Robbie Morrison, Natasha C. H. L. Mazey, Stephen C. Wingreen
This paper reviews the recent case of The DAO “hack” in June 2016 and analyzes The DAO's response in its time of crisis, and its implications for corporate and IT governance. There was no human-led governance in The DAO. Instead, The DAO placed its trust in the smart contract they had built together on the blockchain, which became its governance mechanism. The events that follow allow us to see hitherto unobservable organizational behaviors that are unique to trustless organizations, and hence The DAO gives us a glimpse at a new species of corporate governance. This paper explores the implications of these ideas: we propose the emergence of a spectrum of organizations based on the alienation of trust, we consider the economic impact and legality of decentralized autonomous organizations (DAOs), smart contracts, work and job design, and what happens when corporate governance is managed solely by IT governance.
Christof Ferreira Torres, Antonio Ken Iannillo, Arthur Gervais, Radu State
<div> <div> <p>Smart contracts are Turing-complete programs that are executed across a blockchain. Unlike traditional programs, once deployed, they cannot be modified. As smart contracts carry more value, they become more of an exciting target for attackers. Over the last years, they suffered from exploits costing millions of dollars due to simple programming mistakes. As a result, a variety of tools for detecting bugs have been proposed. Most of these tools rely on symbolic execution, which may yield false positives due to over-approximation. Recently, many fuzzers have been proposed to detect bugs in smart contracts. However, these tend to be more effective in finding shallow bugs and less effective in finding bugs that lie deep in the execution, therefore achieving low code coverage and many false negatives. An alternative that has proven to achieve good results in traditional programs is hybrid fuzzing, a combination of symbolic execution and fuzzing. In this work, we study hybrid fuzzing on smart contracts and present ConFuzzius, the first hybrid fuzzer for smart contracts. ConFuzzius uses evolutionary fuzzing to exercise shallow parts of a smart contract and constraint solving to generate inputs that satisfy complex conditions that prevent evolutionary fuzzing from exploring deeper parts. Moreover, ConFuzzius leverages dynamic data dependency analysis to efficiently generate sequences of transactions that are more likely to result in contract states in which bugs may be hidden. We evaluate the effectiveness of ConFuzzius by comparing it with state-of-the-art symbolic execution tools and fuzzers for smart contracts. Our evaluation on a curated dataset of 128 contracts and a dataset of 21K real-world contracts shows that our hybrid approach detects more bugs than state-of-the-art tools (up to 23%) and that it outperforms existing tools in terms of code coverage (up to 69%). We also demonstrate that data dependency analysis can boost bug detection up to 18%.</p> </div> </div>
Despite various countries getting hands-on technology such as blockchain for banking, transaction,<br> and multiple benefits, a developing country such as India must use these technologies because of<br> the advantages it provides in order to keep pace. In the age of digital currencies and new emerging<br> technologies, central banking is a fast-growing topic in the monetary economy. Cryptocurrencies,<br> blockchain, and distributed Ledger technologies appear to be feasible rivals to Fiat Currency<br> central bank. Blockchain technology's influence behind Cryptocurrencies. Cryptocurrencies have<br> the ability to boost payments and operations by central banks and serve as a forum from which<br> central banks could Perhaps launch their own digital currencies. RBI Indian central bank is no less<br> important when it comes to technology that would pave the way for the new economy, enriched<br> with technology-centric growth momentum, by increasing support from India's reserve bank and<br> the Indian government for innovation and integrating technologies through regulatory sandboxes<br> and various other systems. This article illustrates distributed ledger technology in the Indian<br> context. The secondary data were obtained from various scholarly journals and websites. We have<br> analysed distributed ledger technology, India’s move towards learning new technologies, different<br> central banks distributed ledger project and examined blockchain technology in the Indian market<br> using the SWOC framework as a research case study.
