Blockchain Papers

Jeffrey L. Hoopes, Tyler Menzer, Jaron H. Wilde

No abstract is available for this record.

Sudheer Chava, Fred Hu, Nikhil Paradkar

Abstract We proxy retail investor attention through Google Trends and find that fungible and non-fungible crypto tokens generate greater attention from high-gambling propensity regions. Crypto attention is higher during bubble-like episodes in the crypto market and for more lottery-like tokens. Moreover, retail crypto attention decreases after sports gambling is legalized. Higher token attention is associated with more contributors and higher fundraising. However, consumer credit default rates spike after periods of high crypto attention, but solely in the subprime segment. Overall, our findings suggest that gambling preferences strongly predict retail investor interest in the crypto market.

Philip Newall, Leon Y. Xiao

Professional sports have in recent years become increasingly intertwined with gambling marketing, especially in countries such as Australia, Spain, and the UK. Even Formula 1 racing, which used to be closely associated with tobacco sponsorship, announced in 2021 an agreement to have an official betting sponsor. However, as happened previously with tobacco sponsorship, some policymakers and regulators have started to take legal action with gambling marketing restrictions. In Italy, gambling advertising and sponsorship are now prohibited. In Spain, gambling sponsorship of sports teams is prohibited, whilst advertising is prohibited except between 1:00AM–5:00AM, thus effectively banning commercially viable gambling marketing through sports. The UK is currently considering a sponsorship ban in sports. Although these regulatory actions may have improved consumer protection against gambling harms, a closer examination of recent developments in the top men’s soccer leagues of these three countries reveals an emerging trend toward sponsorship from two gambling-like industries that are unaffected by these legal bans: financial trading apps and cryptocurrencies. Consumers are becoming increasingly exposed to the marketing of these gambling-like products through sports contexts, and these products could pose similar risks to gambling or even additional, unique risks.

Nurettin Menteş, İlyas Yolbaş, Mahmut Bulut

Aim: Cryptocurrency trading is similar to problematic gambling behavior, with its high-risk factors and its methods of use. In this sense, it can become addictive. The aim of this study is to develop a valid and reliable scale to measure Problematic Cryptocurrency Trading among individuals who trade cryptocurrency. Method: ) goodness of fit criteria were used. The Amos 23 software package was used for the data analysis. Results: As a result of the exploratory factor analysis, a two-factor structure was obtained. For the total scores of the scale, Cronbach's alpha reliability value was found to be 0.913, and for the sub-factors, Cronbach's alpha values were found to be 0.897 and 0.866. The factor loadings of items varied between 0.786 and 0.597 for the first sub-factor and between 0.869 and 0.683 for the second sub-factor. The confirmatory factor analysis confirmed the two-factor structure of the scale, and the goodness of fit criteria were found to be at acceptable levels. Conclusion: It was determined that the Problematic Cryptocurrency Trading Scale is a valid and reliable scale.

Chiao-Han Lin, Kuang‐Chieh Yen, Hui-Pei Cheng

No abstract is available for this record.

Mark Utting, Liam Kent

We describe the verification of an existing smart contract for a simple casino application, using the Whiley specification and programming language, with a fully automated verification engine based on Boogie and Z3. After finding and fixing several specification and code issues in the smart contract, we are able to verify all the operations of the smart contract.

