Blockchain Papers

Naman Kabra, Pronaya Bhattacharya, Sudeep Tanwar, Sudhanshu Tyagi

No abstract is available for this record.

David Allen, James Aselta, Russell Engel

This paper examines the risks, accounting practices and disclosures of companies who accept cryptocurrency for the payment of products or services. We provide a brief history of cryptocurrency and blockchain technology that allows the reader to deepen their understanding of the subject before moving on to a discussion of how regulatory bodies such as the Financial Accounting Standards Board (FASB), the Securities and Exchange Commission (SEC) and the Internal Revenue Service (IRS) are treating the accounting for cryptocurrency transactions.

Sebastian Linsner, Franz Kuntke, Gina Maria Schmidbauer-Wolf, Christian Reuter

Digitalization, which proceeds in all branches, as well in agriculture, by using new technology, sensors and networking, requires responsible usage of data. One possibility to manage data and use them to create value is the blockchain-technology. It is primary enforced by the food industries and consumers to ensure traceability and transparency. To put blockchain-technology into beneficial use in agriculture, this domain has to be analyzed regarding social and business aspects. This paper presents the results of a qualitative study where 41 actors from the agricultural domain participated in focus groups and delivered a written statement. It was found that farmers are interested in adapting new markets and technologies early to get an economic advantage. On the other hand, the fear of losing traditional local business partners and the social surroundings of the farmers must be considered.

Weizhao Tang, Weina Wang, Giulia Fanti, Sewoong Oh

Payment channel networks (PCNs) are viewed as one of the most promising scalability solutions for cryptocurrencies today. Roughly, PCNs are networks where each node represents a user and each directed, weighted edge represents funds escrowed on a blockchain; these funds can be transacted only between the endpoints of the edge. Users efficiently transmit funds from node A to B by relaying them over a path connecting A to B, as long as each edge in the path contains enough balance (escrowed funds) to support the transaction. Whenever a transaction succeeds, the edge weights are updated accordingly. In deployed PCNs, channel balances (i.e., edge weights) are not revealed to users for privacy reasons; users know only the initial weights at time 0. Hence, when routing transactions, users typically first guess a path, then check if it supports the transaction. This guess-and-check process dramatically reduces the success rate of transactions. At the other extreme, knowing full channel balances can give substantial improvements in transaction success rate at the expense of privacy. In this work, we ask whether a network can reveal noisy channel balances to trade off privacy for utility. We show fundamental limits on such a tradeoff, and propose noise mechanisms that achieve the fundamental limit for a general class of graph topologies. Our results suggest that in practice, PCNs should operate either in the low-privacy or low-utility regime; it is not possible to get large gains in utility by giving up a little privacy, or large gains in privacy by sacrificing a little utility.

Mark Fenwick, Erik P. M. Vermeulen

Advocates of blockchain believe that distributed ledger technologies can provide us with a technological infrastructure to challenge the concentrated power of tech giants such as Amazon, Facebook and Google, and create a more equitable, sustainable and decentralized world. This paper considers these claims and concludes that they are preferable to defending the status quo or arguing that a solution might be found in more and better regulations. Nevertheless, the future remains highly uncertain and we are currently living in a rapidly evolving “space” between two competing realities: a centralized old-world reality and a fast-emerging, but, as yet, incomplete, decentralized reality. We remain optimistic that decentralization is coming but identify powerful competing forces seeking to preserve the status quo. As such, we must encourage more organizations – business, government, investors, charities – to experiment with distributed ledger technologies and to participate actively in the digital transformation. We need more experimentation to address the current shortcomings of decentralisation and to ensure the early arrival of mainstream applications of a technology that has the potential to solve some of the most pressing global challenges of a digital age.

Mohammed Fisal Abu Khaled

This chapter intends to document the various ways that the nascent technology, blockchain, and other forms of distributed ledger technology (DLT) can provide both increased and decreased risk as well as offer FinTech industries a fertile environment to pursue key technological advancements that can help shape almost every facet of the financial world. Issues of trust, transparency, and privacy will be explored as it pertains to the execution of blockchain technology within financial sectors. Strengths and weakness will be explored within regulations, legal environments, risk management, and the environment. Based on the findings of a comprehensive literature review, possible solutions and recommendations will be provided for governmental agencies, regulators, and users of financial services with a special focus on Islamic FinTech. Future research directions will also be shared that can assist Islamic FinTech.

