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The shift toward a cashless society is strongly endorsed by governments and businesses due to its potential to reduce cash handling costs, enhance transaction transparency, and improve operational efficiency. This transition is facilitated by various digital payment methods, including credit and debit cards, e-wallets, and mobile payment platforms. However, this shift also imposes significant financial burdens, with payment fees estimated at around $2 trillion annually. We investigate the origins of these steep fees as society moves away from cash transactions. We further explore the consequences of the lack of a public payment infrastructure, which has enabled profit-driven initiatives to develop proprietary systems and set up walled gardens within the payments industry. We then analyze the prospective transformative role of Central Bank Digital Currencies (CBDCs) — a public infrastructure — in establishing a more affordable and equitable payment system. Through the analysis of global CBDC trials, we outline six key parameters necessary for their successful deployment: scalable infrastructure, privacy protection, capability for offline transactions, digital identity verification, integration with smart contracts, and support for cross-border transactions.

Smart contracts are programs running on blockchain. In recent years, due to the persistent occurrence of security-related accidents in smart contracts, the effective detection of vulnerabilities in smart contracts has received extensive attention from researchers and engineers. Machine learning-based vulnerability detection techniques have the advantage that they do not need expert rules for determining vulnerabilities. However, existing approaches cannot identify vulnerabilities when the versions of smart contract compilers are updated. In this paper, we propose OC-Detector (Opcode Clustering Detector), a smart contract vulnerability detection approach based on clustering opcode instructions. OC-Detector learns the characteristics of opcode instructions to cluster them and replaces opcode instructions belonging to the same cluster with the ID of the cluster. After that, the similarity between the contract under analysis and contracts in the vulnerability database is calculated to identify vulnerabilities. The experimental results demonstrate that OC-Detector improves the F₁ value of detecting vulnerabilities from 0.04 to 0.40 compared to DC-Hunter, Securify, SmartCheck and Osiris. Additionally, compared to DC-Hunter, the F₁ value is improved by 0.27 when detecting vulnerabilities in smart contracts compiled by different versions of compilers.

Smart contract risk can be defined as a financial risk of loss due to cyber attacks on or contagious failures of smart contracts. Its quantification is of paramount importance to technology platform providers as well as companies and individuals when considering the deployment of this new technology. That is why, as our primary contribution, we propose a structural framework of aggregate loss distribution for smart contract risk under the assumption of a tree-stars graph topology representing the network of interactions among smart contracts and their users. To our knowledge, there exist no theoretical frameworks or models of an aggregate loss distribution for smart contracts in this setting. To achieve our goal, we contextualize the problem in the probabilistic graph-theoretical framework using bond percolation models. We assume that the smart contract network topology is represented by a random tree graph of finite size, and that each smart contract is the center of a random star graph whose leaves represent the users of the smart contract. We allow for heterogeneous loss topology superimposed on this smart contract and user topology and provide analytical results and instructive numerical examples.

As blockchain technology and smart contracts develop, computer technology is constantly integrating with smart chemical plants. Due to the continuous development of intelligent chemical plants, their systems have gradually become large and dispersed, posing a threat to safety management. In order to improve the performance of intelligent security management systems, the study first explores the principles of blockchain and smart contract technology, and then combined with the requirements of intelligent chemical plant security management systems, designs an intelligent security management system based on blockchain and smart contract technology. The experimental results showed that compared to systems without smart contract support, the communication success rate between nodes was lower. The error rates of blockchain-based encryption systems, deep learning-based encryption systems and improved data encryption systems proposed in the study were 0.22, 0.07 and 0.09, respectively. The packet loss rates were 0.13, 0.04 and 0.05, respectively. The lower the bit error rate and packet loss rate of the encryption system, the clearer the illegal eavesdropping information. The experimental results indicate that the intelligent security management system designed in this study has good encryption performance and a higher communication success rate. The results have certain reference value in security management application in intelligent chemical plants.