Md. Zahurul Haq, Zainal Amin Ayub, Zuryati Mohamed Yusoff, Md Abdul Awal Khan

Purpose This paper aims to critically explore the factors influencing the regulation of gambling and cryptocurrencies as part of anti-money laundering (AML) initiatives in Bangladesh. As a member of the Asia/Pacific Group on money laundering, Bangladesh must adopt a risk-based approach to regulate these entities. Design/methodology/approach This study applied an exploratory design and investigated the real nature of the challenge Bangladesh facing in adopting a risk-based approach to regulate gambling and cryptocurrencies. Findings This study demonstrates that current regulatory responses towards gambling and cryptocurrencies in Bangladesh are largely influenced by passive wait-and-see policy instead of a proactive risk-based approach, a measure mandated by the Financial Action Task Force (FATF). It demonstrates that these financial entities, which are poorly regulated because of their unclear legal status in Bangladesh and the regulator’s apparent lack of understanding of the type of threats they pose, may facilitate money laundering. Effective risk-based regulation is required to control potential risks. Research limitations/implications This paper focuses on two specific areas –gambling and cryptocurrencies – which are linked to two specific FATF Recommendations: designated non-financial businesses and professions (DNFBPs) and new technologies. Further research is required to investigate the concern from the perspective of other entities. Practical implications The results of this study will help inform policymakers about ways in which current regulatory approaches may need to be modified to better combat money laundering and financing of terrorism. Originality/value According to the authors’ knowledge, this is the first study aiming to explore challenges Bangladesh confronts in implementing a risk-based approach for DNFBPs and new technologies. Therefore, it provides important insights into the dilemma regulators facing in implementing global AML standards within their traditional legislative and regulatory framework.

Paul Delfabbro, Daniel L. King, Jennifer N. Williams

BACKGROUND AND AIMS: Crypto-currency trading is a rapidly growing form of behaviour characterised by investing in highly volatile digital assets based largely on blockchain technology. In this paper, we review the particular structural characteristics of this activity and its potential to give rise to excessive or harmful behaviour including over-spending and compulsive checking. We note that there are some similarities between online sports betting and day trading, but also several important differences. These include the continuous 24-hour availability of trading, the global nature of the market, and the strong role of social media, social influence and non-balance sheet related events as determinants of price movements. METHODS: We review the specific psychological mechanisms that we propose to be particular risk factors for excessive crypto trading, including: over-estimations of the role of knowledge or skill, the fear of missing out (FOMO), preoccupation, and anticipated regret. The paper examines potential protective and educational strategies that might be used to prevent harm to inexperienced investors when this new activity expands to attract a greater percentage of retail or community investors. DISCUSSION AND CONCLUSIONS: The paper suggests the need for more specific research into the psychological effects of regular trading, individual differences and the nature of decision-making that protects people from harm, while allowing them to benefit from developments in blockchain technology and crypto-currency.

Paul Delfabbro, Daniel L. King, Jennifer N. Williams, Neophytos Georgiou

No abstract is available for this record.

Harun Olcay Sonkurt, Ali Ercan Altınöz

Investment behaviour and gambling overlap from time to time. It is stated that there is a spectrum between gambling and investment behaviour, and there are “speculative” investment tools in the middle of the spectrum. Considering that it presents a higher risk because of its high volatility compared to traditional investment instruments, trading cryptocurrencies can become pathological and gambling-like. This study aims to investigate the pathological trading behaviour and frequency among cryptocurrency investors, to investigate additional gambling disorders, and to investigate the relationship between cryptocurrency investment behaviour and impulsivity. An online questionnaire was created to investigate these issues. In the questionnaire, the Pathological Trading Scale, the South Oaks Gambling Screen Test and the Barratt Impulsivity Scale were all used. A total of three hundred persons were evaluated. We found that total pathological traders were 48.7% of all traders, impulsivity in 18–25 age group was higher, high-frequency traders were more pathological, and their impulsivity was higher; also margin traders and day traders show more pathological behaviour. It seems that an important part of cryptocurrency traders may be pathological, and certain of them may have cryptocurrency addiction, which can be evaluated as a subtype of gambling disorder.Résumé Le comportement de l’investisseur et celui du joueur se chevauchent de temps à autre. On dit qu’il existe un spectre entre ces deux comportements, au milieu duquel se trouvent des outils d’investissement « spéculatif ». Compte tenu de leur risque plus élevé dû à leur plus grande volatilité par rapport aux instruments d’investissement traditionnels, les échanges de cryptomonnaies peuvent devenir pathologiques et s’apparenter aux jeux de hasard. Cette étude vise à analyser le comportement des investisseurs de cryptomonnaies et la fréquence de leurs opérations afin d’examiner d’autres troubles liés à la pratique des jeux de hasard et la relation entre le comportement des investisseurs de cryptomonnaies et l’impulsivité. Un questionnaire en ligne a été créé à cette fin et la Pathological Trading Scale, le South Oaks Gambling Screen Test et la Barratt Impulsivity Scale y étaient utilisés. En tout, 300 personnes ont été évaluées. Nous avons constaté que les joueurs pathologiques représentaient 48,7% de tous les spéculateurs, que l’impulsivité dans le groupe des personnes de 18 à 25 ans était plus élevée, et que les spéculateurs qui effectuaient des transactions plus souvent étaient plus pathologiques et faisaient preuve d’une plus grande impulsivité; de plus, les spéculateurs sur marge et les spéculateurs sur séance affichaient un comportement plus pathologique. Il semble qu’une proportion importante des spéculateurs de cryptomonnaies peuvent être pathologiques, et que certains d’entre eux peuvent être dépendants à l’égard des cryptomonnaies, ce qui peut être évalué comme un sous-type de jeu compulsif.

