Blockchain Papers

Motahareh Fathisalout Bollon, Alexis Down

International audience

Guido Noto La Diega

БЛОКЧЕЙН, СМАРТ-КОНТРАКТЫ И АВТОРСКОЕ

Hugo Pieter Wouda, Raymond Opdenakker

Purpose The transaction process of an office building is known to be time consuming and inefficient, in part due to the lack of market transparency. The purpose of this paper is to focus on the development of a blockchain application that can improve the transaction process of office buildings in the Netherlands. Design/methodology/approach Conducting design science research, the current transaction process of an office building and status quo of blockchain technology in real estate is investigated. Subsequently, multiple parties are interviewed to define major pain points within the process. The interview findings are used to design a blockchain solution which overcomes the aforementioned pain points. After designing, the interviewees are asked again to pragmatically validate the proposed model. Findings One of the major pain points identified concerning the transaction process of an office building is that it is difficult to define the characteristics of a property, due to lack of data structure and quality. The proposed application improves the way specific assets are understood by structuring physical and contractual information in one place and guarantees the quality of the data by using the blockchain mechanisms. Practical implications A blockchain application is proposed, which can improve the transaction process of an office building. Originality/value Recent studies indicate that blockchain technology could lead to improvements in efficiency, transparency and therefore trust within the transaction process. Therefore, the proposed application is of value for the future of real estate data management and the transaction process.

Niaz Chowdhury

This chapter aims to introduce smart contracts, and describes how Ethereum stands out from Bitcoin and opens a new world for the development of distributed applications. Ethereum extends the concept of blockchain one step further, and instead of only validating, storing, and replicating transaction data, it also allows users to write and run computer programs. Ethereum has a metric system of denominations used as units of Ether. The primary motivation of designing Ethereum was to extend the capabilities of Bitcoin, therefore, it incorporates many features and technologies that its predecessor utilised. The Ethereum blockchain did not follow that footstep; it instead ties up all exchanges with the account to recognise the transfers of value and information. The Ethereum platform defines every account by a pair of keys: a private key and a public key, where the latter is used to generate the address of the account.

Tianyu Feng, Xiao Yu, Yueting Chai, Yi Liu

Purpose The application of smart contract can greatly reduce transaction costs and improve transaction efficiency. The existing smart contract are expensive, single application scenario and inefficient. This paper aims to propose a new smart contract model to solve these problems. Design/methodology/approach By investigating the research history, models and platforms, this paper summarizes the shortcomings of existing smart contracts. Based on the content and architecture of traditional contract, a smart contract model with wider application scope is designed. Findings In this paper, several models are used to describe the operation mechanism of smart contracts. To facilitate computer execution, a decomposition method is proposed, which divides smart contracts into several sub-contracts. Then, the advantages and deployment methods of smart contract are discussed. On this basis, a specific example is given to illustrate how the application of smart contract will change our life. Originality/value Smart contract is gradually applied to more fields. In this paper, the structure and operation mechanism of smart contract system in reality are given, which will be beneficial to the application of smart contract to more complex systems.

Hemang Subramanian

Purpose Blockchain technologies have pervaded modern crowdfunding and capital sourcing through a variety of financial instruments implemented as smart contracts. Smart contracts provide a unique mechanism not only to create a unique one-of-a-type financial instrument, but also to enable unique innovations atop existing financial instruments due to underlying efficiencies. The smartness comes from the flexibility that programs provide which can create extremely unique financial instruments that are often complex to implement, yet easy to create, maintain through versioning, trade and destroy. The purpose of this paper is to describe the security token architecture as an application of smart contracts. Further, the author illustrates the implementation and design of a commonly used financial instrument known as Simple Agreement for Future Equity (SAFE) using the security token architecture proposed and smart contract functionality. The author then models the transaction using relational algebra, and, models the utility maximization. The author shows how on account of reduced information asymmetry between the investors and SAFE users (i.e. startups) utility is positive when smart contract-based security tokens are deployed for each state in the SAFE contract. Design/methodology/approach Using an existing well-adopted instrument called a SAFE contract, the author illustrates the architecture of a smart contract-based security token system. The author illustrates how different components of a SAFE contract can be implemented as a smart contract and discusses the advantages and disadvantages of applying blockchain-based smart contracts to design SAFE instruments. The author deploys two methods: a state space diagram to explain state transitions and a utility model to explain the utilities. Findings The key findings of this research study are the design of a security token architecture, which can be used to convert any the physical or contract-based financial instrument to a smart contract that runs on the blockchain. However, there are limitations to the implementation of the same which can be overcome. The model illustrates the positive utilities derived for all economic actors, i.e. the contractors, the utility providers, etc., in the market. Originality/value This paper is an original paper. For the very first time, the author explored the architecture of a security token system. Using a well-known financial instrument, namely the SAFE, the author describes various components, e.g. the four contracts that form SAFE and then model the utilities for the system.

