A. F. M. Shahen Shah, Muhammet Ali Karabulut, A. F. M. Suaib Akhter, Nazifa Mustari · 7 authors
Cryptocurrencies acquire user confidence by making the whole creation and transaction history transparent to the public. In exchange, the transaction history accurately captures the complete range of user activities related to cryptocurrencies. It is thought to be one of the safest and simplest payment methods that may be employed in the future. The trend of banks and other financial institutions investing in cryptocurrencies has increased rapidly in recent years. Therefore, it is necessary to synthesize the findings of previous studies on cryptocurrencies. In this paper, the use of data mining methods in Bitcoin transactions is analyzed and summarized. Cryptocurrencies, similar to the well-known Bitcoin, were targeted to ensure transaction security and privacy and overcome the drawbacks of traditional banking systems as well as other centralized systems. In addition, a comprehensive analysis of the literature on the challenges and applications of electronic currencies is conducted. The evolution of digital currency from electronic cash to cryptocurrencies is summarized and the methods used to increase user privacy are highlighted. The security threats in existing cryptocurrency systems (that compromise the privacy of Bitcoin users) are also highlighted. Finally, several research gaps and trends are identified that need to be further explored.
The set of services by Decentralized Finance (DeFi) and by traditional finance intersects. Loans are examples of the intersection. Data scientists have no access to the loan data of the traditional banking system due to trade secrecy and client privacy reasons. Also, banks’ operation is well regulated. Modern DeFi loan data is openly available in public blockchains the corresponding projects operate in. But the problem is to represent DeFi’s conveniently for analysis. At the same time, DeFis are unregulated. In the paper, we consider a decentralized Ethereum protocol to lend and borrow assets called Compound. We design a relational database, fill it with the project’s data, and provide statistical details. The results help overcome the entering threshold for further data analysis.
Erik Schüler, Clair Lemos, Genizia Islabão de Islabão
A modalidade de negócio de franquia é norteada pelo contrato, o qual regula a relação entre franqueador e franqueado. Por vezes, em função da ocorrência de assimetria de informação ou incorreto cumprimento das cláusulas contratuais acordadas, conflitos na relação entre os envolvidos são gerados. A automatização de contratos, na forma de smart contracts, é uma das possibilidades já relatadas para a solução de alguns dos aspectos envolvendo a relação entre as partes. Este artigo traz os resultados de uma primeira etapa de um projeto constituído de duas etapas, cujo objetivo é demonstrar a aplicabilidade de smart contracts instanciados em blockchain para o controle e monitoramento de cláusulas específicas de contratos de franquias. Ao contrário de documentos reportados na literatura, os resultados apresentados neste artigo baseiam-se na análise de um tipo específico de um contrato real de franquia, identificando-se quais cláusulas apresentam possibilidade do controle e monitoramento automatizado através de smart contract, e propondo-se uma classificação destas cláusulas quanto às possíveis formas de realização destas ações. Resultados indicam, para o contrato analisado, que pouco menos da metade das cláusulas são passíveis de serem implementadas em smart contract, existindo ainda a possibilidade da exclusão de outras cláusulas, uma vez que se garante a correta execução de outras cláusulas.
Transaction fee markets are essential components of blockchain economies, as they resolve the inherent scarcity in the number of transactions that can be added to each block. In early blockchain protocols, this scarcity was resolved through a first-price auction in which users were forced to guess appropriate bids from recent blockchain data. Ethereum's EIP-1559 fee market reform streamlines this process through the use of a base fee that is increased (or decreased) whenever a block exceeds (or fails to meet) a specified target block size. Previous work has found that the EIP-1559 mechanism may lead to a base fee process that is inherently chaotic, in which case the base fee does not converge to a fixed point even under ideal conditions. However, the impact of this chaotic behavior on the fee market's main design goal -- blocks whose long-term average size equals the target -- has not previously been explored. As our main contribution, we derive near-optimal upper and lower bounds for the time-average block size in the EIP-1559 mechanism despite its possibly chaotic evolution. Our lower bound is equal to the target utilization level whereas our upper bound is approximately 6% higher than optimal. Empirical evidence is shown in great agreement with these theoretical predictions. Specifically, the historical average was approximately 2.9% larger than the target rage under Proof-of-Work and decreased to approximately 2.0% after Ethereum's transition to Proof-of-Stake. We also find that an approximate version of EIP-1559 achieves optimality even in the absence of convergence.