Matthias Scharnowski, Stefan Scharnowski, Stefan Scharnowski, Lukas Zimmermann

No abstract is available for this record.

Craig Wright

No abstract is available for this record.

Atte Oksanen, Eerik Mantere, Ilkka Vuorinen, Iina Savolainen

OBJECTIVES: Online platforms enable real-time trading activities that are similar to those of gambling. This study aimed to investigate the associations of traditional investing, real-time stock trading, and cryptocurrency trading with excessive behavior and mental health problems. STUDY DESIGN: This was a cross-sectional population-based survey. METHODS: The participants were Finnish people aged 18-75 years (N = 1530, 50.33% male). Survey asked about monthly regular investing, real-time stock-trading platform use, and cryptocurrency trading. The study had measures for excessive behavior: gambling (Problem Gambling Severity Index), gaming (Internet Gaming Disorder Test), internet use (Compulsive Internet Use Scale), and alcohol use (Alcohol Use Disorders Identification Test). Psychological distress (Mental Health Inventory), perceived stress (Perceived Stress Scale), COVID-19 anxiety, and perceived loneliness were also measured. Background factors included sociodemographic variables, instant loan taking, and involvement in social media identity bubbles (Identity Bubble Reinforcement Scale). Multivariate analyses were conducted with regression analysis. RESULTS: Within the sample, 22.29% were categorized into monthly regular investors only, 3.01% were investors using real-time stock-trading platforms, and 3.59% were cryptomarket traders. Real-time stock-trading platform use and cryptocurrency trading were associated with younger age and male gender. Cryptomarket traders were more likely to have an immigrant background and have taken instant loans. Both real-time stock-trading platform use and cryptomarket trading were associated with higher excessive behavior. Cryptomarket traders especially reported higher excessive gambling, gaming, and internet use than others. Cryptomarket traders reported also higher psychological distress, perceived stress, and loneliness. CONCLUSIONS: Regular investing is not a risk factor for excessive behavior. However, rapid online trading platforms and applications were significantly more commonly used by participants reporting excessive behavior and mental health problems. The strong association between cryptomarket trading and excessive behavior in particular underlines the need to acknowledge the potential risks related to real-time trading platforms.

Yunifa Miftachul Arif, Reza Putra Pradana, Hani Nurhayati, Supeno Mardi Susiki Nugroho · 5 authors

A tourism serious game requires a transaction system to handle the transaction process's visualization between players. In this paper, we propose a serious game with a blockchain-based multiplayer transaction system. To integrate the transaction system with the game engine, we use the ethereum platform. In this serious game, ethereum handles the simulation of transaction activities between several characters' choices, including tourists, ticket sellers, jeep drivers, traders, and horse rental. The experimental results show that the gas price variable affects the speed of the transaction process. Meanwhile, setting the gas limit value in this serious game affects the transaction process's success rate between players.

