The Emerald Handbook of Blockchain for Business

Cover
The Emerald Handbook of Blockchain for Business
Series Page
The Emerald Handbook of Blockchain for Business
Copyright
Table of Contents
List of Figures
List of Tables
Acknowledgments
About the Editors
About the Contributors
List of Contributors and Institutions
I. Blockchain: History and Background
	1. Blockchain: An Overview
		Abstract
		Introduction
		About This Book
			Purpose
			Distinguishing Features
			Intended Audience
		Structure of the Book
			Part I – Blockchain: History and Background
				Chapter 2 – History of Distributed Ledgers and Blockchain (Joey Ryan and Sean Stein Smith)
				Chapter 3 – Review of Blockchain and Emerging Applications (Timothy Grief and Ehsan Nikbakht)
				Chapter 4 – Technical Aspects of Blockchain (Hak J. Kim)
			Part II – Types of Blockchain
				Chapter 5 – Public Blockchains and Applications (Hugo Benedetti)
				Chapter 6 – Private and Hybrid Blockchains and Applications (Gina Pieters and Sean Stein Smith)
				Chapter 7 – Consensus Mechanisms and Related Issues (Deniz Appelbaum)
				Chapter 8 – Token Economies (Alim Khamisa)
				Chapter 9 – Proposed Modifications to Spur Consumer Adoption of Blockchain (Katherine McKechnie, Alexandra M. Dunn, and Say ...
			Part III – The Frontier of Blockchain Technology
				Chapter 10 – Blockchain: Speed, Efficiency, Decreased Cost, and Technical Challenges (Amanda Wilke and Sean Stein Smith)
				Chapter 11 – The Importance of Interoperability, Decentralization, and Choice (Kirk Phillips)
				Chapter 12 – Convergence with Artificial Intelligence and Other Related Concepts (Lian Duan)
				Chapter 13 – Risk Management and Transference Issues in Blockchain Technologies (Joseph Brunsman)
				Chapter 14 – Legal and Regulatory Issues in the Temporary Regime (J. Scott Colesanti)
				Chapter 15 – Regulator Ambiguity and Its Impact on Blockchain (Shehan Chandrasekera)
			Part IV – Blockchain Applications in Business
				Chapter 16 – Considerations for Blockchain Adoption and Integration (Michael Nizich and Michael Campisi)
				Chapter 17 – Blockchain Applications in Finance (Steven Cosares, Kristin Kalish, Thomas Maciura, and Andrew C. Spieler)
				Chapter 18 – Blockchain Applications in Healthcare (Alevtina Dubovitskaya)
				Chapter 19 – Blockchain Applications in Real Estate (Joshua Harris and Ehsan Nikbakht)
				Chapter 20 – Blockchain Applications in Supply Chain (Kaushik Sengupta)
				Chapter 21 – Crypto Accounting Valuation, Reporting, and Disclosure (Sean Stein Smith)
				Chapter 22 – Auditing and Examining Blockchain Information (John “Jack” Castonguay)
		Summary and Conclusions
		References
	2. History of Blockchain
		Introduction
			Blockchain Components
			Cryptocurrency Terminology
		Blockchain and the History of Money
			Borderless Money
		Blockchain Consensus
		Why Blockchain
			Blockchains Importance in the Internet Age
		Different Models of Blockchain
		The Promise of Blockchain
			Obstacles to Blockchain Adoption
			Interoperability
			Cybersecurity
		Blockchain Implementation
		Summary and Conclusions
		Discussion Questions
		References
	3. Review of Blockchain and Emerging Applications
		Introduction
		Review of Blockchain and Emerging Applications
			Credit Scoring
			Managing Water Usage during Climate Change
			Managing Food Supply
			Sharing Services: Contributing to Smart Cities
			Real-time Accounting and Credit-risk Modeling
			Blockchain for Sustainable Development
			Business Process Improvement
			Blockchain and the Healthcare Industry