Nitin Gaur

Purpose Blockchain technology can be used to record virtually anything of value – your identity, a will, a deed or almost any type of secure transfer of information. But in many respects, blockchain is lacking some critical capabilities to make it ready for widescale adoption by business. This paper on IBM blockchain attempts to uncover the promise of blockchain for enterprise, which goes beyond its role as an industry disruptor. It also has tremendous potential to improve existing business processes, as well as to improve efficiencies in existing transaction systems, leading to exponential cost saving for the enterprise and the end consumer. Disintermediation and disruption is the investment magnet for blockchain-related ideas, riding on the success of the business and underpinned by peer-to-peer and crowdsourcing models. Blockchain technology promises a similar explosion in trade, ownership and trust, as the tenets of both technologies rely on principles of distributed governance and rules established for a time-tested protocol. Design/methodology/approach The idea behind defining the path to blockchain enterprise adoption is to ensure that we have a microscopic focus on a singular use case and that we distill the existing business into a blockchain paradigm. This implies both business and technology models. We take a singular use case that has an industry and enterprise impact and apply business and technology acumen to the problem domain. Findings The result is a well-thought-out business architecture and technology blueprint, along with requirements for compliance, audit and enterprise integration. The point of this exercise is to expend time and energy with the right business domain expertise and blockchain technology expertise to derive an adoption model that enlists and surfaces hurdles, challenges and factors in the costs and economic viability of the blockchain solution. Originality/value The resulting artifacts/collateral of the blockchain client led engagement are envisioned to be instrumental in socialization and in providing a blueprint for a business seeking executive sponsorship and the necessary funding for first project.

Yu Wang, Jing Ren, Caroline Lim, Swee‐Won Lo

The unique combination of social and economic factors has brought about a dynamic and rapidly-evolving blockchain ecosystem in Asia. This paper systematically reviewed the development of four fast-growing blockchain hubs in Asia, namely China, Japan, Singapore and South Korea using secondary data sources. These countries are fast-growing based on the development of its digital, technological and regulatory infrastructure, patent applications, cryptocurrency trading volume and Initial Crypto-token Offerings (ICOs) activities. The review included insights into the different regulatory approaches, the blockchain startup scenes, selected enterprise or government-backed projects, as well as the research and educational landscape. Our findings suggested that the regulators, industry players, and academic institutions were purposeful and deliberate in nurturing blockchain technology innovation. Future development would be dependent on the regulatory, technological, as well as talent capability support unique to each blockchain hub.

Hussain Ali Mutar, Muayed S. Al‐Huseiny

While Ethereum run in public networks which make the blockchain size large and transaction run time longer than time for private or national network, that led to continuous worries over the expanding size of Ethereum Blockchain, which certainly reduce Cryptocurrency's effectiveness. The estimations were on increase and believed it would cross the node limit of 1 TB terribly shortly. If new consumer a full node enters to that blockchain and cryptocurrency world, a node is a computer software cum database of the blockchain, which a full node client must download on their personal computers to become a full node in the blockchain. in this way, the client can be verifying transaction on the network with the help of other nodes on the system. We proposed to implement national cryptocurrency which developed using Ethereum as a development platform that could serve national or regional people that has limited or slow internet connections like Iraq, in addition payments in countries with unstable fiat currencies, although cryptocurrencies are suffering from unstable exchange rates against fiat currencies, the use of national cryptocurrency instead of the native fiat cash could even be a far better alternative for individuals in certain countries like Iraq, Iran and Syria, with high rate of inflation. The reminder of this paper is arranging as following: an introduction, the advantages and drawbacks of cryptocurrencies, Background on Blockchain and Ethereum, implementation, results and conclusion.

