Blockchain is currently one of the most important topics in both the academia and industry world, mainly due to the effects that the continuing development of this new technology embraces. The adoption of this technology by FinTech companies constitutes the next step towards the expansion of blockchain and its sustainability. Search results in smart contracts by FinTech companies have shown a deep focus in challenges such as security, scalability, legal and regulatory, privacy or latency, with proposed solutions still to be far from being effective.
Bert-Jan Butijn, Willem‐Jan van den Heuvel, Indika Kumara
This chapter focuses on smart contract-driven business transactions and processes. Business processes that span organization boundaries pose a number of significant business and system level challenges. Once the legal contracts between the trading partners are established, those should be monitored, enforced, and managed. The contracts generally express the rights and obligations of the contract parties to each other, and also outlines the guidelines for handling contract violations, and the conditions of commencement, continuation, and termination of the contract. The choreography model can be used to execute the process, where the deployed smart contracts act as the trusted coordinator. Multiple business partners bound by legal contracts collaborate to realize these business processes, forming a business network. Business collaborations among untrusted parties require incorporating transparency and accountability into the relevant business processes. The supply chain business processes are often carried out as a set of multi-step business transactions.
Bert-Jan Butijn, Damian A. Tamburri, Willem‐Jan van den Heuvel
Blockchain technology has gained tremendous popularity both in practice and academia. The goal of this article is to develop a coherent overview of the state of the art in blockchain technology, using a systematic(i.e.,protocol-based, replicable), multivocal (i.e., featuring both white and grey literature alike) literature review, to (1) define blockchain technology (2) elaborate on its architecture options and (3) trade-offs, as well as understanding (4) the current applications and challenges, as evident from the state of the art. We derive a systematic definition of blockchain technology, based on a formal concept analysis. Further on, we flesh out an overview of blockchain technology elaborated by means of Grounded-Theory.
Abstract We study the interplay between social ties and financial transactions made through a recent cryptocurrency called $\breve {G}1$ <mml:math xmlns:mml="http://www.w3.org/1998/Math/MathML"><mml:mi>Ğ</mml:mi><mml:mn>1</mml:mn></mml:math> . It has the particularity of combining the usual transaction record with a reliable network of identified users. This gives the opportunity to observe exactly who sent money to whom over a social network. This social network is a key piece of this cryptocurrency, which therefore puts much effort in ensuring that nodes correspond to unique, well identified, real living human users, linked together only if they met at least once in real world. Using this data, we study how social ties impact the structure of transactions and conversely. We show that users make transactions almost exclusively with people they are connected with in the social network. Instead, they tend to build social connections with people they will never make transactions with.
Blockchain has become much more than simply a fintech technology, and is enabling and inspiring new conversations around politics, governance, organization, institutions and power structures. I published an attempt to start a rigorous academic treatment of ideology in the blockchain space through my master’s thesis titled Toward a Political Sociology of Blockchain at Queen’s University. Since then, there have been continued rich discussions around politics and experimentation in line with the ideals of the blockchain movement. Examples include discussion of blockchain governance as a social contract, discussion of social scalability and how this enables us to organize, forums such as etherean.org, and movements such as RadicalxChange.org and the concept of Liberal Radicalism. Some of these movements have been started by similar actors in the blockchain space: Vitalik Buterin of the Ethereum project co-authored the paper on Liberal Radicalism which is deeply intertwined with RadicalxChange and the ethos of decentralization, and Lane Rettig is an Ethereum core developer and launched Etherean.org to be a non-maximalist community-based discussion of social aspects and implications around the emerging technology. While the cryptocurrency markets trended downward throughout 2018, there have been strong social indicators of a more mature system though increased interdisciplinary participation and development around the technology as well as increased interest by the public sector for use cases such as records keeping and identity solutions. I expand upon some of the concepts discussed in my thesis, and provide further evidence for the particular observations based on additional events I attended and took part in through late 2018 and early 2019. Primarily, additional evidence is taken from my attendance at both the ETHDenver and RadicalxChange conferences. I further develop some of the ideas and connections between the community that has emerged around blockchain technology, and the more recent adaptations in the political sphere, as well as implications of new forms of social organization allowed through the use of such technology.
