Blockchain Papers

Daniel Hellwig, Arnd Huchzermeier

No abstract is available for this record.

Lingxiao Song, Ning Nan, Shan Wang

Blockchain, or distributed ledger technology (DLT), is expected to be a disruptive technology by enabling a highly decentralized and trust-free business environment. Yet the business pursuit for profit maximization calls for a more centralized structure and thereby conflicts with the decentralized ideology of blockchain. In the context of blockchain-driven supply chain finance (SCF), while blockchain technology enables the decentralization of information, the decentralization of cash flow still relies on mid-tier suppliers’ token delivery in a centralized transaction structure. In other words, mid-tier suppliers can become a “bottleneck” in blockchain-driven SCF. In this paper, we consider the supply chain network as a complex system where firms are self-organized and adaptive to their competitive environment. Via this theoretical lens, we investigate how the application of blockchain technology (information flow), mid-tier suppliers’ token delivery (cash flow) and supply chain transaction structures (goods flow) interplay over time. We propose that in short term, blockchain technology increases mid-tier suppliers’ transaction efficiency and thus motivates mid-tier suppliers’ token delivery and promotes the decentralization of supply chain transaction structure; in long term, the decentralized supply chain transaction structure will in turn negatively affect mid-tier suppliers’ token delivery motivations and drive the centralization of a supply chain. We will test our theoretical propositions by a series of simulation experiments in an agent-based model.

Abdelatif Hafid, Abdelhakim Hafid, Mustapha Samih

In recent years, the scalability issue of blockchain protocols has received huge attention. Sharding is one of the most promising solutions to scale blockchain. The basic idea behind sharding is to divide the blockchain network into multiple committees where each committee processes a separate set of transactions. In this paper, we propose a mathematical model to analyze the security of sharding-based blockchain protocols. Moreover, we analyze well-known sharding protocols including RapidChain, OmniLedger, and Zilliga to validate our model. The key contribution of our paper is to bound the failure probability for one committee and so for each epoch using probability bounds for sums of upper-bounded hypergeometric and binomial distributions. In addition, this paper contribution answers the following fundamental question: “how to keep the failure probability, for a given sharding protocol, smaller than a predefined threshold?”. Three probability bounds are used: Chebyshev, Hoeffding, and Chvátal. To illustrate the effectiveness of our proposed model, we conduct a numerical and comparative analysis of the proposed bounds.

Paul Griffin, Alan Megargel, Venky R. Shankararaman

A typical example of a distributed process is trade finance where data and documents are transferred between multiple companies including importers, exporters, carriers, and banks. Blockchain is seen as a potential decentralized technology that can be used to automate such processes. However, there are also other competing technologies such as managed file transfers, messaging, and WebAPIs that may also be suitable for automating similar distributed processes. In this chapter, a decision framework is proposed to assist the solution architect in deciding the technology best suited to support decentralized control of a distributed business process where there are multiple companies involved. The framework takes as input the different areas of concern such as data, processing, governance, technical, and the pros and cons of the technologies in addressing these areas of concerns and provides a method to analyze and highlight the best technology for any process in question. Two example processes, trade finance and price distribution, are used to show the application of the framework.

Niranjan Sapkota, Klaus Grobys

Cryptocurrencies employ different consensus protocols to verify transactions. While the Proof-of-Work consensus protocol is the most energy consuming protocol, Proof-of-Stake and Hybrid consensus protocols have been introduced which consume considerably less energy. We employ portfolio analysis to explore whether energy is a fundamental economic factor affecting cryptocurrency prices. Surprisingly, our results suggest that, on average, cryptocurrencies employing Proof-of-Work consensus protocols do not generate returns that are significantly different from those that incorporate Proof-of-Stake consensus protocols. Even more surprising is that our results show that cryptocurrencies that incorporate Hybrid consensus protocols generated significantly higher average return than the other groups. A possible explanation for that phenomenon may be that investors’ demand for cryptocurrencies that they perceive as offering more trust is larger than for those that carry potential risks of blockchain manipulation.

