Blockchain: Capabilities, Economic Viability, and the Socio-Technical Environment

Blockchain: Capabilities, Economic Viability, and the Socio-Technical Environment
Preface
Vorwort
Préface
Premessa
Table of Contents
Figures
Tables
The Technical Capabilities of Blockchain and its Economic Viability
	Summary
	Zusammenfassung
	Résumé
	Sintesi
	1. Introduction
	2. Basics of Cryptography
		2.1. Hashing
		2.2. 2 256 or the power of big numbers
		2.3. Public key crypto systems and digital signatures
			2.3.1. Public key cryptosystems
			2.3.2. Digital signatures in blockchain technology
			2.3.3. Safety of private keys
		2.4. Zero-knowledge proof
			2.4.1. Zero-knowledge proof explained
			2.4.2. Zk-Snarks and blockchain
		2.5. Quantum computing
		2.6. Conclusion
	3. Blockchain Technology
		3.1. The origin of blockchain technology
		3.2. How a blockchain works
			3.2.1. The genesis block
			3.2.2. Participating in a blockchain
			3.2.3. Relaying transactions in the network
			3.2.4. Validation
			3.2.5. Multi-signatures
			3.2.6. Creating a block
			3.2.7. Building the chain
			3.2.8. Reaching consensus
		3.3. Who can participate?
			3.3.1. Permissionless chains
			3.3.2. Permissioned chains
			3.3.3. Software protocol governance
		3.4. Incentives
			3.4.1. Transactions fees
			3.4.2. Block rewards
		3.5. Consensus protocols
			3.5.1. Proof-of-work (PoW)
			3.5.2. Proof-of-stake (PoS)
			3.5.3. Proof-of-authority (PoA)
			3.5.4. Practical Byzantine Fault Tolerance (PBFT)
		3.6. Smart contracts
		3.7. Scalability
		3.8. Interoperability of blockchains
		3.9. Privacy versus transparency
		3.10. Patents
	4. Potential Benefits
		4.1. Where blockchains can generate trust in business processes
			4.1.1. Replacing intermediaries
			4.1.2. Automating the verification processes
		4.2. How relationships are typically affected
			4.2.1. Business to business relationships (B2B)
			4.2.2. Business to consumer relationships (B2C)
			4.2.3. Consumer to consumer relationships (C2C)
			4.2.4. Government to Citizen relationships (G2C)
		4.3. Transaction cost theory
			4.3.1. Financial transaction costs
			4.3.2. Costs of legal certainty
			4.3.3. Time costs
	5. Technical Challenges
		5.1. Tokenisation of assets
			5.1.1. Tokenisation for different asset types
			5.1.2. Tokenisation processes
			5.1.3. Cryptocurrencies
			5.1.4. Fiat currencies and lifecycle-less assets
			5.1.5. Assets with a lifecycle
		5.2. Delivery versus payment
		5.3. Voting
			5.3.1. Voting tokens
			5.3.2. Open voting
			5.3.3. Confidential voting
			5.3.4. Anonymous voting
	6. Use Cases
		6.1. Pure blockchain use cases
			6.1.1. Public register (land and commercial registers)
			6.1.2. Cryptocurrencies
			6.1.3. Crowdfunding (Initial Coin Offering)
			6.1.4. Private payment systems (World Food Programme)
		6.2. Blockchain with smart contracts
			6.2.1. Gambling (vDice)
			6.2.2. Insurance (Etherisc)
			6.2.3. e-ID (City of Zug)
			6.2.4. Public e-voting (Follow my Vote)
			6.2.5. Trade financing (Batavia)
			6.2.6. Exchanges (Lykke)
		6.3. Blockchain with smart contracts and IOT
			6.3.1. Proof of provenance (Provenance, Ambrosus, Chronicled)
			6.3.2. Energy (Brooklyn Microgrid and Tal.Markt/Elblox)
	7. Legal, Social, Political, and Ecological Aspects
		7.1. Legal aspects
			7.1.1. MME: Framework for legal and risk assessment
			7.1.2. FINMA: Applicability of financial regulation for ICOs
			7.1.3. Transfer of tokens on the blockchain
			7.1.4. Economic reflections
		7.2. Ecological aspects
			7.2.1. Main ecological problem: proof-of-work-based mining
			7.2.2. Potential ecological gains through accountability
		7.3. Social and political aspects
			7.3.1. Change in trust
			7.3.2. Transparency
			7.3.3. Missing intermediaries
			7.3.4. Collective ownership
			7.3.5. Decentralisation
			7.3.6. Participation
	Conclusions
	Appendices
Blockchain: A New Socio-Technical Environment
	Summary
	Zusammenfassung
	Résumé
	Sintesi
	8. Blockchain as a Historical Construct
		8.1. Cryptography and decentralised networks in the post-war period
		8.2. Consequences of the growth of electronic communications
		8.3. Designing privacy
		8.4. Consequences of public access to the global computer network
	9. The Design and Implementation of the Bitcoin Protocol
		9.1. The publicising of the Bitcoin project
		9.2. The collective design process of the Bitcoin protocol
		9.3. Community ownership of the Bitcoin project
	10. Blockchain as a Distributed Ledger Technology
		10.1. Other applications of the Bitcoin protocol
		10.2. The objectification of blockchain
		10.3. The emergence of permissioned distributed ledger techniques
		10.4. Other distributed ledger techniques
	11. Blockchain Socialisation Patterns
		11.1. Exogenous socialisation patterns
		11.2. Endogenous socialisation patterns
	12. Designing Through Blockchain
		12.1. The emergence of a new sector
		12.2. New regulation techniques
		12.3. Identity paradigms
	Conclusions
	Contributors
Glossary
References
Supervisory Group
Project Management TA-SWISS