Blockchain Papers

Usman W. Chohan

No abstract is available for this record.

Cardozo Law Tech Talks

No abstract is available for this record.

Michael Mainelli, Bernard Manson

An abundance of new technologies and new technology interactions has created the buzz surrounding ‘InsurTech’, the emerging combination of insurance and technology. Smart contracts are an increasingly popular point of discussion as people realise that computer code can be embedded in distributed ledger technology. Yet, smart contracts do not need distributed ledgers and could promote straight-through-processing (STP) in the London wholesale insurance Market with current technology. This guide aims to give insurance executives an overview of smart contracts that should aid them in discussions about the technology future of the Market. The guide tries to explain the concept, give a taste of the technology and applications, and look to the longer-term risks and rewards.

Darcy W E Allen

No abstract is available for this record.

Randolph Robinson

In less than a calendar year, initial coin offerings or “ICOs” have become the fastest growing capital market in the world. In 2016, an entity called The DAO raised $160 million by selling crypto-tokens to over 15,000 individual purchasers around the globe. This massive fund raise would give rise to an entirely new capital ecosystem. In 2017, initial coin offerings would explode, raising a collective $3.5 billion in just the first three quarters of the year. All of this was done without a single registration being filed with the SEC, and many of these initial coin offerings — including several $100 million raises — were based on little more than a white paper and few lines of sample code. Welcome to the new Digital Wild West. With the seemingly overnight success of this new funding mechanism, there is little if any legal scholarship addressing initial coin offerings and how, or if, such offerings should be regulated. This article provides a non-technical legal audience with a foundational understanding of how the blockchain works, and the role initial coin offerings play in this new economic ecosystem. The overarching thesis of the article is that our current securities law framework, a framework that dates to the days of the great depression, is ill-equipped to handle this new world of decentralized, global, pseudonymous fund raises on public blockchains. Instead, governmental regulators should be working with core development teams to build a regulatory framework that integrates investor protections directly into the computer code governing these systems. By embracing “code as law,” both regulators and core development teams can protect the innovation being funded by initial coin offerings, while at the same time injecting some much needed investor protections into this new ecosystem. This article begins with an introduction to the coming decentralized world, including an overview of both public blockchain technology as well the Ethereum platform, the primary public blockchain upon which initial coin offerings are being deployed. Central to this introduction is an explanation of how the decentralization and disintermediation brought by the blockchain has the potential to dramatically reshape our economic and social systems. Next, the article explores the recent explosion of initial coin offerings, discussing how these offerings are structured, and how this new funding mechanism, if developed properly, has the promise of democratizing opportunities for economic innovation. The article then examines the SEC’s early statements on initial coin offerings to illustrate the potential problems with applying a dated legal framework to this new technology. Finally, the article concludes that the traditional securities law framework is ill suited for the coming decentralized world because the SEC’s enforcement power over global blockchain platforms is limited. Recognizing that external legal frameworks cannot be forced upon public blockchain platforms, the article argues for a collaborative process where governmental regulators work with core development teams to build a regulatory framework into the very fabric of these platforms, thereby providing investors protection, while at the same time embracing the concept of code as law.

Guan Hc, Ameen Talib

Bitcoin, as a cryptocurrency and an alternative payment solution has gained popularity in certain circles. Existing literature offers discussions that are very specific, oftentimes about Bitcoin-related technical issues, but few takes the perspective of an overview that offers an understanding of how Bitcoin may work to the potential user. Though some level of technical understanding is required to appreciate the workings of Bitcoin, it is not necessary to fully understand Bitcoin’s computational system. The goal of this paper is to provide a working overview to Bitcoin, while highlighting current issues and possible advantages. Published literature is reviewed, along with current developments published on reliable Bitcoin-related websites and news reports, to ensure relevancy and timeliness as far as possible. The research conducted revealed that Bitcoin has many issues to be resolved before it can be taken as a mainstream payment option and currency, but has defined advantages that may only be developed with the advancement of time and consequently technology.

Luca Brunoni, Olivier Beaudet-Labrecque

The purpose of this paper is to provide a brief explanation regarding the authors’ current research in the field of the possible uses of smart contracts in cybercrime, focusing in particular on how the technology could provide a substitute for trust both in client-criminal transactions and in transactions taking place within criminal organizations. The authors share the conviction put forward by Alharby and Moorsel [1] in their 2017 analysis of blockchainbased smart contracts that there is a ”lack of studies on criminal activities in smart contracts”: while quality research does exist, including a paper by Juels et al. [2] detailing three types of such activities that can be facilitated by the technology, it is evident that the subject deserves a more widespread attention. Quality research, in fact, could play an important role in aiding authorities and regulators to understand the issue and react accordingly.