The traditional financial industry has changed drastically with innovations in digital technology in the sector of finance. The new technology has not only altered the operations of financial services, but also changes the value chain of financial sector. Blockchain is one such technology which has proved to be a game changer in the financial industry. There are various studies on application of blockchain technology in the financial sector. This paper recommends a blockchain-based framework for the insurance industry. The need for this study is that there is an increasing requirement to improve the efficiency and customer experience, reduce the chances of fraud in insurance industry. Blockchain technology can prove to be a solution to the above-mentioned challenges. The methodology used to conduct this study is secondary data analysis and vast literature review. This study finds that there are various studies conducted in identifying the scope and application of blockchain in insurance industry but none of them suggests any framework to be implemented. This study suggests a framework to implement blockchain technology in insurance industry based on industry and academic literature.

The coordination and organization of economic activity has always been one of the greatest challenges of humanity. For a long time, centralized models have been the dominant approach, but the emergence of technologies such as the internet, open-source software, peer-to-peer and ubiquitous computing, smart contracts and blockchain is leading to a shift toward decentralization. This trend is now culminating with a new phase of innovation called Decentralized Autonomous Organization (“DAO”). DAOs offer the potential to empower communities, promote decentralization and reliable coordination, and increase transparency and meritocracy in corporate governance using the institutional technology that is blockchain. In this paper, we present a systematic literature review of 195 academic publications on the DAO phenomenon using the PRISMA methodology. We aim to answer the following research questions: What are the characteristics of DAOs? What topics related to DAOs were researched by whom? Why do DAOs show great potential? When do DAOs face limitations? Where can solutions be found for the identified limitation? We also propose a research agenda and suggest future research directions.

Alcohol counterfeiting, which negatively affects people’s lives in terms of economic, health, and social aspects, is one of the crucial problems that arise in many countries. For this reason, information should be made visible and traceable in all current flows of manufactured products from the raw material supplier to the retailer. In this study, a blockchain-based system architecture is proposed to ensure the traceability of raki (an anise-flavored Turkish drink), which is heavily counterfeited in Turkey. The information that adds value to the product is recorded in blocks in the blockchain, which is the building block of the system architecture, and this recorded information can be viewed by the relevant stakeholders. Product traceability is carried out with two smart contracts. With the Asset Registration Smart Contract (ARSC), assets are identified in the digital layer and the lot ID is assigned to the assets. The security of these smart contracts is ensured by storing recorded information in the blockchain, where it cannot be deleted or changed. Hyperledger Fabric, a blockchain platform, is used in the proposed architecture. In addition, QR codes integrated into the system act as a bridge between the physical and digital layers, directing consumers to the blockchain layer for traceability. Thus, the consumer will be able to see all the stages of the product that have transparently reached him and will be able to notice any counterfeiting event that may occur. In this context, it is foreseen that the proposed architecture will prevent raki counterfeiting as much as possible and provide transparency and traceability in all processes from raw material to bottle.

This paper is arranged as follows. In Sec. 1, the problem is defined, the solution for the problem is explained, information is given about the technologies proposed for the solution, and current studies on the subject are discussed. In Sec. 2, the system architecture created for traceability is explained in detail. Section 3 describes the results.

With the recent rise in the cost of transactions on blockchain platforms, there is a need to explore other service models that may provide a more predictable cost to customers and end-users. We discuss the Contract Service Provider (CSP) model as a counterpart of the successful Internet Service Provider (ISP) model. Similar to the ISP business model based on peered routing-networks, the CSP business model is based on multiple CSP entities forming a CSP Community or group offering a contract service for specific types of virtual assets. We discuss the contract domain construct which encapsulates well-defined smart contract primitives, policies and contract-ledger. We offer a number of design principles borrowed from the design principles of the Internet architecture.

