Janet L. Hartley, William J. Sawaya, David Dobrzykowski
Purpose Despite blockchain's potential supply chain benefits, few organizations have moved beyond pilot projects. The paper aims to explore blockchain adoption intentions for supply chain applications using two theoretical perspectives: innovation diffusion theory (IDT) and institutional theory (IT). Design/methodology/approach Based on theory, five propositions were developed addressing the intention to adopt blockchain. The propositions were tested using scenario-based experiments with supply chain professionals. To provide additional insights, interviews with 21 supply chain professionals in 15 organizations representing 8 industries were content analyzed. Findings Experiments suggest that the intention to adopt blockchain is higher when there are government regulations regarding product origin, organizations are using updated cloud-based information systems and organizations are working with third-party consultants. The content analysis suggests that organizations that face normative pressures to adopt blockchain supply chain applications and recognize blockchain's relative advantage, compatibility and complexity are more likely to be actively seeking information about and adopting blockchain supply chain applications. The authors synthesize findings and provide new propositions to guide future research. Originality/value Using a multi-method approach, the study provides an important window into supply chain managers' perceptions of the necessary conditions to support organization-level blockchain adoption. The findings also indicate key characteristics present in supply chain networks poised for blockchain adoption.
Blockchain is a very attractive technology since it maintains a public, append-only, immutable and ordered log of transactions which guarantees an auditable ledger accessible by anyone. Blockchain systems are inherently interdisciplinary since they combine various fields such as cryptography, multi-agent systems, distributed systems, social systems, economy, and finance. Furthermore, they have a very active and dynamic ecosystem where new blockchain platforms and algorithms are developed continuously due to the interest of the public and the industries to the technology. Consequently, we anticipate a challenging and interdisciplinary research agenda in blockchain systems, built upon a methodology that strives to capture the rich process resulting from the interplay between the behavior of agents and the dynamic interactions among them. To be effective, however, modeling studies providing insights into blockchain systems, and appropriate description of agents paired with a generic understanding of their components are needed. Such studies will create a more unified field of blockchain systems that advances our understanding and leads to further insight. According to this perspective, in this study, we propose using a generic multi-agent organizational modeling for studying blockchain systems, namely AGR4BS. Concretely, we use the Agent/Group/Role (AGR) organizational modeling approach to identify and represent the generic entities which are common to blockchain systems. We show through four real case studies how this generic model can be used to model different blockchain systems. We also show briefly how it can be used for modeling three well-known attacks on blockchain systems.
Centralized marketplaces run on a process where a single authority has control over all activity. They suffer from limitation such as- mandatory fees to be paid to the platform for listing and selling items, lack of privacy and control over account, improper transaction security and so on. This paper presents a decentralized application aiming to reduce these drawbacks using Ethereum blockchain. It was implemented using truffle evolvement framework with solidity language. Ethereum smart contracts contain all functions of this application. Client-side application was created through an API called web3.js. Analytical analyses of this application using Kovan test network show least transactional fees reported in literature till date. The application was shown to have average transaction fee of 0.1524472 (eth) with average run time of 3.5 seconds and average gas consumption of 4.6 gwei, these are the best results obtained till date for such system ensuring cost effectiveness and reducing time complexity. The contract making time was less than a second. Comparison with well-known centralized online marketplaces revealed that proposed system was more economical than current centralized online applications in terms of profit margin.
The Decentralized Finance (DeFi) ecosystem has recently been touted as a potential replacement for the existing financial system, with the monetary equivalent in this ecosystem based on various token concepts and infrastructural protocols. However, questions remain regarding the systemic risk of this ecosystem, and closer examination reveals interesting parallels to the concept of systemic risk in established financial systems. There is a need for research to examine important additional dimensions in relation to DeFi. This paper addresses systemic risk in DeFi, presenting the first holistic research framework on the topic, as well as the first empirical indications in order to create foundations for further research.
