Purpose The purpose of this paper is to investigate the emergence of blockchain to determine its feasibility for electronic transfer payments. An integrated conceptual framework is developed for blockchain electronic transfer. The three “markers” of classic money (store of value, medium of exchange and unit of account and efficiency) are assessed in the case of blockchain technology. A survey is also conducted among the executives of financial vs manufacturing sectors with respect to five major variables for the emerging distributed financial data based on blockchain. Design/methodology/approach Conducting a literature review and using prior knowledge from the works of those well-versed and knowledgeable in the field. This research is also supported by collecting and analyzing the results of a behavioral survey of the executives in two different industries. Findings Blockchain technology has the potential to have widespread change in how firms operate and implement a new method for electronic payments transfer through cryptocurrencies. Although the community for blockchain technology is deregulated and has drawbacks, it is expected that the limitations will gradually be mitigated through its growth. The results of the behavioral survey show that there are significant differences between the expectations/perceptions of participants in the sectors of finance vs manufacturing. Namely, the knowledge/awareness of participants about blockchain, the value-added convenience for end users, and participants’ willingness to embracing and accepting new applications are significantly different between the two sectors. Originality/value The reach and applications for Blockchain are not limited to business or any particular sector. Blockchain technology may contribute to the operations of different types of organizations and industry sectors. Since the perception of participants about blockchain is different between selected industries, this research suggests the need for more education and building awareness among the participants in different sectors of the economy.
The institution of Waqf always played a pivotal role of sustainable economic development in a Muslim society throughout the history of Islam. However, recently, even with the introduction of the modern Islamic finance a few decades ago, the institution has been struggling to rejuvenate its past glory. The key issues are lack of availability of data and historical records, weak transparency and public disclosure, improper audit and compliance practices. The advent of the blockchain has offered a ray of hope for the revival of the Waqf institution. The blockchain has already proved itself as a game changing breakthrough. Similarly, the Waqf institution could be invigorated with the innovative and efficient use of the blockchain. Moreover, the use of smart contracts on blockchain could further enhance the performance and efficacy of the Waqf institution. It is strongly believed that with the firm Islamic jurisprudential foundations of the Waqf, blockchain, and smart contracts will ensure that the Waqf institution could partake in the economic development of the whole Muslim world.
Niclas Kannengießer, Sebastian Lins, Tobias Dehling, Ali Sunyaev
When developing peer-to-peer applications on distributed ledger technology (DLT), a crucial decision is the selection of a suitable DLT design (e.g., Ethereum), because it is hard to change the underlying DLT design post hoc. To facilitate the selection of suitable DLT designs, we review DLT characteristics and identify trade-offs between them. Furthermore, we assess how DLT designs account for these trade-offs and we develop archetypes for DLT designs that cater to specific requirements of applications on DLT. The main purpose of our article is to introduce scientific and practical audiences to the intricacies of DLT designs and to support development of viable applications on DLT.
Niclas Kannengießer, Sebastian Lins, Tobias Dehling, Ali Sunyaev
When developing peer-to-peer applications on Distributed Ledger Technology (DLT), a crucial decision is the selection of a suitable DLT design (e.g., Ethereum) because it is hard to change the underlying DLT design post hoc. To facilitate the selection of suitable DLT designs, we review DLT characteristics and identify trade-offs between them. Furthermore, we assess how DLT designs account for these trade-offs and we develop archetypes for DLT designs that cater to specific quality requirements. The main purpose of our article is to introduce scientific and practical audiences to the intricacies of DLT designs and to support development of viable applications on DLT.
Under the phrase “code is law” and based on its “trustless trust”, blockchain has emerged as a disrupting technology considered by some as an alternative to the law. Based on a study of real-life blockchain-based decentralised applications (Dapps), this article takes blockchain developers at their word and adopts the point of view of users: can blockchain live up to its promise and enable them to transact with each other without the need for the trust granted by the law? The article particularly highlights that users need to be able to ascertain that a self-advertised Dapp indeed qualifies as one. Blockchain technology may make it possible to do away with trust in third parties, but this is not enough. Users also need to trust that an alleged Dapp genuinely is one, and blockchain alone cannot provide this. Beyond Dapps, it is argued that blockchain needs the complementary role of the law to deliver its promises and especially to authenticate blockchain “virtues”. The EU certification mark is identified as a promising form of co-regulation for that purpose.