			Fraud Detection Using Blockchain Technology
			Predicating Customer Default in E-commerce
			Blockchain as a Tool to Break the Poverty Chain
		Summary and Conclusions
		Discussion Questions
		References
	4. Technical Aspects of Blockchain
		Introduction
		Overview of Blockchain
			Concepts
			Types of Blockchain Networks
			Key Properties of Blockchain
			Decentralization
			Immutability
		Architecture of Blockchain Network
			Block
			Node and Miner
		Blockchain Technologies
			Cryptographic Hashing
			Merkle Hash Tree and Root
			Distributed Ledger
			Consensus Algorithms
				Proof of Work
				Proof of Stake
				Proof of Elapsed Time
				Byzantine Fault Tolerance
		Operational Procedure and Technical Challenges
			Operational Procedure
			Technical Challenges
		Summary and Conclusions
		Discussion Questions
		References
II. Types of Blockchain and Related Issues
	5. Public Blockchains and Applications
		Introduction
		Background on Public Blockchains
			Cryptoeconomics and Consensus Protocol
			Common Attributes of Public Blockchains
			Potential Benefits and Challenges of Public Blockchains
		Examples of Public Blockchains
			Bitcoin
			Ethereum
			Zcash
		EOSIO
			Sia
		Summary and Conclusions
		Discussion Questions
		References
	6. Private and Hybrid Blockchains and Applications
		Introduction
			Defining Blockchain Layers
			Private Blockchains
			Comparing Private and Public Blockchains
		Motivating Hybrid Blockchains
			Data Immutability
			Data Privacy and Anonymity
			Applications
			Stablecoins
		Central Bank Digital Currencies
		Payment System Projects by Monetary Authorities
			Private Payment System Issuances: Libra
		Transportation Tracking
			Identity Verification Projects by Public/Private Partnerships
		Key Considerations When Evaluating a Non–Public Blockchain
		Summary and Conclusions
		Discussion Questions
		References
	7. Consensus Mechanisms and Related Issues
		Introduction
		Background of Consensus Mechanisms
		Proof of Work
			Hashing Explained
			Secure Hashing Algorithms
		Bitcoin Blockchain and Proof of Work Example Case
		Related Issues of Proof of Work Consensus Mechanisms
			Power Requirements
			Hardware Demand
			Centralization of Mining and Mining Pools
			Additional Concerns with Proof of Work
				Race Attack
				Finney Attack
				Vector 76 Attack
				Alternative History Attack
				Majority Attack
				Denial of Service Attack
				Sybil Attack
				Selfish Mining Attack
		Proof of Stake
			Related Issues of Proof of Stake Consensus Mechanisms
				Nothing-at-Stake Attack
				Long-range Attack
				Precomputing (Grinding) Attack
				51% Attack
				Sybil Attack
				Bribery or Short-range Attack
				Liveness/Denial of Service Attack
		Other Consensus Mechanisms
			Delegated Proof of Stake
			Proof of Work/Proof of Stake Hybrid
			Programmatic Proof of Work
			Proof of Elapsed Time
			Proof of Storage
			Proof of Retrievability
			Proof of Activity
			Proof of Burn
			Proof of Capacity
			Byzantine-Fault Tolerance Method, Practical Byzantine Fault Tolerant, and Delegated Byzantine Fault Tolerant
		Summary and Conclusions
		Discussion Questions
		References
	8. Token Economies
		Introduction
		Web 3.0
			Evolution of the Web: From Web 2.0 to Web 3.0
			Stateful Web and the Web 3.0 Stack
		Token Fundamentals
			Token Taxonomy
				SoV and MoE Tokens
				Utility Tokens
			Token Standards
		Token Economy Design
			Cryptoeconomics
			Token Engineering
		Summary and Conclusions
		Discussion Questions
		References