Anwar Hasan Abdullah Othman, Syed Musa Alhabshi, Salina Kassim, Ashurov Sharofiddin

Purpose With the continuing development of the financial technology revolution, a better understanding of bank deposits variability has become necessary for bank management and policymakers, especially central banks. This is because the novel innovations of cryptocurrencies operate beyond the realm of the banking system, which may impact the performance of banks and their deposits variability. This study aims to investigate the long- and short-run effects of cryptocurrencies’ market capitalization development on the banks’ deposit variability in the Gulf Cooperation Council (GCC) region. Design/methodology/approach In this study, the Johansen–Juselius (1990) cointegration test with vector error correction model was applied to examine the long-run relationships, while the Engle and Granger (1987) and the Granger (1969) causality tests were used to detect causal relationships in the short term. Findings The findings of Johansen–Juselius cointegration test indicate that the banks’ deposits variability in all six states of the Gulf region share negative long-run equilibrium association with the development of global cryptocurrencies market capitalization, but with different statistically significant levels. For the short-run analysis, the study found that the development of cryptocurrencies market capitalization has significant unidirectional causal effects on bank deposits variabilities in only four states, namely, UAE, Qatar, Kuwait and Bahrain. The findings of the study therefore suggest that to eradicate the effects of cryptocurrencies industry and its threats to the banking industry, banks in GCC region are encouraged to either consider cryptocurrencies as an alternative investment asset for their portfolio investment diversification strategies or adopt the blockchain technology in their operation system to facilitate their customers with low transaction cost, high level of security and ease of use and real-time settlement. Research limitations/implications The empirical findings of the study will provide valuable input for policymakers, especially central banks and bank managements, to evaluate the current situation and the threats of the cryptocurrencies market growth and its effect on the banking industry’s performance, future survival and their deposits variability for better regulation and policy planning and investment strategies. Originality/value This is a pioneering study that empirically explores the phenomenon of bank deposits variability as a consequence of expansion in cryptocurrencies market capitalization, where the findings proved evidence of a drastic decline in banks’ deposits size due to the substantial growth in cryptocurrencies market capitalization.

Mohd Yazid bin Zul Kepli, Sonny Zulhuda

Abstract This chapter attempts to clarify and describe the legal and regulatory framework for cryptocurrency with special focus on Malaysia and the threats that it poses from the anti-money laundering perspective. Currently, very few countries have legislations that regulate cryptocurrency. Nonetheless, the crazy surge in prices (to more than 20-folds at some point) has sent both legitimate investors and criminals flocking to cryptocurrencies. This chapter analyses and compares the official reports from various governments, writings of government officials, experts and scholars in journals and newspapers, interviews and draws conclusions on the legal framework of cryptocurrency, and money laundering challenges. The study notes that the decision of the US regulators in allowing Bitcoin futures to trade on major exchanges to be one of the reasons behind the sudden surge. The study also finds that the South Korean regulators’ approach in banning its financial institutions from dealing with virtual currency is a positive one. The chapter stresses that it is not adequate for regulators to warn the public to act with extreme caution and increase their understanding on the risks they take on if they choose to invest in cryptocurrencies. Instead, it is necessary to have comprehensive international and national laws and regulations for the control and management of cryptocurrencies. In addition, the anti-money laundering legal framework must be improved to cater to the new threats posed by cryptocurrency.