FengQin ZhuanSun, Jiaojiao Chen, Wenlong Chen, Yan Sun
With the development of society, e-commerce competition has become increasingly intense and has ascended to the level of the ecosystem. Therefore, it is extremely significant to study the mechanism of evolution and balance for the e-commerce ecosystem. Simultaneously, blockchain technology is essentially a consensus mechanism, the core idea of which is decentralization, but it is actually the deconstruction of privileges and authority. Especially, the influence on the e-commerce ecosystem cannot be underestimated. Blockchain technology ultimately changes not only technology, but a comprehensive reconstruction of various industries. Building an e-commerce information ecosystem based on blockchain can promote the healthy and sustainable development of e-commerce information ecology. This work combines the definition and technical characteristics of blockchain, discusses the blockchain-based e-commerce information ecosystem model, and discusses how to achieve the ecological balance and system evolution of e-commerce under the background of blockchain. According to the internal problems of the e-commerce ecosystem, three evolutionary paths are proposed in this work. First, consider the timeliness of the information and construct a full-process information channel. Second, remove central nodes and build a safe and efficient block payment. Third, solve the blind zone in the field of logistics and create efficient and transparent intelligent logistics. This work can provide an effective reference for the development of e-commerce.
Purpose This paper aims to design, build and evaluate a blockchain platform in the accounting domain, taking an ecosystem perspective. To achieve this aim, the research provides evidence for developing a decentralised architecture rooted on blockchain technology, designing a proof of concept and modelling an accounting blockchain-based system. Design/methodology/approach Moving from the analysis of previous literature and leveraging on the design science approach, this paper provides a framework grounded on the main pillars of blockchain and accounting functions, identifying technical and non-technical issues that must be addressed embrace blockchain technology's full potential. Findings We propose and discuss a conceptual framework for a blockchain-based accounting context, moving from the identification of a typical accounting scenario. The framework is organised around three scalable levels: the first level is a technological infrastructure based on a distributed database with peer-to-peer storage; second, in the intermediate level, increasing control levels are assured through permissions and validation and third, in the higher level, the system provides the integration of business and security applications. The deployment of this system relies on a private network of nodes that validates transactions. Practical implications The proposed conceptual framework about blockchain development in accounting allows closing the knowledge gap between blockchain developers and accounting experts by suggesting technological and strategic issues for practitioners. Originality/value We provide practical guidelines to design and adopt blockchain in the accounting domain.
The distributed ledger technology (DL T) secures data and the execution of program code in a decentral network. This enables new forms of business cooperation without the need of central intermediaries. However, the design process of DLT applications is not a simple task. The engineering process is burdened with the responsibility of choosing a suitable distributed ledger implementation, that will cope with the environmental limitations and transaction loads. The nature of the distributed ledger technology makes an exchange of the technology base at a later point expensive and complicated, since every network participant needs to agree to the change. That makes prototyping and applied field tests difficult. Stochastic simulation is a means that allows to simulate complex systems that are affected by randomly occurring events. In this paper, we contribute to the advance of using stochastic simulation to support DLT application engineering processes by 1) presenting a structured approach in applying stochastic simulation, that is also configurable depending on individual evaluation goals, 2) use hypothesis tests to assess the model quality of the Ethereum block generation process, when using homogeneous Poisson processes and 3) discuss concrete measures that help assessing the feasibility of implementing an application on the Ethereum blockchain, which is demonstrated for German waterway transportation processes.
As the conversation around programmable money has developed, many have argued that digital currencies built on distributed ledger technology — and the secure, automated, 24/7/365 and realtime environment this provides — are needed to unlock the solution. This paper, however, proposes an alternative way forward. Pointing to the various innovations developed and launched by the payments industry over the last decade, this paper argues that rather than waiting for digital currencies to reach maturity, it makes more sense to explore how existing payments tools can be used to create programmable money. Indeed, the paper suggests that by leveraging such recently delivered building blocks as instant payments, open-banking application programming interfaces and request to pay, the industry can create programmable money already — with the added benefit of faster time to market. Specifically, the paper contends that request to pay, and the underlying four-corner model that creates a level playing field for solution providers, is the best means to drive forward the programmable money journey.
Current work in the field of smart contracts is primarily aimed at developers and directly connected to an underlying cryptocurrency. Those self-enforcing contracts are suitable for financial applications, but often disregard regular agreements that do not rely on digital money or are difficult to specify in the form of program code. In order to promote social interaction and self-organization for all types of users, we present Fides, a framework for creating contracts based on natural language that focuses on security and privacy. The use of natural language, detached from the actual payment process, allows everyone to create digital contracts inside a decentralized peer-to-peer network without relying on an inefficient Blockchain solution. These agreements are not only intended for interactions between humans, but can also be established between devices by automation.
