The blockchain role in ethical data acquisition and provisioning

The collection of personal data through mobile applications and IoT devices represents the core business of many corporations. From one hand, users are losing control about the property of their data and rarely are conscious about what they are sharing with whom; from the other hand, laws like the European General Data Protection Regulation try to bring data control and ownership back to users. In this paper we discuss the possible impact of the blockchain technology in building independent and resilient data management systems able to ensure data ownership and traceability. The use of this technology could play a major role in creating a transparent global market of aggregated personal data where voluntary acquisition is subject to clear rules and some forms of incentives, making not only the process ethical but also encouraging the sharing of high quality sensitive data

Blockchain Technologies: The Foreseeable Impact on Society and Industry

The authors describe blockchain's fundamental concepts, provide perspectives on its challenges and opportunities, and trace its origins from the Bitcoin digital cash system to recent applications

Can Smart Contracts Enhance Firm Efficiency in Emerging Markets?

Blockchain technology has the potential to eliminate one of the most significant barriers to economic growth through private business transactions in developing countries—lack of trust. In a typical developed country, individuals and firms conduct transactions within an institutional environment that offers security through the enforcement of agreements. Transparent and effective courts, while imperfect to be sure, enable parties to feel secure in their transactions even if their level of trust in the other party is low. This security, in turn, facilitates transactions far afield from high-trust relationships (e.g., immediate relatives), generating transactions based upon economic value rather than party trust alone. Developing countries often lack effective or transparent institutions and are frequently plagued with corruption that weakens substantially their level of security in economic transactions. Accordingly, individuals and firms in developing countries seek contracting parties whom they trust, knowing that it is trust that will ensure enforcement more than courts or law enforcement. Transactions in this type of environment are thus limited to known entities, such as relatives or colleagues who have a trust-relationship with the individual. As a result, potentially valuable transactions are avoided due to lack of trust, which, on a macro-level, limits the economic growth potential of the entire economy. Blockchain technology and smart contracts offer a solution to the trust problem prevalent in developing country contractual transactions. First, because blockchain uses an open architecture, all transactions are publicly accessible, immutable, and verifiable by anyone. This helps to eliminate corruption and fraud from the transaction. Second, because all smart contract transactions are recorded along a blockchain and cannot be modified ex post, a permanent and publicly accessible ledger is available to shed any doubt about payments or other transactions throughout the process. And third, because blockchain systems are automated, security in the enforcement mechanism is all but guaranteed. For instance, failure to deliver goods by a set time will automatically trigger a default clause that transmits payment of liquidated damages to the injured party without the intervention of a judge or arbitrator. Numerous problems with this approach exist. For instance, access to information about technology such as blockchain, especially among firms that would most directly benefit from it (e.g., informal firms), is highly limited for the moment. Second, smart contracts are in their infancy and work primarily with clearly stipulated terms that allow for no interpretation, which are not always common in contracts between firms. In this case, eliminating a neutral arbiter from the transaction also eliminates the possibility of reviewing the circumstances of a breach or other contract mishap. And third, though lack of trust in parties may be reduced through this technology, lack of trust in online financial transactions may be exacerbated. The use of electronic finance options in developing countries is far less common than in developed countries, making implementation of a completely online transmission system particularly challenging. Despite the evident weaknesses in applying smart contracts and blockchain technology to developing country firm transactions, there is great potential for at least small-scale application in certain markets where party trust levels are particularly low. In this paper, I will review literature on the development of smart contract technology and its application in relevant contexts. I will consider the potential impact that this technology could have if properly implemented in emerging markets. And I will offer a set of suggestions for policymakers to consider in educating firms and incentivizing their use of this technology. What follows is an introduction to the area of smart contracts as a substitute or at least a complement to legal institutions. I fully expect a robust literature to develop around this topic in the near future

Can Smart Contracts Enhance Firm Efficiency in Emerging Markets?

Blockchain technology has the potential to eliminate one of the most significant barriers to economic growth through private business transactions in developing countries—lack of trust. In a typical developed country, individuals and firms conduct transactions within an institutional environment that offers security through the enforcement of agreements. Transparent and effective courts, while imperfect to be sure, enable parties to feel secure in their transactions even if their level of trust in the other party is low. This security, in turn, facilitates transactions far afield from high-trust relationships (e.g., immediate relatives), generating transactions based upon economic value rather than party trust alone. Developing countries often lack effective or transparent institutions and are frequently plagued with corruption that weakens substantially their level of security in economic transactions. Accordingly, individuals and firms in developing countries seek contracting parties whom they trust, knowing that it is trust that will ensure enforcement more than courts or law enforcement. Transactions in this type of environment are thus limited to known entities, such as relatives or colleagues who have a trust-relationship with the individual. As a result, potentially valuable transactions are avoided due to lack of trust, which, on a macro-level, limits the economic growth potential of the entire economy. Blockchain technology and smart contracts offer a solution to the trust problem prevalent in developing country contractual transactions. First, because blockchain uses an open architecture, all transactions are publicly accessible, immutable, and verifiable by anyone. This helps to eliminate corruption and fraud from the transaction. Second, because all smart contract transactions are recorded along a blockchain and cannot be modified ex post, a permanent and publicly accessible ledger is available to shed any doubt about payments or other transactions throughout the process. And third, because blockchain systems are automated, security in the enforcement mechanism is all but guaranteed. For instance, failure to deliver goods by a set time will automatically trigger a default clause that transmits payment of liquidated damages to the injured party without the intervention of a judge or arbitrator. Numerous problems with this approach exist. For instance, access to information about technology such as blockchain, especially among firms that would most directly benefit from it (e.g., informal firms), is highly limited for the moment. Second, smart contracts are in their infancy and work primarily with clearly stipulated terms that allow for no interpretation, which are not always common in contracts between firms. In this case, eliminating a neutral arbiter from the transaction also eliminates the possibility of reviewing the circumstances of a breach or other contract mishap. And third, though lack of trust in parties may be reduced through this technology, lack of trust in online financial transactions may be exacerbated. The use of electronic finance options in developing countries is far less common than in developed countries, making implementation of a completely online transmission system particularly challenging. Despite the evident weaknesses in applying smart contracts and blockchain technology to developing country firm transactions, there is great potential for at least small-scale application in certain markets where party trust levels are particularly low. In this paper, I will review literature on the development of smart contract technology and its application in relevant contexts. I will consider the potential impact that this technology could have if properly implemented in emerging markets. And I will offer a set of suggestions for policymakers to consider in educating firms and incentivizing their use of this technology. What follows is an introduction to the area of smart contracts as a substitute or at least a complement to legal institutions. I fully expect a robust literature to develop around this topic in the near future