Jeppe Hallgren, Malte Hallgren, S. S. Fisher, Nicolai Garhøj Larsen · 5 authors

No abstract is available for this record.

Roman Beck, Christian Becker, Juho Lindman, Matti Rossi

This report documents the program and the outcomes of Dagstuhl Seminar 17132 "Opportunities and Risks of Blockchain Technologies". Blockchain-based applications such as Bitcoin or Ethereum are emerging technologies, but a dramatic increase in industrial and academic interest in the technology is evident. Start-­ups and large financial players are working intensely on blockchain-based applications, making this one of the most promising drivers of financial innovation. However, the design and implementation of blockchain-based systems requires deep technical know-how in various areas, as well as consideration of economic and societal issues. These opportunities and challenges provided the starting point for the Dagstuhl Seminar where we analyzed and synthesized the current body of knowledge on the emerging landscape of blockchain technologies. We linked cryptographic economic systems to already established research streams around trust-related issues in payment systems and digital currencies, and digital asset management.

Eva Micheler

No abstract is available for this record.

Anastasiia Potekhina, Ivan Riumkin

Blockchain technology and its numerous applications have become a major catalyst of new ideas and solutions for the financial sector. A headline containing the word “blockchain” attracts tons of attention from the media and new start-ups developing something in blockchain receive huge investments. But the theoretical framework for blockchain even for financial industry remains raw and empirical evidence is insufficient. In this study, we explore the theoretical framework for blockchain applications in accounting, identify the core benefits and downside, and discuss its implications for auditing and accounting in general and for credit risk management in particular. The research methodology of this study is designed to satisfy objectivist ontological position and positivist epistemological stance as the notion researched is considered to be primarily external to affected social actors, consequently the quantitative methods are used to establish the relationships between the variables, in turn the variables are produced by a deductive approach from general theories and ideas which exist in abundance in the area but lack empirical observations. A case study was consequently chosen as a research strategy to add a real-life touch to our statistical modelling. In the case study where we use financial data of Ericsson corporation to model theoretical effects of blockchain accounting on credit scores measures we add an empirical dimension to the research in a real-life context. Then we discuss the findings and try to draw general conclusions and identify consequences of the results for different affected parties. As it is always important to do when dealing with new technologies we discuss potential ethical advantages and issues resulting from the technology’s implementation. The study aims to review the current theoretical framework for blockchain accounting in a coherent way as the current literature seems to be disjointed and multiple sources doesn’t focus solely on accounting applications. The empirical study aims to identify a measurable material effect on a very specific problem of credit risk modelling under a broader blockchain accounting paradigm. There are two primarily findings of the research. Fist is the fact that the potential material effect of blockchain accounting on credit scores measures is confined within boundaries of actual volatility of quarterly credit scores and thus the technology will have larger implications for companies with high volatility of credit measures. The second finding is that the implications will be not solely positive in the form earlier identification of financial distress and quicker reaction to resolve the troubles but also may affect the company negatively by exacerbating the economic short-termism problem, the problem that hasn’t been discussed in connection with blockchain accounting before.

Katrin Tinn

No abstract is available for this record.

Lee W. McKnight, Richie Etwaru, Yihan Yu

No abstract is available for this record.

Jim Lindberg

Blockchain technology emerged in 2009 together with the introduction of Bitcoin, the first virtual currency which enabled nodes in a network, that do not necessarily trust each other, to exchange digital value without the use of trusted intermediaries. Since then, the idea of disintermediation and decentralization has gained traction in a large number of applications outside the world of finance and virtual currencies. This thesis is written in collaboration with Scania, an automotive industry manufacturer, with the purpose of gaining a better understanding of blockchain technology and how it can be used in the transportation industry. This thesis proposes five potential blockchain use cases that aim to either enhance Scania’s existing services or to create new services. Out of these five use cases, one is deemed inappropriate in regards to the use of blockchain technology while the other four have potentials benefits. The common denominator among these use cases is that they are decentralized in nature meaning that the use of intermediaries is mitigated. It is recognized that all use cases could be implemented using traditional, centralized databases and that the use of blockchain boils down to a technology choice with its own trade-offs relative to other potential choices. This thesis concludes that blockchain technology offers a new kind of database architecture, the main benefit of which is that it lets several non-trusting entities agree on a common set of facts, without having a trusted intermediary establishing these facts.

Hänninen, Lauri

In this paper, I study the day-of-the-week effect on Bitcoin returns for the period from 2011 through late 2017. Under the trading time hypothesis, returns should be the same for each day of the week. Additionally, I examine how five-day momentum and previous day change in Google trends explain Bitcoin daily returns and return differences between weekends and weekdays. The results show that daily returns are statistically positive on every weekday from Monday to Friday. On the weekends, daily returns are slightly positive, but not at a significant level. Furthermore, I find that the momentum effect is strong during the weekdays but not on the weekends, and previous day change in Google trend does not affect daily returns in a significant manner. My findings indicate that weaker weekend returns cannot be entirely explained by the momentum and Google trend interaction variables.

