Henry Kim, Marek Laskowski, Michael Zargham, Hjalmar Turesson · 6 authors
The study of how to set up cryptocurrency incentive mechanisms and to operationalize governance is token economics. Given the $250 billion market cap for cryptocurrencies, there is compelling need to investigate this topic. In this paper, we present facets of the token engineering process for a real-life 80-person Swiss blockchain startup, Insolar. We show how Insolar used systems modeling and simulation combined with cryptocurrency expertise to design a mechanism to incentivize enterprises and individual users to use their new MainNet public blockchain network. The study showed subsidy pools that incentivize application developers to develop on the network does indeed have the desired positive effect on MainNet adoption. For a startup like Insolar whose success hinge upon how well their model incentivizes various stakeholders to participate on their MainNet network versus that of numerous alternatives, this token economics simulation analysis provides invaluable insights.
Purpose Blockchain holds promise as a potential solution to the problem of cybersecurity in financial transactions. However, difficulty exists for both the industry and organizations in assessing this potential solution. Hence, it is important to understand how organizations in the financial sector can address these concerns by exploring blockchain implementation for financial transactions in the context of cybersecurity. To do this, the problem question is threefold: first, what objectives are important based on the strategic values of an organization for evaluating cybersecurity to improve the security of financial transactions? Second, how can they be used to ensure the cybersecurity of financial transactions in a financial organization? Third, how can these objectives be used to evaluate blockchain as a potential solution for enhancing the cybersecurity of organizations in the financial sector relative to existing cybersecurity methods? The paper aims to discuss this issue. Design/methodology/approach To accomplish this goal we utilize Keeney’s (1992) multi-objective decision analytics technique, termed value-focused thinking (VFT), to demonstrate how organizations can assess a blockchain solution’s value to maximize value-add within financial organization. Findings The presented model clearly demonstrates the viability of using Keeney’s (1992) VFT technique as a multi-criteria decision analysis tool for assessing blockchain technology. Further, a clear explanation of how this model can be extended and adapted for individual organizational use is provided. Originality/value This paper engages both the academic literature as well as an expert panel to develop an assessment model for blockchain technology related to financial transactions by providing a useful method for structuring the decision-making process of organizations around blockchain technology.
Abstract Distributed ledger technologies, and particularly blockchain, have attracted significant attention recently and we believe that it is right time to look back the literature and digest the accumulated knowledge. The purpose of this study is to contribute to the existing knowledge of blockchain technology by surveying the stock of research about this newly rising technology. We conducted a descriptive analysis of current academic and business research on blockchain technology and categorized the studies according to source, field, approach, geography, affiliation, and cryptocurrency-focus. We accompanied this with a global patent publication analysis and presented our insights and takeaways from our analyses.
Sina Rafati Niya, Sebastian Allemann, Arik Gabay, Burkhard Stiller
Data leaks and privacy scandals have been a growing concern of the last decade. While most traditional, i.e., centralized, online platforms require users to register with their personal data, they potentially expose the user's identity and data to be used for unintended purposes. This work proposes TradeMap as an integrated architecture, designing and enabling an online end-to-end (e2e) trading market place, while supporting anonymous management features. TradeMap addresses the Swiss Financial Market Supervisory Authority (FINMA) regulations by designing a FINMA-complaint Know Your Customer (KYC) platform. Additionally, TradeMap is based on blockchains and employs Ethereum Smart Contracts (SC). Thus, trust and anonymity between the market place and the KYC system relies on zero knowledge proof-based SCs used for user identification processes. With this management approach proposed, the user authentication is only verified within the KYC platform, providing a legally valid and fully anonymous online trading platform.
Francis Berenger, Marcia Penna, Sandra Regina da Rocha-Pinto, Leonardo Lima Gomes
A DAO ( Decentralized Autonomous Organization ) e um modelo autonomo, descentralizado e automatizado baseado em uma tecnologia digital emergente que possibilita a seus membros associados relacionarem-se entre si sem que haja intermediacao de pessoas ou entidades externas. A adocao de modelos DAO vem sendo ampliada, a partir da difusao de tecnologia do blockchain e com o uso de smart contracts que sao artefatos digitais autoexecutaveis. Abre-se, entao, um novo locus para a investigacao de fenomenos ainda pouco explorados sob a lente das dinâmicas das rotinas organizacionais. A principal conclusao do estudo e a confirmacao da importância do artefato nas dinâmicas das rotinas em modelos que utilizam artefatos digitais de forma intensa. Alem disso, assuntos como materialidade dos artefatos e actância parecem ser de interesse especial dentro dessas novas formas organizacionais. Propoe-se assim, o aprofundamento do estudo de novos modelos organizacionais e suas relacoes com os artefatos digitais.