Assistant Professor, SLRTCE Mumbai (Maharashtra), India., Neha Jain
Data security is the key to the development of modern internet technology. By allowing digital information to be distributed but not copied, blockchain technology created the backbone of a new type of internet. It allows storage of all transactions into immutable records and every record distributed across many participant’s nodes. As there is huge increase in the use cases for blockchain technology, nowadays, the primary issue is to enable secure data sharing, data integrity and authentication. The goal of this study paper is to provide a systematic literature survey exploring the use of blockchain as a base technology for securing financial as well as non-financial applications. The purpose is to identify the whether blockchain technology is capable to provide the desired security solutions in various application. The advantages, challenges and the solution provided by previous research is discussed. The survey was focused on various security issues like Confidentiality, Integrity, Availability, Authenticity, Accountability, and Reliability. The study shows that the Blockchain technology is prospective for financial and non-financial services since it can provide solutions for majority of security issues. Future research needs to provide the implementations of desired solutions discussed in security challenges of Blockchain technology.
Cryptomonnaies et efficience des marchés Les innovations apportées par les cryptomonnaies et leur technologie sous-jacente, la blockchain, ouvrent de nouvelles voies de recherches en finance. Cette thèse de doctorat est composée de trois essais portant sur les cryptomonnaies et est centrée autour de la notion d’efficience informationnelle des marchés. La première étude vise à expliquer comment la blockchain, développée au sein de communautés informelles, est adoptée et intégrée par les organisations. Cette étude apporte un cadre théorique à la technologie blockchain, cadre qui s’appuie sur les approches contractuelle et cognitive de la théorie des organisations. Grâce à une revue de la littérature illustrée, une analyse à deux dimensions présente les possibles utilisations de la blockchain fondées sur l’accès à l’information pour les participants. L’objectif de la seconde étude est double. Premièrement, elle soulève la problématique de la réelle nature du Bitcoin. Après avoir comparé le Bitcoin aux monnaies, à l’or et aux actions, nous basons notre analyse sur l’hypothèse que les cryptomonnaies peuvent être assimilées aux actions. Deuxièmement, la performance financière (la rentabilité ajustée au risque) du Bitcoin est mesurée en utilisant des modèles traditionnels tels que le MEDAF et le model de Fama-French à trois facteurs. Nous trouvons que l’intégration du Bitcoin dans un portefeuille améliore considérablement sa diversification, tout en apportant des rentabilités ajustées au risque positives et significatives dans le monde, l’Europe et l’Asie-Pacifique. La forte volatilité du Bitcoin ainsi que sa haute performance nous conduisent à analyser le caractère de bulle spéculative des cryptomonnaies, ce qui est l'objet de la troisième étude. Nous analysons cet aspect en utilisant le modèle PSY de Phillips and Shi, 2018. Deuxièmement, nous analysons le plus important pic/éclatement du marché des cryptomonnaies à la fin des années 2017 à l’aide du modèle LPPL (Log Periodic Power Law). Les résultats suggèrent des périodes de bulles avec effet de contagion entre les cryptomonnaies. Les analyses théoriques et empiriques de cette thèse contribuent à la littérature académique sur les cryptomonnaies. Nos résultats sont également importants pour les entreprises et pour les investisseurs qui s’intéressent au potentiel des cryptomonnaies et de la blockchain, ainsi que pour les décideurs politiques responsables de leur régulation.
