Blockchain Papers

Gerard H. Th. Bruijl

No abstract is available for this record.

David Vitt

No abstract is available for this record.

Felipe de Oliveira Simoyama, Ian Grigg, Ricardo Luiz Pereira Bueno, Ludmila Cavarzere De Oliveira

Legislation generally requires public agencies to account for their activity to the public. Among the many duties imposed by legislatures around the world are requirements for transparency in procurement of services, budgeting and presentation of accounts. However, agencies in countries with high corruption problems have trouble complying with the legislation, especially in smaller agencies. Moreover, it is typically infeasible for national auditors to audit all the accounts rendered, and instead, they select a small sample for audit based on their level of risk. Another problem is that the presentation of accounts occurs once a year for all agencies, leading to a seasonal demand with significant lag time between auditing and accounting period. In this study, we present a non-technical framework based on the emerging technology of blockchain that could be a solution to all these concerns. We apply it within the context of Brazilian legislation and the Federal Court of Accounts of Brazil (TCU), although the proposal is applicable across a wide range of countries facing severe corruption.

Chinelle van der Westhuizen

Virtual and digital crypto-currencies, specifically Bitcoin, were developed by an anonymous pseudonym ‘Satoshi Nakamoto’ in 2009 and have become a developing form of payment system used by businesses and consumers. Unlike traditional payment systems, Bitcoin is a peer-to-peer network with unique characteristics. Bitcoin is a private, anonymous and decentralised network that is intended to work independently from a government or banking authority. Bitcoin is therefore a network dependent upon mathematical algorithms between two users and managed through a process called ‘mining’, which is then stored within a user’s private ‘wallet’. This innovative technology offers numerous opportunities as a payment system; however, the legal challenges and risks it creates can be detrimental to consumers and businesses that use Bitcoin as an alternative payment system. The legal challenges of Bitcoin cause uncertainty for governments, businesses and consumers on the treatment of Bitcoin as an acceptable means of payment in Australia. Therefore, the purpose of this thesis is to determine whether Bitcoin is a form of ‘money’ and as such ought to be accepted as legal tender by the Australian Government under specific legislative instruments. Furthermore, this thesis will examine how Bitcoin is used to facilitate money laundering activities. Moreover, this thesis considers the treatment of tax within Bitcoin transactions and how unregulated Bitcoin transactions can be used to avoid tax. In addressing these legal issues and concerns, consideration is given to the possible regulation of virtual and digital currencies like Bitcoin in Australia. This thesis considers Australian banking, money laundering and taxation legislation and examines whether these regulatory frameworks are suitable to include Bitcoin as a payment system in order to limit money laundering and tax evasion activities within Bitcoin payment systems. Additionally, this thesis examines regulatory approaches to virtual and digital currencies in foreign jurisdictions, namely the United States, Canada and the European Union in order to gain some insight into how other countries are regulating Bitcoin as a payment system. This thesis arrives at a number of conclusions relevant to the possible regulation of Bitcoin in Australia. Firstly, it identifies Bitcoin as money and a form of payment system, but not legal tender and therefore not an accepted legal currency in Australia, which considers self-regulation of Bitcoin as a payment system a possibility. Secondly, it recognises that existing money laundering legislation can be amended to include Bitcoin as a payment system through which money laundering can take place and where Bitcoin exchange platforms are required to implement a ‘know-your-customer’ policy or ‘know-your-user’ policy. Thirdly, this thesis identifies that Bitcoin is recognised as a commodity for tax purposes and that suitable guidelines can be introduced on how to deal with tax activities and tax evasion within Bitcoin payments. Lastly, it is also recommended that international organisations such the Financial Action Task Force and International Monetary Fund could provide clarity on the treatment of virtual and digital currencies, specifically Bitcoin, as a payment system and legal currency, given that Bitcoin in global and borderless. Therefore, this research contributes towards how the Bitcoin network operates, its legal challenges and regulation in order to further research in this area of law.

Authors unavailable

No abstract is available for this record.

