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8 pages, 354 KiB

Open AccessProceeding Paper

Incentives for Crypto-Collateralized Digital Assets

by Philip N. Brown

Proceedings 2019, 28(1), 2; https://doi.org/10.3390/proceedings2019028002 - 21 Oct 2019

Cited by 2 | Viewed by 1799

Digital currencies such as Bitcoin frequently suffer from high price volatility, limiting their utility as a means of purchasing power. Hence, a popular topic among cryptocurrency researchers is a digital currency design which inherits the decentralization of Bitcoin while somehow mitigating its violent [...] Read more.

Digital currencies such as Bitcoin frequently suffer from high price volatility, limiting their utility as a means of purchasing power. Hence, a popular topic among cryptocurrency researchers is a digital currency design which inherits the decentralization of Bitcoin while somehow mitigating its violent price swings. One such system which attempts to establish a price-stable cryptocurrency is the BitShares market-pegged-asset protocol. In this paper, we present a simple mathematical model of the BitShares protocol, and analyze it theoretically and numerically for incentive effects. In particular, we investigate how the selection of two key design parameters function as incentive mechanisms to encourage token holders to commit their core BitShares tokens as collateral for the creation of new price-stabilized tokens. We show a pair of analytical results characterizing some simple facts regarding the interplay between these design parameters. Furthermore, we demonstrate numerically that in some settings, setting these design parameters is a complex, sensitive, and unintuitive task, prompting further work to more fully understand this design process. Full article

(This article belongs to the Proceedings of The 3rd Annual Decentralized Conference on Blockchain and Cryptocurrency)

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8 pages, 301 KiB

Open AccessProceeding Paper

Risk and Return Management through Smart Contract Profit Redistribution

by Victor Deleau and Jia Yuan Yu

Proceedings 2019, 28(1), 3; https://doi.org/10.3390/proceedings2019028003 - 21 Oct 2019

Cited by 1 | Viewed by 1373

Abstract

Investing into a new product or service is a high-risk, high-return activity. This is best symbolized by the observation that the return over investment distribution of startups is a power law. Introduction of new products or services to the market might fail to [...] Read more.

Investing into a new product or service is a high-risk, high-return activity. This is best symbolized by the observation that the return over investment distribution of startups is a power law. Introduction of new products or services to the market might fail to generate profit even though there is a demand. Early adopters are also penalized, as they often pay a high price for something which will end up being cheaper, and might lose their warranty if the firm goes bankrupt. Innovation is slowed down. We propose to equally redistribute part of the generated profit at the end of a predefined time period to previous customers using Ethereum smart contract. Because customers are aware of the amount they would get back, their behaviors will change. The return over investment distribution and therefore the risk and return balance of the firms will also be affected. We formally define both a classic market and a market that is using our proposed system, and present an architecture to deploy such system. A preliminary numerical simulation is provided. Full article

(This article belongs to the Proceedings of The 3rd Annual Decentralized Conference on Blockchain and Cryptocurrency)

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12 pages, 357 KiB

Open AccessProceeding Paper

An Algorithmic Blockchain Readiness Index

by Andreas Vlachos, Klitos Christodoulou and Elias Iosif

Proceedings 2019, 28(1), 4; https://doi.org/10.3390/proceedings2019028004 - 21 Oct 2019

Cited by 1 | Viewed by 2643

Abstract

This paper presents the design of a Blockchain Readiness Index (BRI) to be used as a tool for assisting nations to monitor the level of Blockchain maturity according to their suitability on hosting blockchain-based activities, and successfully adopting a blockchain regulatory framework. BRI [...] Read more.