Hee Jin Kim, Ji Sun Hong, Hyunchan Hwang, Sun Mi Kim · 5 authors

Bitcoin has unique characteristics that have inspired people to invest in it as well as distinct drawbacks. With a rapid increase in Bitcoin prices in the short term, more investors enthusiastically began investing in it, raising concerns about a speculative bubble. This study investigated the multiple factors involved in the Bitcoin craze despite concerns about its shortcomings. In what concerns to personality traits and psychological states, online use patterns, and investment patterns, we first hypothesized that Bitcoin investors would show differences in multiple factors when compared to share investors. Based on our assumptions about these differences, we secondly hypothesized that investors’ personality, psychological states, and investment patterns could predict whether they would invest in Bitcoin or shares. In total, 307 respondents completed the research protocol and were sorted into Bitcoin investors (n = 101), share investors (n = 102), and non-investors (n = 104). A self-report questionnaire on demographic data, online use patterns, investment patterns as well as the Fear of Missing Out (FoMO) scale, Temperament and Character Inventory-Revised-Short (TCI-RS), Mood Disorder Questionnaire (MDQ), trait anxiety part of the State-Trait Anxiety Inventory (STAI-T), and the Korean version of the Canadian Problem Gambling Index (K-CPGI) were administered. The results of this study indicated that Bitcoin investments can be attributed to the interaction of multiple factors, among which personality, psychological states, and investment patterns are particularly important. Specifically, the investment pattern is the strongest predictive factor for Bitcoin investment. Bitcoin investors were distinct with regard to higher novelty seeking, higher gambling tendencies, and unique investment patterns. Thus, personality, psychological states, and investment patterns could explain the substantial investments in Bitcoin.

Jonathan Meng, Feng Fu

The statistical concept of gambler’s ruin suggests that gambling has a large amount of risk. Nevertheless, gambling at casinos and gambling on the Internet are both hugely popular activities. In recent years, both prospect theory and laboratory-controlled experiments have been used to improve our understanding of risk attitudes associated with gambling. Despite theoretical progress, collecting real-life gambling data, which is essential to validate predictions and experimental findings, remains a challenge. To address this issue, we collect publicly available betting data from a DApp (decentralized application) on the Ethereum blockchain, which instantly publishes the outcome of every single bet (consisting of each bet’s timestamp, wager, probability of winning, userID and profit). This online casino is a simple dice game that allows gamblers to tune their own winning probabilities. Thus the dataset is well suited for studying gambling strategies and the complex dynamic of risk attitudes involved in betting decisions. We analyse the dataset through the lens of current probability-theoretic models and discover empirical examples of gambling systems. Our results shed light on understanding the role of risk preferences in human financial behaviour and decision-makings beyond gambling.

Avigail Gurin-Schleifer, Ouri Poupko, Ehud Shapiro, Nimrod Talmon

We envision a self-sovereign, grassroots, digital community that grows in a bottom up, decentralized manner, and aim to integrate for it the following previously-proposed building blocks: a mechanism that accepts members into the community while keeping a bounded number of sybils; digital social contracts that define the possible interactions of a community bounded by such a contract; a design for a fault-tolerant distributed ledger implementation of digital social contracts; and a digital social contract for the egalitarian and just minting of digital currency, which also offers a form of universal basic income. We augment these building blocks with a mechanism that allows the community to maintain sovereignty over the economy, by making it sybil-resilient. To do so, we assume that the community has the means for exposing sybils and we extend the basic egalitarian currency digital social contract with means to balance the economy so that money minted by sybils is eventually retrieved and burned. This leads---asymptotically---to distributive justice among the genuine agents, with the amount of money minted being equal to the number of genuine agents, multiplied by the time each agent was a member of the community. We then argue that this approach constitutes a mechanism that deters the creation of sybils and incentivizes sybil hunting.

Kunal Sahitya, Bhavesh Borisaniya

No abstract is available for this record.

Julian Kolb, Adrian Hofmann, Luc Becker

In recent years, the blockchain technology has matured and established new opportunities in the digital world. With the release of the Blockchain 2.0, the Ethereum Network and smart contracts, it is now possible to operate applications decentralized and independently. These applications promise lower transaction costs, better efficiency and higher security. However, there is still a lack of in-depth understanding and standardization within the variety of recently developed smart contracts. In addition, there is still no proper taxonomy that structures the technical elements of a smart contract and makes them comparable. Hence, we develop a smart contract taxonomy using an inductive research approach. Following Nickerson et al. (2013) we analyze the smart contracts of 47 gambling DApps to identify the 18 dimensions and 41 characteristics of your technical and code-based taxonomy. In future research, we will continue to expand the developed taxonomy and include other application areas. Finally, a general taxonomy for research and product development will be available to science and practice, ensuring a consistent and standardized implementation of smart contracts.

