden kann. Dieses Logbuch wird von einem Peer-to-Peer-Netzwerk verwaltet. Blockchains der zweiten Generation bieten darüber hinaus die Ausführung von Smart Contracts an. Hierbei handelt es sich um Codeteile, die in der Blockchain gespeichert und von jedem Teilnehmer des Netzwerks ausgeführt werden können. Das IoT wird durch miteinander verbundene Objekte gebildet, wobei ein Objekt jedes Rechengerät sein kann, welches eindeutig adressierbar ist und über standardisierte Protokolle kommunizieren kann. Das IoT wächst stetig, ebenso wie die Menge an Daten,die über das Netzwerk generiert und ausgetauscht werden. Da die Anzahl der vom IoT generierten Daten weiter zunimmt, gestaltet sich das Auffinden von Datenquellen ohne Datenmarktplatz als sehr schwierig. Zu diesem Zweck bieten Datenmarktplätze eine Plattform auf der verschiedene Parteien ihre Daten anbieten können. Die Kombination von Blockchain-Technologien mit dem IoT bietet vielversprechende Anwendungsfälle, einschließlich dezentraler Datenmarktplätze. Die Forschung hat bereits verschiedene Konzepte und Lösungen im Zusammenhang mit Datenhandel und Datenmarktplätzen hervorgebracht, das heißt sowohl traditionelle Ansätze als auch Ansätze, die bereits Blockchain-Technologien verwenden. Viele dieser Arbeiten decken jedoch nicht alle wesentlichen Funktionen von Datenmarktplätzen ab. Im Rahmen dieser Arbeit entwerfen und implementieren wir ein Framework für einen dezentralen IoT-Datenmarktplatz. Das Design des Frameworks basiert auf einer Drei-Schichten-Architektur, bei der Smart Contracts verwendet werden, um verschiedene Funktionen zu implementieren und die Regeln des Datenmarktplatzes durchzusetzen. Zu diesem Zweck wurden unter anderem mehrere Smart Contract-Plattformen miteinander verglichen, um festzustellen, welche Unterschiede bestehen und welche für diese Anwendung am besten geeignet ist. Darüber hinaus enthält das Framework grafische Benutzeroberflächen, einen Proxy, der es Anbietern und Verbrauchern ermöglicht, IoT-Geräte zu integrieren und einen Broker, der den Datenhandelsprozess erleichtert und ressourcenintensive Aufgaben übernimmt. Abschließend evaluieren wir die Kosten, die durch die Verwendung von Smart Contracts entstehen und diskutieren Probleme, die während der Implementierung aufgetreten sind.
As per 2018, agriculture provides employment to more than 50% of the Indian workforce and contributes 17-18% to the country's GDP. Every farmer possesses a requirement of credibility or other services during the time of cultivation. Due to unavailability of bank loans for low-income farmers, they have no other option but to look up to private lenders or micro-finance institutions. The interest rate charged by microfinance institutions consists of various subjective factors which forces MFIs to provide microcredits to farmers at high-interest rates. Relevant to this context, this paper proposes a blockchain-based system which eliminates the need of MFIs. The system handles microloans on a distributed ledger which increases transparency among stakeholders and also enables small/large scale investors to lend microcredits to farmers at interest rate and repayment schedule decided by the farmer. The proposed system facilitates low-cost, secure and real-time payments with the help of smart contracts.
Digitalization apparently improves the efficiency and flexibility of financial services. In this work, we aim to introduce the Rotation Savings and Credit Association (ROSCA) into electronic commerce. ROSCA is one kind of non-interest lending and called as micro-loaning. The corresponding standards and rules are not severe restricted in comparison with those defined by financial institutions. It is friendly to people whose financial conditions are not so well. In particular, we adopt the smart contract which is a sort of automation technique to fulfill electronic micro-loaning in a solidarity group. Since all specifications of ROSCA are interpreted into functions via a logical transition, the contract content will be automatically implemented once the executing conditions are satisfied. This can significantly result in an effective operation and decrease the transaction cost. Moreover, the reputation strategy is applied to classify players into an appropriate group; thus, leading to mitigating the risk of embezzlement and insolvency.