With the advancement of digitization, digital ecosystems are playing an increasingly important role in value creation. The mechanism by which digital ecosystems create value, however, has been generally deemed to be a mixed effect due to various factors. On the basis of signaling theory, this paper explores the effect of information transmission on the value creation capability of a digital ecosystem from two dimensions: the scale and sustainability of value creation. Taking a sample of weekly transaction data from Ethereum during August 2015–August 2018, our research proposes an integrated framework of information transmission in value creating, and discusses the diffusion process of the network effect within the digital ecosystem. As a generally accepted exchange medium, digital currency traffic acts as an observable proxy of information flow in a crypto-digital ecosystem, where the effects of heterogeneity in transaction attributes are filtered. Empirical results show that information transmission positively influences the scale and sustainability of value creation activities in a digital ecosystem by affecting user number and transaction frequency. Further research reveals that user number is the initial driving force of the network effect and a critical factor for the overall ecosystem market capitalization. This research provides a new insight into the design of sustainable value creation mechanisms under digital circumstances.
Purpose: The study provides a recent overview of the diffusion of blockchain technology in the logistics industry. It reveals the adoption of blockchain technology at German logistics service providers (LSPs) and their expectations regarding the future relevance of the technology. Based on the TOE Framework adoption supporting and inhibiting factors are identified. Methodology: In a first step, LSPs listed in the “Die Top 100 der Logistik 2016/2017” were contacted and questioned about their blockchain activities. Based on the responses, qualitative interviews were conducted with seven participants as part of a three-stage Delphi study. Findings: In particular small and medium-sized German LSPs are currently hardly involved in blockchain technology. Larger LSPs are beginning to define their own use cases and are trying to develop them further in joint projects with partners. A systematic use is currently not taking place. Originality: The study reveals the current discrepancy between rapidly evolving theoretical approaches for the use of blockchain technology in logistics, on the one hand, and the absence of the technology in everyday operations on the other hand. It also reveals a reluctant attitude of the management towards the technology.
A.K.M. Najmul Islam, Matti Mäntymäki, Marja Turunen
This paper investigates the focal actors in a blockchain network and their heterogeneity in splits. Disagreements in blockchain communities often lead to splits in both the blockchain and the community. We use three key elements of the actor-network theory — punctualization, translation, and actor heterogeneity—and employ case study methodology to examine Bitcoin splits. We identify several human actors, such as miners, developers, merchants, and investors, as well as non-human actors, including blockchain, exchanges, hardware manufacturers, and wallets, involved in Bitcoin splits. Our results show that the consolidation of actors in homogeneous groups plays a key role in blockchain splits. We further describe how the human and non-human actors' fluid moves into micro and macro actor positions in the network affect the development of the split. In addition, we discuss the roles of these actors and their engagement in forming micro and macro agencies in blockchain splits.
This paper presents TXSC, a framework that provides smart contract developers with transaction primitives. These primitives allow developers to write smart contracts without the need to reason about the anomalies that can arise due to concurrent smart contract function executions.
Redhwan Al-Amri, Nur Haryani Zakaria, Adib Habbal, Suhaidi Hassan
In this research, a Systematic Literature Review (SLR) is performed to identify the carried-out research topics related to cryptocurrency adoption and models that have been used as well as the current adoption challenges that need to be overcome in future studies.
Decentralized autonomy is a long-standing research topic in information sciences and social sciences. The self-organization phenomenon in natural ecosystems, the Cyber Movement Organizations (CMOs) on the Internet, and the Distributed Artificial Intelligence (DAI), and so on, can all be regarded as its early manifestations. In recent years, the rapid development of blockchain technology has spawned the emergence of the so-called Decentralized Autonomous Organization [DAO, sometimes labeled as Decentralized Autonomous Corporation (DAC)], which is a new organization form that the management and operational rules are typically encoded on blockchain in the form of smart contracts, and can autonomously operate without centralized control or third-party intervention. DAO is expected to overturn the traditional hierarchical management model and significantly reduce organizations’ costs on communication, management, and collaboration. However, DAO still faces many challenges, such as security and privacy issue, unclear legal status, and so on. In this article, we strive to present a systematic introduction of DAO, including its concept and characteristics, research framework, typical implementations, challenges, and future trends. Especially, a novel reference model for DAO which employs a five-layer architecture is proposed. This article is aimed at providing helpful guidance and reference for future research efforts.