Elizabeth Sara Ross

This Note examines the disruptive effects that distributed ledger technology will have on payment systems and the financial services industry. It discusses how financial technology companies and banks will need to adapt to ensure that American consumers and banks, as well as the American economy at large, remain secure and efficient within an increasingly online and global financial system. This Note argues that the disjointed digital currency licensing regimes and complex landscape of state-by-state money transmission licensing directly threaten to stifle innovation, capital formation, consumer protection, and national cybersecurity. To ensure the U.S. remains competitive in the global financial revolution, and to ensure consumer protection, this Note advocates for the U.S. to adopt a principles-based approach to regulating innovative payments and financial technology (“FinTech”). It concludes that a limited purpose national FinTech charter should be implemented in the U.S. and discusses how it would correspond with the joint proposed rule by the Office of the Comptroller, Department of Treasury and Federal Deposit Insurance Corporation for cybersecurity standards.

Runar Alvseike, Geir Arne Gjersvoll Iversen

Bitcoins original idea proposed a trustless monetary system, without the need of
\nintermediaries. In recent years, these very intermediaries it originally tried to circumvent, have
\ngained an increased interest in Bitcoin’s underlying technology, the Blockchain. It presents a
\ndecentralized database technology, suitable for exchanging value in an untrusted environment.
\nConsequently, it introduces an innovation in both economics and information technology.
\nIn this explorative study, we aim to investigate how Bitcoin and Blockchain technology may
\nimpact the monetary and financial system. By conducting 20 in-depth interviews from a broad
\nrange of stakeholders and a literature review in this new topic of interest, we have identified
\ntwo main themes introduced with this new technology. First, we seek to understand how the
\nfuture of money could unfold with Cryptocurrencies and Central Bank issued Digital Currency
\n(CBDC). The former is recognized to have a series of specialized architectures, spanning from
\nsimple monetary transactions to complex platforms enabling a decentralized economy to
\nevolve. CBDC is not necessarily reliant on blockchain technology, but the of digitally issued
\ncurrencies and blockchains introduces new fiscal and monetary policy toolkits. There are
\nhowever a series of intricate questions that needs to be addressed before CBDC could act as a
\ncomplement or replacement for physical currency. Lastly, we explore how the future of
\nfinance will be affected by blockchain technology and the cryptoeconomy. Banks may be
\nfacing increased competition from new entrants, where blockchain technology may facilitate
\nreduced costs in terms of regulatory compliance, efficiency in transactions and settlement, and
\nreconciliation. Moreover, new financial services are introduced by financial technology
\ninnovation. This might change the business model of banks and other financial institutions
\ndrastically. Furthermore, cryptocurrencies introduce new funding possibilities and enables
\norganizations to evolve with no governing body. This might facilitate a new economic system,
\ncalled the cryptoeconomy.
\nDevelopment in blockchain technology is mentioned to be at the same maturity stage as the
\nInternet by the early 1990s. There are several uncertainties regarding its future applications.
\nHowever, smart contracts seems to be an interesting application, facilitating automation in a
\nrange of applications.

Sushant Nagpal

No abstract is available for this record.

Mark M. Lennon, Daniel Folkinshteyn

Over the past 15 years, NASDAQ, the world’s first all-electronic stock exchange, has actively engaged in efforts to serve the global digital economy by expanding its reach beyond its original domestic U.S. market. They have attempted to create a global 24/7 trading platform, to serve customers in the U.S., Japan, and Europe. These efforts have met with varying degrees of success. More recently, the renamed NASDAQ OMX Group has been experimenting with the disruptive fintech (financial technology) Bitcoin and its underlying technology blockchain to develop robust trading solutions, which drastically reduce transaction and record keeping costs. In this paper we analyze the various approaches taken by NASDAQ in its expansion ventures. We describe the similarities and differences in these undertakings, in order to identify successful strategies for firms who desire to increase the quality of their products while increasing efficiency and reducing the costs of their services. Drawing upon the strategy literature, we also develop theoretical models on how markets operate, and derive a series of propositions about the interplay between technology and markets.

David Lee Kuo Chuen

No abstract is available for this record.