Abstract Nowadays, the emergence of Distributed Ledger Technologies (DLTs) and the rapidly developing of the digital economy have the potential to transform the current international regulatory framework. Thus, the current developments of DLTs in e-commerce demand a closer analysis of the implications for global governance and international trade. While the Internet has enhanced the development of new platforms for international trade, DLTs may be instruments to unleash the potential of e-commerce. In this scenario, DLTs could drive, strength and promote e-commerce transactions by diminishing inefficiencies. For instance, it could significantly reduce intermediation costs, facilitating the use and interoperability of smart contracts and single window systems. Indeed, customs operations are very complex and involve different types of intermediaries across borders, creating unnecessary obstacles to trade that could be reduced by the application of DLTs. There is where the regulatory paradox enters into place. The operability of DLTs in e-commerce raises significant regulatory challenges posing new policy questions. For this reason, it is crucial to achieving common understandings among relevant stakeholders to identify a set of principles that guide a country’s regulatory frameworks to facilitate the interoperability of e-commerce. One of the main pieces of the puzzle of proposing a set of principles is how to deal with an appropriate level of intervention from regulators in order to promote trust in international transactions, transparency, efficiency, security and operability among regulatory frameworks. This paper will examine current developments, initiatives, and proposals from different approaches: It will start with an overview of the opportunities that DLTs will create to promote e-commerce. Then, it will explore the current international economic legal framework in light of the application of DLTs in e-commerce, taking into consideration policy recommendations from international institutions and initiatives in some specific jurisdictions. From those views, a set of principles will be identified.
Regarding accounting for holdings of cryptocurrencies, following the ASBJ's PITF 38 in March 2018, the IFRS Interpretations Committee finalized Agenda Paper 12: Holdings of Cryptocurrencies in June 2019. However, despite PITF 38 regarding cryptocurrencies as a new type of asset in developing a new standard, Agenda Paper No. 12 uses existing IFRS, which describes that the holdings of cryptocurrencies for sale in the ordinary course of business will meet the definition of inventories under IAS 2 and as such be measured at fair value. However, if IAS 2 is not applicable, IAS 38 will apply, and cryptocurrencies will then meet the definition of an intangible asset. As a rule, financial statements should reflect the economic circumstances resulting from the psychology of cryptocurrency users. To clarify what is in users' minds, from May to June 2019, concerning the holding of cryptocurrencies, a questionnaire was administered in Japan. The results show whether, under the new accounting rules, users know their minds or respond to their information needs.
Abstract Blockchain remains still an experimental technology, with current applications addressing only some elements of small-scale projects. Once the technology matures however, it has the potential to transform industries and even the economy, as it begins to integrate complementary technologies such as AI and IoT. It has the potential to bring fundamental changes to financial accounting and auditing, and even to entire financial markets. This paper explores the potential for blockchain applications in accounting, identifying major benefits and shortcomings, and analysing opportunities and possible threats. We investigate mainly the organizational challenges raised by an accounting blockchain systems and its potential to enhance the accounting activity. We discuss blockchain’s potentially disruptive effect on the accounting profession, and conversely, the potential role of this professions in further developing blockchain technology.
Berrak Perk, Can Bayraktaroglu, Engin Deniz Dogu, Faizan Safdar Ali · 5 authors
As a decentralized immutable ledger where several trustless peers can reach consensus with each other without the need of any trusted third party, blockchain technology fits perfectly with the peer-to-peer (P2P) energy trading paradigm. In this paper, we propose, design and analyze a marketplace for energy trading based on smart contracts on the blockchain. The proposed system named Joulin serves as a competitive and efficient marketplace where peers can both produce, buy and sell energy depending on their needs. As a proof-of-concept, we developed the prototype of the Joulin system using Ethereum blockchain. Our results, in terms of usability, flexibility and resiliency, demonstrate the potential to achieve an easily extendable and reliable system with low transaction costs. Low Ethereum gas costs and quick response times demonstrate usability. Our smart contracts have also been tested with security tools to ensure that they are not vulnerable to outside manipulations.
Nowadays, many novel blockchain-based architecture and frameworks are proposed to solve issues in computer science and financial service. Smart contracts with blockchain systems, especially consortium blockchain systems, can help to provide many reliable and efficient functions for existing systems like smart grid payments. The novel concept of smart contract as a service is proposed but the difficulty of developing smart contracts on various kinds of blockchain systems are also significantly increasing which brings the additional cost for both developers and infrastructure builders. In this paper, we present an updated cloud-based smart integrated smart contract development system, ChainIDE 2.0, for the ultra-efficient development of blockchain-based smart contracts on multiple kinds of blockchain systems. Not only we stay as the most popular cloud-based developing Integrated Development Environment (IDE) for the Libra blockchain, but also we introduce the consortium blockchain systems such as Ant Financial Open-Chain (Ant OC) and served as the first cloud-based IDE supporting the Ant Financial OpenChain test net. Today, we have served almost 1 million compiled smart contracts which makes us the most popular cloud-based blockchain development IDE in the world.
