The volume of Initial Coin Offerings (ICOs) had risen steeply with an all-time high market capitalisation of close to 1 Trillion USD in December 2017. Since then, the digital asset market has slumped, retreating to approximately 200 Billion USD by mid-2018. Stakeholders of the crypto industry have pondered the reasons for this retrenchment and are increasingly focusing on the notion that many ICOs could be scams. A recent industry study even went as far to claim that 80% of all ICOs are indeed scams. In this paper, we investigate the question whether these scams are as common as claimed. We do so by first defining what a scam is and secondly, by drawing on empirical data to assess the number of cases fitting such a definition. Building on Principal Agent Theory and based on the statistical analysis of our empirical data set we attempt to establish the current state of affairs with regards to scams in the cryptocurrency world. The results of our study divert from salient beliefs.
:I analyze cryptocurrency ecosystems with Elinor Ostrom’s meta-framework for self-governance. I conclude that Bitcoin falls short in its self-governing ambitions, while cryptocurrency software protocols and blockchain technologies have potentialities within “permissioned” peer-to-peer private or hybrid networks. However, regulation and supervision by trusted third parties are required.
Blockchains (BCs) received significant attentions from FinTeh in recent years. Many proof-of-concepts (POCs) projects and experiments have been carried out to explore the strengths and weaknesses of constructing financial market infrastructures upon BCs. The experiments showed that considerable improvements are still necessary to meet financial requirements such as safety, efficiency, reliability, scalability, security and transparency. The Principles for Financial Market Infrastructure (PFMI), issued by the Committee on Payment and Settlement System (CPSS) and International Organization of Securities Commissions (IOSCO), is a key standard for designing Financial Market Infrastructures (FMIs) so that global financial markets could be more robust and stable, especially, could withstand financial shocks. It is thus necessary to design BC-based FMIs according to PFMI. This position paper analyzes financial system requirements and the challenges, and discusses the design issues of BCs in meeting PFMI.
Transferring money and gaining access to credit across international borders, is still complicated, time consuming and expensive. Existing money transfer systems suffer furthermore from long lines, exchange rate losses, counter-party risks, bureaucracy and extensive paperwork. An estimate two billion adults are unbanked and with no, or limited access to financial services. Providing workable financial services to this population is often tagged as a key step towards eliminating world poverty and bootstrapping local economies. The Everex application focuses on easing the financial inclusion problem by applying blockchain technology for cross-border remittance, online payment, currency exchange and micro lending, without the volatility issues of existing, non-stablecoin cryptocurrencies. Finally, the Everex wallet facilitates a fiat-to-cryptocurrency gateway that eases access to cryptocurrencies, thereby enabling our users to instantly buy and sell tokens without having to visit an exchange. This paper fills the gap in the state of the art by presenting a blockchain-based capital transfer system that aims to lower financial inclusion barriers and provide financial services to the unbanked. We present the advantages of the system, outline the requirements and goals, as well as the architecture of the Everex financial ecosystem.
High-value derivatives contracts require substantial legal protection and\noften utilise standardised legal documentation provided by the International\nSwaps and Derivatives Association (ISDA). Smart Derivatives Contracts aim to\nautomate many aspects of high-value contracts, including automation of the\nprovisions of the ISDA legal documentation. Here we investigate how the ISDA\nMaster Agreement may affect the automation of payments and deliveries: we\nprovide a framework for understanding how high-value derivatives contracts are\nstructured at different levels, in terms of both the legal documentation and\nthe workflow; we explain issues relating to how the smart contract code\nprocesses payments-related and deliveries-related events; and we discuss the\nextent to which these are amenable to automation.\n
Cryptocurrencies are developed as a decentralized and trustless payment system, in which participants should be able to conduct payments across borders with acceptable latency. However, the fluctuation of the exchange rate between crypto and fiat currencies has raised significant concerns and thwarted the prevalence of cryptocurrency payment adoption. Existing solutions require merchants to liquidate the received cryptocurrency on an exchange platform. To compensate for the exchange rate risk, merchants tend to charge a higher price in cryptocurrencies compare to in fiat currency, which dampens the incentive of customers to choose cryptocurrencies as the means of payment. This paper proposes an architecture bolstered by smart contracts to transfer the risk from the merchants to the cryptocurrency issuer. This narrows the gap between prices denominated in cryptocurrencies and fiat currencies, and thus increases the adoption of cryptocurrencies as a payment method. The Ethereum blockchain is chosen as the experimental environment in this work, yet the architecture can be migrated to other decentralized systems without additional efforts. This work devises a novel ERC1standard to resolve the payment at a predetermined exchange rate that can be employed by any existing cryptocurrency. Immutable events on the blockchain will be generated upon the issuance and settlement of a payment, which are considered as the receipts for granting rights to the merchants to settle the payment at a regular basis. The architecture demonstrates a notable reduction on the exchange rate risk for the merchants, solving the primary problem of cryptocurrency payment adoptions nowadays.