Roberto Mavilia, Roberta Pisani

Blockchain technology, born as a tool to support Bitcoins (the most popular and controversial cryptocurrency in the world) has set itself in a very short time as a disruptive technology able not only to revolutionize existing businesses but also to create new ones. This work illustrates the main characteristics of the blockchain and its functioning, and then focuses on the potential applications that can be implemented for developing countries. More specifically, the work, considers the case of financial inclusion in Africa, on the basis of the Global Findex 2017 data, the World Bank Survey on financial inclusion. The empirical analysis identifies the weaknesses in the current financial system in Africa and constitues the basis to discuss potential blockchain solutions to reduce the current level of financial exclusion and pursue sustainable development for African countries.

Mehmet Can YUMUŞAKER

Çoğu ülkede Sanal para, bitcoin gibi isimlerle adını duyuran kripto paraların işlem hacimleri üst düzey boyutlara ulaştığı görülmüştür. Hatta günümüzde birçok firma ödemelerini iş çi ücretlerini kripto paralarla yapmaktadır.Bu paraların bir çok avantajının olması yanında bir takım dezavantajlarının olduğu görülmüştür. Kripto paralar hukuki anlamda kabul görmüş olmasa da yüksek kar getiri oranı, kolay transfer edilmesi, işlem çok az olması gibi sebeplerle işletmeleri hayran bırakan bir yatırım aracına dönüştürmüştür. Günümüzde Ticari işletmeler kripto paralarla tediyeişlemleri borçlanma işlemleri veya tahsilatlarını gerçekleştirebilmekte olup ayrıca kur getirisinden extra yararlanmak sebebiyle kripto paralara çok sık yatırım yaptıkları görülmektedir. Ayrıca bu paraların piyasada bir çok modeli olması ve bu paraların kendine has bir borsası vardır. Very madenciliği yapılmasada aynı borsadaki gibi arz talep dengesine bağlı olarak kar getirisi elde etmek mümkündür. Bu çalışmanın amacı sanal paralar ve bitcoin özelinde tüm kripto paraların nasıl çalıştığı ve bu paraların özellikleri hakkında bilgi verip Türkiye’de Bitcoin ile yapılan ticari işlemlerinin muhasebeleştirilmesi hakkında değerlendirmelerde bulunmaktır.

Masarah Paquet-Clouston, Matteo Romiti, Bernhard Haslhofer, Thomas Charvat

In the past year, a new spamming scheme has emerged: sexual extortion messages requiring payments in the cryptocurrency Bitcoin, also known as sextortion. This scheme represents a first integration of the use of cryptocurrencies by members of the spamming industry. Using a dataset of 4,340,736 sextortion spams, this research aims at understanding such new amalgamation by uncovering spammers' operations. To do so, a simple, yet effective method for projecting Bitcoin addresses mentioned in sextortion spams onto transaction graph abstractions is computed over the entire Bitcoin blockchain. This allows us to track and investigate monetary flows between involved actors and gain insights into the financial structure of sextortion campaigns. We find that sextortion spammers are somewhat sophisticated, following pricing strategies and benefiting from cost reductions as their operations cut the upper-tail of the spamming supply chain. We discover that one single entity is likely controlling the financial backbone of the majority of the sextortion campaigns and that the 11-month operation studied yielded a lower-bound revenue between \$1,300,620 and \$1,352,266. We conclude that sextortion spamming is a lucrative business and spammers will likely continue to send bulk emails that try to extort money through cryptocurrencies.

Jiaming Ye, Mingliang Ma, Tianyong Peng, Yinxing Xue

No abstract is available for this record.

