The smart contract is an interdisciplinary concept that concerns business, finance, contract law and information technology. Designing and developing a smart contract may require the close cooperation of many experts coming from different fields. How to support such collaborative development is a challenging problem in blockchain-oriented software engineering. This paper proposes SPESC, a specification language for smart contracts, which can define the specification of a smart contract for the purpose of collaborative design. SPESC can specify a smart contract in a similar form to real-world contracts using a natural-language-like grammar, in which the obligations and rights of parties and the transaction rules of cryptocurrencies are clearly defined. The preliminary study results demonstrated that SPESC can be easily learned and understood by both IT and non-IT users and thus has greater potential to facilitate collaborative smart contract development.
A fundamental problem for electronic commerce is the buying and selling of digital goods between individuals that may not know or trust each other. Traditionally, this problem has been addressed by the use of trusted third-parties such as credit-card companies, mediated escrows, legal adjudication, or reputation systems. Despite the rise of blockchain protocols as a way to send payments without trusted third parties, the important problem of exchanging a digital good for payment without trusted third parties has been paid much less attention. We refer to this problem as the Buyer and Seller's Dilemma and present for it a dual-deposit escrow trade protocol which uses double-sided payment deposits in conjunction with simple cryptographic primitives, and that can be implemented using a blockchain-based smart contract. We analyze our protocol as an extensive-form game and prove that the Sub-game Perfect Nash Equilibrium for this game is for both the buyer and seller to cooperate and behave honestly. We address this problem under the assumption that the digital good being traded is known and verifiable, with a fixed price known to both parties.
The year 2017 saw the rise and fall of the crypto-currency market, followed by high variability in the price of all crypto-currencies. In this work, we study the abrupt transition in crypto-currency residuals, which is associated with the critical transition (the phenomenon of critical slowing down) or the stochastic transition phenomena. We find that, regardless of the specific crypto-currency or rolling window size, the autocorrelation always fluctuates around a high value, while the standard deviation increases monotonically. Therefore, while the autocorrelation does not display signals of critical slowing down, the standard deviation can be used to anticipate critical or stochastic transitions. In particular, we have detected two sudden jumps in the standard deviation, in the second quarter of 2017 and at the beginning of 2018, which could have served as early warning signals of two majors price collapses that have happened in the following periods. We finally propose a mean-field phenomenological model for the price of crypto-currency to show how the use of the standard deviation of the residuals is a better leading indicator of the collapse in price than the time series' autocorrelation. Our findings represent a first step towards a better diagnostic of the risk of critical transition in the price and/or volume of crypto-currencies.
Due to conclusion could not rely on only one test, in this study, we apply various approaches to verify the actuary of VaR model to find out whether VaR model, especially historical VaR and delta normal VaR model, can provide the accurate risk measurement results for cryptocurrencies risk, especially CRIX, BTC, ETH and XRP. We use Kupiec’s POF test, Independence Test - Christoffersen (1998) and Joint Test that widely use for backtesting VaR model. Performance test results for risk measurement by historical VaR provide a fairly accurate over delta normal VaR when we use Kupiec’s POF-test for the accuracy of VaR model. Christoffersen (1998) independence test, the exceptions (failures) of historical VaR and delta normal VaR model show independence exceptions in accordance with an only high confidence level of critical values (0.99). Otherwise, the low confidence level of critical values (0.90 and 0.95) appears dependence exceptions. For the Joint test, we combine POF-test and independence test because each model has different advantages and disadvantages. The results show that historical VaR model is suitable for measuring cryptocurrency risk over delta normal VaR only high confidence level of critical values.
Jun 20, 2018·Proceedings of the IEEE International Conference on Computing, Electronics & Communications Engineering 2018 (IEEE iCCECE '18), to be held between 16-17 August 2018, at University of Essex, Southend, UK, published by IEEE
Securities exchange being digitalised and online, security of information and data has become a major concern. Blockchain (BC) technology, being distributed and immutable in nature, has proved to the "Trust Machine" eliminating the need for third-parties. Authors of this paper investigate how Blockchain can be used to secure stock exchange transactions, with an especial focus to the technological as well as legal aspects of such applications. Considering the intricate operational structure of the securities exchange, the research proposes to design, develop and implement a hybrid BC, customised according to the need of the respective stock exchange. The study suggests that the use of such BC can bring many benefits which the other technologies currently being used cannot offer. However, during the design process of any such application using BC, the relevant laws and regulations of the corresponding country need to be considered.
The article deals with the problems and prospects of blockchain implementation as a general purpose technology in the financial sector. The underlying mechanism of this technology is described, practical cases of its adoption in various segments of the financial sector and in the field of corporate governance are provided. Cryptocurrencies’ status, issuance and regulation are also discussed.