Payment channel networks (PCNs) are viewed as one of the most promising scalability solutions for cryptocurrencies today. Roughly, PCNs are networks where each node represents a user and each directed, weighted edge represents funds escrowed on a blockchain; these funds can be transacted only between the endpoints of the edge. Users efficiently transmit funds from node A to B by relaying them over a path connecting A to B, as long as each edge in the path contains enough balance (escrowed funds) to support the transaction. Whenever a transaction succeeds, the edge weights are updated accordingly. In deployed PCNs, channel balances (i.e., edge weights) are not revealed to users for privacy reasons; users know only the initial weights at time 0. Hence, when routing transactions, users typically first guess a path, then check if it supports the transaction. This guess-and-check process dramatically reduces the success rate of transactions. At the other extreme, knowing full channel balances can give substantial improvements in transaction success rate at the expense of privacy. In this work, we ask whether a network can reveal noisy channel balances to trade off privacy for utility. We show fundamental limits on such a tradeoff, and propose noise mechanisms that achieve the fundamental limit for a general class of graph topologies. Our results suggest that in practice, PCNs should operate either in the low-privacy or low-utility regime; it is not possible to get large gains in utility by giving up a little privacy, or large gains in privacy by sacrificing a little utility.
Summary With the increasing popularity of blockchain technologies in recent years, blockchain‐based decentralized applications (DApps for short in this paper) have been rapidly developed and widely adopted in many areas, being a hot topic in both academia and industry. Despite of the importance of DApps, we still have quite little understanding of DApps along with its ecosystem. To bridge the knowledge gap, this paper presents the first comprehensive empirical study of blockchain‐based DApps to date, based on an extensive dataset of 995 Ethereum DApps and 29,846,075 transaction logs over them. We make a descriptive analysis of the popularity of DApps, summarize the patterns of how DApps use smart contracts to access the underlying blockchain, and explore the worth‐addressing issues of deploying and operating DApps. Based on the findings, we propose some implications for DApp users to select proper DApps, for DApp developers to improve the efficiency of DApps, and for blockchain vendors to enhance the support of DApps.
Since it takes time and effort to put a new product or service on the market,\none would like to predict whether it will be a success. In general this is not\npossible, but it is possible to follow best practices in order to maximise the\nchance of success. A smart contract is intended to encode business logic and is\ntherefore at the heart of every new business on the Ethereum blockchain. We\nhave investigated how to measure the success of smart contracts, and whether\nsuccessful smart contracts have characteristics that less successful smart\ncontracts lack. The appearance of a smart contract on a listing website such as\nEtherscan or StateoftheDapps is such a characteristic. In this paper, we\npresent a three-pronged analysis of the relative success of listed smart\ncontracts. First, we have used statistical analysis on the publicly visible\ntransaction history of the Ethereum blockchain to determine that listed\ncontracts are significantly more successful than their unlisted counterparts.\nNext, we have conducted a survey among more than 200 developers via an\nanonymous online survey about their experience with the listing process. A\nsignificant majority of respondents do not believe that listing a contract\nitself contributes to its success, but they believe that the extra attention\nthat is typically paid in tandem with the listing process does contribute.\nFinally, based on the respondents' answers, we have drafted 10 recommendations\nfor developers and validated them by submitting them to an international panel\nof experts.\n
The development of the cryptocurrency market and the implications for the whole economy and finance for all traders cause a keen interest in this subject. The chapter discusses the functioning of a financial system based on cryptocurrencies and its significance for economies. In this chapter, the development of the global cryptocurrency market was presented and the history of the most popular cryptocurrency, bitcoin, was analyzed. The analysis and the assessment of the state and structure of the Polish cryptocurrencies market were presented on the background of the global cryptocurrency market. Also, we presented the possible development paths for the cryptocurrencies market in Poland and in the world.
With the emergence of distributed ledger technology (DLT), numerous practitioners and researchers have proclaimed its beneficial impact on supply chain transactions in the future. However, the vast majority of DLT initiatives are discontinued after a short period. With the full potential of DLT laying far down the road, especially managers in supply chain management (SCM) seek for short-term cost-saving effects of DLT in order to achieve long-term benefits of DLT in the future. However, the extant research has bypassed grounding long-term as well as short-term effects of DLT on supply chain transaction with empirical data. We address this shortcoming, following an abductive research approach and combining empirical data from a multiple case study design with the corresponding literature. Our study reveals that the effects of DLT on supply chain transactions are two-sided. We found six effects of DLT solutions that have a cost-reducing or cost avoidance impact on supply chain transactions. In addition, we found two effects that change the power distribution between buyers and suppliers in transactions and a single effect that reduces the dependency of supply chain transactions on third parties. While cost-reducing and avoidance as well as dependency-reducing effects are positive effects, the change in power distribution might come with disadvantages. With these findings, the paper provides the first empirical evidence of the impact of DLT on supply chain transactions, which will enable managers to improve their assessment of DLT usage in supply chains.