Peter Eklund, Jonas Sveistrup Søgaard, Lasse Herskind, jason Spasovski
This paper examines the feasibility of blockchain solutions for national and transnational business-to-business and business-to-government (B2B/B2G) compliance frameworks, namely a trust-less, de-centralised, self-regulating distributed ledger. In particular, the paper examines whether blockchain platforms scale to support national and transnational e-business trading.
Decentralized finance (DeFi) is known for its unique mechanism design, which applies smart contracts to facilitate peer-to-peer transactions. The decentralized bank is a typical DeFi application. Ideally, a decentralized bank should be decentralized in the transaction. However, many recent studies have found that decentralized banks have not achieved a significant degree of decentralization. This research conducts a comparative study among mainstream decentralized banks. We apply core-periphery network features analysis using the transaction data from four decentralized banks, Liquity, Aave, MakerDao, and Compound. We extract six features and compare the banks' levels of decentralization cross-sectionally. According to the analysis results, we find that: 1) MakerDao and Compound are more decentralized in the transactions than Aave and Liquity. 2) Although decentralized banking transactions are supposed to be decentralized, the data show that four banks have primary external transaction core addresses such as Huobi, Coinbase, and Binance, etc. We also discuss four design features that might affect network decentralization. Our research contributes to the literature at the interface of decentralized finance, financial technology (Fintech), and social network analysis and inspires future protocol designs to live up to the promise of decentralized finance for a truly peer-to-peer transaction network.
Ingrid Bauer, Rafael Ziolkowski, Janine Hacker, Gerhard Schwabe
Despite the large number of resources that blockchain has, and continues to mobilize, what makes the technology unique and why people engage with it is not yet fully understood. Hence, “Why blockchain?” is a question that many scientists and managers still ask themselves or must to answer when facing the technology's critics. While the question is undoubtedly justified, it cannot always be answered from a purely technical perspective. Thus, in this study, we apply a socio-technical information systems artifact perspective and analyze the reasons managers involved in the blockchain consortia have for using blockchain technology. Based on a multiple-case study of 19 blockchain consortia, including interviews with 53 stakeholders, we explicate 19 different motives that justify engagement with the technology in practice. Further, we identify the systemic character of tokenization and the importance of the socio-technical interplay of aspects like power decentralization that justify the necessity of blockchain.
Omar Ali, Mujtaba Momin, Anup Shrestha, Ronnie Das · 6 authors
The nonfungible token (NFT) marketplace spiked in the recent past. The concept originated initially as a token standard of Ethereum, an open-source blockchain with smart contract functionality, where each token is characterized by distinguishable signs. These types of tokens have unique digital properties that allow their distinct identification. NFTs, with their distinct qualities, can be fluidly traded with customized values according to their ages, rarity, and liquidity. The trading of NFTs has heavily influenced the growth of the decentralized application (dApp) marketplace, as exponential returns (thousand folds from their original value) on its ever-expanding market are being observed, leading to worldwide attention. However, the NFT ecosystem is in its nascence, and the associated technologies are still in their infancy. New researchers might be fascinated with the exponential, yet nebulous evolution of NFTs; however, this novelty has contributed to the paucity of systematic and conclusive published research work on this topic. This review portrays the NFT ecosystem multidimensionally, wherein the paper commences with an overview of state-of-the-art NFT technology and furnishes summary standards and desired properties. Finally, the study concludes with an elaborate discussion of the future outlook for and prime challenges faced by NFTs.
In this paper, we investigate some economic fundamentals related to the Tezos blockchain platform under the Emmy* consensus protocol. The protocol is based on a liquid version of Proof-of-Stake, in the sense that users can temporarily delegate some or all of their Tz units to full nodes. In addition to increasing the stake of the full node, and thus the probability of being selected as a block baker/endorser, such delegation induces the property of the super-additivity of users’ selection probability of baking/endorsing a block. That is, with delegation, the selection probability may be larger than the sum of the selection probabilities without delegation. In this paper, we study how monetary holdings and stakes can evolve with time, also discussing the individual user and the market implications of delegation.