Magdi El Messiry, Adel Elmessiry, Malak Elmessiry

No abstract is available for this record.

Federico Matteo Benčić, Pavle Skočir, Ivana Podnar Žarko

Supply chain management enhanced by the Internet of Things (IoT) solutions integrate special tags (e.g., RFID, NFC, and QR-codes) with products to create Smart Tags, in addition to storing supplemental information about a product, which is also used to track products during their lifecycle. However, a product consumer has to implicitly trust the Smart Tag creator and other stakeholders within the supply chain that they are providing authentic data within a product's tag. The DL-Tags solution steps into this environment to offer a decentralized, privacy-preserving, and verifiable management of Smart Tags during a product's lifecycle. The solution is based on distributed ledger technology (DLT) and uses the Ethereum blockchain to mediate interactions between the stakeholders during a product's exchange process. By reaching a consensus on the product's description and state logged on the blockchain, all involved stakeholders and product consumers can verify the product's authenticity without revealing their identity. The paper describes the DL-Tags solution and includes a cost analysis of all implemented transactions on the Ethereum blockchain. The proposed solution provides evidence of the product's origin and its journey across the supply chain while preventing tag duplication and manipulation. It is among the first documented practical solutions using DLT and IoT for supply chain management, which is designed to be distributed ledger agnostic.

Hussam Juma, Khaled Shaalan, Ibrahim Kamel

Blockchain has emerged as a promising technology to ensure trust between parties. By using this technology, we can establish a secure communication paradigm, where data integrity and immutability can be guaranteed. These inherited features underline blockchain as a suitable technology to optimise the adopted processing model in several domains, such as health, trade supply chain and food safety. In this paper, we present a detailed overview of the use of blockchain technology in (international) trade supply chains. Furthermore, the discussed proposals have been classified based on the target application scenarios. Our goal is to clarify the benefits of applying this technology to the trading domain and highlight the challenges that are associated with applying this technology to optimise the trading domain. Accordingly, we underline several issues that occur during the designing of the blockchain solution to optimise the (international) trade supply chain.

Ravi Chandra Koirala, Keshav Dahal, Santiago Matalonga

The concept of openness and decentralization is one which people have desired since years. Everyone wants transactional data to be transparent. When sensitive data are on the hand of third-parties, it may be susceptible to frauds and misuse. The advent of blockchain, a decentralized technology in cryptocurrency, has revealed an appropriate solution to address such issues. Blockchain maintains the integrity of a transaction. It not only secures from tempering and fraud but also ensures transactions are verifiable without involvement of an intermediate. Therefore, blockchain is applied to different decentralized domains that require trusted computing. Supply chain is one of these domains, that can benefit from trustworthy decentralized transactions initiated by multiple stakeholders. This paper presents a general model for a blockchain enabled supply chain. We have implemented this model using three smart contracts on an Ethereum platform. We have provided evidence of our verification and validation efforts. Our results convey the feasibility of the approach, which can streamline the administrative processes, and automatize the transactions making the system more efficient and transparent.

Gregor Blossey, Jannick Eisenhardt, Gerd J. Hahn

Given the hype around the cryptocurrency Bitcoin, blockchain technology (BCT) has also received considerable attention outside the financial sector. Multiple applications of BCT in supply chain management (SCM) are discussed in business practice and there is increasing interest in this topic within the academic community. In this paper, we intend to combine these two perspectives on BCT in SCM to summarize a current state of the art and to derive avenues for further research. For this purpose, a comprehensive framework of use case clusters of BCT in SCM is developed according to the distinctive features of BCT. The framework is used to analyze 53 applications of BCT in SCM which are derived from a systematic literature review and a secondary dataset of blockchain-driven innovations in SCM. We identify five emerging use case clusters of BCT in SCM which clearly extend the scope beyond frequently mentioned applications such as product tracking and tracing.