Can Smart Contracts Enhance Firm Efficiency in Emerging Markets?

Blockchain technology has the potential to eliminate one of the most significant barriers to economic growth through private business transactions in developing countries—lack of trust. In a typical developed country, individuals and firms conduct transactions within an institutional environment that offers security through the enforcement of agreements. Transparent and effective courts, while imperfect to be sure, enable parties to feel secure in their transactions even if their level of trust in the other party is low. This security, in turn, facilitates transactions far afield from high-trust relationships (e.g., immediate relatives), generating transactions based upon economic value rather than party trust alone. Developing countries often lack effective or transparent institutions and are frequently plagued with corruption that weakens substantially their level of security in economic transactions. Accordingly, individuals and firms in developing countries seek contracting parties whom they trust, knowing that it is trust that will ensure enforcement more than courts or law enforcement. Transactions in this type of environment are thus limited to known entities, such as relatives or colleagues who have a trust-relationship with the individual. As a result, potentially valuable transactions are avoided due to lack of trust, which, on a macro-level, limits the economic growth potential of the entire economy. Blockchain technology and smart contracts offer a solution to the trust problem prevalent in developing country contractual transactions. First, because blockchain uses an open architecture, all transactions are publicly accessible, immutable, and verifiable by anyone. This helps to eliminate corruption and fraud from the transaction. Second, because all smart contract transactions are recorded along a blockchain and cannot be modified ex post, a permanent and publicly accessible ledger is available to shed any doubt about payments or other transactions throughout the process. And third, because blockchain systems are automated, security in the enforcement mechanism is all but guaranteed. For instance, failure to deliver goods by a set time will automatically trigger a default clause that transmits payment of liquidated damages to the injured party without the intervention of a judge or arbitrator. Numerous problems with this approach exist. For instance, access to information about technology such as blockchain, especially among firms that would most directly benefit from it (e.g., informal firms), is highly limited for the moment. Second, smart contracts are in their infancy and work primarily with clearly stipulated terms that allow for no interpretation, which are not always common in contracts between firms. In this case, eliminating a neutral arbiter from the transaction also eliminates the possibility of reviewing the circumstances of a breach or other contract mishap. And third, though lack of trust in parties may be reduced through this technology, lack of trust in online financial transactions may be exacerbated. The use of electronic finance options in developing countries is far less common than in developed countries, making implementation of a completely online transmission system particularly challenging. Despite the evident weaknesses in applying smart contracts and blockchain technology to developing country firm transactions, there is great potential for at least small-scale application in certain markets where party trust levels are particularly low. In this paper, I will review literature on the development of smart contract technology and its application in relevant contexts. I will consider the potential impact that this technology could have if properly implemented in emerging markets. And I will offer a set of suggestions for policymakers to consider in educating firms and incentivizing their use of this technology. What follows is an introduction to the area of smart contracts as a substitute or at least a complement to legal institutions. I fully expect a robust literature to develop around this topic in the near future

Smart Contract Relations in e-Commerce: Legal Implications of Exchanges Conducted on the Blockchain

Much of the discussion around blockchain-based smart contracts has focused on whether or not they operate in the same way as legal contracts. However, it is argued that most contracts are social rather than legal in nature and are entered into because the parties trust each other to perform the agreed exchange. Little has been written to address how the blockchain’s trust protocol can enable the kind of social contracting that characterized the way exchanges were conducted before the Internet. This article aims to fill that gap by exploring blockchain-based smart contracts primarily as noncontractual social exchanges

The financial auditing of distributed ledgers, blockchain and cryptocurrencies

The internet and digital transfer of money is set to fundamentally change the way financial audits are conducted. This paper critically assesses the way that such assets are currently audited when stored in distributed ledgers, transmitted via a blockchain or whose value is stored in crypto rather than sovereign currency form. In it, we identify the self-verifying nature of such financial data which negates the need for traditional audit methods. Despite the promise of such methods, we highlight the many weaknesses that still exist in the blockchain and how these presents issues for verification. We address distributed transaction and custody records and how these present auditing challenges. We suggest how auditors can use smart contracts to address these and at the same time provide arbitration and oversight. Our contribution is to propose a protocol to audit the movement of blockchain transmitted funds in order to make them more robust going forward