Blockchain protocols’ main differentiator is their purported decentralization that unlocks various information technology applications that were supposedly impossible beforehand. The key promise is that incentive-driven participation of a large set of interested parties can lead to decentralized protocol states where no single operator can be a “single point of failure.” Despite this promise, there is little systematic analysis of decentralization in blockchain systems and the sporadic theoretic and empirical investigations that exist paint a rather negative picture due to resource “pooling behaviors” that are impossible to prevent in the “permissionless” setting of such protocols where parties have no designated identities.
The always-available liquidity of automated market makers (AMMs) has been one of the most important catalysts in early cryptocurrency adoption. However, it has become increasingly evident that AMMs in their current form are not viable investment options for passive liquidity providers. This is large part due to the cost incurred by AMMs providing stale prices to arbitrageurs against external market prices, formalized as loss-versus-rebalancing (LVR) [Milionis et al., 2022]. In this paper, we present Diamond, an automated market making protocol that aligns the incentives of liquidity providers and block producers in the protocol-level retention of LVR. In Diamond, block producers effectively auction the right to capture any arbitrage that exists between the external market price of a Diamond pool, and the price of the pool itself. The proceeds of these auctions are shared by the Diamond pool and block producer in a way that is proven to remain incentive compatible for the block producer. Given the participation of competing arbitrageurs to capture LVR, LVR is minimized in Diamond. We formally prove this result, and detail an implementation of Diamond. We also provide comparative simulations of Diamond to relevant benchmarks, further evidencing the LVR-protection capabilities of Diamond. With this new protection, passive liquidity provision on blockchains can become rationally viable, beckoning a new age for decentralized finance.
Arguments to invest in accounting information systems (AIS) are multiple, but two key themes have emerged in the literature: the potential for cost saving from improved efficiency and the capacity to support business strategies. This chapter examines the latter of these two themes, taking as its starting point Porter’s two generic business strategies: cost leadership and differentiation. Two approaches to AIS acquisition are considered: bespoke development and off-the-shelf purchase. These two dimensions – generic business strategy and software acquisition mode – provide a framework for analysis of AIS support for firms, and the four quadrants of the framework provide the basis for this chapter. A key contribution of the chapter is the identification of the critical factors involved in the choice of AIS to support the business strategy. The chapter also considers the implications for AIS of new forms of business competition afforded by platforms, networks and ecosystems and new modes of transferring and recording value through cryptocurrencies and blockchains.
This research aims to identify current strengths and weaknesses of content trading in the creative economy, and whether/how distributed ledger technologies (DLTs) could help to resolve some of these business challenges. Thus, we are addressing the following two research questions: 1) How is content currently traded and what are strengths and weaknesses in current business practice? 2) What are the business models that would drive engagement, and how could this transform the business of traditional content publishers? To gain rich insights, this work is drawing on a case study design. We build on business model literature and aim to contribute to transaction cost theory applied to a content trading context. From the empirical study we will deduce managerial implications on how to potentially resolve identified challenges by using emerging technologies such as DLTs. This work also opens opportunities to create a more equitable digital economy, for example, by encouraging diversity in content creation as the content trading marketplace becomes more accessible to a more diverse set of content producers.
In recent years, the volume of data generated by IoT devices has increased dramatically. Using this data can improve decision-making in the public and private sectors and increase productivity. Many attempts have been made to enhance and adapt businesses to exploit this IoT data. Among these, IoT data trading is the most popular approach. To this end, ongoing projects are currently focused on developing decentralized data marketplaces for IoT using blockchain and cryptocurrencies. Here we explore how a decentralized data marketplace could be created using IOTA tangle and IOTA smart contract chains (SC chains). We also consider the advantages of such architecture in terms of cost, scalability, and privacy over current designs and introduce the various elements it should have.
