Cryptocurrencies such as bitcoin or ethereum are gaining ground not only as alternative modes of payment, but also as platforms for financial innovation, particularly through token sales (ICOs). All of these ventures are based on decentralized, permissionless blockchain technology whose distinguishing characteristics are their openness to, and the formal equality of, participants. However, recent cryptocurrency crises have shown that these architectures lack robust governance frameworks and are therefore prone to patterns of re-centralization: they are informally dominated by coalitions of powerful players within the cryptocurrency ecosystem who may violate basic rules of the blockchain community without accountability or sanction.
Against this background, this paper makes two novel contributions. First, it suggests that cryptocurrency and token-based ecosystems can be fruitfully analyzed as complex systems that have been studied for decades in complexity theory and that have recently gained prominence in financial regulation, too. It applies these insights to three key case studies: the Bitcoin Hard Fork of 2013; the Ethereum hard fork of 2016, following the DAO hack; and the ongoing Bitcoin scaling debate. Second, the paper argues that complexity-induced uncertainty can be reduced, and elements of stability and order strengthened, by adapting a corporate governance framework to blockchain-based organizations: cryptocurrencies, and decentralized applications built on top of them via token sales. Most importantly, the resulting “comply or explain” approach combines transparency and accountability with the necessary flexibility that allows cryptocurrency developers to continue to experiment for the sake of innovation. Eventually, however, the coordination of these activities may necessitate the establishment of an “ICANN for blockchains”.
Keywords: blockchain; token sales; ICO; initial coin offering; governance; corporation; bitcoin; ethereum; hard fork; utility token; investment token; complexity theory; ICANN; hard fork
Blockchain, like the internet, or democracy, or money, is many overlapping things. It is a decentralized record of cryptocurrency transactions. It is a peer-to-peer network of computers. It is an immutable, add-on-only database. What gets confusing is the way in which these overlapping functions override one definition or explanation of blockchain, only to replace it with an altogether different one. The conceptual overlaps are like glass lenses dropped on top of one another, scratching each other’s surface and confusing each other’s focal dimensions.This guide takes apart the stack of these conceptual lenses and addresses them one by one through the reconstruction of the basic elements of blockchain technology. The first section of this report gives a short history of blockchain, then describes its main functionality, distinguishing between private and public blockchains. Next, the guide breaks down the components and inner workings of a block and the blockchain.The following section focuses on blockchain’s journalistic applications, specifically by differentiating between targeted solutions that use blockchain to store important metadata journalists and media companies use on a daily basis, and hybrid solutions that include targeted solutions but introduce cryptocurrency, therein changing the journalistic business model altogether. Finally, the report speculates on the proliferation of what are known as Proof-of-Stake blockchain models, the spread of “smart contracts,” and the potential of enterprise-level and government-deployed blockchains, all in relation to what these mean to newsrooms and the work of reporters.Key findingsFor media organizations, the use cases of blockchain can be grouped into three key areas: Auditable (and officially verifiable) database solutions for editorial and advertising Cryptocurrency-based business models Access to public data secured in blockchain-based file systems
the distributed architecture underpinning the initial Bitcoin anarcho-capitalist, libertarian project, ‘blockchain’ entered wider public imagination and vocabulary only very recently. Yet in a short space of time it has become more mainstream and synonymous with a spectacular variety of commercial and civic ‘problem’/’solution’ concepts and ideals. From commodity provenance, to electoral fraud prevention, to a wholesale decentralisation of power and the banishing of the exploitative practices of ‘middlemen’, blockchain stakeholders are nothing short of evangelical in their belief that it is a force for good. For these reasons and more the technology has captured the attention of entrepreneurs, venture capitalists, global corporations and governments the world over.Blockchain may indeed offer a unique technical opportunity to change cultures of transparency and trust within cyberspace, and as ‘revolutionary’ and ‘disruptive’ has the potential to shift global socioeconomic and political conventions. But as a yet largely unregulated, solutionist-driven phenomenon, blockchain exists squarely within the boundaries of capitalist logic and reason, fast becoming central to the business models of many sources of financial and political power the technology was specifically designed to undo, and increasingly allied to neoliberal strategies with scant regard for collective, political or democratic accountability in the public interest. Regulating Blockchain casts a critical eye over the technology, its ‘ecosystem’ of stakeholders, and offers a challenge to the prevailing discourse proclaiming it to be the great techno-social enabler of our times.