Syeda Sumbul Hossain, Samen Anjum Arani, Md. Tanvir Rahman, Touhid Bhuiyan · 6 authors

In every nation, democratic elections are a momentous and weighty occurrence, and the voting system that is now in place requires the use of ballots or electronic voting machines (EVM). Transparency, poor turnout, vote manipulation, distrust of electoral organizations, fabrication of unique IDs (voting party IDs), and delays in posting results are some of the issues that arise as a result of these procedures. The matter of safety is of the utmost importance. When considering the installation of a computerized voting system, voter confidentiality has always been one of the most important concerns. There is no question regarding the system's capability to secure itself in contrast to prospective assaults and safeguard data in the face of such big choices. Utilization of blockchain technology is one approach that might be taken to resolve security concerns. The blockchain technology has an endless number of different uses that might be implemented. The technology known as blockchain is a distributed ledger that makes it possible for peer-to-peer networks all over the world to handle digital assets. In this context, distributed ledger technology represents an intriguing development. A grouping of all transactions is referred to as a block. Immutability, decentralisation, security, transparency, and anonymity are some of the outstanding properties offered by blockchain technology. The combination of blockchain technology with smart contracts has shown promise as a viable option for the development of trustworthy and open-source electronic voting systems. In this article, we demonstrate how to use blockchain technology with the help of a wallet and the Solidity programming language to build an electronic voting application. The programme was designed as a smart contract for the Ethereum network. In order to avoid having the same person vote twice, the user's wallet will only hold a certain number of tokens (gas), which will be depleted each time the user casts a vote. This article talks about the pros and cons of using blockchain technology. It also shows a practical solution in the form of a web app for voting and analyses its limits.

Antti Lehtovirta

The objective of this research is to provide the reader an overview of the distributed ledger technology (DLT), its fundamental challenges, the current and potential future uses in the financial industry, and to suggest future fields of the topic to be researched. The first task of this thesis is trying to answer, “how will the distributed ledger technology impact the financial industry”. Although the thesis will not cover exhaustively all the financial industry’s needs towards the distributed ledger technology, it will give an overview of the DLTs probable usage in the industry. By reading the thesis and especially its use cases from the fields of private equity, and settlement and clearing of public securities’ trading, the reader should get a more accurate answer to the secondary question “how can the public securities and private equity markets use distributed ledger technology in the near future”. The question about the distributed ledger technology’s impact on the whole market is complicated. Despite the amount of financing this technology has acquired in the recent years, there are no new, disruptive or widespread usages for the DLT in the financial industry. However, it is expected that during the next five years, the DLTs become reality. This is due to their enormous potentiality in security, efficiency and automation, which all could save the financial industry up to 50% of their current costs. Additionally, during the same time period, it is highly expectable that some financial service applications, basing on the DLT, will be presented for the consumers by the players from outside the traditional markets. To answer the secondary question, the both markets will face significant changes during the upcoming years: public securities’ post-trade processes will benefit from the more secure and rapid settlement, whereas the private equity market’s whole nature can become a more accessible for both the investors and the businesses seeking for financing.

Maria Letizia Perugini

Italian Abstract: Questo studio si propone di analizzare il complesso delle novità introdotte al sistema dei pagamenti e al trasferimento di diritti da Distributed Ledger e Blockchain, in una prospettiva che tenga conto delle applicazioni di mercato di queste innovazioni tecnologiche e della tutela giuridica degli interessi economici e delle posizioni soggettive che ne derivano. In particolar modo, l’opera vuole stimolare la discussione volta alla definizione di un quadro normativo socialmente adeguato che sostenga l’efficienza di questi strumenti in un’ottica di scambio economico globalizzato. English Abstract: This essay aims at analyzing the ensemble of innovation introduced by Distributed Ledger and Blockchain to the payment system and the transfer of rights, in a perspective considering the market applications of these new technologies and the legal protection of deriving economics interests and individual rights. Purposely, our dissertation aspires to encourage the discussion for the definition of a socially adequate legal framework sustaining the efficiency of these instruments in a global exchange perspective.