Security and users privacy have become an important factor in today's customer-centric world. Most of the trade nowadays is carried on e-commerce as it's easy and hassle proof. In C2C (Customer to Customer) e-commerce (Olx, eBay, etc) which acts as an intermediate between sellers and buyers, when a user buys products from these e-commerce that deals with a used products like Olx, eBay, etc cost evaluation becomes difficult and we end up buying it at the hiked price as there is no authority to verify that price quoted by seller is justified or not. These e-commerce websites often sell user data and influence users to buy specific products, they also charge transition fees for every good sold. In past years a lot of fraud has been seen on these e-commerce platforms as they don't have any existing model to prevent fraudulent people from joining their network. Besides these websites also control and manage the product reviews given by the genuine buyer. Keeping this scenario in mind our research focuses on various issues related to existing C2C e-commerce and overcoming them by using blockchain technology along with cost evaluation model. The use of blockchain in this scenario can help to move this centric model to a distributed model helping the user to trade better without letting share their personal information to others and getting products at the right price. This research work is aimed to provide better cost evaluation of used goods, provide data privacy and a sense of trust to end-users by leveraging various aspects of blockchain technology.
S.A. Pranesh, Vignesh Kannan V., N. Viswanathan, M. Vijayalakshmi
Blockchain is becoming more popular because of its decentralized, secured, and transparent nature. Supply chain and its management is indispensable to improve customer services, reduce operating costs and improve financial position of a firm. Integration of blockchain and supply chain is substantial, but it alone is not enough for the sustainability of supply chain systems. The proposed mechanism speaks about the method of rewarding the supply chain parties with incentives so as to improve the security and make the integration of supply chain with blockchain sustainable. The proposed incentive mechanism employs the co-operative approach of game theory where all the supply chain parties show a cooperative behavior of following the blockchain-based supply chain protocols and also this mechanism makes a fair attempt in rewarding the supply chain parties with incentives.
Traditional stock exchange systems are centralized and have high transaction fees, third party brokerage and less secure environment vulnerable to attacks. Blockchain decentralizes the exchange and creates a fair trading environment for every individual. This paper aims to implement a decentralized stock exchange based on blockchain. The proposed system aims to bring down the transaction costs and reduce the time taken to settle orders and eliminate the need of third parties for executing trades. Three different contracts one for buyer, seller and exchange are used to separate stock exchange functionality and optimize transaction costs. The system is implemented using Ethereum. The system is evaluated for scalability of number of transactions and scalability of number of nodes using sampled trading data from NASDAQ. Transaction fees for the miner at 16.5 Gwei is 99.98% lesser than the brokerage fees of traditional traders for the same transactions. Experimental results of the proposed method show that it is possible to eliminate third party brokerages, reduce transaction fees to almost 0 and create a peer-to-peer trading environment that does not require a central exchange.
Ever since peer to peer transaction paradigm was implemented, there has been a certain belief that it can be used effectively in the commercial sector. The freelance economy has witnessed massive growth over the years, while India is the largest freelancing market with over 10 million freelancers. Freelancer is the person who works under different employers to earn money, with no assurance of long-time commitment to a particular employer. There are multiple centralised freelancing websites present but the problem with the centralised system is that it can be manipulated. In these platforms, freelancers and employers are dependent on the third-party for payment contracts. Hence, we are proposing a decentralised system based on public Blockchain Ethereum to resolve the issues generated by the third party. The proposed system will have peer to peer transaction using cryptocurrency and peer to peer reviews on the distributed ledger of Ethereum.
Blockchain Technology can enhance the basic services that are essential in traditional finance and it has the potential to become the foundation for decentralized business models, empowering entrepreneurs and innovators with all the right tools. By means of a trustless and distributed infrastructure, blockchain technology is optimizing transactional costs and allows the rise of decentralized, innovative, interoperable, borderless and transparent applications which facilitate open access and encourage permissionless innovations. DeFi stands for "Decentralized Finance" and refers to the ecosystem comprised of financial applications that are being developed on top of blockchain and distributed ledger systems. The Decentralized Finance (DeFi) or Open Finance movement takes that promise a step further. Imagine a global, open alternative to every financial service you use today - savings, loans, trading, insurance and many others - accessible to anyone in the world only by means of a smartphone and internet connection.
The security problems of smart contracts have drawn extensive attention due to the enormous financial losses caused by vulnerabilities. Existing methods on smart contract vulnerability detection heavily rely on fixed expert rules, leading to low detection accuracy. In this paper, we explore using graph neural networks (GNNs) for smart contract vulnerability detection. Particularly, we construct a contract graph to represent both syntactic and semantic structures of a smart contract function. To highlight the major nodes, we design an elimination phase to normalize the graph. Then, we propose a degree-free graph convolutional neural network (DR-GCN) and a novel temporal message propagation network (TMP) to learn from the normalized graphs for vulnerability detection. Extensive experiments show that our proposed approach significantly outperforms state-of-the-art methods in detecting three different types of vulnerabilities.