Sri Nikhil Gupta Gourisetti, Michael Mylrea, Hirak Patangia

Blockchain technology has been gaining great interest from a variety of industry sectors, including financial, food processing, and power and energy markets. Realizing the strength of blockchain technology beyond the successful application in the cryptocurrency arena, researchers have been evaluating and using blockchain for applications such as supply chain management, transactive industry (both financial and energy), system integrity, device cybersecurity, identity management, and much more. One of the unique elements of the blockchain technology that made it such a captivating technology to researchers is its plethora of features. Some of the features include smart contracts, cryptocurrency and tokenizing, immutable distributed ledger, cryptographic hashing, and digital signature. In addition, there are multiple types of blockchains, such as permissioned/private and permissionless/public, and various consensus models, such as proof-of-work, proof-of-authority, proof-of-burn, and proof-of-stake. Therefore, it is often nontrivial to determine if an application requires a blockchain. If so, what kind of blockchain and consensus is most appropriate? This article discusses the blockchain applicability framework (BAF), which was specifically designed with the purpose to answer those questions. The BAF is divided into five domains, 18 subdomains, and about 100 controls. It is designed to ingest detailed user requirements to perform a weighted evaluation that is built on mathematical constructs to determine the ideal combination of blockchain that is appropriate for an application. Along with the core logical formulation of the BAF, this article depicts the efficacy of the BAF through two use cases.

Kaidong Wu, Yun Ma, Gang Huang, Xuanzhe Liu

Summary With the increasing popularity of blockchain technologies in recent years, blockchain‐based decentralized applications (DApps for short in this paper) have been rapidly developed and widely adopted in many areas, being a hot topic in both academia and industry. Despite of the importance of DApps, we still have quite little understanding of DApps along with its ecosystem. To bridge the knowledge gap, this paper presents the first comprehensive empirical study of blockchain‐based DApps to date, based on an extensive dataset of 995 Ethereum DApps and 29,846,075 transaction logs over them. We make a descriptive analysis of the popularity of DApps, summarize the patterns of how DApps use smart contracts to access the underlying blockchain, and explore the worth‐addressing issues of deploying and operating DApps. Based on the findings, we propose some implications for DApp users to select proper DApps, for DApp developers to improve the efficiency of DApps, and for blockchain vendors to enhance the support of DApps.

Colleen Baker, Kevin Werbach

Banks and financial institutions have been spending significant sums to explore potential applications of blockchain technology. The financial services industry is among those areas predicted to benefit the most from blockchain use in the years to come. This chapter investigates this prediction after providing a primer on blockchain. It analyses the potential of blockchain to increase efficiencies and to transform business processes in a number of areas within the industry such as the trade life-cycle of securities and of derivatives, payments, traditional financing arrangements, asset management, insurance and corporate governance. It also examines new currencies and cryptoassets, phenomena ultimately enabled by the use of blockchain technology.

Harriet Territt

Both the functionality and the flexibility of distributed ledger technology (DLT) systems can raise complex questions of applicable law for users. This chapter considers the challenges of establishing what laws or regulations may be relevant to the operation and governance of DLT systems and transactions conducted on them. It highlights the risks of failing to include express contractual clauses to make the parties' choice of law and forum for dispute resolution clear. It also discusses how governing law and jurisdiction will be assessed in the absence of any express contractual clauses, including an explanation of common DLT governance systems.

Hubert de Vauplane

Today’s economy is being transformed by digitisation, prompting central banks to seriously consider the issuance of central bank digital currencies (CBDCs’. In that context, many central banks are examining the relevant economic and political factors, as well as necessary regulatory reforms in order to weigh the benefits and disadvantages of issuing CBDCs. In addition to these factors, legal issues related to CBDCs and the possible need to adopt new legislation to address them, also deserve consideration. This chapter examines the legal characteristics of CBDCs by reference to the features of sovereign currencies and cryptocurrencies. It concludes that the issuance of CBDCs will require adapting national legal and regulatory frameworks, in order to ensure clarity around the status and legal characteristics of CBDCs.

Dirk Andreas Zetzsche, Ross P. Buckley, Douglas W. Arner, Anton N. Didenko

The transformative potential of distributed ledger technology (DLT) is attracting significant interest around the world. Many institutions are investing heavily in proof of concept demonstrations, pilot initiatives and the rollout of applications of DLT. Part of the attraction of distributed ledger systems, such as blockchain, lies in their perceived ability to transcend law and regulation. Yet, while the law may be dull and the technology exciting, the impact of the law cannot be simply wished away. With data distributed among many ledgers, legal risks will remain. Legal relationships recorded on, or evidenced by, distributed ledgers may give rise to various forms of liability based on contract, tort, partnership or joint venture structures, specific legislation or breach of fiduciary duties. At the same time, despite existing similarities among common law and civil law systems, the sources of DLT-linked liability may vary substantially across jurisdictions.