Philip Treleaven, Bogdan Batrinca

Efficient financial regulation is crucial to the future success of the financial services industry and especially the rapidly evolving new financial technology (FinTech) area. The concept of “algorithmic regulation, ” modelled on “algorithmic trading systems” [Treleaven et al. (2013)], is to stream compliance, social networks data, and other kinds of information from different sources to a platform where compliance reports are encoded using distributed ledger technology and regulations are “codifiable” and “executable” as computer programs, using the same technology being developed for blockchain smart contracts. In this paper, five areas are discussed: a) an “intelligent regulatory advisor” as a front-end to the regulatory handbook; b) “automated monitoring” of online and social media to detect consumer and market abuse; c) “automated reporting” using online compliance communication and big data analytics; d) “regulatory policy modeling” using smart contract technology to codify regulations and assess impact before deployment; and e) “automated regulation” employing blockchain technology to automate monitoring and compliance. We refer to algorithmic regulation for systems that facilitate compliance and regulation decision-making in financial services using advanced mathematical tools and blockchain technology.

Robert Leonhard

No abstract is available for this record.

Anastasia Olegovna Barinova, Sergey Zapechnikov

Currently, business processes become more and more complicated. Data used in these processes circulates mainly through the digital communications. Due to these conditions some kind of electronic contracts for business deals becomes necessary. Smart contracts should describe a set of conditions, implemented through some events in the real world and digital systems. The most important requirement for this technology is privacy ensuring. In this work we have explored existing projects of privacy-preserving smart contracts, defined comparison criteria, compared projects and made a conclusion about options required for smart contract frameworks.

Marc Sel, Henning Diedrich, Sander Demeester, Harald Stieber

This paper explains the main features of and motivation for the “report once” demonstrator1 shown at the 2017 Data For Policy conference. It shows how Ethereum2 smart contracts, based on the semantics and algorithmic representations defined in ACTUS3 can implement “digital doppelgängers” of financial contracts. <br> <br> The implementation makes use of a private4 Ethereum blockchain, with smart contracts written in Solidity.5 The limitations of using ACTUS in a semi real-time scenario are explored, as well as how to overcome these limitations. <br> <br> The major innovation, visualized by the demonstrator, is that compliance reports can be generated in semi realtime, using the information present in the “digital doppelgängers”, residing in the blockchain. <br> <br> The demonstrator supports various use cases, illustrated through the narration of stories. In these stories, Alice, Bob and Eve are contracting parties, Romeo acts as regulator, and the narrator tells the stories. The stories cover trading a Bond, trading an Interest Rate Swap (IRS), the defaulting of a party (i.e. a payment stop), and various types of regulatory reports. <br>

Chris Reed, Uma M Sathyanarayan, Shuhui Ruan, Justine K. Collins

Blockchain technology allows the creation of distributed ledgers. These distribute control among the players rather than requiring a centralized database, and so can reduce costs and speed-up transactions. However, when it is used for assets which exist outside the blockchain itself, an unmodified adoption of the technology would bypass legal and regulatory requirements which, for these kinds of assets, cannot be bypassed without fundamental change to the law. Building those requirements into any blockchain-based system introduces features which are not necessary for performing its core functions, and we call these ‘legal impurities’. The most important legal impurities required are those relating to identification of the parties, and introducing the ability of a trusted third party to make modifications to the ledger. Not only does introducing these legal impurities make fundamental changes to the concept behind blockchain, but it is also essential that they are implemented in ways which do not threaten the integrity of the blockchain as evidence. This article has been produced by members of the Microsoft Cloud Computing Research Centre, a collaboration between the Cloud Legal Project, Centre for Commercial Law Studies, Queen Mary University of London and the Computer Laboratory, University of Cambridge. The authors are grateful to members of the MCCRC team and to attendees at the fourth Annual MCCRC Symposium (Windsor, September 2017) for helpful comments and to Microsoft for the generous financial support that has made this project possible. Responsibility for views expressed, however, remain with the authors.