In this study, we discussed several aspects, including the definition of the general concept of traditional crowdfunding, which aims to finance emerging small projects and innovative ideas as well as financing medium-sized projects that cannot provide sufficient guarantees for banks to obtain the necessary liquidity for their projects. These companies use crowdfunding to obtain this required liquidity for new projects through electronic platforms. In the same context, some of the challenges facing these companies when obtaining crowdfunding from these electronic platforms were discussed, with the presentation of the regulatory framework for crowdfunding in light of Islamic funding standards, which differ from traditional funding in that it is essentially non-profit as much as it targets charitable and social work as well as it regulates the collection of funds and the distribution of profits to the principles of Islamic finance. On the other hand, the general concept of blockchain, its general characteristics, and working mechanisms were discussed. Then, the reasons that may lead to the shift from traditional models in Islamic crowdfunding to the use of blockchain in enhancing Islamic crowdfunding mechanisms were discussed through exposure to the Ventera project model of crowdfunding using blockchain technology as a model as well as exposure to other models of Islamic crowdfunding, where the study suggests that it can improve their performance through the use of blockchain technology as it may bring them a number of benefits and help them overcome a number of challenges. This chapter aims to explore the impact of the application of blockchain technology in Islamic crowdfunding operations and also bridge the gap between the academic side and the applied professional side in the field of using modern technologies, such as blockchain as a safer, faster, and lower-cost alternative in Islamic finance projects, as there are only few studies that dealt with this area despite its importance. This chapter discusses the benefits of blockchain in Islamic crowdfunding with an illustration of some projects as an applied model, after identifying the challenges facing traditional Islamic crowdfunding and the advantages of developing it using blockchain applications; this study ends with presenting models of Islamic crowdfunding projects that can be developed using blockchain technology.

Blockchain is being viewed as a mechanism that can further protect and enhance the security of data due to its properties of immutability, auditability and encryption, whilst providing transparency between parties who may not know each other and who therefore are operating in a trustless environment. It’s true that blockchain has its roots in cryptocurrency applications and is still evolving for that purpose in the financial sector, but many other organisations across different industries are beginning to see the non-crypto use cases in which this mechanism can be used to record data that cannot be changed or reversed or as smart contracts (as a way to time-stamp transactions between parties). Consequently, blockchain is becoming extremely relevant and purposeful. Organisations have various options. They can run blockchain as permissionless (anyone can join), permissioned (invitations are required) or hybrid (like a consortium). They can also choose whether data should be held on-chain or off-chain in data lakes. With industry entering its fourth industrial revolution (Industry 4.0), the addition of blockchain as a complementary technology has its place; there are some industries very suited to the significant impact it may bring. Also, the advances made in areas such as Internet of Things and Machine Learning and Artificial Intelligence may have considerable impact on the amount of data we collect for analysis and the ways in which we store, manage and analyse it. They may also increase the likelihood of cyber attacks and the ripple effects they cause. This has also become complicated, as cyber attacks have become much more sophisticated in recent years. Cyber attacks come in different configurations, and various industry sectors have suffered from a range of these different attack vectors, resulting in some devastating outcomes. These cyber attacks have manifested in the shape of ransomware, malware, manipulation methods, phishing and spear-phishing. Whilst data breaches are a serious incident, there is a growing concern in most organisations regarding attacks that are designed to have a more destructive effect, such as the Ukraine cyber attack in 2015 that resulted in a shutdown of the power grid, or the WannaCry ransomware attack in 2017 that caused widespread chaos with healthcare institutions unable to carry out any tasks since access to data/systems was unavailable.

We introduce economic research on blockchains and its recent advances. In particular, we highlight the (i) unifying concepts on blockchain as a decentralized consensus and its core benefits, (ii) equilibrium characterizations and allegedly irreducible tensions among consensus formation, decentralization, and scalability, (iii) major issues including network security, overconcentration, energy consumption and sustainability, adoption, multi-party computation and encryption, smart contracting, and information distribution and aggregation, and (iv) future directions concerning blockchains and their applications such as informational and agency issues, as well as game-theoretical and mechanism design approaches to blockchain protocols.

Among recent FinTech developments, new digital ledger technologies have the potential to facilitate the financing of entrepreneurial projects, as they can enable different and better financing contracts. Costly verification is arguably one of the main reasons why bank financing and debt contracts have been traditionally so prevalent, with investors not being easily assured that entrepreneurs will report accurately future cash flows generated. The adoption of digital ledger technologies can mitigate this friction, by offering a better tool to maintain a shareable history of transactions, which not only reduces verification costs but also further enables “smart contracts” which can benefit from adjusting optimally to incoming data. Such smart contracts (the optimal form of which is found to be a dynamically adjusting profit-sharing rule) dominate less flexible debt and equity contracts that do not give the right incentives for the entrepreneur to continue to try to generate sales, especially when there is learning from data. There remain unresolved issues around digital ledger technology, especially with “proof-of-work” systems, which create limitations for realizing its potential. Permissioned systems may solve some of these problems but remain at an experimental stage. Third-party platforms that collect and share information are another way to reduce the verification costs faced by individual investors, and there seems to be a close link between the evolution toward “smart” contracts and crowdfunding. The appropriate supporting regulation still needs to be established and will have to tackle issues that are quite novel compared to what banking regulations and securities markets regulations have had to address.