Simon Johanning, Thomas Brückner

Motivated by numerous drivers, blockchain-based peer-to-peer energy trade whitepapers surged in the past two years. Assuming disruption through blockchain technology, they envisioned a transformation of energy systems through technosocio-economic solutions. Few impartial and sober assessments of blockchain-based energy projects exist, and many publications praise disruptive potential without further examination. A more distant and critical perspective, however, is imperative for a responsible use of a novel, in particular disruptive, technology. This review aims at surveying the energy system envisioned by the projects through discussing the projects by their characteristics, their perspective on the transactive energy lifecycle and the energy ecosystem envisioned in the white papers. This review is descriptive and comparative in nature, and attempts to synthesize topics raised in the white papers through methods of grounded theory, as well as assessing the disruptive potential of blockchain technology in energy systems. Through this and a critical and neutral perspective, it strives to (soberly) contribute to a discussion on the digitization of elements of the energy system, and how blockchain-based use cases can contribute constructively to the problems at hand.

Robert Muth, Kerstin Eisenhut, Jochen Rabe, Florian Tschorsch

Urban development processes often suffer from mistrust amongst different stakeholder groups. The lack of transparency within complex and long-term planning processes and the limited scope for co-creation and joint decision-making constitute a persistent problem for successful participation in urban planning. Civic technology has the potential to improve this predicament. With BBBlockchain, we propose a blockchain-based participation platform, which is able to address all layers of participation. In the development of the platform, we focus on two key aspects: How to increase transparency and how to introduce enhanced co-decision-making. To this end, we exploit the immutable nature of blockchains and effectively offer a platform that excludes monopolistic control over information. The decision-making process is governed by smart contracts implementing, for example, timestamping of planning documents, opinion polls, and the management of a participatory budget. Our architecture and prototypes show the operational capabilities of this approach in a series of use cases for urban development.

Rafaa Ibrahim Al-Hamdani, Laila Abdul Karim Mohammed, Jamal Hadash Mohammed

The purpose of research is focused on the insight into the future of Bitcoin on the financial situation, its implications and challenges. The problem of study is to investigate how to deal with a new type of digital currencies (such Bitcoin) that does not have a physical presence and there is no specific body to issue. Thus, this study aims to identify the nature of Bitcoin currency and what are the challenges associated with it as well as exchange rates with some currencies, as the research hypothesized the main hypothesis that Bitcoin will contribute to financial development in the future, the research also used the analytical rooted approach to present concepts and data, using financial technical analysis to display the results The research also came up with a number of conclusions and recommendations. The results of paper significantly contribute to the literature through providing evidence from financial data of Bitcoin.

V. U. Wickramarachchi, Chamath Keppitiyagama, Kasun Gunawardana

Financial contracts play a major role in the modern economy. Due to a large variation of contracts being traded in financial markets, a standard representation for contracts was required in order to eliminate the ambiguity imposed by natural languages. Peyton Jones et al. catered this need by proposing a combinator library embedded in Haskell which enabled contract representation and valuation. However, every financial contract represented as such suffered from the same fundamental problem. If a contract is executable, the parties involved in the contract needed to trust a central counterparty to give them the correct results after execution. The interference of this middleman introduced certain risks as well as a significant amount of overhead. In this paper, a novel approach to facilitate autonomous contract execution was proposed, exploiting the features and use cases of the Ethereum blockchain and its scripting language, Solidity. The approach involves transforming contracts written in Peyton Jones Contract Descriptive language (CDL) to Solidity using a special purpose compiler. The result of this transformation is a smart contract equivalent to the traditional financial contract. The transformed smart contract is deployed and executed on the Ethereum blockchain using an Ethereum client. The proposed solution was evaluated against existing attempts to design autonomous financial contracts. The research shows that a contract written using CDL can be transformed into a smart contract which executes autonomously in a trust-less environment. As a result, it was concluded that financial contracts could operate without a central counterparty with increased performance and reduced overheads in comparison to traditional financial contracts.

Ulyana Shtybel

This paper explores the use of emerging distributed ledger technology in capital markets infrastructure with the aim of improving the efficiency of private securities issuance, settlement and trading. It emphasises the current inefficiencies in the private securities market and highlights the implications of the tokenisation process of private securities and the advantages of DLT-native digital and tokenised securities over securities issued in the traditional form. The paper also highlights the aspects of issuance of securities on permissioned or semi-public Blockchain versus public Blockchains and the use of Blockchain protocol level smart contracts versus token-based smart contracts for adoption by capital markets. It stresses the legal grounds for security tokens and the position of regulators towards a new form of securities issuance.

Weiqi Hua, Hongjian Sun

Climate change enforces the integration of distributed renewable energy sources and development of carbon price scheme. Whilst the energy is traded among distributed prosumers, the carbon responsibilities and corresponding allowances trading need to be transferred from large-scale energy suppliers to prosumers. During this transformation, the issues of energy imbalance, carbon reduction imbalance, and residential privacy leakage in centralised trading market present serious challenges. In this paper, we propose a fully decentralised blockchain-based peer-to-peer trading scheme coupling energy and carbon markets. We implement pay-to-public-key-hash with multiple signatures as a transaction standard to realise a more secure transaction and reduced storage burden of senders. A script is hashed during the wallet address generation for each new transaction to protect residential privacy. A novel carbon accounting method and corresponding incentive mechanism for carbon reduction are designed to evaluate emission behaviours of distributed prosumers. Case studies demonstrate that the proposed scheme leads a reduced costs and carbon emissions compared to centralised trading systems and existing blockchain-based trading schemes.