Oliver James Scholten, David Zendle, James Alfred Walker

Decentralised gambling applications are a new way for individuals to engage in online gambling. Decentralised gambling applications are distinguished from traditional online casinos in that individuals use cryptocurrency as a stake. Furthermore, rather than being stored on a traditional server, decentralised gambling applications are stored on a cryptocurrency’s blockchain.Previous work in the player behaviour tracking literature has examined the spending profiles of gamblers on traditional online casinos. However, parallel work has not taken place in the decentralised gambling domain. The profile of gamblers on decentralised gambling applications are therefore not known.This paper explores 2,232,741 transactions from 24,234 unique addresses to three such applications operating atop the Ethereum cryptocurrency network over 583 days. We present spending profiles across these applications, providing the first detailed summary of spending behaviours in this technologically advanced domain. We find that the typical user spends approximately \$110 equivalent across a median of 6 bets in a single day, although heavily involved bettors spend approximately \$100,000 equivalent over a median of 644 bets across 35 days. Our findings suggest that the use of decentralised gambling applications typically involves lower and less frequent expenditures than other online casinos, but that the most heavily involved players in this new domain spend substantially more. Our findings also demonstrate the use of these applications as a research platform, specifically for large scale longitudinal in-vivo data analysis.

Sinyong Choi, Kyung-Shick Choi, Yesim Sungu-Eryilmaz, Heekyung Park

The Darknet and Bitcoins have been widely utilized by those who wish to anonymously perform illegal activities in cyberspace. Restricted in many countries, gambling websites utilize Bitcoin payments that allow users to freely engage in illegal gambling activities with the absence of a formal capable guardian. Despite the urgency and limited knowledge available to law enforcement regarding this issue, few empirical studies have focused on illegal gambling websites. The current study attempts to examine the characteristics and operations of online gambling websites on both the Darknet and Surface Web, which allow Bitcoin payments. The findings suggest that both websites on the Surface Web and Darknet have similar and distinctive features that attract and encourage online users to engage in extensive illegal gambling activities and potentially other illegal activities as well. The study concludes with policy recommendations to remedy the issue of online gambling.

Dookie Cynthia

In 2008, bitcoin disrupted the transactional ecosystem with its value propositions. However, sustaining autonomous, deregulated systems in markets filled with laws and regulations has had its challenges. There are also open questions of scalability, resilience, availability, speed and finality of transactions. Sound technical components have emerged but we need to take this one step further and integrate the units to provide an accepted packaged solution. Using a game application as an entry point, we propose a simple, inclusive asset transfer system which will stimulate adoption and create traction in the distributed ledger universe.

Klaus Grobys, Juha-Pekka Junttila

This is the first paper that explores lottery-like demand in cryptocurrency markets. Since recent research provides evidence that cryptocurrency returns appear to be short-memory processes, we modify Bali, Cakici and Whitelaw’s (2011) and Bali, Brown, Murray, and Tang’s (2017) MAX measure and employ a weekly forecast horizon and daily log-returns from the previous week to calculate the metric for our portfolio sorts. From an econometric point of view, this study proposes statistical tests that are robust to unknown dynamic dependency structures in the cryptocurrency data. Our results show that average raw and risk-adjusted return differences between cryptocurrencies in the lowest and highest MAX quintiles exceed 1.50% per week. These results are robust after controlling for Bitcoin risk or potential microstructure effects. Our findings are important also from a theoretical point of view because they suggest that parallel to stock markets, similar behavioral mechanisms of underlying investor behavior are present also in new virtual currency markets.

Zhifeng Jia, Rui Chen, Jie Li

In this paper, we design DeLottery, a decentralized lottery and gambling system based on block chain technology and smart contracts. Lottery is a classical form of entertainment and charity for centuries. Facing the bottleneck of the combination between lottery and information technology, we use smart contracts and blockchain in decentralized, intelligent, and secure systems for lottery industries. Moreover, we are inspired by the algorithm of RANDAO, an outstanding way of random number generation in blockchain scenario. The components and the functions of the novel system are described in details. We implement DeLottery in a blockchain network and show functioning procedure and security of the proposed lottery system.