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Blockchain Technology Applications and Security
Innovations and Analysis in Business and Education
Blockchain supports a variety of decentralized applications enabled by its immutable, decentralized, and trustless properties. However, there are no unifying criteria for blockchain architecture across the organizations and business models. This variance has created complex and diverse blockchain products. Costs in every economic exchange with partners are associated with two metrics: transaction costs due to market imperfections and agency costs due to conflict of interest and information asymmetry in an organization. To understand the effectiveness of economic activities by blockchain intervention and facilitate strategic alignment, we use transaction cost and agency cost as theoretical lenses to explore the impacts of blockchain, discuss the transformation of those costs, and support our arguments using a case study. Our study proposes that blockchain technology brings two more benefits, trust and transparency, to the existing Internet-based business services, and helps improve corporate governance. Smart contracts improve the execution time of transactions significantly and increase transaction volume rapidly. As the internet shifts hierarchies towards electronic markets, lack of trust between peers inhibits exchanges. Blockchain applications provide a framework for building trust between peers through its consent mechanism, which allows organizations to construct trust and operate in a more decentralized manner. Thus, by including blockchain in the current Internet infrastructure, the decision boundary of organization forms would extend outward. Finally, the transformation of costs in different stages of the blockchain transition, as described in our study, has important managerial implications for the organization structure and the role of third parties. Blockchain does not assume away transaction and agency costs but pushes the transformation of the two, forming a more efficient economic entity. This study contributes to the academia and the industry. We first add to the understanding of blockchain from the perspective of exchange technology. Second, we contribute to the prediction of organization boundaries. Third, the shift in the role of third parties supports the transaction cost theory in terms of controlling opportunism. Lastly, this study facilitates the development of blockchain business models and contributes to the practice.
Insurance is a big financial market with a high-risk high-gain margin. But the insurance system existing in the current scenario has a lot of dependencies both on the Insurance provider as well as the consumer. With its distributed ledger, smart contracts, and non-repudiation capabilities, blockchain is revolutionizing the way financial organizations do business, and the insurance industry is no exception. Through blockchain this system can be optimized to reduce costs and the middlemen dependency involved, by managing information in a smarter way. The main idea is to establish a peer to peer system of consensus for claiming insurance without the hassle of involving insurance surveyors or other non-involved parties.
U. Sailesh, T. Tharun, U. Aditya Varma, Shilpa Shilpa · 5 authors
File authorization is a process of either giving or denying access to a system which in order gives the permission for client to access information depending on the client's profile. Most of the security frameworks depend on a advance procedure which consists of two steps. Confirmation: The first stage which guarantees about the user personality. Approval is subsequent step, which grants the user to get to the access dependent on the user's character. Act in the present day frameworks rely upon trusted third party member. We propose using blockchain-based shrewd agreements to encourage secure examination and the board of files without the need of confided in outsider part. Utilizing the Ethereum blockchain, we can store a hash of a private report (an agreement, for instance) alongside an Ethereum Address. This demonstrates in an open and secure manner that the proprietor of the Ethereum Address has marked the archive. Different gatherings to the agreement can sign it too. All they need is a connect to the marking page, which is produced when a client transfers a document.
Bart Garré, Michael Voisin, Richard Hay, Sophia Le Vesconte
Over recent years, the benefits and use of cases for adopting distributed ledger technology (DLT) in securities markets have been outlined by numerous public and private authorities, including the European Securities and Markets Authority,22 the European Central Bank,3 the Bank for International Settlements,4 the US Federal Reserve5 and the Committee on Payments and Market Infrastructures (CPMI).6 Furthermore, the European Commission has adopted a policy of promoting the uptake of DLT and encouraged exploration of its use across the financial sector, including the securities market.7 Cited benefits include: (i) trust (based on the reduced risk of the data being manipulated); (ii) a single but shared version of the ‘truth’; (iii) a reliable means of sharing control of transactions and data; (iv) automation through smart contracts; and (v) the ability to represent, hold and transfer value without the risk of duplication.8 In the securities market, this could mean, amongst other things: (i) more efficient post-trade processes, reducing the time-to-market; (ii) enhanced reporting and oversight; and (iii) reduced costs, for example.9
Technologists have argued that cryptocurrencies and blockchains will revolutionize our lives. Many have suggested that blockchain is the single biggest technological innovation since the internet itself. It will “democratize finance” and “disintermediate big tech” among other societal improvements. Yet adoption of blockchain has been underwhelming, and it has largely failed to live up to these lofty expectations. One significant reason for this is that the digital assets that underpin blockchains such as Bitcoin and Ether are often not secure, as the industry has been rife with hacks and scams. The emerging market for Digital Asset Insurance may provide the necessary backstop to make the asset safe enough for broader adoption. This article provides an overview of the relevant technology, outlines the state of the digital asset insurance industry, and discusses how the insurance integral to the broader blockchain ecosystem.