Purpose Blockchain technology can be used to record virtually anything of value – your identity, a will, a deed or almost any type of secure transfer of information. But in many respects, blockchain is lacking some critical capabilities to make it ready for widescale adoption by business. This paper on IBM blockchain attempts to uncover the promise of blockchain for enterprise, which goes beyond its role as an industry disruptor. It also has tremendous potential to improve existing business processes, as well as to improve efficiencies in existing transaction systems, leading to exponential cost saving for the enterprise and the end consumer. Disintermediation and disruption is the investment magnet for blockchain-related ideas, riding on the success of the business and underpinned by peer-to-peer and crowdsourcing models. Blockchain technology promises a similar explosion in trade, ownership and trust, as the tenets of both technologies rely on principles of distributed governance and rules established for a time-tested protocol. Design/methodology/approach The idea behind defining the path to blockchain enterprise adoption is to ensure that we have a microscopic focus on a singular use case and that we distill the existing business into a blockchain paradigm. This implies both business and technology models. We take a singular use case that has an industry and enterprise impact and apply business and technology acumen to the problem domain. Findings The result is a well-thought-out business architecture and technology blueprint, along with requirements for compliance, audit and enterprise integration. The point of this exercise is to expend time and energy with the right business domain expertise and blockchain technology expertise to derive an adoption model that enlists and surfaces hurdles, challenges and factors in the costs and economic viability of the blockchain solution. Originality/value The resulting artifacts/collateral of the blockchain client led engagement are envisioned to be instrumental in socialization and in providing a blueprint for a business seeking executive sponsorship and the necessary funding for first project.
Suhag Pandya, Murugan Mittapalli, Sri Vallabha Teja Gulla, Ori Landau
Abstract This research paper is a holistic review done on the rise of Blockchain and cryptocurrency, then elaborate about the great advantages of having a decentralized finance system. The existing scenarios from a sample of countries were reviewed in regards to their effort to adopt cryptocurrency to find some of the challenges like what are the security challenges this new monetary system faces, and limitations faced by different countries. A detailed analysis was done to answer some of the vital questions as such why cryptocurrency is banned in a few countries when other countries see cryptocurrency as a secured mode of payment transaction or what kind of security is provided by cryptocurrency compared to the traditional payments such as pay by cash, credit, or checks. Lastly, this paper also summarizes a high-level overview to propose recommended solutions to overcome the security concerns associated with the adoption of cryptocurrencies and how does the future of cryptocurrency look.
E-cash has its merits comparing with other payment modes. However, there are two problems, which are how to achieve practical/complete tracing and how to achieve it in compact E-cash. First, the bank and the TTP (i.e., trusted third party) have different duties and powers in the reality. Therefore, double-spending tracing is bank's task, while unconditional tracing is TTP's task. In addition, it is desirable to provide lost-coin tracing before they are spent by anyone else. Second, compact E-cash is an efficient scheme, but tracing the coins from double-spender without TTP results in poor efficiency. To solve the problems, we present a compact E-cash scheme. For this purpose, we design an embedded structure of knowledge proof based on a new pseudorandom function and improve the computation complexity from O(k) to O(1). Double-spending tracing needs leaking dishonest users' secret knowledge, but preserving the anonymity of honest users needs zero-knowledge property, and our special knowledge proof achieves it with complete proofs. Moreover, the design is also useful for other applications, where both keeping zero-knowledge and leaking information are necessary.
Purpose Given that Blockchain technology poses a growing challenge to the banking industry, this paper aims to analyse the innovation of Blockchain banking with regard to its systemic dimension, as well as dynamics of competition. The empirical research demonstrates how the systemic characteristics of Blockchain banking relate to the pursuit of strategies and to what extent these strategies influence the directional path and level of technology diffusion. Design/methodology/approach The research study uses a case study methodology to explore the strategic competition of Blockchain banking. The study proposes the systemic innovation model for analysing and tracking the path of innovations. The model can be applied to any industry to understand the process of innovation development and the strategies to win market share in the banking industry. This research makes a contribution towards the theory of technology diffusion to understand the directional path of innovations. Findings The analyses of findings reveal the situation whereby most banks still compete to create their own Blockchain banking systems. The analyses, based on the systemic innovation model, also shows the low systemic feature of Blockchain banking at present. From the technology diffusion perspective, the future of Blockchain banking may need cross-chain interoperability to support a full spectrum of payments and value exchanges on the internet of things. Originality/value The main contribution of this paper is the systemic analysis of the latest innovation of Blockchain banking. Given that the research also includes the major banking innovation cases of ATM/cash cards, credit cards and electronic fund transfer at the point of sale/debit cards, the comparative analyses offer strategic insights to predict the progress, as well as pattern of technology development and diffusion for the case of Blockchain banking.