Since its introduction in the Satoshi Nakamoto's Bitcoin white paper published in 2008, blockchain technology has been seen as a great opportunity to enable new business scenarios both for developed and developing countries. Considering that digital alternative payment methods represent a key factor to the smart cities development, in this study we propose an innovative payment solution aimed at improving the remittance flows by exploiting the potential of blockchain technology. Traditional banking remittance systems are characterized by high transaction fees and long transfer times, therefore they encourage the adoption of informal channels for money transfer with consequent losses in the economic system. By focusing our interest in a specific country of Sub-Saharan Africa, Ethiopia, we launch an innovative blockchain based system able to make the remittance process safer, faster and to allow secure and reliable transactions between the counterparts in data sharing. We describe its architecture, which enables a secure management of big data and the different stages of solution design. Furthermore, the system guarantees the compliance with the Ethiopian government's recommendations on the matter, in particular it allows to encourage formal data collection on remittances and to support the introduction of new technology in the payments system. In addition, its use by individuals could improve awareness and financial education in Ethiopia and it can help prevent money laundering and financing of terrorism.
Blockchain technology is reshaping the the traditional economies. People may have more trust than ever before as the transaction is immutable and transparent. Success in crypto-currency and other technical areas highlights many attractive features of the blockchain technology that can benefit more aspects of modern society. Time Banking is a generalized exchange economy not based on money, but values everyone's contribution on the same scale, the time expended. Time banking is a noble idea with great potential, but the security and trust issues are not well addressed. In this paper a BLockchain-ENabled Decentralized Time Banking System (BlendTBS)is proposed to build a trustful, dynamic and respectful community. People in this community are encouraged to be engaged in mutual serving relationships. For this purpose, the BlendTBS is designed to reward the residents who commit in socially beneficial activities. An initial prototype is implemented on a permissioned blockchain network and a small scale study is planned to examine the utility of BlendTBS to a traditional community on the island of Aneityum, Republic of Vanuatu. Within a selected community in the village of Analgahuat, deeper insights will be explored by observing the trust enabled by Blockchain technology that allows peer to peer service exchanges between any two individuals. Authors hope this position paper may inspire more interests in the roles that blockchain technology can play in modern society.
This thesis aims to contribute to the understanding of the economics of the cryptocurrency market. In the first chapter, I document the literature on cryptocurrency and the financial applications of blockchain infrastructure. Finance and economics literature on the area of cryptocurrency is relatively new and spans only the last seven years, thus this review intends to serve as a foundation to prompt future work and a deeper understanding of this field. In the second chapter, I develop an equilibrium model of proof-of-work cryptocurrencies. Equilibrium behaviour of miners and users are characterised for exogenous blockchain protocol metrics; I demonstrate that equilibrium between miners and users can be achieved in the long run. High fixed mining rewards are the reason for instability in current cryptocurrency designs. The equilibrium model has two key implications: first, decentralisation and technological improvement in mining are drivers of low transaction fees and low mining costs in a proof-of-work cryptocurrency environment; and second, limited block size and mining difficulty create an incentive mechanism that achieves cryptocurrency sustainability in the long run. In the third chapter, I study the return spillover and systemic risk in the cryptocurrency market in the context of connectedness. The data illustrates that system-wide connectedness in the cryptocurrency market, commonly observed as the level of systemic risk in the literature, changes over time with respect to the adoption rate of cryptocurrencies. Cryptocurrency protocol disputes, malicious activities in the cryptocurrency environment, and negative financial regulations on cryptocurrencies are key sources of increased connectedness over different time periods. Instead, pairwise connectedness between cryptocurrency pairs can be explained by cryptocurrency fundamentals.
The blockchain uses a decentralized consensus mechanism to maintain the books in an immutable way, which ensures the blockchain smart contract system highly secure. In existing blockchain systems, all user information is disclosed in the blockchain. However, currently users begin to pay more and more attention to personal privacy, therefore the future blockchain smart contract system needs not only to keep immutability but also to protect user privacy. To achieve this goal, in this paper we propose a privacy-encrypted blockchain system, where all data is encrypted within a controllable period of time. Although the data is visible from a historical perspective, our design can effectively protect user privacy and against deceivers, making the system more secure and healthy.