Ahmad Shauqi Bin Haji Mohamad Zubir, Nur Aishah, Azwadi Ali, Safiek Mokhlis · 5 authors
As the society is becoming more digitised day by day, we are being constantly introduced with advanced smart technologies that transpire changes in our lives. The blockchain technology and cryptocurrencies came in at the appropriate time which has provided pathways and security for many vulnerable internet-connected devices as the technology uses distributed verification of transactions. Due to their unique features, cryptocurrencies carry value on their own and now can be used for trading and transactions. In many established markets, transactions and trading in cryptocurencies have been growing and many have seen them as potential assets and investment option. Nevertheless, in many other countries, cryptocurrencies are not very popular and due to lack of awareness, many of their citizens are yet to own any cryptocurrencies. This study assessed the awareness of cryptocurrencies among selected Malaysian public and tested certain determinants and found almost three quarter of the respondents were aware of them but none is owning even one digital currency. Among the determinants, age group, ethnicity and occupation status were found to have influenced respondents’ awareness about cryptocurrencies. If it is an interest of the government to promote the use of cryptocurrencies, necessary exposure campaigns as well as guarantee of control and security should be made a priority.
Abstract Blockchain technology has become an ubiquitous phenomenon. While the topic originated in computer science, the business and economics literature was comparatively slow to pick up on it. To better understand the academic basis, current developments and future research avenues of the discourse, 9672 cited references of 467 blockchain and cryptocurrency articles from the fields of business and economics are gathered from the Web of Science Core Collection and are analyzed. Five major strands of research are identified through factor analysis. They are reviewed and their interrelation is mapped using social network analysis. Research on (I) market efficiency and economics and (II) asset pricing and valuation is relatively mature and focuses on cryptocurrencies, while research on (III) the principles and applications of blockchain technology, (IV) transactions and anonymity and (V) monetary theory and policy lacks maturity. Potential paths for future research are pointed out and in conclusion, it is assessed that this young field of research still leaves plenty of room for manoeuvre. A scientific place next to Nakamoto (2008) is still available for existing, emerging and new research streams.
The tokenization of assets deployed to distributed ledger technology is increasingly cited to revolutionize financial services by allowing traditionally illiquid assets to be bought and sold on primary and secondary markets increasing asset liquidity, transparency and reducing transaction completion time. To realize these benefits it is important the token is transferrable, that is, portable from one distributed ledger to another. In this paper we survey current interoperability architectures and smart contract languages, identifying factors affecting the portability of tokenized assets. We propose a portability maturity model that can be used to help assess the current state of technology and supporting market infrastructure.
‘‘Cryptocurrency trading was one of the most exciting jobs of 2017’’. ‘‘Bit- coin’’,‘‘Blockchain’’, ‘‘Bitcoin Trading’’ were the most searched words in Google during 2017. High return on investment has attracted many people towards this crypto market. Existing research has shown that the trading price is completely based on speculation, and its trading volume is highly impacted by news media. This paper discusses the existing work to evaluate the sentiment and price of the cryptocurrency, the issues with the current trading models. It builds possible solutions to understand better the semantic orientation of text by comparing different machine learning techniques and predicts Bitcoin trading price based on Twitter feed sentiment and additional Bitcoin metrics. We observe that the statistical machine learning model was able to better predict the sentiment of Twitter tweet feed compared to the advanced BERT model. Using Twitter feed sentiment and additional Bitcoin metrics, we were able to improve the prediction of bitcoin price compared to only using bitcoin’s previous day closing pricing.