ABSTRACT: The banking sector has undergone tremendous changes in the past decades. This paper seeks to investigate the future of Kenya banks by using cryptocurrency and blockchain technology to mitigate financial risk. A cryptocurrency performs the fundamental function of money, as a medium of exchange. The encryption and decentralization of digital currencies are the most important aspects regarding the applicability of Cryptocurrencies and Blockchain Technology in Kenya. Digital money supports individual investors as opposed to a dominant market player or authority. The fact that no single authority controls cryptocurrencies is the heart of its applicability in Kenya. Digital money is a unifying factor for the world markets defined by growing inequality and financial malpractices. The Kenyan banking system may take advantage of the smart contracts to address the myriad risks owed to the economic actions of the private and public parties. Banks can use the digital money to eliminate intermediaries that often constrain the capacity of the individual traders to enter into contracts. Cryptocurrencies operate on a user-to-user basis to enhance flexibility and control by the individual traders. The use of the technology can help the state to reduce the risk of loss owed to inaccurate authentication and valuation of assets. KEYWORDS: cryptocurrencies, blockchain technology, financial institutions, market risks, Kenia, banking system
Digitalization changes all kind of sectors of the economy—in particular, financial industry, which is probably one of the first to undergo fundamental changes. As money and financial transactions are immaterial, it is evident that financial industry has been one of the first economic sectors to be digitalized. Digitalization of the financial industry started already at the beginning of the 1980s, when large banking networks were introduced across the globe. With the rise of the Internet, online banking and all kinds of Internet-based services that allow a direct contact with clients and real-time transactions were established. The next step is now ahead, based upon the new technology of blockchain and on the use of artificial intelligence. It is obvious that the so-called fintech are already challenging the traditional financial industry; however, the notion of fintech remains opaque and is used to describe different phenomena. From the international private law perspective, it is of particular interest how traditional paradigms, such as location of a transaction (loci actus), can change. While contracts concluded by using fintechs will not raise specific choice-of-law problems as the principles of law applicable to contracts would not change, the situation is different for proprietary effects of transactions in securities. Even though securities were immaterialized long before the existence of fintechs or blockchain, the use of decentralized networks based on distributed ledger technology (DLT) raises new problems as to the assessment of the location of the transaction. The article discusses different approaches to solve the location problem, with specific regard of DLT. The issue discussed is embedded in a more general debate about the chances and limits to regulate a decentralized DLT; thus, conflict of laws for securities transactions is just a part of the overall problem. I will show that there are some important parallels to the intellectual property law that have been disregarded in the discussion so far. However, this approach also reveals some flaws, so that it will be the lex fori, in the end, that should govern the proprietary effects of transactions on a decentralized DLT network. Concerning the legal base of analysis, I have to concentrate—unfortunately—upon national law (in this case, German law) as European regulations such as the Rome Regulations do not deal with proprietary effects of securities transactions.
Purpose The purpose of this study hopes to encourage further research into the topic of local currencies, as well as specific research into increasing the efficiency of these systems through the use of blockchain technology. There is currently a lack of available research into the topic, which poses barriers for those who wish to study it, so the paper provides a general overview to be used as a starting point for those wishing to broaden their knowledge of local currency systems while also introducing a working implementation of a proof-of-concept for the proposed system. Design/methodology/approach A literature review of available studies on local currencies is conducted to provide an overview of the current systems and their shortcomings. Subsequently, blockchain technology is briefly introduced and an Ethereum-based model is proposed, which helps overcome the problems identified. The section exploring the Ethereum-based model draws code written by the author to simulate the features. Findings The paper concludes that blockchain technology can significantly help improve efficiency, transparency and security of local currency systems, while also helping cut costs associated with the implementation of a complementary monetary system. In the medium-term, local currency systems will most likely use a blockchain protocol as the underlying technology for the network. Originality/value Local currencies are an understudied topic by itself and the intersection between them and blockchain is a nearly non-existent research space. Thus, the paper takes a multidisciplinary approach, aiming to bridge the fields of computer science and economics to provide a foundation for further research.
The purpose of the research is to investigate the implementation of blockchains (BCs) and smart contracts (SCs) in smart tourism. BCs and SCs in the context of tourism are underexplored. Data were collected and analysed from relevant secondary sources in extensive desktop research between January and August 2018. The results highlight some implemented examples of BCs and SCs in tourism and few that are still in probation phase. The findings are interesting for tourism policy-makers, professionals, academics and tourism suppliers who are interested in real value added of BCs and SCs in tourism.
Ethereum blockchain is a revolutionary decentralized database technology on the Internet, with the characteristics of data tamperability, disintermediation, autonomy, traceability, point-to-point transaction, programmable and so on. Its emergence has an important impact on the development of many traditional industries. This paper analyzes the shortcomings of the traditional second-hand goods rental system and uses the blockchain technology to design the second-hand goods renting system based on ethereum smart contract. It introduces the background of blockchain and Ethereum smart contract, gives the overall framework of system design, and specifically describes the three parts of the system: blockchain module, smart contract module and the front end of DAPP, and the problems of combining blockchain and rental system are analyzed to provide a reference for better applications in the future.