Blockchain is an emerging technology which gained popularity with Bitcoin, which is the most famous application of that technology. After Bitcoin became popular, new usage areas of Blockchain was started to being investigating because of the advantage of the technology such as security, agentless transaction, and transparency. HAVELSAN is a large scale software company, investigates on new generation technologies and works on to adapt it. In this manner, Blockchain is one of these new generation technologies that brings impressive advantages. Blockchain is a decentralized transactional database technology in which all transactions are encrypted on blocks, allowing the buyer and seller to make a secure exchange between themselves directly. In this transactional database technology, all transactions are recorded in a structure called “Distributed (Open) Ledger”, where transactions are held and open to all users. In the traditional approach (central database), when the database is controlled by a third party, the copy of the database in the Blockchain approach is available to all participants. This prevents the data from being corrupted and destroyed. In order to be able to modify this distributed structure, the relevant changes must be recorded on all computers in the system. The success of any type of cyber attack becomes impossible because of the necessity of accepting changes in the vast majority of the network. Smart Contract is a key concept of Blockchain in order to gather all these advantages. Smart Contracts not only define the rules and penalties around an agreement in the same way that a traditional contract does, but also automatically enforce those obligations. HAVELSAN is a large scale software company that has wide range of operation field, so there could be different applications of Blockchain with regard to company operation fields. Combining this variety with the importance of Smart Contract concept, which could be counted as the basis for most Blockchain applications, it is beneficial to establish a strong based Smart Contract frame before starting to build our own applications with Blockchain. Therefore, we aimed to build our customized Smart Contract structure before developing miscellaneous applications. In this article, HAVELSAN Blockchain Smart Contract framework establishment; which infrastructures were used, the problems encountered during the development and the most applicable way of use this framework will be explained.
This paper compares Initial Public Offerings (IPOs) and equity crowdfunding with Initial Coin Offerings (ICOs) and explores the corresponding risks and limitations of these different fundraising practices, with a view to analysing the extent to which the latter should be subject to the same regulatory framework as the former. After assessing the underlying principles and current regulatory framework for IPOs and equity crowdfunding, with a focus on Europe and the US, we investigate the possibility of applying existing financial regulations to ICOs. Drawing from the notion of “functional equivalence”, we contend that many ICOs share a sufficient number of similarities with traditional IPOs and equity crowdfunding, to be regulated in a similar manner. However, given the various attempts by token issuers to escape from the scope of securities laws by assigning a different function to their ICOs tokens, we argue that principle-based regulation based on an in-depth risk-analysis could be an effective way of addressing the regulation of ICOs, thereby moving from “functional equivalence” to “risk equivalence”. Finally, we explore the use of blockchain technology as a regulatory technology, incorporating specific rules and constraints into the technological fabric of an ICO, in order to ensure compliance with the fundamental principles of financial regulation.
With the global proliferation of virtual currency, regulators continue to analyse the market to determine the optimal framework for regulation. A key issue in this evolving regulatory environment is the outstanding question of how virtual currencies should be classified: as securities, commodities, assets or currency, and which government agency should regulate these products. This paper provides an overview of the current regulatory landscape and provide steps that firms and compliance professionals can take to minimise the potential anti-money laundering (AML) and sanctions risks of participating in the cryptocurrency market. Faced with an uncertain and rapidly changing regulatory landscape, this paper encourages cryptocurrency companies that engage in trading and exchange activity to consider implementing a risk-based compliance programme for addressing financial crime risk that is comparable to what a securities broker-dealer would have, considering the similarities they share with the securities industry.
This paper analyses the impact of distributed ledger technology (DLT) on various areas of transaction banking (TxB), identifies the most promising use cases and discusses the impact on banks’ business models. By means of both a theoretical analysis as well as expert interviews using a variation of the Delphi approach, a number of potential use cases and their relative importance are evaluated. The most promising use cases identified were the utilisation of DLT for internal systems among disparate entities, securities settlement, cross-border payments, remittances, trade and supply chain finance and regulatory compliance. The impact on banks’ business models depends on the role that banks play in the ecosystem. If banks build or control their own private ledgers, DLT-based applications can significantly increase efficiency and reduce transaction cost and times for banks and, therefore indirectly, their customers. If other players build up exclusive private ledgers without banks, banks face a significant threat of disintermediation and high business model impact. Finally, while not likely in the near future, the possibility exists that overarching public ledgers with various participants will emerge. These would not necessarily disintermediate banks but rather provide a significant opportunity for new business models, forcing banks to adjust to these changes.
Stored-value cards are used more and more widely. But there are some problems in the present stored-value card platform: 1. The service agreement of stored-value card is not clear enough; 2. The refund process of users is inconvenient; 3. The transfer of stored-value can not be realized among users; 4. The security of accounts is not guaranteed. Smart contracts are computer contracts written in code, which are enforced directly by computers. This paper proposes a stored-value card platform in which the service contracts are expressed with smart contracts. The smart contract is executed on the blockchain. Blockchain technology, in which accounts are decentralized and data is resistant to modification, is applied to improving reliability in the consumption process. The platform is built on the private blockchains of Ethereum, which is designed for small merchants. ECDSA (Elliptic Curve Digital Signature Algorithms) is used to asymmetrically encrypt accounts. Some functions, such as stored-value issuance, stored-value consumption, commodity purchase, are designed in this system.
Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
Advances in technology and digitalisation are widespread and affect all facets of life, including jobs, education and social interactions. Electronic devices and high-speed networks have become practically ubiquitous, leading to the rise of the modern, digital consumer, who is positively inclined towards mobile and online platforms and is increasingly the driving force of consumption. The need for speed, convenience, round-the-clock availability and an enhanced user experience has led to significant changes in the payments space. These include the emergence of non-bank payment service providers, private cryptocurrencies and real time gross settlement (RTGS) enhancements. These changes have prompted many central banks to study the possibility of a central bank digital currency (CBDC) as a payment token and the impact it could have on their economies. Electronic central bank-based currencies have been in place for decades. They are in the form of banknotes and serve as reserve balances that banks and participating financial institutions maintain with central banks. The latter are used for interbank settlements. CBDC is a potential new form of money, issued digitally by the central bank and intended to serve as legal tender. Given that these are government-issued legal tender, CBDCs will need to be backed by government debt. This paper aims to provide an understanding of the concept of CBDCs, the case for and against CBDCs and the CBDC experiments worldwide that explore central bank investigations around CBDC usage.
Danyal Akarca, X. Y., Dave Ebbitt, Mustafa Baydar · 6 authors
There have been significant efforts in the UK to embrace health technology to improve provisions of care. Yet, healthcare offers unique challenges to innovation, particularly with regard to data siloing. Blockchain is a shared distributed ledger technology that decentralises information storage with the potential to improve health outcomes by concurrently optimising data sharing practices and data privacy. In this paper, we explore how blockchain technology may facilitate the handling of health data in the context of regulatory frameworks, patient rights, cybersecurity and provider-centric perspectives. This is essential if this developing technology is to be considered for implementation at scale.
There are still many open issues and questions concerning the supervision and the legal and regulatory assessment of cyber security issues in the insurance sector, especially regarding smart insurance contracts and similar issues. In the present case the focus shall be on the underlying legal framework in the European Union and in Switzerland, including the most relevant ordinances and circulars as well as public and private guidelines, followed by an outlook and some general ideas how Brexit could potentially have an impact on the general recognition and acceptation of smart contracts within the legal and regulatory framework and the society in general.
Ethereum is still the most prominent platform for smart contracts. For the deployment of contracts on its blockchain, the so-called deployment code is executed by Ethereum's virtual machine. As it turns out, deployment code can do a lot more than merely deploying a contract. This paper identifies less-anticipated uses of contract deployment in Ethereum by analyzing the available blockchain data. In particular, we analyze the specifics of deployment code used beyond actually deploying a contract in a quantitative and qualitative manner. To this end, we identify code patterns in deployment code by distilling recurring code skeletons from all external transactions and internal messages that contain deployment code. Tracking the use of these patterns reveals a set of vulnerabilities in contracts targeted by skillfully crafted deployment code. We summarize the encountered exploitative cases of collateral use of deployment code and report respective quantities. Example scenarios illustrate the recent usage. Collateral use of deployment code starts to appear in the middle of 2018 and becomes dominant among contract creations in autumn of 2018. We intend to raise awareness about the less obvious uses of deployment code and its potential security issues.
This paper explores how distributed ledger technology (DLT) can contribute to the instant payments market, discussing the potential impacts of the technology. The paper defines how the locus of control in DLT shifts from centralised system administrators to end users, while the locus of knowledge shifts from organisational to smart-contract programmers’ knowledge. The radical implementation of DLT is depicted as a single-layer network where intermediaries are eliminated from the payment cycle, while the conservative approach is described as the gradual application of some DLT components into existing ecosystems. Both designs are briefly discussed from the perspective of database centrality, technological literacy and quality assurance. The paper then compares DLT and instant payments schemes through the lens of standardisation, market adoption and platformisation. The paper shows that to be successful, both instant payment systems and DLT need to gain traction in the market, and that service fragmentation must be resolved by unifying the market. The paper ends by contrasting the various components of instant payment and DLT systems, and concluding that while DLT remains an evolving technology, instant payment systems will continue to play a more prominent role in the market.
istributed ledger technology (DLT) and blockchain, and their headline-catching applications in cryptoassets and initial coin offerings (ICOs), have attracted extraordinary global attention. Alongside Bitcoin's spectacular rise and fall in the past few years, there has been an explosion of ICOs, a tokenization of assets, and fund-raising projects utilizing digital tokens issued and operated on blockchains.
The graduation certificate forgery has become a major problem in now a days and the lack of effective anti-forge mechanism, In order to solve the problem of counterfeiting certificates, the digital certificate system based on blockchain technology would be introduced. The system generate the electronic file of a paper certificate accompanying other related data into the database and calculates its hash value. It then store the hash value into the block in the chain system. The system will create a related QR-code and inquiry string code to affix to the paper certificate, this will verify the authenticity of the paper certificate through mobile phone scanning or website inquiries. By integrating the features of blockchain, the system improves the efficiency operations at each stage.