Miquel À. Cabot-Nadal, M. Magdalena Payeras–Capellà, Macià Mut–Puigserver, Alberto Soto
Lots of business processes can be benefited of the use of blockchain-based technologies. The distributed nature of the blockhain overcome a part of the reliability issues related to centralised systems. Recently the use of NFTs has been spread to multiple applications. The EIP-721 standard proposal defines the interface of non-fungible tokens (NFTs). This type of token was designed with the aim of creating interchangeable tokens but with the peculiarity of being unique and non-fungible and with the impossibility to be damaged or destroyed. For this reason, the EIP-721 standard has almost limitless applications: it can represent ownership of digital or physical assets, unlock access to certain services, … In short, it can represent any single object or right that we can transfer between a sender and a receiver. In this paper we present a study on the transferability of the NFTs and its implications in the generation of secure applications. Currently, the NFTs can be transferred with the consent of the owner (by himself or by an authorised party) but the receiver of the token cannot decline the reception of the token, that will be transferred to his wallet. Therefore, we propose in this paper the enhancement of the NFT standard that allows the rejection of reception of tokens, obtaining a kind of token that can be used in a secure way in all kinds of applications that require the selective reception of the tokens.
Purpose The blockchain technology is based on distributed ledger. Many stakeholders, such as developers, entrepreneurs and technology lovers, consider the blockchain as an economic and business re-creation that is faced with numerous challenges in its application. Blockchain technology is the backbone of many digital currencies, i.e. Bitcoin and Ethereum. Although presently digital currencies are recognized as payment and exchange instruments in many countries, the economic sanctions imposed on some countries have restricted the possibility of the trading. So, this study seeks to evaluate the adoption of blockchain for digital currency use in Iran in the shadow of economic sanctions. Design/methodology/approach The developed value-based technology adoption model and smart PLS software have been used in this research. The statistical population of the study was people active in the Iranian stock market; the purpose for this selection was their familiarity with financial and digital currency issues. Findings The results show that the terms of sanctions, usage and facilitating conditions are directly related to users' perceived value of digital currency and its use; As a result, in a sanctioned country like Iran, the use of digital currencies is being accepted as a way of rolling out economic sanctions and thus making commercial payments. Originality/value As well as the fact that evaluating the adoption of the blockchain technology in a sanctioned country like Iran is considered as the originality aspect of the research, applying an extended model in the technology adoption is also the research innovation.
Nov 15, 2022·Zeitschrift für schweizerische Statistik und Volkswirtschaft/Schweizerische Zeitschrift für Volkswirtschaft und Statistik/Swiss journal of economics and statistics
Basil Guggenheim, Sébastien Kraenzlin, Christoph Meyer
Abstract We use unique individual bank-to-bank repo transaction data to empirically assess the efficiency of the existing Swiss financial market infrastructure (FMI) for executing delivery versus payment transactions. This approach enables us to identify its current benefits and drawbacks as well as where new technologies, such as distributed ledger technology, could provide a remedy. We find that the fastest settlement time for repo transactions is 12 s, but that settlements are often delayed by more than 10 min due to the lack of collateral availability. We conclude that the cross-border availability of securities needs to be addressed by either improving interoperability of existing infrastructures or using new technologies.
Tiziana Russo Spena, Cristina Mele, Jaqueline Pels
Purpose This paper aims to focus on how the use of new technologies disrupts markets. To date, marketing literature has lacked studies investigating the link between market practices and new technologies. The study adopts the blockchain technology (BcT) context to elicit novel technology-enhanced market practices. Design/methodology/approach The authors adopt a qualitative multimethod research design to engage in interpretative theorizing. They investigated 77 companies and used the Gioia method for the data coding and analysis. Findings The study of the adoption of blockchain prompts three technology-enhanced market practices. The latter offers new ways of resourcing by removing constraints and expanding actors’ network and knowledge to integrate resources; sensemaking by expressing new language and assigning novel meaning to represent markets; and legitimizing, by structuring new rules and trusting new mechanisms to institutionalize markets. Research limitations/implications The technology-enhanced market practices are distinct from extant market practices as well as related, thus, enriching and complementing them. Therefore, this work expands the understanding of the mechanisms of how markets work. Originality/value This study is the first, to the best of the authors’ knowledge, to focus on how BcT features affect market practices. BcT market practices entail how actors perform, share and interpret symbols and objects and set rules for how markets should work.
Sergii Grybniak, Nicolae Goga, Oleksandr Nashyvan, Răzvan Mihai · 9 authors
This article proposes a concept of building a payment system for subscription-based services in cases of fixed prices and with recurring frequency. The proposed solution offers the user the opportunity for ease-of-use and transaction fee cost savings. The proposed method of calculating balances for crypto-wallets can be applied to other financial services that provide traditional banking products based on decentralized public platforms. The concept is deployed in the form of a smart contract for issuing tokens on Ethereum, which is backward compatible with ERC-20 and ERC-777, and can form the basis for a new EVM-based decentralized network standard.