Daniela Balutel, Christopher S. Henry, Jorge Vásquez, Marcel Voia
Abstract We develop a tractable model of Bitcoin adoption with network effects and social learning, which we then connect to unique data from the Bank of Canada's Bitcoin Omnibus Survey for the years 2017 and 2018. The model determines how the probability of Bitcoin adoption depends on: (i) network effects, (ii) individual learning effects and (iii) social learning effects. After accounting for the endogeneity of beliefs, we find that both network effects and individual learning effects have a positive and significant direct impact on Bitcoin adoption, whereas the role of social learning is to ameliorate the marginal effect of the network size on the likelihood of adoption. In particular, in 2017 and 2018, a one percentage point increase in the network size increased the probability of adoption by 0.45 and 0.32 percentage points, respectively. Similarly, a one percentage point increase in Bitcoin beliefs increased the probability of adoption by 0.43 and 0.72 percentage points. Our results suggest that network effects, individual learning and social learning were important drivers of Bitcoin adoption in 2017 and 2018 in Canada.
To enable secure and efficient dynamic spectrum sharing (DSS) with guaranteed revenue and quality of service (QoS) in future wireless communications, we present a consortium blockchain based DSS framework, where the regulators supervise the whole process of DSS, and thus the revenue of each participant can be guaranteed. Each mobile network operator (MNO) on the chain can adaptively act as a spectrum provider or spectrum requestor based on their demand, and the spectrum resource allocation is recorded on the chain with a smart contract. The optimal spectrum pricing and buying strategies are solved based on a multi-leader multi-follower (MLMF) Stackelberg game model, and the equilibrium is solved with the proposed algorithm. We then build a prototype with Hyperledger Fabric consortium blockchain, and the average latency is evaluated. Simulations and prototype evaluations validate the feasibility of blockchain based DSS and show that the average latency increase with the participants, which provides useful insights for real applications.
Small and Medium Enterprises (SMEs) contribute significantly to the society and the economy however, most of their financing needs throughout their life cycle remains unmet by traditional financial channels. Fintech solutions help to fulfil this gap through advanced digital economic tools such as Decentralized Finance (DeFi) that are powered through the underlying blockchain technology. While this might seem to be a silver bullet for most financing problems faced by SMEs, there are issues pertaining to cyber security when SMEs adopt such technologies. SMEs are already seen as lucrative targets for cyber-attacks given their poor cyber hygiene practices, lack of investments coupled with huge skills gap in implementing cyber best practices for improving their resilience. Adoption of DeFi without completely understanding the underlying ecosystem might further exacerbate the cyber threats they face. This calls for further research and implementation of socio-technical solutions that will help SMEs understand better the DeFi ecosystem and implement effective solutions. In this paper, the unique challenges that SMEs face pertaining to security, risk and vulnerability management and potential mitigation strategies to improve their resilience are outlined in the UK context.
Over the previous decade, cryptocurrency, along with the current trend of digital wallets, has gained popularity as a cashless, more convenient, and fast payment option for doing ecommerce transactions. In both public and private sector computer applications, blockchain (a popular cryptocurrency technology) promises to be hugely disruptive and liberating. Blockchain provides a consensus record with an encrypted audit trail that can be maintained and validated by different nodes as a mechanism to rank transactions in a distributed ledger. The use of blockchain and bitcoin as an alternative payment system has been unquestionably broad, not just in e-commerce but also in other areas of finance. Major businesses who adopted cryptocurrency have benefited from the boom, but there is a risk of value depreciation because cryptocurrency is notoriously volatile. While bitcoin enables for anonymous purchases via encrypted wallet addresses, it's essentially the same as carrying about unmarked cash. This allows your customers to purchase things without exposing their personal information, and it allows you to conduct business without fear of violating any privacy laws. Crypto payments, on the other hand, come with no user protections or redress, akin to the security vulnerabilities that can arise with a wire transfer.