Blockchain, the technology behind digital currency, is a decentralized, distributed ledger that records transactions in digital assets. By authenticating and recording immutable transactions, decentralized blockchains perform the same function as many intermediaries in our society that establish trust and maintain integrity between transacting parties. Due to its natural relation to accounting and possible uses in accounting functions, business operations, and financial services, it is important that accountants learn about blockchain technology and its opportunities and limitations. This chapter explores applications of blockchain technology in finance, auditing, financial reporting, and supply chain. We first discuss the classification, characteristics, and issuance of cryptoassets and the evolving regulatory environment. Then, we address potential innovative uses of blockchain in auditing and financial reporting, keeping in mind the limitations of its application. Finally, we explore how blockchain technology can enhance communication and trust between organizations in a supply chain or in contracting relationships.

The takāful and insurance industry is an evolving process of safeguarding the assets of people from loss and uncertainty. It may be described as a social device to reduce or eliminate risk of loss to life and property. Insurance offers financial protection to both individuals and business, in the risks of a loss and as such, plays an essential role in mitigating risks through risk-sharing in uncertain but potentially injurious episodes. The risk landscape is continually evolving, and in order to keep up, the insurance industry needs to trace and provide customized insurance policies that can serve specific indemnity needs of the new economy. The insurers have to possess full understanding of every risk covered in their policies and when disaster hits, compensation and claims will be done in a timely and judicious manner.

Latest developments in FinTech promises more efficiency and reduced costs causing significant shifts in the financial landscape, and the impending disruption in the insurance industry is inevitable. Blockchain today is something like where the Internet was in the 1990s — on the strategic interest of forward-looking companies, but still a while from extensive implementation. Therefore, the question for most insurance companies is not whether they will adopt blockchain, but rather, what to start with and how to test and prove the value proposition.

In this chapter, we provide a strategic discourse on how blockchain can provide additional value to the insurance and takāful industries, understand the change in processes, issues that need to be overcome, and efficiency benefits, projected cost-saving, and risk management.

The healthcare industry faces a critical need for digital innovation, as personalization and data science prompt patients to engage in the details of their healthcare and restore agency over their medical data.

In this chapter, we discuss ways as to how technologies like the blockchain can primarily secure personal and confidential patient data giving permissioned-access approved by the patient herself/himself to related parties like healthcare providers, pharmacies, and healthcare or medical insurers. Patients do not transfer the data to the parties requesting it, but he/she is merely giving them access to view it to enable their work. This protects the privacy of the patients.

Responsible governance is a crucial issue in strengthening the performance of Islamic Social Finance institutions, viz. waqf, zakat, and those pertaining to inheritance (fara’id). Although past research has found that good governance in these institutions has been well implemented in some aspects, they, however, have not been implemented comprehensively.

This research aims at elaborating good governance from the perspective of Islam and proposing technology to fill gaps in governance due to various factors, by effectively tracking and tracing assets such that it ends up to the deserving beneficiaries with minimal leakages.

In this chapter, we provide ways as to how technologies like the blockchain and AI can operationalize the transparency and accountability that is required of important social institutions that govern the dispensation of fara’id law, and the management and distribution of waqf and zakat. These areas go beyond efficiency benefits in processes or projected cost-savings, but demand the highest level of ethical implementation of governance.

As the world adopts more and more of blockchain-based technologies, it will increasingly attract malicious users who will find and exploit their vulnerabilities. Therefore, the study of these vulnerabilities and how they are exploited becomes vital. In this chapter, we have reviewed a variety of vulnerabilities of blockchain. We have looked at these vulnerabilities from networking as well as programming perspective. We have also discussed various attacks on blockchain-based systems as a case study to understand how vulnerabilities are exploited in the real world. We have also provided some tools and techniques that can help in detecting vulnerabilities and enhance security of the blockchain system.