Ziyao Liu, Nguyen Cong Luong, Wenbo Wang, Dusit Niyato · 7 authors

Over the past decade, blockchain technology has attracted tremendous attention from both academia and industry. The popularity of blockchains was originated from the concept of crypto-currencies to serve as a decentralized and tamper-proof transaction data ledger. Nowadays, blockchains as the key framework in the decentralized public data-ledger have been applied to a wide range of scenarios far beyond crypto-currencies, such as the Internet of Things, healthcare, and insurance. This survey aims to fill the gap between a large number of studies on blockchain networks, where game theory emerges as an analytical tool, and the lack of a comprehensive survey on the game theoretical approaches applied in blockchain-related issues. In this survey, we review the game models proposed to address common issues in the blockchain network. The focus is placed on security issues, e.g., selfish mining, majority attack and denial of service attack, issues regarding mining management, e.g., computational power allocation, reward allocation, and pool selection, as well as issues regarding blockchain economic and energy trading. Additionally, we discuss the advantages and disadvantages of these selected game theoretical models and solutions. Finally, we highlight important challenges and future research directions of applying game theoretical approaches to incentive mechanism design and the combination of blockchain with other technologies.

Shangping Wang, Dongyi Li, Yaling Zhang, Juanjuan Chen

With the improvement of living standard, people begin to pay more attention to food safety and product quality. Therefore, for consumers, it is necessary to establish a reliable system that can trace the source of products. However, most existing traceability systems tend to lack transparency, data is primarily stored within the enterprise, and the cost of tampering with data is very low. Besides, the supply chain nodes are easy to evade responsibility when product safety or quality issues arise under the traditional centralized management model, and it is difficult to trace the root of issues. The development of blockchain technology provides us with new ideas for realizing the traceability of products in supply chain scenarios. Due to its characteristics of decentralization, transparency, and immutability, blockchain can be effectively used to alleviate the above problems. In this paper, we propose a product traceability system based on blockchain technology, in which all product transferring histories are perpetually recorded in a distributed ledger by using smart contracts and a chain is formed that can trace back to the source of the products. In particular, we design an event response mechanism to verify the identities of both parties of the transaction, so that the validity of the transaction can be guaranteed. And all events are permanently stored in the form of logs as a basis for handling disputes and tracking responsible entities. Furthermore, a system prototype is constructed based on the testing framework of Truffle. The contract code is deployed on a test network TestRpc that runs in local memory, and a decentralized web page interface is implemented based on the prototype. Finally, the system security analysis and experimental results show that our solution is feasible.

Petra Maria Asprion, Philipp Hübner, Pascal Moriggl

Interoperability and traceability of digital supply chains are becoming a major competitive factor. Businesses operating in supply chains need to share interoperable information and systematically track product and service deliveries. This research investigates a novel approach to model digital supply chains and operationalizes this through a "Distributed Ledger System" in combination with "Smart Contracts". Based on design science, relevance and rigor for a novel approach are derived. As resulting ‘artifacts’, exemplary supply chains using colored Petri-nets are modeled as a structured and automatable instance for the sketched ‘Token-flow Supply Chains’. For the operation of our visionary scenario, a baseline concept with an associated architecture is drafted. We argue that the outlined approach and related artifacts are predestined to achieve a new quality of performance and innovation including bridging the current challenges for digital supply chains.

Teijo Peltoniemi, Jarkko Ihalainen

Objective: This exploratory study examines how distributed ledger technologies could be used within the plasma derivatives supply chain. The plasma derivatives are used increasingly in the pharmaceutical market and the supply chain is global. However, there are significant risks relating to the governance of the supply. The risks include unclear origin of plasma and the propagation of contaminated or poor-quality blood to the pharmaceutical production process. From an ethical perspective, the risk is that vulnerable individuals are exploited in the donation process. Finally, the plasma supply chain currently depends on only a few exporters of plasma, which presents a supply chain risk. Design: The blockchain technology is piloted in other areas of pharmaceutical supply chains and in this study we examine those solutions and conceptualize how a similar solution can be applied to the plasma supply chain. We identify risks within the plasma supply chain and discuss how blockchain-based solutions can mitigate those risks. Results: Drawing on existing literature within the pharmaceutical blockchain arena, we introduce a solution to verify the origin of plasma. We also model how the blockchain technology can be used to tackle ethical and supply chain risks. Conclusions: Blockchain can have a role in mitigating plasma supply chain risks. The area is, however, novel and requires more research.