Abstract Many types of cryptocurrencies, which predominantly utilize blockchain technology, have emerged worldwide. Several issuers plan to circulate their original cryptocurrencies for monetary use. This study investigates whether issuers can stimulate cryptocurrencies to attain a monetary function. We use a multi-agent model, referred to as the Yasutomi model, which simulates the emergence of money. We analyze two scenarios that may result from the actions taken by the issuer. These scenarios focus on increases in the number of stores that accept cryptocurrency payments and situations whereby the cryptocurrency issuer designs the cryptocurrency to be attractive to people and conducts an airdrop. We find that a cryptocurrency can attain a monetary function in two cases. One such case occurs when 20% of all agents accept the cryptocurrency for payment and 50% of the agents are aware of this fact. The second case occurs when the issuer continuously airdrops a cryptocurrency to a specific person while maintaining the total volume of the cryptocurrency within a range that prevents it from losing its attractiveness.
Ahmed Idries, John Krogstie, Jayaprakash Rajasekharan
Distributed ledger technologies (DLTs) have become a game changer in electrical services platformization and digitalization. Therefore, the need for DLTs in electrical energy services must be understood. We present a case study of a European Union (EU) project in the Norwegian city of Trondheim, where a DLT-driven energy marketplace was piloted. We contribute to the literature and field by presenting the factors, challenges, and issues affecting DLT implementation in electrical energy services, which can be helpful for further work in electrical energy services and platform ecosystems. For policy makers and practitioners, this paper presents DLT providers' reflections about their experience in an electrical energy services project in the smart city context. These insights could be useful to ease future adoption of DLTs and to provide a ground for future empirical investigations.
Towards a Decentralized Literature. The purpose of this paper is to discuss how the History of Contemporary Romanian Literature by Mihai Iovănel opens new paths both in interpreting literature and towards understanding Romanian cultural identity at large. In this sense, “transnational specificity,” as Iovănel calls it, becomes a most resourceful field that allows, as Vancea shows, important insights into national and global identity in the context of significant technological developments. In the same vein, Vancea draws from Daniel David’s work on the psychology of the Romanian people to highlight new cultural aspects that could lead to changes in literature. At the same time, the paper tries to bring humanities closer to the perspectives that the Web3 phenomenon announce. Article history: Received 22 May 2022; Revised 25 August 2022; Accepted 31 August 2022; Available online 20 September 2022; Available print 30 September 2022 REZUMAT. Către o literatură descentralizată. Scopul acestei lucrări este de a evidenția modul în care Istoria Literaturii Române Contemporane scrisă de Mihai Iovănel deschide noi căi de interpretare a literaturii, dar și a identității culturale. Specificul transnațional devine în acest sens un teren ofertant care permite deschiderea unei discuții mai largi cu privire la identitatea noastră națională și globală în contextul profundei dezvoltări tehnologice. În acest sens, voi completa exemplele menționate de criticul literar cu studiul lui Daniel David despre psihologia poporului român pentru a evidenția noi puncte vulnerabile care ar putea să determine schimbări în viitorul apropiat al literaturii. Totodată, lucrarea încearcă să apropie umanioarele de perspectivele pe care le aduce în viitor fenomenul Web3. Cuvinte-cheie: identitate culturală, literatura descentralizată, Web3, istorie literară, NFT
Christoph Müller-Bloch, Jonas Valbjørn Andersen, Jason Spasovski, Jungpil Hahn
Blockchain systems allow for securely keeping shared records of transactions in a decentralised way. This is enabled by algorithms called consensus mechanisms. Proof-of-work is the most prominent consensus mechanism, but environmentally unsustainable. Here, we focus on proof-of-stake, its best-known alternative. Importantly, decentralised decision-making power is not an inherent feature of blockchain systems, but a technological possibility. Numerous security incidents illustrate that decentralised control cannot be taken for granted. We therefore study how key parameters affect the degree of decentralisation in proof-of-stake blockchain systems. Based on a real-world implementation of a proof-of-stake blockchain system, we conduct agent-based simulations to study how a range of parameters impact decentralisation. The results suggest that high numbers of initial potential validator nodes, large transactions, a high number of transactions, and a very high or very low positive validator network growth rate increase decentralisation. We find weak support for an impact of changes in transaction fees and initial stake distributions. Our study highlights how blockchain challenges our understanding of decentralisation in information systems research, and contributes to understanding the governance mechanisms that lead to decentralisation in proof-of-stake blockchain systems as well as to designing proof-of-stake blockchain systems that are prone to decentralisation and therefore more secure.