With the development of cloud computing, a great amount of information is stored on cloud, such as Facebook, Twitter, and so on. Single cloud or company is not reliable enough for permanent information storage. Once the cloud or company is in downtime, users could lost their information. Multiple clouds can store the information with more security. However, in JointCloud environment, it is a big problem for multiple clouds or companies to maintain the common rights of information for each user. In this paper, we propose EtherShare, a blockchain-based application in JointCloud environment. EtherShare enables users to share information with permanent storage and open access. It keeps the rights of users through smart contracts to make consensus between multiple clouds. And this application is open source on Github.
The term 'trustlessness' has given rise to a common misperception of smart contracts reducing or even eliminating the need for trust. At first glance, smart contracts appear to do away with the need for trust in the counterparty. Since performance is automatic, smart contracts enable the promisee to obtain what has been promised to them, without the need to depend on interpersonal trust vis-a-vis the counterparty or a system of contract law to enforce the promise. However, if we take into account the social, economic, and political contexts in which smart contracts operate, do they override the need for trust? In other words, are they really 'trustless'? We argue that a new set of trust concerns arise in the context of smart contracts, especially when they run on blockchains.
Wei‐Tek Tsai, Ning Ge, Jiaying Jiang, Kevin Feng · 5 authors
This paper presents a new Beagle framework for Smart Contracts (SCs) taking account of law. Different from previous SC development or execution frameworks, this framework takes a practical approach to integrate law into SCs. Instead of translating legal contracts into codes directly, this paper proposes to treat SCs as a key component of legal contracts, use SCs to partially automate the executions of legal contracts, and produce legal evidence during the process. Thus, the proposed SC design will be significantly different from previous SC designs, not in programming languages to be used, but in the way SCs are designed and executed. This Beagle framework has five stages: SC template development from domain analysis, formal SC model and code development from templates, verification and validation (V&V), SC execution, and runtime monitoring.
Smart Contracts bring Ethereum transactions great convenience, meanwhile they can have potentially devastating financial consequences. To address the lack of security guarantee, we investigate state-of-art bug detection tools and conduct experiments to analyze their pros and cons. Finally, we conduct research to answer why they have false positives and a convincing bug benchmark is provided.
This paper focuses on two of the key challenges a developer encounters when reusing smart contracts: finding actionable information about existing smart contracts (descriptors) and writing the necessary integration logic to invoke selected contracts and implement missing functions. As for the former issue, the paper proposes a smart contract description format that allows the developer to search for publicly available contracts, understand which features a contract exposes and how to invoke them, according to a service-oriented approach. For the latter, the paper implements a simple, model-driven development environment consisting in a visual programming editor that provides a set of modeling constructs encoding specific, reuse-oriented code patterns. The approach is implemented and demonstrated in the context of the blockchain platform Ethereum and its programming language Solidity. The results obtained show that the proposed approach can be beneficial in the development of composite smart contracts and generic blockchain applications.
Crowdfunding has become a popular form of collective funding, in which small donations or investments, made by groups of people, support the development of new projects in exchange of free products or different types of recognition. Social network sites, on the other hand, promote user cooperation and currently are at the basis of any individuals cyber-interactions. In this paper, we present LikeStarter, a blockchain-based decentralized platform that combines social interactions with crowdfunding mechanisms, allowing any user to raise funds while becoming popular in the social network. Being built over the Ethereum blockchain, LikeStarter is structured as a Decentralized Autonomous Organization (DAO), that fosters crowdfunding without the intervention of any central authority, and recognizes the active role of donors, enabling them to support artists or projects, while making profits.