Clara Schneidewind, Ilya Grishchenko, Markus Scherer, Matteo Maffei
Ethereum has emerged as the most popular smart contract development platform, with hundreds of thousands of contracts stored on the blockchain and covering a variety of application scenarios, such as auctions, trading platforms, and so on. Given their financial nature, security vulnerabilities may lead to catastrophic consequences and, even worse, they can be hardly fixed as data stored on the blockchain, including the smart contract code itself, are immutable. An automated security analysis of these contracts is thus of utmost interest, but at the same time technically challenging for a variety of reasons, such as the specific transaction-oriented programming mechanisms, which feature a subtle semantics, and the fact that the blockchain data which the contract under analysis interacts with, including the code of callers and callees, are not statically known. In this work, we present eThor, the first sound and automated static analyzer for EVM bytecode, which is based on an abstraction of the EVM bytecode semantics based on Horn clauses. In particular, our static analysis supports reachability properties, which we show to be sufficient for capturing interesting security properties for smart contracts (e.g., single-entrancy) as well as contract-specific functional properties. Our analysis is proven sound against a complete semantics of EVM bytecode and an experimental large-scale evaluation on real-world contracts demonstrates that eThor is practical and outperforms the state-of-the-art static analyzers: specifically, eThor is the only one to provide soundness guarantees, terminates on 95% of a representative set of real-world contracts, and achieves an F-measure (which combines sensitivity and specificity) of 89%.
Financial derivatives are a crucial part of our global financial infrastructure. They serve as effective hedging tools and improve economic development, but conversely are complicated and subject to heavy regulation. Decentralized Ledger Technology (DLT) enables a distributed, trustworthy ledger that stores encrypted information. It could enable frictionless, transparent, financial derivative processing by creating an inherently trustworthy ecosystem that eliminates the need for transaction verification. This paper discusses how different DLT protocols could facilitate financial derivatives. We then present a protocol for facilitating financial derivatives using Stellar's DLT protocol. Assessing our protocol shows that it processes derivatives efficiently with complete transparency. Comparing our DLT based derivatives to traditional derivatives affirms our belief that DLT enables an increase in transparency and reduction of market friction. However, we also found that DLT based derivatives have increased security and counterparty risk. Overall, if the developer mitigates the risks associated with DLT, our protocol could enable a level 3 blockchain application to improve the financial derivatives ecosystem significantly.
The trend of cryptocurrencies has stirred interest in the underlying technology that qualifies cryptocurrencies as a secure structure with speedy, timely and cheap transactions. The aforementioned technology, the blockchain, in brief terms is a decentralized ledger technology that attains an immutable characteristic through consensus and timestamp mechanics. The model also sets the stage for transparency in transactions, which renders the technology applicable to a myriad of scenarios that involve financial instruments. This research puts forth an argumentative approach to the applicability of blockchain technology and specifically studies the prospect of utilizing smart contracts. This approach probes the feasibility of introducing smart contracts to everyday financial transactions and settlements. An opposing perspective, by taking a devil's advocate standpoint, invokes the impractical or implausible aspects of implementing the blockchain in certain scenarios. Difficulty in auditing is a prominent example among those impracticalities. Research methodology is qualitative in nature and takes the form of exploratory research by examining existing literature on the topic.
Malni Kumarathunga, Rodrigo N. Calheiros, Athula Ginige
This paper presents a conceptual model for an online agricultural commodity market that empowers farmers with a better price determination mechanism through collective marketing and Blockchain smart contracts. The model makes collective marketing possible by generating Many-one-Many relationships between farmers, farmers' groups, and buyers. While collective marketing improves farmers' bargaining position leading to higher rates, trust enabled by Blockchain smart contracts facilitates farmers to establish deals with buyers who offer the best rate transforming the commodity market into a sustainable market.