Audi Ramadhan, Chandra Indira Septiarani, Faisal Dias, Deden Yoga Pratama
Aplikasi trading cryptocurrency merupakan sebuah aplikasi yang relatif baru yang ditandai dengan munculnya banyak cryptocurrency seperti Bitcoin, Ethereum dan lain sebagainya. Oleh sebab itu, analisis penerimaan teknologi pada aplikasi tersebut sangat penting untuk dikaji lebih dalam. Penelitian ini bertujuan untuk menganalisis dan mengukur penerimaan aplikasi trading cryptocurrency yaitu Indodax Trading Platform dengan menggunakan Technology Acceptance Model (TAM) yang diintegrasikan dengan faktor resiko dan kepercayaan. Penelitian ini merupakan penelitian kuantitatif asosiatif dengan menggunakan kuesioner untuk mendapatkan data primer. Sampel yang digunakan pada penelitian ini sebesar 134 dengan menggunakan teknil analisis Semi Equation Model – Partial Least Square (SEM-PLS). Hasil dari penelitian ini yaitu adanya pengaruh dari perceived usefulness dan trust terhadap penggunaan aplikasi trading cryptocurrency. Sedangkan resiko dan perceived ease of use tidak berpengaruh terhadap penggunaan aplikasi trading cryptocurrency.
Tim K. Mackey, Neal Shah, Ken Miyachi, James E. Short · 5 authors
Scientific research activity is reaching a staggering growth rate, introducing new and compounding existing challenges regarding the quality of peer-review, rise of predatory journals, and larger issues involving academic integrity and fraud stemming from the increased pressure to publish. Blockchain, a distributed ledger technology, is well-suited to address some of the challenges specific to scientific publishing. Companies including ARTiFACTS, Pluto, Orvium, and ScienceMatters-EUREKA, along with academic researchers, are exploring blockchain-based solutions to facilitate research data provenance and workflows, optimize the peer-review process, introduce better incentives, and even create new research journals and platforms utilizing blockchain. Building upon a review of these efforts, we propose a governance framework for scientific publishing based on a consortium blockchain model to create a more efficient means of navigating the publishing process. At the center of this framework is a model that adopts shared governance and validated inclusion via a Democratic Autonomous Organization (DAO). A DAO is an entity wherein the organizational rules are implemented and executed via smart contracts. The DAO will be comprised of participants of validated individuals and organizations who are publishers, editors, peer-reviewers, and citizen scientists to manage and oversee the framework. The framework also maps specifically to the publication workflow of submitting, handling, peer-review, and final editorial decision-making for scientific manuscripts. The goal of this framework is to increase transparency of scientific publishing, create a “pedigree” of a manuscript’s research life cycle, and democratize the publication process while maintaining the accepted workflow common to scientific publishing by journals.
Christopher G. Reddick, Gabriel Purón-Cid, Sukumar Ganapati
What are the factors that influence blockchain adoption in the public sector? This paper uses the diffusion of innovation theory to examine leading adopters of blockchain at the national government level. Six factors for blockchain adoption were tested using logistic regression: cybersecurity, control of corruption, e-government development, government effectiveness, political stability, and democratic participation. The analysis shows that cybersecurity, government effectiveness, and political stability are significant predictors. High levels of cybersecurity and government effectiveness increases the likelihood of countries to adopt blockchain. Paradoxically, higher degree of political stability decreases the likelihood of early blockchain adoption.
Blockchain and distributed ledger technologies (BC/DLT) are one of the hottest hype information technologies. Within BC/DLT regulatory development, virtual currency regulations have dominated both research and regulative work. At the same time, the impacts on virtual currency regulation on their developers and users have been investigated limitedly, especially empirically. This article fills this research gap. The present article reviews research on regulatory frameworks, approaches and regulations primarily within the European Union (EU) as the empirical data is collected within one EU member state. The virtual currency regulation use case of the country is also described. Survey data was collected from 40 virtual currency service developers and users with the help of three BC/DLT and fintech associations. The detected 27 regulatory expectations were rank-ordered with 164 pairwise comparisons by using the analytic hierarchy process (AHP) based Wiki Survey method. The respondents indicated that increased clarity of taxation is their most important regulatory expectation followed by regulators’ understanding about the nature of distributed ledgers. This article contributes to research by consolidating findings on regulations, by empirically investigating developers’ and users’ regulatory expectations and by extending the use of the Wiki Survey to fintech and BC/DLT studies.