Milton Chang

Blockchain technology is believed to be a highly secured solution for it is a decentralized ledger guarded by cryptographic techniques. However, the recent successful ‘51% Attack’ [1] on Ethereum Blockchain network, raised concerns regarding the trustworthiness of this technology. This paper addresses the causes and solutions to that attack. Private Transactions like the techniques implemented in Parity Ethereum and Quorum are introduced. Proof of Stack (POS) is another approach using economic incentives instead of intensive computations to guard against attacks while reducing power consumed. They are considered mitigation to the ‘51% Attack’. The use of Second Factor Authentication at the Smart Contract level is also addressed.

Merike Malan, Riana Steyn

Distributed ledger technology allows for data to be recorded, shared, and synchronized across multiple distributed data stores. This brought forth the idea of using this technology to build consensus. Implementing this technology within the Syndicated Loan Market through Smart Contracts allows for reduced manual labor and back-office workloads as well as the removal of reconciliation and corporate actions. As a result, counterparty risk and settlement times will be minimized, and performance and transparency for regular reporting will increase. However, an individual's embrace of this new technology will determine its successful implementation. To address this issue, this article examines the trust model, trust in technology drivers, and the revised unified theory of acceptance and use of the technology model to construct the trust and adoption of the technology model. This article culminates in guidelines for the implementation of Smart Contracts. Avenues for future work include the investigation of a multimotive information systems acceptance model.

Gerd Hartung, Kevin Rutter, Guido Stroemer

For the financial industry, the need to manage high-quality liquid assets (HQLA) efficiently and the related topic of collateral mobility are more relevant than ever. In the aftermath of the global financial crisis, they have posed a significant challenge for the industry. Progress on this issue is strongly linked to the evolution of new technologies. This paper assesses the current situation and how distributed ledger technology (DLT) can help to address this subject and improve the securities lending market. It examines which aspects need to be taken into consideration when designing a DLT solution, how it can be implemented and what are the next steps on our way to solving one of the most pressing issues for the future of financial services.

Disha Shinde, Snehal Padekar, Siddharth Raut, Abdul Wasay · 5 authors

Storing sensitive information like property papers needs a secure and untamperable database. Existing centralized systems has numerous drawbacks like performance bottleneck and single point of failure. Hence, a decentralized system with high security is needed. To cater this need, in this paper, we propose blockchain based system for secure storage of property papers. In our system, when a land is bought by a person, the government authority will provide the person with the hard copy of property papers and our system will store the documents into the Inter Planetary File System (IPFS), a decentralised database. The IPFS network will generate the hash of document. This hash will be securely stored into the ethereum blockchain after satisfying the conditions of the smart contracts. The smart contracts will validate and verify the documents from the government authorities. This will create a decentralized, tamper-proof ledger from which we can retrieve the stored data easily.

Muhammad Imran Sarwar, Kashif Nisar, Khan Amna

A technology that has shifted the entire paradigm of computer applications during the last decade is undoubtedly, the Blockchain technology. The purpose of inventing Blockchain was to develop a technology in which data is immutable, confidential and located on a de-centralized network. This technology was first used to build a cryptocurrency application, which is just one of many applications developed using Blockchain technology. Since, most of the emphasis has been on the money and finance related services, now the vertical industries have also started to implement Blockchain. This study contributes to review the opportunities of using Blockchain technology in vertical industries.

Mariia Sigova, Valery Alexandrovich Dolbezhkin, Artem Koltsov

The article is devoted to the discussion of urgent problems of developing financial services projects of retail. They are based on a combination of the capabilities of existing social networks and distributed ledger technology (DLT), as new subjects of competition in the banking sector of the market. The threat to commercial banks is determined by the risk of loss of income, in particular, commission income from transfer transactions that are already being executed in the social media environment, and which have the potential for growth in turnover. Despite the active development of crypto-innovations (algorithms, platforms, actually cryptocurrencies), the use of distributed ledger technologies by the banks themselves in the financial sector is still very modest. At the same time, social networks with a huge client base show an obvious interest in fintech prospects. These two components of the projects under discussion are contradictory and the success of integration is not obvious. Therefore, it is of interest to researchers in the financial sector. The author consider the main, from their point of view, properties of social networks, payment services and distributed ledger technologies that are significant for the projects under consideration and the issues of banks' competition with them.