Ku Ruhana Ku‐Mahamud, Mazni Omar, Nur Azzah Abu Bakar, Ishola Dada Muraina

Blockchain technology and cryptocurrency are attracting increasing attention from consumers, investors, investment industry and regulators. Cryptocurrency has great potential to be used for transaction or investment in the future. However, level of awareness of the blockchain technology and cryptocurrency is still at infant stage, specifically in developing countries. Thus, this study aims to investigate the level of awareness, trust and adoption of blockchain technology among blockchain community in Malaysia. Quantitative approach was adopted in this study where a new questionnaire was developed in the first phase to measure the level of awareness, adoption, and trust of blockchain technology applications among Malaysian blockchain communities. The resulting questionnaire consists of items on respondents’ demographic, their awareness, trust, and adoption of FinTech particularly on blockchain technology and cryptocurrency. In the second phase, a pilot study was conducted to validated the new questionnaire from 304 respondents. Reliability test using Cronbach’s alpha with a value of 0.908. A real survey was also conducted in this phase using the validated queationnaire and data were obtained online from 304 respondents. Descriptive statistics were used in the analysis during the third phase of the study, and results demonstrate that the awareness level of blockchain technology and cryptocurrency are at the intermediate level. Nevertheless, the majority of respondents are confident and trust that the blockchain technology can offer a stable and secure platform, which gives positive impact on the application of the technology. Empirical results provide significant insights into the development of the blockchain technology industry in the country.

Jack Laurie Tilbury, Edward de la Rey, Karl van der Schyff

The current real estate purchasing process in South African sector can be described as inefficient due to heavy reliance on multiple third parties which results in high transaction costs and a prolonging of the time in which property transactions are completed in. Additionally, the extensive manual review and verification of financial and legal documents as well as manually updating multiple systems with redundant information not only takes time but is also prone to error and fraudulent activities. Blockchain technology presents an opportunity for the real estate sector as it has the potential to bring about more efficient transactions. This study examines two approaches to executing real estate transactions; the South African case and an international blockchain technology use case. Two conceptual models are presented using Business Process Modelling and Notation. Document review was employed in order to provide sufficient information on the real estate transactions. The findings show that the South African real estate transaction process is inefficient as it is manual, involves paper-based documents and relies heavily on third parties which result in numerous bottlenecks. The study revealed that blockchain-based transactions are more efficient and reduce reliance on third parties and manual processes. The study contributes two conceptual models illustrating how the two different processes are conducted. It also contributes a list of the challenges and opportunities related to blockchain-based real estate transactions.

Kai Lei, Maoyu Du, Liwei Yang, Jin Liu · 7 authors

The last decade has witnessed the explosive growth of digital tokens and cryptocurrencies including Bitcoin, reward programs and various tokens on Ethereum. However, trading these heterogeneous and non-financial digital assets often encounters substantial liquidity barriers due to the lack of interoperable standards, and faces an equilibrium dilemma in pricing strategies with a risk of market disequilibrium. In this sense, we introduce a novel decentralized equilibrium trading mechanism for assets across value systems with a combination of blockchain and economic theories that optimizes storage, equilibrium, and circulation of assets. To demonstrate the practical feasibility of the proposed mechanism, we design, implement, and evaluate an end-to-end prototype system on Ethereum platform with carefully-crafted smart contracts. Our extensive experimental evaluations and the trading simulation suggest that the proposed mechanism settles exchanges and tradings among different assets with equilibrium prices in a decentralized fashion, providing both practical and theoretical foundation for the autonomous equilibrium of asset trading market without human interventions.

Zeng Xueyun, Ninghua Hao, Junchen Zheng, Xuening Xu

This paper focuses on how to use consortium blockchain to improve the regulation of peer-to-peer (P2P) lending market. The partial decentralized consortium blockchain with limited pre-set nodes can well improve transparency and security, which is suitable for financial regulation. Considering irregularities of the P2P lending market, the Hyper-ledger-based Peer-to-Peer Lending System (HyperP2PLS) is proposed. First elaborate the application scenario and business logic of the system, where a national P2P Lending Trading Center will be established to integrate all transactions and information of P2P lending market. Then construct the system architecture consisting of the blockchain network, HTTP server, and applications. The algorithm of implementation process and the web application for users have been well illustrated. The performance analysis shows that HyperP2PLS can guarantee the reliability, safety, transparency and efficiency.

Claudia Otto, Thorsten Conrad

No abstract is available for this record.