	9. Proposed Modifications to Spur Consumer Adoption of Blockchain
		Introduction
		Government Applications
			Functions in Government
			Why Blockchain Is an Improvement
		Business Applications
			Positive Disruptions in Business Practices
			Business-to-Business Transactions Made Secure and Simple
		Consumer Applications
			Effect on Individuals
		Summary and Conclusions
		Discussion Questions
		References
III. The Frontier of Blockchain Technology
	10. Blockchain: Speed, Efficiency, Decreased Costs, and Technical Challenges
		Introduction
			Five Elements of Blockchain
		The Promise of Blockchain
			Efficiency
			Transparency
			Traceability
			Decreased Costs
		Technical Challenges
			Speed and Scalability
			Lack of Standardization
			Interoperability
		Regulatory Ambiguity
		Summary and Conclusions
		Discussion Questions
		References
	11. The Importance of Interoperability, Decentralization, and Choice
		Introduction
		The State of Blockchains and Decentralization
		Early Internet Lessons
		Second Chance
		Bitcoin Background Economics and Limitations
		De Facto Interoperability
		Interoperability Blockchains (Interopchains)
			Cosmos
			Polkadot
		Cross-chains
			Chain-split Refresher
		Sidechains
			The Liquid Sidechain
			RSK Sidechain
		Token Bridge
			The RSK-ETH Bridge
		Oracles
			Tellor
			Chainlink
		Wallet Standards
			Foundation for Interwallet Operability (FIO)
		Other Innovations in Interoperability
		Atomic Swaps and Lightning
		Summary and Conclusions
		Discussion Questions
		References
	12. Convergence with Artificial Intelligence and Other Related Concepts
		Introduction
		Basic AI Techniques
			System Infrastructure
				Data Capture
				Data Storage
				Data Computing
			Data Analytics
			Descriptive Analytics
				Association Rules
				Clustering
			Predictive Analytics
			Prescriptive Analytics
		AI Applications with Database and Extension with Blockchain
			AI in Finance
			AI in Healthcare
			AI in Other Domains and Extension with Blockchain
		Summary and Conclusions
		Discussion Questions
		References
	13. Risk Management and Transference Issues in Blockchain Technologies
		Introduction
		Commercial Crime Insurance Policies
		Computer Fraud
		Commercial General Liability Policies
		Cyber Insurance Policies
		Hope for the Future and Other Solutions
		Summary and Conclusions
		Discussion Questions
		References
	14. Legal and Regulatory Issues in the Temporary Regime
		Introduction
		Application of the Securities Laws
			Forced Fit to Cryptocurrency and Blockchain
			SEC Disciplinary Cases
			Class Action Litigation
		Timeline of SEC Pronouncements
		Other Pending Solutions
		Summary and Conclusions
		Discussion Questions
		References
	15. Regulatory Ambiguity and Its Impact on Blockchain
		Introduction
		Tax Implications of Virtual Currency
			General Treatment
			Investors
			Miners
			Payer/Payee
			Like Kind Exchange
			Charitable Contributions of Virtual Currencies
			Airdrops and Forks
			Schedule 1: “Virtual Currency” Question
		Regulatory Ambiguities
			2019 Virtual Currency Guidance May Not Be Binding
			Are Frequently Asked Questions Applied Retroactively or as of the Date of Issuance?
			Hard Forks and Airdrops
			Interpreting Third-party Information Reporting Standards
			Foreign Reporting Guidance Is Unclear from the Internal Revenue Service and Financial Crimes Enforcement Network
			Staking Reward Taxation
			Schedule 1: Virtual Currency Question
			Taxation Related to Capital Formation Is Nonexistent
		Why Crypto Tax Compliance Is so Low?