Professors from seven U.S. colleges including the Massachusetts Institute of Technology, Stanford University and University of California, Berkeley have teamed up to create a digital currency that they hope can achieve speeds Bitcoin users can only dream of without compromising on its core tenant of decentralization. The Unit-e, as the virtual currency is called, is the first initiative of Distributed Technology Research, a non-profit foundation formed by the academics with backing from hedge fund Pantera Capital Management LP to develop decentralized technologies.
Source: The New Aesthetic
All of this is a sign of a micro-economy in trouble, as Muhammad Salman Anjum, an investor who eats dinner alone by himself in the buffet hall each night, explains. He has a pragmatic take on all these beautiful young women having blockchain exhaustively explained to them by schlubby-looking guys who can’t believe their luck. ”One of the elements in blockchain is about fundraising the ICOs. So you can guess why they are here—to pamper the investors. Because it’s tough now.”In 2017, Salman says, it was relatively easy to raise funds for a nine-figure ICO. Now that crypto prices have crashed, demand on “the supply side of the ICOs is booming, and the demand for the investors is shrinking.” Since the actual mood at this moment is conservative-going-on-terrified, these glamorous models seem to have been hired to give the ship—and the passengers’ selfies—the glitzy appearance of the boom times of 2017.One of the ways men bond is by demonstrating collective power over women. This is why business deals are still done in strip clubs, even in Silicon Valley, and why tech conferences are famous for their “booth babes.” It creates an atmosphere of complicity and privilege. It makes rich men partners in crime. This is useful if you plan to get ethically imaginative with your investments. Hence the half-naked models, who are all working a lot harder than any of the guys in shirtsleeves.The cruise’s panelists all tout decentralization’s promises of shared responsibility, community, and freedom, but the version I see here means that nobody knows precisely who is responsible for all of this. It’s nobody’s specific fault that we’re trapped on a floating live-action walkthrough of how un-trammelled free-market capitalism can be bad for women, given that money and power are things women tend to have less of.
This paper provides an analysis of how concepts pertinent to legal contracts can influence certain aspects of their digital implementation through smart contracts, as inspired by recent developments in distributed ledger technology. We discuss how properties of imperative and declarative languages including the underlying architectures to support contract management and lifecycle apply to various aspects of legal contracts. We then address these properties in the context of several blockchain architectures. While imperative languages are commonly used to implement smart contracts, we find that declarative languages provide more natural ways to deal with certain aspects of legal contracts and their automated management.
Blockchain has been wildly mis-sold, but underneath it is a database with performance and scalability issues and a lot of baggage. Any claim made for blockchain could be made for databases, or simply publishing contractual or transactional data gathered in another form.Its adoption by non-technical advocates is faith-based, with vendors’ and consultants’ claims being taken at face value, as Eddie Hughes MP (Con, Walsall North) cheerfully confessed to the FT recently.”I’m just a Brummie bloke who kept hearing about blockchain, read a bit about it, and thought: this is interesting stuff. So I came up with this idea: blockchain for Bloxwich,” said Hughes.As with every bubble, whether it’s Tulip Mania or the Californian Gold Rush, most investors lose their shirts while a fortune is being made by associated services – the advisors and marketeers can bank their cash, even if there’s no gold in the river.For example, Fujitsu offers fast-track consulting services starting at £9,900 to tell you if blockchain is appropriate for your project (that’s something we can confidently tell you for nothing: no, it isn’t).And the magic B-word enabled doomed tech quango Digital Catapult to conduct a Houdini-like escape.Now that’s magic.A modest proposalPerhaps technology consultancy and marketing should be as tightly regulated as financial consultancy, where mis-selling can (in theory) lead to a lifetime ban from the industry, something the US Securities and Exchange Commission can do for people who violate securities law, like Michael Milken.
A new study that was undertaken by Queen Mary University of London and the University of Cambridge, UK, came to some interesting conclusions about how blockchain could fit into the EU’s complex regulatory structure.
What is the economic potential and the risks of crypto assets? Regulators and supervisors have taken great interest in these new markets. This Policy Contribution is a version of a paper written at the request of the Austrian Presidency of the Council of the European Union for the informal ECOFIN meeting of EU finance ministers and central bank governors.Read file Close