Despite being one of the fastest-growing digital assets in the present day, investment in cryptocurrencies is still a matter of questionable interest. Therefore, the present study intends to study the behavioural intention of Generation Z Indians towards investment in cryptocurrencies. With the integration of Rogers’ Diffusion of Innovation Theory and the Technology Acceptance Model, the study analyses the behaviour of respondents aged between 18 and 23. Data was collected from 392 respondents using the street-intercept data collection method, which was further tested using structural equation modelling and associated tests. The study finds that complexity, compatibility, and observability influence perceived usefulness and perceived ease of use, which further influence behavioural intention. Besides offering practical implications for crypto exchanges and online trading platforms, it is also found to be novel as it integrates the two most significant theories of technology adoption, contributing significantly to the existing literature.
DeFi, short for decentralized finance, is a new paradigm that enjoys increasing popularity in the financial world. DeFi posits that financial services should not rely on centralized intermediaries but should be provided by users for users. This is done by deploying software components to a decentralized peer-to-peer system which is grounded on blockchain technology. This introductory text discusses the origins of DeFi and delineates DeFi characteristics from those of traditional finance. Several examples of DeFi applications are given, the disadvantages resulting from this paradigm are discussed, and an outlook is provided.
Purpose The objective of this study is to examine the nature of cryptocurrencies, risks involved in using it due to its volatile nature, advantages, disadvantages and its functions as money. Design/methodology/approach This is an inductive approach to a descriptive analysis (Qualitative research). In order to come to an adequate conclusion, we reviewed several studies and articles previously published in this field related to our research questions, and then explored the nature of Cryptocurrencies, their advantages and disadvantages, risks associated with cryptocurrency usage and their user-friendliness in Saudi Arabia. Findings The findings of this study reveal that anonymity and concealment are important aspects of cryptocurrencies. This system does not follow a transparent process that can make it parallel to conventional fiat currency. Research limitations/implications Although this study focuses on the issue of trust, it fails to recognize more technological factors hampering its transaction mechanism instead of enhancing it, owing to a lack of facts and knowledge. Practical implications Like conventional transaction system users must sign their crypto transactions that others must duly verify easily. Once a promise is made, one will not be able to back out of it until it is protected from revocation by the signer. Originality/value In comparison with reviewed literature, this study focuses more on the issue of volatility, which accounts for the fact that cryptocurrency has not been accepted as a permanent tool of monetary policy. Additionally, the study finds that the Saudi public is largely pessimistic toward such currencies.
Governance for centralized organizational structures has long roots and well-developed frameworks, including for various specialty areas, such as IT or data governance. However, the introduction of blockchain technology as a supportive tool for implementing decentralized organizations requires a renewed focus for research in the area. The paper utilizes empirical data from blockchain ecosystems in the form of white papers (public communique of intention) to analyze their governance intentions. The empirical findings are based on a review of 241 blockchains and distributed ledger technology white papers, out of which 67 include explicit descriptions of how governance should be organized in the ecosystem. Our empirical research distinguishes between three categories of governance: objectives, mechanisms, and stakeholders. We further identify 28 features for these categories, which are described in an open encoding format. Hence, the paper contributes to the emerging blockchain research field, particularly to the decentralized aspects of blockchain governance research. This research also reveals that blockchain governance does not receive the attention it should as a large majority of ecosystems have not disclosed their governance intentions. The results can be utilized as a framework for future research. The results can also be helpful for industry when designing and developing governance systems.
David M. Herold, Sara Saberi, Mahtab Kouhizadeh, Simon J Wilde
Purpose In response, the purpose of this paper is to provide theoretical frameworks about the organizational uncertainty behind what and when to adopt blockchain technology and their implications on transaction costs. The immature nature and the absence of standards in blockchain technology lead to uncertainty in government organizations concerning the adoption (“what to adopt”) and the identification of the right time (“when to start”). Design/methodology/approach Using transaction cost theory and path dependency theory, this paper proposes two frameworks: to assess transaction cost risks and opportunities costs; and to depict four different types of transaction costs outcomes regarding blockchain adoption. Findings This paper identifies various theoretical concepts that influence blockchain adoption and combine the two critical constructs of “bounded rationality” and the “lock-in effect” to categorize the multiple transaction costs outcomes for blockchain adoption. Research limitations/implications Although existing research in blockchain highlights mainly the potential benefits of blockchain applications, only a little attention has been given to frameworks that categorize potential transaction costs outcomes under uncertainty, in particular from organizational theorists. Originality/value Both frameworks advance the understanding of the decision-making behind blockchain adoption and synthesize the current literature to offer conceptual clarity regarding the varied implications and outcomes linked to the uncertainty regarding transactions costs stemming from blockchain technology.