			Poor to No Information Reporting
			Reconciliation Burden
			Ideology
		Summary and Conclusions
		Discussion Questions
		References
IV. Blockchain Applications in Business
	16. Considerations for Blockchain Adoption and Integration
		Introduction
		Preparing for Blockchain Implementation
			Blockchain Technology Background
			Identifying the True Purpose for Implementing Blockchain
			Identifying the Real Cost of Implementing Blockchain
				Hardware Costs
				Software Costs
				Data Conversion and Programming Costs
				Adapting Internal Procedures and Processes
				Attracting and Retaining Qualified People
				Selecting a Blockchain Network Model
		Evaluating Organizational Capabilities
			Technical and Organizational Capability
			Personnel Qualifications
			Implementation Risks
			Total Cost of Ownership
			Decision Metrics
			Maintaining the Blockchain
		Challenges and Considerations to Blockchain Implementation
			Technological Challenges
				System Throughput Challenges
				System Latency Challenges
				Data Size and System Bandwidth Challenges
				System Scalability Challenges
				Data Malleability Challenges
			Transaction Authentication Challenges
			System Security Challenges
		Life Cycle Approach to Implementation
			Planning Phase
			Systems Analysis and Requirements Phase
			Systems Design Phase
			Development Phase
			Integration and Testing Phase
			Implementation Phase
			Operation and Maintenance Phase
		Summary and Conclusions
		Discussion Questions
		References
	17. Blockchain Applications in Finance
		Introduction
		Opportunities and Limitations of Blockchains
		Shareholder Voting
			Electronic and Paper Voting
			Depository Trust Company
			Share Classes
			Complications
			Blockchain for Voting
		Insurance Applications
			Application in Flight Insurance
			Application in Risk-pooling
		FX Trading
			Key Participants
			Instruments
			FX Operations
			Blockchain Applications in FX
				Hyperledger
			Blockchain in Practice for FX
		Blockchain in Real Estate
			Blockchain for Listings
			Digitizing Identities on the Blockchain for Real Estate
		Blockchain for Dividend Payments
		Summary and Conclusions
		Discussion Questions
		References
	18. Blockchain Applications in Healthcare
		Introduction
		Motivation and Advantages of Using Blockchain in Healthcare
			Requirements
			Applying Blockchain in Different Healthcare Scenarios
		Blockchain-based Healthcare Data Management: Technical Aspect
			Managing Data On- and Off-chain
			Combining Artificial Intelligence and Blockchain for Managing and Monetizing Healthcare Data
		Blockchain Adoption
			Barriers
			Toward Blockchain-based Healthcare Systems
		Summary and Conclusions
		Discussion Questions
		References
	19. Blockchain Applications in Real Estate
		Introduction
		Issues and Challenges
			The Case of Parcel Location and Data Management
			Chain of Title and Proof of Claim of Real Property Assets
			Parties with Interests or Obligations to Real Property Assets
			Blockchain-powered Real Property Records
		Blockchain Applications for the Main Areas of Real Estate Transactions
		Blockchain Applications for Real Estate Finance
			Blockchain Applications for Mortgage Originations
			Blockchain Applications for Mortgage Servicing
			Blockchain Applications for Secondary Market Operations
			Blockchain Applications to Real Estate Operations
				Blockchain Applications for Property Management and Leasing
				Blockchain Applications for Physical Maintenance and Monitoring
				Blockchain Applications for Investment Management and Reporting
		Summary and Conclusions
		Discussion Questions
		References
	20. Blockchain Applications in Supply Chain
		Introduction
		Blockchain in the Supply Chain Context
		Areas of Benefits and Improvements
			Product Safety and Recalls
			Global Shipping and Cross-border Logistics
		Current and Emerging Adoption and Implementation Issues
			Role of Existing Technologies
				RFID
				ERP Systems
			Transaction Automation through Smart Contracts
			Trust among Supply Chain Partners
		Top Management Support
		Summary and Conclusions
		Discussion Questions
		References
	21. Crypto Accounting Valuation, Reporting, and Disclosure
		Introduction
		Accounting for Crypto Assets
			Intangible Classification
			Crypto Asset Volatility
			Complicating Factors
		Valuation of Crypto Assets
		Stablecoin Reporting
			Stablecoin Considerations
		Custody
			Wallet Definitions
		Governmentally Managed Crypto Assets
			Government Crypto Asset Example
		Disclosure
		Accounting Example
		Control Disclosures
		Smart Contracts
		Summary and Conclusions
		Discussion Questions
		References
	22. Auditing and Examining Blockchain Information
		Introduction
		External Auditing and Assurance
		Auditing Digital Assets on the Blockchain
			Valuation
			Rights
		Internal Controls Over Financial Reporting
			Blockchain Governance
			Access and Validation Controls
			Smart Contract Testing
			Limitations and Challenges to Auditors
		Summary and Conclusions
		Discussion Questions
		References
A Glossary of Blockchain Terms
Discussion Questions and Answers (Chapters 2–22)
Index