Abstract This study suggests a payment portfolio model that includes new payment methods that have emerged from the development of cryptocurrency markets and central bank digital currencies (CBDCs). Our model analyzes the optimal payment choice for consumers under various macroeconomic conditions. We determine that an individual economic agent chooses payment methods under specific conditions by incorporating policy interest rates on CBDCs and stablecoins used on cryptocurrency exchanges. We analyze the impacts of CBDCs and stablecoins on the choice of whether to use cash or deposits. We also examine how the agent changes her portfolio compositions in response to exogenous macroeconomic policies. If a government replaces cash with a CBDC, the convenience of digital currency would not affect consumer choices. The higher the government’s interest rate on CBDCs, the more consumers will use CBDCs than deposits.
Despite its many potential economic and organisational benefits, enterprise blockchain (distributed ledger) technology has still not been widely adopted. From the viewpoint of the participants, the deployment of a blockchain that links collaborating enterprises requires value creation that will exceed investment, including investment in operational and strategic change. The theory behind and practice of cross-enterprise open innovation can inform blockchain adoption. Blockchain implementation requires and creates interdependencies across collaborators, both among enterprise consortium partners and with stakeholders in the broader ecosystem. Distinguished from arm’s-length forms of collaboration, interdependencies occur when organisations intentionally collaborate to become reliant upon one another. In this paper, we develop a framework of blockchain interdependencies and explore key factors that promote or inhibit interdependence. We propose a blockchain collaboration continuum with three levels: cooperation, interdependence, and mutualism. We then explore factors that influence the level of interdependence: two types of consortium-level interdependencies—socio-technical and economic, and two types of ecosystem-level interdependencies—standards and legal/regulatory. We illustrate these interdependencies and their payoffs through the example of supply chains in maritime trade. This work can be used as a starting point for diagnosing critical factors influencing adoption and for illuminating points of leverage that may sway hesitant organisations to participate in blockchain consortia.
IOTA Tangle is a distributed ledger technology (DLT), primarily designed for Internet-of-Things (IoT) networks and applications. IOTA Tangle utilizes a direct acyclic graph (DAG) structure for the ledger, with its protocol offering features attractive to the IoT domain, over most blockchain alternatives, such as feeless transactions, higher achievable transactions per second (TPS), and lower energy consumption. The original IOTA implementation relied on a bootstrap centralized coordinator solution for consensus which limited its degree of decentralization and scalability. This concern, alongside other limitations to its adoption, such as lack of smart contracts, are being addressed with the release of IOTA 2.0. This update brings with it significant changes in order to remove the coordinator and achieve a scalable decentralized solution. To this end, this paper provides a technical overview of the key features of IOTA 2.0 while discussing their relevance and benefits for the wider IoT ecosystem. The paper also provides performance insights and future research directions for IOTA 2.0.
Marin Jovanovic, Nikola Kostić, Ina M. Sebastian, Tomaz Sedej
The proliferation of blockchain-based platform ecosystems in recent years has prompted scholars across various disciplines to explore the conditions leading to their successful deployment. However, developing a blockchain-based platform ecosystem creates various challenges for the platform sponsor that may influence industry-wide adoption and, ultimately, the platform's success. This study follows the development of TradeLens, a leading global shipping platform ecosystem underpinned by blockchain technology. We examine the factors affecting industry-wide adoption among global supply chain actors by unpacking platform value drivers and platform governance mechanisms identified at TradeLens. While the platform value hinges on the digitalization of workflows and the ecosystem leverage, the platform governance includes strategic (off-chain), technology (on-chain), and interoperability (on- and off-chain) governance – as mechanisms for effectively managing a blockchain-based platform ecosystem. This paper contributes to the literature on blockchain-based platform ecosystems and the platform literature.