In this paper, we use a Delphi approach to investigate whether, and to what extent, blockchain-based applications might affect firms' organizations, innovations, and strategies by 2030, and, consequently, which societal areas may be mainly affected. We provide a deep understanding of how the adoption of this technology could lead to changes in Europe over multiple dimensions, ranging from business to culture and society, policy and regulation, economy, and technology. From the projections that reached a significant consensus and were given a high probability of occurrence by the experts, we derive four scenarios built around two main dimensions: the digitization of assets and the change in business models.
Abstract This paper investigates whether the application of the latest guidance of the Financial Action Task Force (FATF) for regulating cryptocurrencies may engender unintended consequences at odds with the initial purposes of transparency and technology neutrality. For instance, we will ask whether regulation strengthening may incite a category of investors to flight to unregulated and non-compliant decentralised exchange platforms to stay under the radar of regulators. Furthermore, we ask whether regulation may lead to a two-tier industry, fragmented between compliant trading venues that attract mainstream users and non-compliant trading venues that attract privacy-centric users. We argue that somewhat paradoxically, regulation may push part of the crypto-industry to the ‘dark side’ of financial innovation and drives privacy-centric investors out of the scope of regulators.
In blockchains such as Bitcoin and Ethereum, users compete in a transaction fee auction to get their transactions confirmed in the next block. A line of recent works set forth the desiderata for a "dream" transaction fee mechanism (TFM), and explored whether such a mechanism existed. A dream TFM should satisfy 1) user incentive compatibility (UIC), i.e., truthful bidding should be a user's dominant strategy; 2) miner incentive compatibility (MIC), i.e., the miner's dominant strategy is to faithfully implement the prescribed mechanism; and 3) miner-user side contract proofness (SCP), i.e., no coalition of the miner and one or more user(s) can increase their joint utility by deviating from the honest behavior. The weakest form of SCP is called 1-SCP, where we only aim to provide resilience against the collusion of the miner and a single user. Sadly, despite the various attempts, to the best of knowledge, no existing mechanism can satisfy all three properties in all situations. Since the TFM departs from classical mechanism design in modeling and assumptions, to date, our understanding of the design space is relatively little. In this paper, we further unravel the mathematical structure of transaction fee mechanism design by proving the following results: - Can we have a dream TFM? - Rethinking the incentive compatibility notions. - Do the new design elements make a difference?
Stefan Kitzler, Friedhelm Victor, Pietro Saggese, Bernhard Haslhofer
We present a measurement study on compositions of Decentralized Finance (DeFi) protocols, which aim to disrupt traditional finance and offer services on top of distributed ledgers, such as Ethereum. Understanding DeFi compositions is of great importance, as they may impact the development of ecosystem interoperability, are increasingly integrated with web technologies, and may introduce risks through complexity. Starting from a dataset of 23 labeled DeFi protocols and 10,663,881 associated Ethereum accounts, we study the interactions of protocols and associated smart contracts. From a network perspective, we find that decentralized exchange (DEX) and lending protocol account nodes have high degree and centrality values, that interactions among protocol nodes primarily occur in a strongly connected component, and that known community detection methods cannot disentangle DeFi protocols. Therefore, we propose an algorithm to decompose a protocol call into a nested set of building blocks that may be part of other DeFi protocols. This allows us to untangle and study protocol compositions. With a ground truth dataset that we have collected, we can demonstrate the algorithm’s capability by finding that swaps are the most frequently used building blocks. As building blocks can be nested, that is, contained in each other, we provide visualizations of composition trees for deeper inspections. We also present a broad picture of DeFi compositions by extracting and flattening the entire nested building block structure across multiple DeFi protocols. Finally, to demonstrate the practicality of our approach, we present a case study that is inspired by the recent collapse of the UST stablecoin in the Terra ecosystem. Under the hypothetical assumption that the stablecoin USD Tether would experience a similar fate, we study which building blocks — and, thereby, DeFi protocols — would be affected. Overall, our results and methods contribute to a better understanding of a new family of financial products.