The amalgamation of information and communication technologies in power industry has led to a revolution known as smart grid (SG). The energy consumers interact with the power utility using a bidirectional communication channel for energy trading in SG ecosystem. However, the traditional energy trading mechanisms strongly rely on trusted third parties which act as a single point of failure. Therefore, it is important to equip SG with a decentralized and secure energy trading system which can execute contracts and handle negotiations among various trading parties. Hence, in this paper, EnergyChain, a blockchain model for storing and accessing the data generated by smart homes in a secure manner is proposed. EnergyChain works in following phases: 1) a miner node is selected on the basis of power capacity of various smart homes, 2) a block creation and validation scheme is presented, and 3) a transaction handling mechanism is designed for secure energy trading. After evaluation, the superiority of EnergyChain is validated. The results obtained show that EnergyChain outperforms the traditional scheme in terms of communication costs and computation time.
Jelena Pajić, José Rivera, Kaiwen Zhang, Hans‐Arno Jacobsen
The recent success of electric vehicles leads to unprecedentedly high peaks of demand on the electric grid at the times when most people charge their cars. In order to avoid unreasonably rising costs due to inefficient utilization of the electricity infrastructure, we propose EVA: a scheduling system to solve the valley filling problem by distributing the electricity demand generated by electric vehicles in a geographically limited area efficiently over time spans in which the electric grid is underutilized. EVA is based on a smart contract running on the Ethereum blockchain in combination with off-chain computational nodes performing the schedule calculation using the Alternating Direction Method of Multipliers (ADMM). This allows for a high degree of transparency and verifiability in the scheduling computation results while maintaining a reasonable level of efficiency. In order to interact with the scheduling system, we developed a decentralized app with a graphical frontend, where the user can enter vehicle information and future energy requirements as well as review upcoming schedules. The calculation of the schedule is performed on a daily basis, continuously providing schedules for participating users for the following day.
Marine transportation is the oldest means of transportation, which is the most useful when the goods to be shipped are in bulk. Travelling through sea means there is high chance of mishappening even when safety regulations are in place, which could result in damage or loss of the ship or the shipments. Thus, Marine insurance is advisable as it covers the hull, cargo, freight and marine liabilities. Any losses or damages sustained during a marine journey must be settled as early as possible through Insurance. The process of declaring and claiming Insurance involves a lot of documentation, which is collected and stored in paper format, and third-party participation. In modern times, there has been a shift towards Digitization in every sector, which means everything is stored in a digital format. One of the key developments in Digitization has been the use of Blockchain technologies which support distributed ledgers, smart contracts, smart properties, storage, etc. Applications, in which there is involvement of money or assets, are reliant on blockchain because of the security, by encryption of data, and performance provided by it. In this paper, we have discussed the challenges and key issues associated with the declaration and claiming of Marine Hull Insurance through the existing system. To resolve these issues, we combine three of the latest technologies in Blockchain, namingly, Private Blockchain, Filecoin Protocol and Smart Contracts. Our proposed system is based on a digital platform, where all documents can be commonly accessed and third-party involvements are removed, resulting in simpler, faster and easier declaration and claiming of marine hull insurances that removes the complications in the present general procedure.
Popularly known for powering cryptocurrencies such as Bitcoin and Ethereum, blockchains is seen as a disruptive technology capable of impacting a wide variety of domains, ranging from finance to governance, by offering superior security, reliability, and transparency in a decentralized manner. In this tutorial presentation, we first study the original Bitcoin design, as well as Ethereum and Hyperledger, and reflect on their design from an academic perspective. We provide an overview of potential applications and associated research challenges, as well as a survey of ongoing research projects. We mention opportunities blockchain creates for event-based systems. Finally, we conclude with a walkthrough showing the process of developing a decentralized application (ĐSApp), using a popular Smart Contract language (Solidity) for the blockchain platform of Ethereum.
Bitcoin and Ethereum are novel mechanisms for decentralizing the concept of money and computation. Extending decentralization to the human identity concept, we can think of using blockchain for creating a list of verified human identities with a one-person-one-ID property. UniqueID is a Decentralized Autonomous Organization(DAO) for maintaining human identities such that every physical human entity can have no more that one account. One part of this identity is simply the user's claim on one of his unique, permanent, and measurable characteristics -biometrics. Blockchain has proved its integrity as a platform for storing and performing computations on such claims. The biggest challenge here is to ensure that the user has submitted his own valid biometric data. Human verifiers can check if there is any inconsistency in other users' data, by peer-to-peer checks. For preventing bad behavior and centralization in the verification process, UniqueID benefits from novel governance mechanisms to choose verifiers and punish unjust ones. Also, there are incentives for honest verifiers and users by newly generated tokens. We show how the users' privacy can be preserved by using state-of-the-art cryptographic techniques, and so they can use their identity without any concerns for votings, financial and banking purposes, social media accounts, reputation systems etc.