Sharing clinical data using Distributed Ledger Technologies (DLT) is increasing in momentum. Fast Healthcare Interoperability Resources (FHIR) standard provides a standard based shared vocabulary and widely accepted mechanisms enabling healthcare providers to share patient data across institutions. Many DLT based solutions are capitalizing on these standards to enable trustworthy electronic health record sharing among institutions. In this paper, we present our preliminary work on capturing the semantics of the FHIR standard in smart contracts. We also discuss the appropriate data to mine from transaction logs in decentralized ledgers to find any anomalies and information misuses by leveraging these standards-based ontological concepts.
Cryptocurrencies, like Bitcoin, are designed to facilitate payments even when there is a lack of trust. In this article, the authors discuss the features that are necessary for cryptocurrencies to play this role. They conclude that the specific features required to allow cryptocurrencies to facilitate payments when there is a lack of trust make these currencies less convenient as a payment mechanism than alternatives that rely on trust. The authors conclude that as long as sufficient trust exist in payment intermediaries, cryptocurrencies are likely too inconvenient to be widely adopted. <b>TOPICS:</b>Currency, portfolio construction, wealth management
Christopher S. Henry, Kim P. Huynh, Gradon Nicholls
This article provides an update of the results of the 2017 Bitcoin Omnibus Survey (BTCOS) conducted by the Bank of Canada from December 12 to 15, 2017. The BTCOS was previously conducted in November and December 2016 and the results were reported in Henry, Huynh, and Nicholls (2017, forthcoming). The 2017 survey took place in an interesting time, as Bitcoin prices were increasing and reached an all-time high on December 17, 2017. During this period, the level of awareness of Bitcoin increased from 64 percent in the 2016 BTCOS to 85 percent in the 2017 BTCOS, while ownership rose from 2.9 to 5.0 percent respectively. The main reason cited by survey participants for owning Bitcoin changed from transactional purposes in 2016 to investment purposes in 2017. Further, only about half of Bitcoin owners were found to regularly use Bitcoin to buy goods or services or to send money to other people. <b>TOPICS:</b>Currency, portfolio construction, wealth management
This paper examines how smart contracts can enhance accounts payable in supply chain finance by automating the three-way match.The conventional system relies on the manual verification of purchase orders, goods receipts, and invoices; hence, it usually causes delays and errors and is expensive.This paper has created a set of conceptual frameworks where blockchain technology is used to automate such processes.The outcomes are great improvements.The processing time is also cut down to approximately 1.5 or 2 days using smart contracts, compared with the manual systems of about 8-14 days.The per 1000 transactions cost is reduced to approximately 650 from 2000 by a wide margin of almost 40-70%.The error rate also reduces drastically from 9.5% to 1.3%, which is primarily through automated validation and elimination of manual data entry.Real-time data capture enhances transparency and accelerates reporting on finances.Certain issues are still there, including the reliability of the data, scaling of the system, and absence of clear legal and accounting standards.The analysis demonstrates that smart contracts can benefit the efficiency, accuracy, and control in the accounts payable process significantly.
Many individuals (including governments) envision living in a future world where physical currency is a thing of the past. Many countries have made great strides in their efforts to go cashless. At the same time, there is increasing awareness among citizens of the decreasing amount of privacy in their lives. The potential hazards cashless societies pose to financial privacy may incentivize citizens to hold some of their money in independent cryptocurrencies. This article argues that in order for governments in cashless societies to keep firm control over their money supply, they should enact stronger privacy law protections for its citizens in order to decrease the real or perceived loss of (financial) privacy. This paper compares the privacy laws that exist today in both the United States and the European Union and suggests combining elements of both legal systems in order create a more privacy-friendly legal framework that can enable governments to complete against independent cryptocurrencies.
Blockchain ilk defa 2009 yılında ortaya çıkan bir alt yapı teknolojisi olsa da finans dünyası tarafından keşfedilip araştırılmaya başlanması 2014 yılının ilk aylarını bulmuştur. Bugün gelinen noktada, mevcut ekonomik ve iş modellerini bozma gücüyle radikal bir inovasyon olduğunu ispatlamış, yeni ve heyecan verici bir teknoloji olduğu söylenebilir. Finans sektöründen enerji piyasalarına, tedarik zinciri süreçlerine, fikri mülkiyet yönetimine, kamu sektörüne ve bunlar gibi çok çeşitli alanlara verimlilik artışı sağlama potansiyeline sahiptir. Blockchain teknolojisi sağladığı tam otomatik, şeffaf, güvenli ve minimum aracı alt yapısı ile pek çok sektörün ve devletin ilgisini çekmektedir. Yapılan bu çalışmada Blockchain’in taşıdığı potansiyelin daha iyi anlaşılabilmesi için uygulama alanlarına genel bir bakış ile Türkiye’nin bu teknolojiye olan yaklaşımı incelenmiştir. Çalışmada ek olarak Türkiye’deki emeklilik yatırım fon piyasasının işleyişinde kullanılacak özel bir Blockchain ağ yapısı tavsiye edilmiştir. Yapılan araştırma ve incelemeler sonucunda Blockchain kullanımının pek çok sektör için avantajlı, hatta on sene içerisinde hayati öneme sahip olacağı söylenebilir.