Sihem Ben Saad, Aida Allaya, Fayda Taârit, Rafla Hchaichi
A cryptocurrency is a digital medium of exchange that operates independent of the central bank. It relies on cryptography to secure financial transactions and to check asset transfer. Several studies have shown that several factors play a role in inhibiting cryptocurrency spread, such as national culture, variables related to consumer psychology as well as factors related to regulation and monetary policy. Despite all the technological innovations, the inclusion of cryptocurrencies has become a challenge to governments and central banks since cryptocurrencies are often disfavored by rigorous regulation and monetary policy. On the other hand, psychological levels such as the need for human interaction, the organizational and functional barriers and many other variables related to power distance and uncertainty avoidance are the hindering factors for cryptocurrency adoption. In this chapter, we study the phenomenon of resistance to the spread of cryptocurrency. This study aims to explain how economic and psychological factors could discourage the consumer to use cryptocurrency.
Cryptocurrencies have gathered a lot of attention since the birth of Bitcoin in 2009. However, less is known about how the characteristics of cryptocurrencies and other factors facilitate and impede their adoption. The objective of this study is to discuss the main conceptual findings on individual and organizational adoption of an innovation and examine the factors influencing the adoption of cryptocurrencies from a holistic perspective. This study proposes two theoretical models. The first model presents the factors impacting the adoption of cryptocurrencies at the individual level. It was derived by combining the eight factors of the Innovation Diffusion Theory (IDT) model with the construct “personal innovativeness.” The second model presents the factors impacting the adoption of cryptocurrencies at the organizational level. It was developed based on the Technology–Organization–Environment (TOE) framework. This research allows a better understanding of the current outlook of the cryptocurrency system and predicts its future perspectives. Therefore, this chapter is practically useful for those cryptocurrency users, traders and merchants considering their implementation as an alternative payment method.
Chibuzor Udokwu, Patrick Brandtner, Alex Norta, Alexandr Kormiltsyn · 5 authors
Abstract Inter-organizational collaboration is an important aspect of organizational operations. Traditional systems that support organizations in executing these collaborations are inefficient, not inter-operable and insecure. Novel functions provided by blockchain technology yields the potential for addressing problems that affect organizational collaborations by enabling tamper-proof, transparent, and secure systems for the exchange of information between organizations. Still, a proper approach for building blockchain-decentralized applications (DApps) that support inter-organizational collaborations is missing. The DAOM framework addresses this gap by providing a model-driven design approach for building DApps. This paper shows the development of the semantics of the DAOM framework, implementation of the support tool, and the evaluation of the DAOM framework and support tool. We conducted an evaluation to understand the usefulness of the DAOM framework in developing blockchain DApps and the effectiveness of the support tool in producing DAOM diagram models. The evaluation result shows that the framework is useful and applicable for developing DApps for inter-organizational collaborations. Furthermore, evaluation of the tool support shows that DApps can be modelled efficiently and correctly with the implemented enterprise-modelling software.
Blockchain1 is a technology that, similar to the World Wide Web (i.e., the Internet), was born by a desire to transact more freely, with less or no reliance on the State or third parties acting as intermediaries.2 Initially used in relation to Bitcoin,3 blockchain’s practical application has expanded significantly, and appears to be moving into the mainstream.4 Blockchain is believed to eventually become ubiquitous,5 particularly in light of the evolution of Artificial Intelligence, the Internet of Things, the ever growing importance of data, the need for secure storage, management and processing of large datasets, and the meteoric rise in the development and use of all things digital. It is against this background that the European Commission (the ‘Commission’) has launched a programme for the financing of blockchain-related projects.6 But what is blockchain, really? A blockchain is a type of distributed ledger technology (‘DLT’) that employs cryptography, mathematics, and algorithms to record and synchronise data in ‘chains of blocks’.7 Put simply, a blockchain is a database (or ledger), in which data are stored, shared, and synchronised across a distributed network of multiple nodes or computers,8 enabling parties that do not otherwise trust each other to transact on a peer-to-peer basis.