While the financial sector was the first to investigate the potential of Blockchain, and in more general terms, Distributed Ledger Technology (DLT), with an initial focus on digital currencies including cryptocurrencies such as Bitcoin and Ether, the study of potential uses of this technology is gradually expanding to also include other areas of application including public-sector applications. Academic and non-academic publications on the subject have so far burgeoned mainly in and around the so-called fintech (financial technology) area, a fact that is underlined by a surprisingly high number of literature reviews already performed in this relatively novel area of research. For the public sector and the study domain of Digital Government, Blockchain and DLT have remained under-researched topics, and the number of respective publications is still relatively low. The aim of this meta-level literature study is to map the existing Blockchain and DLT-related body of knowledge and link its prevalent concepts to known needs and requirements studied in the context of the public sector and in Digital Government. Among the concepts, which intersect the existing literature on Blockchain strongly with the public sector-related research and practice, the study found cost reduction, innovation, regulation, taxation, security, privacy, transparency, among others, all of which deserve increased attention from scholars active in the domain of Digital Government research.
Cryptocurrencies are one of the greatest technological innovations. Cryptocurrencies are decentralized payment systems in which ownership is demonstrated cryptographically. An overview of ownership of payment units is stored in a data structure called blockchain. Of the thousands of cryptocurrencies, the best known are Bitcoin, Ethereum, Ripple, Litecoin, EOS, Cardano, NEO, Dash, and Monero. In the past, new cryptocurrencies were most often created by modifying the parameters of another cryptocurrency and by launching a new blockchain. Nowadays, new cryptocurrencies are most commonly created as applications on another existing cryptocurrency. Such cryptocurrencies are called tokens. Creating a new cryptocurrency is easy, but its value depends on users’ willingness to pay for its units. If a cryptocurrency loses its users, it becomes worthless. In this article, we analyze over 2,500 cryptocurrencies that are or were previously traded on cryptocurrency exchanges. We have explored the probability that a cryptocurrency will not survive and will be delisted from exchanges. For the different categories of cryptocurrencies according to their previous trading time on exchanges, we have determined the conditional probability of delisting within 1 to 5 years. We found out that the new cryptocurrencies are the riskiest. With the increasing age of the cryptocurrency, the probability of its delisting decreases. <b>TOPICS:</b>Currency, statistical methods, risk management, exchanges/markets/clearinghouses <b>Key Findings</b> • Cryptocurrencies constitute an expanding area for potential participation and investment. Since the first cryptocurrency was created in 2009 (Bitcoin) more than 2,500 cryptocurrencies have been listed on exchanges. • Consider waiting at least a year before buying a new cryptocurrency. More than 70% of cryptocurrencies that become delisted do so in the first year. • Consider waiting five years before buying a new cryptocurrency. Cryptocurrencies that have been trading for five years have a 9% chance of being delisted within one year..
Simón Fernández-Vázquez, Rafael Rosillo, David de la Fuente, Paolo Priore
Blockchain is currently one of the most important topics in both the academia and industry world, mainly due to the possible effects that the continuing application of this new technology could have. The adoption of this technology by FinTech companies constitutes the next step towards the expansion of blockchain and its sustainability. The paper conducts a mapping study on the research topics, limitations, gaps and future trends of blockchain in FinTech companies. A total of 49 papers from a scientific database (Web of Science Core Collection) have been analyzed. The results show a deep focus in challenges such as security, scalability, legal and regulatory, privacy or latency, with proposed solutions still to be far from being effective. A vast majority of the research is focused into finance and banking sector, obviating other industries that could play a crucial role in the further expansion of blockchain. This study can contribute to researchers as a starting point for their investigation, as well as a source for recommendations on future investigation directions regarding blockchain in the FinTech sector.
The rise of blockchain has resulted in discussions on (new) governance models with multiple actors collaborating. Incidents and problems occurred due to flaws in blockchain protocols, smart contracts and Decentralized Autonomous Organizations (DAOs). Often it is unclear how decisions are made concerning evolvement of blockchain applications. In this paper, we identify and analyze potential challenges regarding governance of blockchain initiatives in various types of decentralized networks using literature and case study research. The governance challenges are classified based on a framework consisting of different layers (infrastructure, application, company and institution/country) and stages (design, operate, evolve/crisis). The results show that in various stages and layers, different challenges occur. Furthermore, blockchain applications governance and blockchain infrastructure governance were found to be entangled adding to the challenge. Our research shows a specific need for further research into governance models for DAO applications on permissionless blockchains, linked to the products and services offered whereas in permissioned blockchains and other type of applications, existing governance models might often be feasible. For developing new governance models, we recommend learning from the lessons from the open source community.