Having set out in the last chapter some of the basics that underlie the Blockchain, this chapter will further develop some of the concepts described previously. In particular, the concept of the Blockchain will be expanded upon to encompass different versions of the Blockchain currently in operation. The reader will be introduced to some of the technical refinements in the Ethereum Blockchain that have given rise to what has been termed ‘smart contracts’ that allow the automatic execution of code to ensure that certain actions take place once a stipulated set of conditions is found to exist. From here, the discussion will move to consider how Blockchain proponents seek to resolve some of the conventional consumer protection issues that tend to emerge from a doctrinal perspective in consumer sales contracts.
Blockchain teknolojisi, resmi kurumların katkısı olmadan bir ağa bağlı bilgisayarlar aracılığı ile çeşitli onaylama ve doğrulama işlemlerinin gerçekleştirildiği bir sistemdir. 21. yy’da ortaya çıkan blockchain teknolojisi ve kripto paraların hızla yatırım aracına dönüştüğü görülmektedir. Bu çalışmada blockchain teknolojisinin kullanımı sonucu ortaya çıkan kripto paralar, paranın tarihinden yola çıkılarak incelenmeye çalışılmıştır. Kripto paralar sahip olduğu gücü insanların güveninden alırken, geleneksel para gücünü kendisini piyasaya süren devletten almaktadır. Bu çalışmada kripto paraların güçlü ve zayıf yönleri anlatılarak gelecekte geleneksel para birimi gibi kullanılıp kullanılamayacağı incelenmiştir. Kripto paraların bir para birimi olmaktan çok bir yatırım aracı olarak kullanıldığı görülmektedir. İnsanların bu paralara güveni devam ettiği sürece kripto paraların varlığını koruyacağı, değerinde artış ve azalışlar olacağı gözlemlenmiş, güvenin yok olması durumunda ise etkinliklerini devam ettiremeyeceği tespit edilmiştir.
With the process of the population aging, the problem of the aged in the urban is becoming increasingly prominent in China, especially the shortage of pension resources. In order to solve this problem, we proposed Volunteer time bank (VOLTimebank) based on blockchain, a novel distributed ledger that allows transactions without any third party organization. VOLTimebank is a record management system to handle volunteer service records. The system provides a channel for volunteers to serve the elderly and gives volunteers a way to exchange the services they can offer today with the services that they hope to get in the future. And a Delegated Proof of Stake (DPOS) consensus mechanism is used to select auditors, whose main task is to audit volunteers' services. Each holder of the (volunteer medals (VOLMedals) has the right to vote for auditors and be voted to be an auditor. As a proof of concept, we present a prototype implementation of VOLTimebank via smart contracts based on Ethereum. VOLTimebank is a true realization of "Serve today, enjoy tomorrow", encouraging more people to take part in the volunteer services, for the elderly and for themselves. This paper is intended to illustrate the ideas and methods of VOLTimebank.
Abstract This chapter considers whether the principles and practices employed by traditional banks may be reconciled with the trading and holding of Bitcoin and other cryptocurrencies. It examines three basic functions of traditional banking — storing value, making payments and lending — and the extent to which they can be performed through cryptocurrency transactions. In analysing the extent to which cryptocurrencies operate as stores of value, the chapter asks whether a cryptocurrency itself stores monetary value and how the economic value in cryptocurrencies is stored in digital wallets. It also discusses four duties that arise from drawing an analogy between digital wallets and bank accounts in the context of bank-customer relationships: the duty to act in accordance with one's mandate; the duty to keep information confidential; the duty to act with reasonable skill and care; and the fiduciary duties (or disabilities) relating to unauthorised conflicts of interest and profit-making.