Gabriella M. Hastig, ManMohan S. Sodhi

We seek to guide operations management (OM) research on the implementation of supply chain traceability systems by identifying business requirements and the factors critical to successful implementation. We first motivate the need for implementing traceability systems in two very different industries—cobalt mining and pharmaceuticals—and present business requirements and critical success factors for implementation. Next, we describe how we carried out thematic analysis of practitioner and scholarly articles on implementing blockchain for supply chain traceability. Finally, we present our results pertaining to the needs of different stakeholders such as suppliers, consumers, and regulators. The business requirements for traceability systems are curbing illegal practices; improving sustainability performance; increasing operational efficiency; enhancing supply‐chain coordination; and sensing market trends. Critical success factors for implementation are companies’ capabilities; collaboration; technology maturity; supply chain practices; leadership; and governance of the traceability efforts. These findings provide a nascent measurement model for empirical work and a foundation for descriptive and normative research on blockchain applications for supply chain traceability.

Ulrich Gallersdörfer, Florian Matthes

No abstract is available for this record.

Yingli Wang, Jeong Hugh Han, Paul Beynon‐Davies

Purpose This paper aims to investigate the way in which blockchain technology is likely to influence future supply chain practices and policies. Design/methodology/approach A systematic review of both academic and practitioner literature was conducted. Multiple accounts of blockchain adoption within industry were also consulted to gain further insight. Findings While blockchain technologies remain in their infancy, they are gaining momentum within supply chains, trust being the predominant factor driving their adoption. The value of such technologies for supply chain management lies in four areas: extended visibility and traceability, supply chain digitalisation and disintermediation, improved data security and smart contracts. Several challenges and gaps in understanding and opportunities for further research are identified by this research. How a blockchain-enabled supply chain should be configured has also been explored from a design perspective. Research limitations/implications This systematic review focuses on the diffusion of blockchain technology within supply chains, and great care was taken in selecting search terms. However, the authors acknowledge that their choice of terms may have excluded certain blockchain articles from this review. Practical implications This paper offers valuable insight for supply chain practitioners into how blockchain technology has the potential to disrupt existing supply chain provisions as well as a number of challenges to its successful diffusion. Social implications The paper debates the poential social and economic impact brought by blockchain. Originality/value This paper is one of the first studies to examine the current state of blockchain diffusion within supply chains. It lays a firm foundation for future research.

Dona Kaid, Maged M. Eljazzar

Motivated by the recent disruption in shaping industries through blockchain, this paper examines the effect of integrating blockchain and Enterprise Resource Planning systems on the relation among the different parties of the supply chain. For a seamless integration, distributors seek to automate payments with retailers under specific conditions, which can be achieved through smart contracts in a blockchain network. In this paper, we study the utilization of QR codes to handle such cases in the supply chain industry between the distributors and retailers in particular. Then, we analyze the contribution of using blockchain to handle these cases. Furthermore, to emphasize the advantages of blockchain on a supply chain, a prototype is implemented and developed using Hyperledger Composer. This prototype highlights the added value blockchain can have on the relation between the two supply chain parties, while providing additional features to build the needed trust between both parties.