Benedikt Pittl, Stefan Starflinger, Werner Mach, Erich Schikuta

Amazon's EC2 On-Demand marketspace is the dominant platform for trading Cloud services such as virtual machines. On such platforms consumers and providers do not negotiate with each other. Instead, consumers purchase predefined virtual machines at fixed-prices and so this approach is also termed take-it-or-leave-it approach. In the last years more dynamic platforms emerged such as Amazon's spot marketspace which was relaunched at the end of 2017 - here consumers can bid for virtual machines. The recent efforts of Amazon and other Cloud providers such as VirtuStream show that dynamic trading mechanisms are a promising approach for realizing future Cloud markets. Hence, multi-round bilateral negotiations which are executed autonomously have gained popularity in the scientific community. A key challenge towards the adoption of autonomous multi-round bilateral negotiations is to ensure the integrity and transparency so that the generated agreements are legally biding. In the paper at hand we present an approach which uses a smart contract - called Bazaar-Contract - to ensure integrity and transparency during multi-round bilateral negotiations. Thereby, consumers and providers exchange offers by calling methods of the Bazaar-Contract. Moreover, Cloud referees can use these Bazaar-Contracts in order to manage penalties resulting from poor service quality. In order to prove the technical feasibility of our approach we implemented the Bazaar-Contract using Ethereum and the Inter-Planetary File System. We evaluate the economical feasibility of our approach by considering the gas costs.

Suhag Pandya, Murugan Mittapalli, Sri Vallabha Teja Gulla, Ori Landau

Abstract This research paper is a holistic review done on the rise of Blockchain and cryptocurrency, then elaborate about the great advantages of having a decentralized finance system. The existing scenarios from a sample of countries were reviewed in regards to their effort to adopt cryptocurrency to find some of the challenges like what are the security challenges this new monetary system faces, and limitations faced by different countries. A detailed analysis was done to answer some of the vital questions as such why cryptocurrency is banned in a few countries when other countries see cryptocurrency as a secured mode of payment transaction or what kind of security is provided by cryptocurrency compared to the traditional payments such as pay by cash, credit, or checks. Lastly, this paper also summarizes a high-level overview to propose recommended solutions to overcome the security concerns associated with the adoption of cryptocurrencies and how does the future of cryptocurrency look.

Wei-Kai Yang, Jie-Si Chen, Yeong-Sheng Chen

This study proposed a management system of the electronic medical records in the blockchain environment. In the proposed system, electronic medical records are first stored in the InterPlanetary File System (IPFS), and then the system generates the hash value, which will be sent to the smart contract to correlate with the patients' data. After that, if the medical staff's medical authority is confirmed by the system, the smart contract can send back the hash value that IPFS generated, and thus the system will present the complete electronic medical records. In the experimental simulation, the results showed that our proposed electronic medical record management and storage process not only can block forged or tampered electronic medical records via smart contracts, but also make it easy to integrate electronic medical records and share medical resources.

Umesh Bodkhe, Pronaya Bhattacharya, Sudeep Tanwar, Sudhanshu Tyagi · 6 authors

In the era of Industry 4.0, e-tourism uses bulk of digital payments through applications supported by heterogeneous payment gateways. These heterogeneous payment gateways open the doors for the attackers to perform malicious activities such as-hacking of wallet accounts, identity theft, attacks on payment clearance cycles. In e-tourism, financial data is maintained in a centralized cloud server, which can lead to payment failures during peak traffic. The aforementioned issues can be addressed by the usage of a decentralized mechanism such as-blockchain, which enables trust and reputation management among various stakeholders such as-banks, travel agencies, airports, railways, cruises, hotels, restaurants, and local taxis. Motivated by the above discussion, we propose a framework named as BloHosT (Blockchain Enabled Smart Tourism and Hospitality Management), which allows tourists to interact with various stakeholders through a single wallet identifier linked with a cryptocurrency server to initiate payments. BloHosT uses an immutable ledger, where no proofs are required during travel that provides a hassle-free experience to tourists. Also, a Tourism enabled Deep-Learning (TeDL) framework is presented as a part of BloHosT framework, which is trained on experience of previous visited travelers. It provides rating scores to prospective travelers about the recently visited locations by previous travelers. Finally, through case studies, we demonstrate that BloHosT achieves a high Return of Investment (ROI) in tourism sector as compared to traditional frameworks.