This paper presents the design of a Blockchain Readiness Index (BRI) to be used as a tool for assisting nations to monitor the level of Blockchain maturity according to their suitability on hosting blockchain-based activities, and successfully adopting a blockchain regulatory framework. BRI is a composite index that combines a variety of indicators from a range of sources to a single score. The proposed methodology attempts to fill a knowledge gap by evaluating the relatively unexplored area of blockchain adoption per nation. The index presented in this paper aims to distinguish between the most promising and non-hostile countries, acting as the basis for professional work, decision making and operations of organizations, investors, academics, and other stakeholders within the blockchain space. As the index is updated regularly, all new developments on the fast-changing landscape of blockchain and cryptocurrencies are reflected. In addition, this research aims to go beyond the regulatory environment towards examining several other factors such as local engagement, expertise, investments, and the need for a decentralized provision of services. This paper presents an overview of the landscape of similar attempts on designing such indexes by reviewing and identifying potential gaps and opportunities for improving their methodological design that can lead to more accurate and relevant conclusions. In addition, with this paper we contribute a systematic methodology for building a BRI using techniques from the information retrieval domain to normalize the non-normalized values, and a cosine similarity measure to derive an index ranking consisting of various nations. More specifically the proposed BRI covers a wide range of blockchain readiness indicators which can be organized into the following “pillars”: (1) Government Regulation, (2) Research, (3) Technology, (4) Industry, and (5) User Engagement. An empirical evaluation reports preliminary but promising results of the algorithmic design methodology showing evidence that, the identified indicators are sufficient for developing our index when compared to judgements made by human experts. Full article

(This article belongs to the Proceedings of The 3rd Annual Decentralized Conference on Blockchain and Cryptocurrency)

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12 pages, 670 KiB

Open AccessProceeding Paper

Do Cryptocurrency Prices Camouflage Latent Economic Effects? A Bayesian Hidden Markov Approach

by Constandina Koki, Stefanos Leonardos and Georgios Piliouras

Proceedings 2019, 28(1), 5; https://doi.org/10.3390/proceedings2019028005 - 21 Oct 2019

Cited by 2 | Viewed by 2206

Abstract

With Bitcoin, Ether and more than 2000 cryptocurrencies already forming a multi-billion dollar market, a proper understanding of their statistical and financial properties still remains elusive. Traditional economic theories do not explain their characteristics and standard financial models fail to capture their statistic [...] Read more.

With Bitcoin, Ether and more than 2000 cryptocurrencies already forming a multi-billion dollar market, a proper understanding of their statistical and financial properties still remains elusive. Traditional economic theories do not explain their characteristics and standard financial models fail to capture their statistic and econometric attributes such as their extreme variability and heteroskedasticity. Motivated by these findings, we study Bitcoin and Ether prices via a Non-Homogeneous Pólya Gamma Hidden Markov (NHPG) model that has been shown to outperform its counterparts in conventional financial data. The NHPG algorithm has good in-sample performance and identifies both linear and non-linear effects of the predictors. Our results indicate that all price series are heteroskedastic with frequent changes between the two states of the underlying Markov process. In a somewhat unexpected result, the Bitcoin and Ether prices, although correlated, are significantly affected by different variables. We compare long term to short term Bitcoin data and find that significant covariates may change over time. Limitations of the current approach—as expressed by the large number of significant predictors and the poor out-of-sample predictions—back earlier findings that cryptocurrencies are unlike any other financial asset and hence, that their understanding requires novel tools and ideas. Full article

(This article belongs to the Proceedings of The 3rd Annual Decentralized Conference on Blockchain and Cryptocurrency)

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10 pages, 366 KiB

Open AccessProceeding Paper

Optimal Transaction Throughput in Proof-of-Work Based Blockchain Networks

by B. Swaroopa Reddy and G. V. V. Sharma

Proceedings 2019, 28(1), 6; https://doi.org/10.3390/proceedings2019028006 - 22 Oct 2019

Cited by 2 | Viewed by 1781

Abstract

As of today, Bitcoin suffers with restrictive transaction throughput of 3–7 transactions per sec and the transaction confirmation takes several min as bitcoin blockchain was designed with a block creation time of 10 min and each block is restricted with less blocksize for [...] Read more.