Shaohan Feng, Zehui Xiong, Dusit Niyato, Ping Wang · 6 authors

Benefit from the capabilities of providing decentralized tamper-proof ledgers and platforms for data-driven autonomous organization, open-access blockchains based on proof-of-work protocols have gained tremendous popularity. Yet, the proof-of-work based consensus protocols under threats, e.g., double-spending. In this paper, by adopting the cyber-insurance as an economic tool to neutralize cyber risks, we propose a novel approach of cyber risk management for blockchain-based service. The blockchain service market under our consideration is composed of four entities, i.e., the infrastructure provider, blockchain provider, cyber-insurer, and users. The blockchain provider purchases the computing resources, e.g., a cloud, from the infrastructure provider to maintain the blockchain consensus and then offers blockchain services to the users. The blockchain provider optimize its profit by strategizing its investment in the infrastructure in order to improve the security of the blockchain and the service price charged to the users. In the meantime, to prevent the potential damage incurred by the attacks and then fully secure the cyber-space, the blockchain provider purchases a cyber-insurance from the cyber-insurer. In return, the cyber- insurer adjusts the insurance premium according to the perceived risk level of the blockchain service and will pay the claim to the blockchain provider once attacks happen. Based on the rationality of the market entities, we model the interaction among the blockchain provider, users, and cyber-insurer as a two- stage Stackelberg game. Specifically, the blockchain provider and cyber-insurer lead to set their pricing/investment strategies in the upper level subgame, and then the users follow to determine their demand of the blockchain service in the lower level subgame. Specifically, we consider the scenario of double-spending attacks and provide a series of analytical results about the Stackelberg equilibrium in the market game.

Thomas Hepp, Matthew Sharinghousen, Philip Ehret, Alexander Schoenhals · 5 authors

Abstract Supply chains are the basis of most everyday life products. Both data integrity and authenticity of related information have severe implications for quality and safety of end-products. Hence, tamper-proof storage is necessary that prevents unauthorized modifications. We examine peer-reviewed blockchain technologies according to four criteria relevant to supply chains: On-chain storage, off-chain storage, verification cost and secure data sharing. Our evaluation yields an overview of concepts for modeling supply chain processes and points out that on-chain storage is currently not practical.

Taehyun Ko, Jaeram Lee, Doojin Ryu

Blockchain technology has been recommended for the sustainability in the manufacturing industry, owing to its benefits in terms of real-time transparency and cost savings. To verify this, we first examine how firms can employ distributed ledger technology by adopting blockchain technology to achieve real-time transparency and cost savings. We also review the current blockchain technology applications in the financial industry and supply chains to explain this technology’s mechanisms for enabling real-time transparency and cost savings in the manufacturing industry. Finally, we theoretically compare the profits of manufacturing firms in two managerial delegation games under a duopoly situation. This theoretical model suggests that the real-time transparency and cost savings secured by blockchain technology improve the profitability and competitiveness of manufacturing firms, which, in turn, assure the sustainability in the manufacturing industry.

Hokey Min

No abstract is available for this record.

Moritz Petersen, Niels Hackius, Birgit von See

Abstract Driven by successful pilot projects in supply chain and logistics, Blockchain has become one of the industry’s latest technology hypes. In this paper, we cut through the hype and shed light on the expectations of industry professionals towards the benefits and challenges of Blockchain. Also, we categorize current Blockchain applications that are expected to provide tangible benefits for supply chain and logistics processes. To explore such potentials, we argue that companies should gain own first-hand experiences through small-scale experiments.

Weifan Jiang, Jian Liu

Overconfidence is a universal psychological behavior. Overconfidence on demand awareness will have a significant impact on operation decisions. The supplier estimated the demand with excessive precision which influences the inventory financing decision-making deeply. We built the demand function based on the supplier’s overconfidence. Then we established the retailer, supplier, and the Bank’s profit function, respectively. Through the analysis of the bilevel Stackelberg game, we obtained the order quantity of the retailer with the capital constraint, the wholesale price of overconfident supplier, and the loan-to-value ratio of Bank, and we analyzed the influence of overconfidence on the decision variables. We have several findings as follows. First, the overconfidence makes the decisions of the retailer, supplier, and Bank deviate from the rational decisions. Second, the space of the market profit will affect the decision variables in the joint decision-making. Third, the financing supply chain (including the Bank and supply chain) should have a positive attitude towards the overconfidence of the supplier. Forth, in the joint decision-making, the supplier need determines the buyback price according to the capital demand; and in the decentralized decision-making, the supplier should try to use high buyback price strategy.