Research on blockchains addresses multiple issues, with one being automating creation of smart contracts. One of the promising approaches, targeted for industry adoption, uses Business Process Model and Notation (BPMN) modeling to describe an application that is transformed into a smart contract. Although systems using this approach have been developed as a proof of concept, they do not address a major issue arising in the trade vertical that has applications involving collaboration of many actors over a long period of time. There are two difficulties: (i) BPMN's concept of a transaction is limited to actions of one actor, while trade transactions involve collaborations by many actors, and (ii) trade applications are long term and thus require support of transactional activities that span invocations of several methods of a smart contract. The difficulty is that a blockchain infrastructure supports the transactional properties only within the scope of one execution of one method of a smart contract. We extend the BPMN model by introducing the concept of a collaborative transaction to represent activities of many actors. In our previous research, we developed an approach, and a tool as a proof of concept, to transform a BPMN model into methods of a smart contract. In this paper we describe how collaborative transactions are supported by our approach even though the transaction activities span multiple calls to methods of a smart contract produced by transformation from a BPMN model to methods of a smart contract.
Innovation breakthroughs prompt sensemaking discourses that promote community learning and socially construct the innovation. Through this discourse, interested actors advance diverse frames, appealing to consumers with disparate preferences but raising concerns for the coherence of that discourse. We unpack this diversity-coherence paradox by recasting coherence as the relatedness of innovation frames and spotlighting the role of discursive fields that circumscribe meaning. Our empirical context is the first six years of blockchain discourse across seven discursive fields. Our research offers three insights in furtherance of an ecological perspective on innovation discourse. First, framing diversity emanates from discursive fields rather than from actors. Second, fields play differentiated roles in the framing process. Enactment fields comprised of actors with direct experience with the technology limit diversity. They do so by erecting walls that circumscribe discourse through imprinting on their original frame and retracting from or abandoning frames learned from other fields. In contrast, mediated fields, in which actors lack direct experience with the technology, enhance diversity. They do so by imitating or learning from other fields and foreshadowing or anticipating the frames used by other fields, thereby building bridges. Third, rather than opposing each other, diversity and coherence coevolve as the diversity induced by mediated fields increases framing redundancies, synthesizing frames into a coherent community understanding of the innovation. Our research signals to the actors who serve as innovation ambassadors and gatekeepers that diverse views of an innovation are not only inevitable, given the many discourse fields in which those views are formulated, but can also be coherent and desirable.
The purpose of this paper was to propose a model that examined a study adopting the technology acceptance model with additional constructs (i.e., innovativeness) and the mediating role of attitude and perceived risk to use the cryptocurrency platform in Thailand. The data were collected through a questionnaire-based survey (456 usable responses) from consumers in Thailand. A two-step SEM approach (i.e., a measurement model and a structural model) was used to analyze the data. The findings showed a significant positive influence of perceived usefulness, perceived ease of use, innovativeness, attitude, perceived risk, and cryptocurrency platform adoption. Moreover, attitude mediated the relationship between perceived usefulness, perceived ease of use, innovativeness, and cryptocurrency platform adoption. Overall, our results showed that the model of perceived usefulness, perceived ease of use, and innovativeness explained 62.9% of the variance in the intention to use the cryptocurrency platform in Thailand. Our study has contributed to the technology acceptance model and highlighted its effectiveness in explaining the adoption of the cryptocurrency platform in Thailand.
Within the past years, enterprise blockchain solutions were frequently developed within different industry consortia. In most cases, this resulted in isolated solutions competing against each other due to similar approaches and goals. Today, decision makers do not necessarily need to establish entirely new blockchain consortia, as established ones already exist, and participation is a considerable way to avoid unreasonable efforts. In this paper, we apply an iterative literature review to identify different factors relevant for practitioners, who face the challenge of joining an existing enterprise blockchain consortium. In a second step, we discuss these factors utilizing supply chain management as a role model. As a main finding, we propose an evaluation framework for the purpose of enterprise blockchain consortium analysis. Additionally, we provide several questions relevant for practitioners during their evaluation stages. With our evaluation framework we contribute to blockchain research, where - despite its high relevance - the topic of consortium evaluation has so far been neglected. We also contribute to research in the field of technology evaluation by proposing and merging five different evaluation dimensions.