As of today, Bitcoin suffers with restrictive transaction throughput of 3–7 transactions per sec and the transaction confirmation takes several min as bitcoin blockchain was designed with a block creation time of 10 min and each block is restricted with less blocksize for fast transmission. In this paper, we obtained the optimal transaction throughput for a Proof-of-Work (PoW) based longest chain rule blockchain network (called bitcoin protocol). This is done by modeling the delay diameter (D) and double spending attack in a Erd

\ddot{o}

s-R

\overset{´}{e}

nyi random network topology as constraints. Through numerical results, it is shown that the throughput can be significatly improved without compromising the fairness of the network. Full article

(This article belongs to the Proceedings of The 3rd Annual Decentralized Conference on Blockchain and Cryptocurrency)

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5 pages, 214 KiB

Open AccessProceeding Paper

Blockchain Technology: Financial Sector Applications Beyond Cryptocurrencies

by Ariana Polyviou, Pantelis Velanas and John Soldatos

Proceedings 2019, 28(1), 7; https://doi.org/10.3390/proceedings2019028007 - 25 Oct 2019

Cited by 14 | Viewed by 7038

Abstract

Blockchain technology was initially employed as the public transaction ledger for cryptocurrencies. However, beyond cryptocurrencies, blockchain technology has been recently considered for a plethora of other applications as it encapsulates unique properties including decentralization, security, transparency and anti-tampering. Such properties are particularly advantageous [...] Read more.

Blockchain technology was initially employed as the public transaction ledger for cryptocurrencies. However, beyond cryptocurrencies, blockchain technology has been recently considered for a plethora of other applications as it encapsulates unique properties including decentralization, security, transparency and anti-tampering. Such properties are particularly advantageous for variety of prominent issues experienced in the financial sector. As a result, blockchain technology holds the potential to revolutionize the financial industry by altering the way in which different services are conducted in the financial industry. In this paper, we outline five different financial industry use cases that are expected to be radically transformed by the use of blockchain technology. Full article

(This article belongs to the Proceedings of The 3rd Annual Decentralized Conference on Blockchain and Cryptocurrency)

11 pages, 228 KiB

Open AccessProceeding Paper

Exploring the Perceptions of Applying Blockchain Technology in the Higher Education Institutes in the UAE

by Abdullah El Nokiti and Shafiz A. Mohd. Yusof

Proceedings 2019, 28(1), 8; https://doi.org/10.3390/proceedings2019028008 - 31 Oct 2019

Cited by 4 | Viewed by 1721

Abstract

Based on the increasing demand for having a reliable method to verify student records in the education sector in the UAE, this research will attempt to get the perception of the managerial unit of higher education organizations in the UAE about the expected [...] Read more.

Based on the increasing demand for having a reliable method to verify student records in the education sector in the UAE, this research will attempt to get the perception of the managerial unit of higher education organizations in the UAE about the expected value of applying this technology. The study will test two main areas: student academic records and student campus life happiness. Mentioned about the methodology used. The research will finally suggest a possible way to adopt this technology, like spreading the awareness about the advantages of the Blockchain technology, providing support from the governmental organizations and creating the brainstorming & skills workshops that assist in understanding this new technology. These methods will help to grow up the technology and support its implementation process. Finally, evaluations should be conducted after the implementation to review and rate the success in reaching the main organizational goals. Full article

(This article belongs to the Proceedings of The 3rd Annual Decentralized Conference on Blockchain and Cryptocurrency)

10 pages, 3704 KiB

Open AccessProceeding Paper

Can a Blockchain-Based Maas Create Business Value?

by Gabriel Hogan, Sigma Dolins, Izzet Fatih Senturk, Ioannis Fyrogenis, Qian Fu, Erion Murati, Federico Costantini and Nikolas Thomopoulos

Proceedings 2019, 28(1), 8001; https://doi.org/10.3390/proceedings2019028001 - 17 Oct 2019

Cited by 1 | Viewed by 3215

Abstract

In this paper two contemporary technological novelties are combined to introduce the concept of a blockchain-based MaaS, with the aim of pinpointing where and how business value can be created through data-based services of such a system. Towards this purpose, an integrated version [...] Read more.

In this paper two contemporary technological novelties are combined to introduce the concept of a blockchain-based MaaS, with the aim of pinpointing where and how business value can be created through data-based services of such a system. Towards this purpose, an integrated version of the Business Model Canvas is deployed, combining the advantages of the Lean Canvas and the Ethics Canvas. The overview of data flows among the versatile system stakeholders are outlined to highlight the potential benefits for diverse industries through sharing and collaboration. Full article

(This article belongs to the Proceedings of The 3rd Annual Decentralized Conference on Blockchain and Cryptocurrency)

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