Sarah Meiklejohn, Rebekah Mercer

Cryptocurrencies allow users to securely transfer money without relying on a trusted intermediary,&#13;\nand the transparency of their underlying ledgers also enables public verifiability. This openness,&#13;\nhowever, comes at a cost to privacy, as even though the pseudonyms users go by are not linked to their&#13;\nreal-world identities, all movement of money among these pseudonyms is traceable. In this paper,&#13;\nwe present M¨obius, an Ethereum-based tumbler or mixing service. M¨obius achieves strong notions of&#13;\nanonymity, as even malicious senders cannot identify which pseudonyms belong to the recipients to&#13;\nwhom they sent money, and is able to resist denial-of-service attacks. It also achieves a much lower&#13;\noff-chain communication complexity than all existing tumblers, with senders and recipients needing&#13;\nto send only two initial messages in order to engage in an arbitrary number of transactions.

Jonathan Rohr, Aaron Wright

Best known for their role in the creation of cryptocurrencies like bitcoin, blockchains are revolutionizing the way technology entrepreneurs finance their business enterprises. In 2017 alone, tech entrepreneurs raised over $6 billion through the sale of blockchain-based digital tokens, with some sales lasting mere seconds before selling out. In a token sale, also referred to as an “initial coin offering” or “ICO,” organizers of a project sell digital tokens to members of the public to finance the development of new technological platforms and services. After the initial sale, cryptocurrency exchanges scattered across the globe list tokens for trading and facilitate an active secondary market in which wild price fluctuations are common.\nThe recent explosion of token sales could mark the beginning of a broader shift in public capital markets. Blockchains drastically reduce the cost of exchanging value and enable anyone to transmit digitized assets around the globe in a highly trusted manner, stoking dreams of truly global capital markets that leverage the power of a blockchain and the Internet to facilitate capital formation. Lacking homogeneity, the status of tokens under U.S. securities laws is unclear. Although the SEC recently issued a Report of Investigation and has initiated several enforcement actions in which it has found that tokens are securities, confusion still surrounds the boundaries between the types of tokens that will be treated as securities and those that will not.\nIn this Article, we argue that the SEC and Congress should provide token sellers and the exchanges that facilitate token sales with additional regulatory certainty and a sensible path to compliance. Specifically, we outline extrinsic and intrinsic factors that courts and regulators should consider when applying the Howey test to digital tokens, adoption of which would help resolve the uncertainty surrounding tokens that mix aspects of consumption and use with the potential for profit. We further propose that lawmakers adopt both a compliance-driven safe harbor for online exchanges that list tokens with a reasonable belief that the public sale of such tokens is not a violation of section 5 of the Securities Act of 1933 as well as an exemption to the section 5 registration requirement that has been tailored to digital tokens.

Dr Craig S Wright, Stephane Savanah

No abstract is available for this record.

Alexandros Seretakis

Abstract Distributed ledger technology, a variant of which is blockchain technology, represents one of the most important innovations of the FinTech revolution. Academics, policy-makers, and market participants are experimenting with the technology with the aim of enhancing the functioning of financial markets. Industry consortia are being formed by the biggest financial institutions in the world seeking to leverage the use of the technology, in order to improve the clearing and settlement process. Furthermore, central banks in advanced and developing economies are examining the potential of using the technology in market infrastructures operated by central banks and are even exploring the possibility of issuing digital base money. Nevertheless, the widespread adoption of distributed ledger technology as envisioned by its ardent supporters encounters considerable legal obstacles, including the numerous new regulations imposed on financial markets and market participants in the aftermath of the Global Financial Crisis. This chapter seeks to disentangle the myths from the realities of the so-called distributed ledger technology or blockchain revolution and discusses how the legal regime can act both as an impediment and a catalyst to the widespread adoption of the technology.

Alexander Savelyev

No abstract is available for this record.

Dhiren Patel, Jay S. Bothra, Vasudev Patel

A blockchain is a distributed, decentralised database of records of digital events (transactions) that took place and were shared among the participating parties. Each transaction in the public ledger is verified by consensus of a majority of the participants in the system. Bitcoin may not be that important in the future, but blockchain technology's role in Financial and Non-financial world can't be undermined. In this paper, we provide a holistic view of how Blockchain technology works, its strength and weaknesses, and its role to change the way the business happens today and tomorrow.