The popularity of blockchain technology continues to grow rapidly in both industrial and academic fields. Most studies of blockchain focus on the improvements of security, usability, or efficiency of blockchain protocols, or the applications of blockchain in finance, Internet of Things, or public services. However, few of them could reveal the concerns of front-line developers and the situations of blockchain in practice. In this article, we investigate how developers use and discuss blockchain with a case study of Stack Overflow posts. We find blockchain is a relatively new topic in Stack Overflow but it is rising to popularity. We detect 13 types of questions that developers post in Stack Overflow and identify 45 blockchain relevant entities (e.g., frameworks, libraries, or tools) for building blockchain applications. These findings may help blockchain project communities to know where to improve and help novices to know where to start.
Purpose The Bitcoin has experienced wide popularity in academic and commercial spheres during the years following 2012. Research has been conducted in respect of information technology, finance and reporting paradigms, but there has been little research into the taxation of the Bitcoin. The purpose of this paper is to present a conceptual approach for developing a taxation policy for the Bitcoin, using a multi-jurisdictional analysis. Design/methodology/approach An interpretive mixed-method approach is followed. The traits of the Bitcoin are determined through a review of the literature, followed by the determination of key taxation themes using a multi-jurisdictional view where the jurisdictions were determined using the largest Bitcoin exchanges. These form the row and column headings of the correspondence table research instrument, respectively. The correspondence table was completed by 40 tax experts. Correspondence analysis (a multivariate statistical technique) was then used to determine correlations between the Bitcoin traits and taxation themes, further used to present initial insights into developing a taxation policy for the Bitcoin. Findings The correspondence analysis reveals that, contrary to current tax laws, the manner of acquisition as opposed to the reason (intention) for acquisition is key in determining how the Bitcoin is to be taxed. For taxing purposes, Bitcoin is seen as being distinct from currency, given that transactions with the Bitcoin are seen as barter transactions. Finally, because of the unique characteristics of the Bitcoin, it is shown that exchanges and the Bitcoin need to be regulated in the same manner as a currency. Research limitations/implications This research focuses on income tax including capital gains tax and consumption taxes and was conducted with a sample of purposefully selected South African tax experts, given that the Bitcoin is experiencing enhanced popularity in South Africa. As a result, this research does not provide generalisable positivist conclusions and does not purport to represent the views of all tax practitioners. This paper does, however, provide an initial mechanism to develop taxation treatments for transactions not covered by existing legislation. Originality/value This paper is the first to provide normative recommendations on the taxation of the Bitcoin. Using correspondence analysis, this paper offers an innovative approach for developing taxation policies when a transaction is not specifically included in the extant legislation. Further value is added through the use of a third dimension in the correspondence analysis which enhances the exploratory potential of the research.
Blockchain technology has evolved from a niche subject to the hottest tech disruption buzzword, but there is still a lot of confusion about the subject. Without a clear understanding about what Blockchains are, their potential public sector potential impact is sometimes misunderstood or, more often, ignored. Questions related to their technical complexity, risk, security, and appropriateness often serve as obstacles to government officials’ ability to truly engage with this emerging technology. In light of this, the Observatory of Public Sector Innovation (OPSI) in collaboration with the Working Party of Senior Digital Government Officials (E-Leaders) has developed a guide on Blockchains and how they may (and may not) apply to government. OPSI is part of the OECD Directorate for Public Governance (GOV).
Isaac Sheff, Xinwen Wang, Andrew C. Myers, Robbert van Renesse
Blockchains offer a useful abstraction: a trustworthy, decentralized log of totally ordered transactions. Traditional blockchains have problems with scalability and efficiency, preventing their use for many applications. These limitations arise from the requirement that all participants agree on the total ordering of transactions. To address this fundamental shortcoming, we introduce Charlotte, a system for maintaining decentralized, authenticated data structures, including transaction logs. Each data structurestructure -- indeed, each block -- specifies its own availability and integrity properties, allowing Charlotte applications to retain the full benefits of permissioned or permissionless blockchains. In Charlotte, a block can be atomically appended to multiple logs, allowing applications to be interoperable when they want to, without inefficiently forcing all applications to share one big log. We call this open graph of interconnected blocks a blockweb. We allow new kinds of blockweb applications that operate beyond traditional chains. We demonstrate the viability of Charlotte applications with proof-of-concept servers running interoperable blockchains. Using performance data from our prototype, we estimate that when compared with traditional blockchains, Charlotte offers multiple orders of magnitude improvement in speed and energy efficiency.