Christian Janze, Ilya Gvozdevskiy

This exploratory study investigates drivers of the competition between cryptocurrency exchanges. We specifically examine the impact of the market as well as the community on two distinct types of competition - the competition for trading frequency and the competition for trading quantity. In our empirical analysis, we draw on a comprehensive data sample compiled from three data sources. The data includes 24 Bitcoin-fiat currency pairs traded on 79 cryptocurrency exchanges, 71,516 associated posts extracted from a corpus of 2.13bn Reddit posts and Wikipedia search data. We find that the competition for trading frequency is driven by both the market as well as the community whereas the competition for trading quantity is driven solely by the market. We contribute to theory and practice by providing a first understanding of drivers of the competition of cryptocurrency exchanges. In addition, we introduce a new competition measure that is based on the trading frequency.

Jan Andries Lombard

Blockchain technology has received a disproportionate share of technology news reporting in recent years. As the database technology that solves the double-transaction problem for cryptocurrencies, blockchain has conventionalised digital ledger technology thinking and is envisaged to represent the future of financial platforms. Smart contract technology, the blockchain containers for processes and rules, is positioned to expedite automation in the post-trade infrastructure of financial systems.
\nFintech disruptors discern blockchainÕs potential as a mechanism for disintermediation of the insurance value chain as an opportunity for innovation. Industry counter-measures to this threat include coalitions of financial institutions to evaluate potentially disruptive technologies. The fundamental questions facing the insurance industry are the end-consumerÕs trusting beliefs and propensity to use these emerging technologies in policy servicing systems.
\nWe harness technology adoption theories, trust in technology research and the task-technology fit model to measure policyholder perceptions of blockchain among consumers in the life insurance industry. Responses from a sample of life insurance policyholders (n = 199) were used to measure concepts from three IS adoption theories. Our research finds evidence of policyholder trust in the reliability of blockchain technology, an understanding of the benefits of the technology and a willingness for it to be used in policy servicing.

Navroop K. Sahdev

Blockchain, the technology behind Bitcoin, promises to be nothing less than Internet 2.0. The financial services industry, in particular, is preparing for the disruption blockchain/distributed ledger technology promises to cause. In the current business environment, the majority of startups and small businesses have to look for alternative sources of funding given that ‘going public’ is increasingly expensive. The crowdfunding space has seen tremendous growth as an alternative way to raise capital by businesses. However, these crowdfunded shares cannot be traded for 7-10 years on average on any given platform in the U.S. currently. To build a trading platform on the blockchain which is completely P2P, immutable, fully transparent and low cost presents some key design issues. In particular, the issue of liquidity - and price discovery - on the blockchain continues to be a puzzle. At the same time, the proposition of removing middlemen from equities trading is a very attractive one, streamlining the process of capital formation with higher market efficiency. The current paper addresses the following key questions: How can a DLT trading platform ensure adequate liquidity? What would be the process of price discovery? While some recent studies hail blockchain technology as a boom for market liquidity, it is not immediately clear what the impact of P2P trading would be on the prices of various stocks. There are no ‘solutions’ just yet. At the same time, the lack of regulation around trading on the blockchain creates an environment of uncertainty for all players. In particular, the implementation of such a platform can revolutionize capital formation and build robust markets in both developing and developed countries where crowdfunding has proven to be a successful model. While my research is targeted at solving a very specific pain point for both researchers and companies working on distributed ledger technology, ultimately, it would be a significant step forward towards onboarding underserved communities across the world who don’t have access to financial services.

Wulf A. Kaal, Craig Calcaterra

No abstract is available for this record.

Neil Shroff, Padma Venkataraman

No abstract is available for this record.

Taneli Hukkinen, Juri Mattila, Juuso Ilomäki, Timo Seppälä

Abstract This report documents a blockchain application developed for the energy sector that enables distributed market coordination for decentralized energy systems. As its core element, it utilizes Ethereum-based smart contracts to facilitate market matching between individual producers and consumers of electricity. The motive for this application was to understand the process of developing blockchain applications with industrial partners. Moreover, the purpose of this exercise was to examine whether Ethereum-based smart contracts could be effectively utilized for similar applications in industry and society at large. The application and the discussions during its development indicate that similar horizontal market structures may spring up in value chains in which the dynamicity of the market is growing and in which the roles of the market actors are shifting from fixed roles towards switch-role markets.

Martin Walker, Jose Luu

No abstract is available for this record.

Chris Berg, Sinclair Davidson, Jason Potts

No abstract is available for this record.

Luis Ibáñez, Elena Simperl

No abstract is available for this record.