Clara Schneidewind, Ilya Grishchenko, M. Schérer, Matteo Maffei
Ethereum has emerged as the most popular smart contract development platform,\nwith hundreds of thousands of contracts stored on the blockchain and covering a\nvariety of application scenarios, such as auctions, trading platforms, and so\non. Given their financial nature, security vulnerabilities may lead to\ncatastrophic consequences and, even worse, they can be hardly fixed as data\nstored on the blockchain, including the smart contract code itself, are\nimmutable. An automated security analysis of these contracts is thus of utmost\ninterest, but at the same time technically challenging for a variety of\nreasons, such as the specific transaction-oriented programming mechanisms,\nwhich feature a subtle semantics, and the fact that the blockchain data which\nthe contract under analysis interacts with, including the code of callers and\ncallees, are not statically known.\n In this work, we present eThor, the first sound and automated static analyzer\nfor EVM bytecode, which is based on an abstraction of the EVM bytecode\nsemantics based on Horn clauses. In particular, our static analysis supports\nreachability properties, which we show to be sufficient for capturing\ninteresting security properties for smart contracts (e.g., single-entrancy) as\nwell as contract-specific functional properties. Our analysis is proven sound\nagainst a complete semantics of EVM bytecode and an experimental large-scale\nevaluation on real-world contracts demonstrates that eThor is practical and\noutperforms the state-of-the-art static analyzers: specifically, eThor is the\nonly one to provide soundness guarantees, terminates on 95% of a representative\nset of real-world contracts, and achieves an F-measure (which combines\nsensitivity and specificity) of 89%.\n
Kerolly Kedma Felix do Nascimento, Fábio Sandro dos Santos, Jader da Silva Jale, Tiago A. E. Ferreira
Os mercados financeiros são sistemas complexos em que os negociadores interagem usando as mais variadas estratégias. Técnicas computacionais que usam agentes inteligentes podem auxiliar na tomada de decisão com o objetivo de maximizar os ganhos. Neste sentido, o objetivo deste artigo é observar o comportamento dos agentes financeiros participantes de mercados simulados e inferir sobre os ganhos destes agentes. Por meio do algoritmo Particle Swarm Optimization, utilizamos dois grupos distintos de agente inteligentes: um grupo utiliza um grau de crença na previsão dos ativos para o dia seguinte e o outro grupo não utiliza, em que ambos interagem entre si buscando maximizar seus ganhos. Foi realizada uma pesquisa exploratória, com análise de natureza quantitativa sobre os dados. Os resultados mostraram que o grupo que usa a previsão é mais homogêneo, apresentando maiores ganhos de riqueza média, com concentrações de capital e de ações adquiridos variando de acordo com a série histórica de preços utilizada (Bitcoin, Ethereum, Litcoin ou Ripple). Diante disso, o procedimento implementado pode ser aperfeiçoado e utilizado para o desenvolvimento de ambientes que visem a melhor compreensão dos mercados financeiros e auxiliem os agentes participantes dos mercados na definição de estratégias de negociação que possibilitem a minimização de perdas financeiras.
In this article, we discuss the potential of blockchain technology in addressing the documentation of users’ land rights in the informal land rental market. Blockchain technology is a peer-to-peer protocol that can be leveraged to keep track of transactions over the internet. Publicised for its use in the bitcoin revolution, the technology provides transparency and traceability that can be used in the management of land rights. When it comes to the formalisation of land rights, blockchain technology promises to authenticate owners and other users of land, and provides a fixed ledger of land use rights transactions. At present, blockchain technology is being explored as a proof of concept in several countries to track land titles (state to individual). We extend the idea to capture the granting of land use rights (individual to individual) making use of the decentralisation, peer-to-peer nature of blockchain technology. While the technology is not a panacea to all land administration challenges, it can offer an effective means to manage land transactions, provide digital documentation to actors in the informal land rental market and reduce inefficiency in land systems. However, the uptake of the technology in land administration is limited by human related factors. These limitations include, but are not limited to, the accuracy of data being entered into the system, the ability of the system to facilitate data preservation, pre-existing institutional and legal pillars, and the digital divide across communities. Part of overcoming these barriers requires the political will of governments to invest in digital technologies and develop institutional capacities to overcome current limitations to bring land management into the industry 4.0 era.
Ghareeb Falazi, Andrea Lamparelli, Uwe Breitenbuecher, Florian Daniel · 5 authors
In this article, we introduce a set of technologies that lay the foundation for a service-oriented integration of smart contracts into generic software applications. In particular, we showcase the use of three specifications using a typical supply chain scenario.