In this article, the author analyses the VAT treatment of non-fungible tokens (NFTs), which is an innovative service within the e-commerce industry. VAT faces different challenges when it comes to taxing e-commerce transactions, and in order to have certainty on the tax implications it is important first to understand the business itself. The sale of NFTs might trigger additional payments, such as gas fees, royalties and marketplaces fees, which is addressed by the author in this article.
We study the competition between blockchains in a multi-chain environment, where a dominant EVM-compatible blockchain (e.g., Ethereum) co-exists with an alternative EVM-compatible (e.g., Avalanche) and an EVM-incompatible (e.g., Algorand) blockchain. While EVM compatibility allows existing Ethereum users and developers to migrate more easily over to the alternative layer-1, EVM incompatibility might allow the firms to build more loyal and "sticky'' user base, and in turn a more robust ecosystem. As such, the choice to be EVM-compatible is not merely a technological decision, but also an important strategic decision. In this paper, we develop a game theoretic model to study this competitive dynamic, and find that at equilibrium, new entrants/developers tend to adopt the dominant blockchain. To avoid adoption failure, the alternative blockchains have to either (1) directly subsidize the new entrant firms or (2) offer better features, which in practice can take form in lower transaction costs, faster finality, or larger network effects. We find that it is easier for EVM-compatible blockchains to attract users through direct subsidy, while it is more efficient for EVM-incompatible blockchains to attract users through offering better features/products.
Pedro Bustamante, Marcela Gomez, Martin B. H. Weiss, Ilia Murtazashvili · 5 authors
The wireless crunch resulted in excess demand for the use of spectrum, and spectrum sharing is increasingly being proposed as a solution. To date, little research has considered how block-chain technologies can enable greater spectrum sharing. To address this gap, we develop a stylized model to show how blockchains can be leveraged to facilitate the exchange of access rights on a well-known band. To demonstrate proof of concept, we analyze available system design options, implement a small-scale test scenario, estimate the implementation and usage costs, and demonstrate how these technologies impact spectrum sharing prospects. Our exercise shows that blockchains can alleviate some of the perceived obstacles to greater sharing of spectrum.
Play-to-earn is one of the prospective categories of decentralized applications. The play-to-earn projects combine blockchain technology with entertaining games and finance, attracting various participants. While huge amounts of capital have been poured into these projects, the new crypto niche is considered controversial, and the traditional gaming industry is hesitant to embrace blockchain technology. In addition, there is little systematic research on these projects. In this paper, we delineate play-to-earn projects in terms of economic & governance models and implementation and analyze how blockchain technology can benefit these projects by providing system robustness, transparency, composability, and decentralized governance. We begin by identifying the participants and characterizing the tokens, which are products of composability. We then summarize the roadmap and governance model to exposit there is a transition from centralized governance to decentralized governance. We also classify the implementation of the play-to-earn projects with different extents of robustness and transparency. Finally, we discuss the security & societal challenges for future research in terms of possible attacks, the economics of tokens, and governance.
Paula Zenni Lodetti, Beatriz Batista Cardoso, O. B. Luis Gustavo Ulhoa, Luciano Benvenuti Roncalio · 8 authors
Blockchain development is expected to bring significant contributions to electrical grids. Mainly due to the security requirements, real-time operation and encrypted communication features of this technology. Such features provide ways to shorten the process and carry out direct and secure energy trading through smart contracts. In order to circumvent the impediments imposed by Brazilian regulation with regard to trading smart contracts for shared energy generation, this paper describes a blockchain project, explaining the business rules and focusing on energy issues. A basic blockchain implementation is also shown in order to explain peer-to-peer transactions.
A tecnologia blockchain possibilita a implementação de contratos inteligentes que expressam na forma de código as cláusulas de contratos do mundo real de modo a serem executadas sem a necessidade de um intermediário. Nesse contexto, foram introduzidas as aplicações decentralizadas (DApps) que utilizam recursos, como imutabilidade, descentralização, transparência e privacidade. Contudo, o desenvolvimento de DApps é limitado ao escopo de contratos e às especificidades da blockchain. Os desenvolvedores necessitam compreender todo o ambiente inerente à tecnologia, como questões da linguagem de programação dos contratos, questões de segurança e outros. O objetivo deste artigo é definir um metamodelo que facilite tanto para os especialistas do domínio quanto para desenvolvedores a modelagem dos contratos em alto nível. A proposta consiste em um metamodelo que abstraia as questões técnicas inerentes a Ethereum Virtual Machine (EVM) que permita definir os elementos essenciais que devem ser implementados no contrato final.