In an Islamic framework, the scholars need to verify all aspects of the emerging phenomenon known as cryptocurrency. It works as an agent for the prevailing forms of currencies and substitutes the need to carry it everywhere in its physical form which may become a security threat. The theologians have always disapproved what seem to them innovative, alien and working as an agent of change. However, whatever may be their stance about previous innovations, the society had to act otherwise due to the compelling needs that had to be fulfilled. The difference of opinion between the Muslim Scholars about the cryptocurrency has once again divided the Ummah about its acceptance, substituting other forms of currency like fiat currency, plastic currency etc. No doubt these forms of currency have heavily damaged the financial markets due to their speculative nature. It seems that Muslim Ummah is again standing on the cross roads where it is unable to decide its fate. This article presents the basic concept of cryptocurrency & virtual money, its pros & cons, its status regarding Pakistani & Islamic Perspective. At the end, various conclusions and suggestions have been drawn.
The aim of this paper is to find alternative method of executing reimbursement loan, as a form of documentary loan, that is, to investigate new digital technology methods (fintech) to improve the efficiency of the international exchange. Reimbursement loans are often used to credit the trade of overseas goods. The reason of such case is that the shipment of goods by the maritime transport requires a significant amount of time and those trades are often associated with high financial amounts. Since international trade (exchange) is a kind of a generator of society’s progress, it is necessary to explore the possibilities for making international payment cheaper, more efficient and more secure. In this case, we based our research on the implementation of modern technologies, more precisely “blockchain”/DLT (Distributed Ledger Technology) and “smart contracts”. The new reimbursement loan model presented in the paper is based on the aforementioned technologies. It could potentially change not only the documentary lending techniques, but also, eventually, overall financial paradigm. The effectiveness of the application of modern technologies is proven comparing the results of the so called conventional and unconventional reimbursement credit model on a real case involving two companies in Indonesia and Singapore. The paper also tackles on the further implementation of “smart contract” technology and “blockchain”/DLT, thus considering the potential impact of these technologies on overseas trade, credit markets and financial institutions. Finally, the paper argues on the limitations in implementing this new technique (e.g. legal, political and technical challenges).
Joshua Ellul, Jonathan Galea, Max Ganado, Stephen McCarthy · 5 authors
Abstract Blockchain, Smart Contracts and other forms of Distributed Ledger Technology provide means to ensure that processes are verifiable, transparent, and tamper-proof. Yet the very same enabling features that bring decentralisation also pose challenges to providing protection for the various users and stakeholders. Most jurisdictions which have implemented regulatory frameworks in this area have focused on regulating the financial aspects of cryptocurrency-based operations. However, they have not addressed technology assurance requirements. In this paper we present a world-first technology regulatory framework.
Abstract The role that trust plays in blockchain-based systems is understood and portrayed in various manners. The blockchain technology is said to enable and establish trust as well as to redirect it, to substitute for it, and to make it obsolete. Furthermore, there is disagreement on whom or what users have to trust when using the blockchain technology: (only) code, math, algorithms, and machines, or still (also) human actors. This paper hypothesizes that the divergences of the depictions largely rest on implicitly adhering to different accounts of trust. Thus, the goal of this paper is to outline how the current lack of a shared understanding of the term “trust” leads to diverging interpretations of the blockchain technology’s core features. Furthermore, it shows how this lack of common understanding obstructs scholars from referring to one another meaningfully in the discourse on blockchain technology. To do so, this paper outlines the most prominent depictions of the setup of relevant trust relationships within blockchain-based systems and traces their roots to different underlying assumptions on the nature of trust.
In this paper, we propose KiRTi, a deep-learning-based credit-recommender scheme for public blockchain to facilitate smart lending operations between prospective borrowers (PB) and prospective lenders (PL) to eliminate the need of third party credit-rating agencies (CRAs) for credit-score (CS) generation. Thus loan grants to PB from PL is secured, authorized, and automated so as to expedite the disbursement process. KiRTi stores PB historical transactions, current assets, and liabilities as time-series sequenced data in a public blockchain. The sequenced data is fetched from blockchain by a long-short term memory (LSTM) model that generates CS for loan recommendations based on proposed lending algorithms for PB and PL. To ensure real-time updation of CS, edge-weights are updated based on boolean indicators from PB and PL, which indicates the successful repayments and loan-defaults. The process is iterated to improve the accuracy of edge-weights and generated CS to ensures the correct credibility of PB for future lending. Smart contracts (SC) are proposed for automatic setup of loan repayments between PB and PL. To model the LSTM recommender scheme, a German credit dataset from UCI repository is considered with 1000 credit-histories of PB, with 700 successful repayments and 300 defaults. KiRTi achieves an accuracy of 97.5% in comparison to conventional approaches with an F-measure of 0.98304. The security evaluation of KiRTi shows that it has computation cost of 20.96 ms and communication cost of 121 bytes compared to other state-of-the-art approaches.