Free access seminars for our Research and Industry community
During this proving time, we recognise the difficulties and sense of isolation that many are experiencing. While many events and conferences have been cancelled worldwide, UCL CBT believes that now more than ever it is essential to stay focused and keep pushing the boundaries of knowledge with a sense of solidarity and altruism.
In this spirit, we launched a massive series of Online Open Seminars. These will be free access seminars promoted by the UCL CBT to give voice to our Research and Industry community. Register here for the 2022 seminars.
2023 Open Seminars
Tracing the Masterminds Behind Cryptocurrency Pump-and-Dump Schemes
HONGLIN FU, University College London
In this paper, we aim to address the growing problem of pump-and-dump schemes in the cryptocurrency market. These fraudulent activities have a negative impact on the market stability and can harm unsuspecting investors. The decentralized nature of the cryptocurrency market makes it challenging to regulate and enforce laws against these schemes. To tackle this issue, we propose a novel approach for identifying the masterminds behind pump-and-dump schemes on online social networks (OSNs), such as Telegram, by exploiting both cryptocurrency market data and online social network (OSN) data. Our approach starts by scanning online social network (OSN) sites, reducing data volume through extracting relevant signals. Next, we perform a comprehensive analysis of pump-and-dump schemes from a market trading perspective and combine this knowledge with the extracted pump signals to calculate the impact scores of online social network (OSN) channels. This indicates the influence of the channels in affecting the market. Finally, we conduct online social network (OSN) profiling and topology analysis to examine the connections between channels, which enables us to pinpoint the masterminds. Our approach offers a more in-depth understanding of the pump-and-dump phenomenon, a comprehensive evaluation of entities involved, and an optimized processing pipeline for efficient results. Our results demonstrate that our approach can accurately identify all the entities and masterminds behind pump-and-dump schemes.
2022 Open Seminars
Identifying fundamental value drivers of DeFi protocols – a theoretical framework
ROBERT RICHTER, Technical University of Munich
Digital assets, including Bitcoin and Ethereum, are known for their high volatility in prices. The protocols that have emerged in the Decentralized Finance (DeFi) space are no exception to this volatility. Until now academic research has focussed on analysing this volatility, however no research has been done on identifying price drivers of the myriad of different protocols. This paper is the first attempt of a unified framework that identifies theoretical price drivers for DeFi protocols. Rather than taking a macro-perspective and analysing correlations to the NASDAQ or Bitcoin, this paper analyses the price drivers of DeFi protocols on a micro level. The approach followed in this paper is to categorise DeFi protocols into clusters based on their characteristics in order to determine theoretical price drivers for the cluster.
A Taxonomy of Decentralized Autonomous Organizations
Nobody has ever offered a systematic taxonomy of DAOs, identifying the full spectrum of their organizational primary and secondary functional building blocks, governance, and reward mechanisms. This is important for further studies that look at how these organizational and governance structures relate to DAO performance during and after DAO launch.
Stablecoins in Three Dimensions: Foundations of Value in the Crypto-economy
ENRICO ROSSI, University College London
Current taxonomies and classifications of cryptoassets typically identify stablecoins as a separate asset class next to other main categories of cryptoassets, such as security tokens, utility tokens, e-money tokens or exchange tokens. Policy and regulatory guidelines have been developed in accordance with this standard approach that interprets stablecoins as a distinct asset class including all tokens whose value is kept stable relative to some specified asset or basket of assets. However, this approach suffers from a variety of shortcomings that limit its applicability and usefulness for both regulatory and business purposes: the concept of stablecoin is too broad as it encompasses a variety of heterogeneous assets, it is not mutually exclusive with other asset classes, and it fails to capture the multidimensional nature of the various assets. This work identifies the three main components of any stablecoin —defined as the peg, the token and the backing or reserve— and claims that these can be interpreted simply as three dimensions of (exchange) value fulfilled by the three fundamental functions of money, characterised as: the unit of account, the means of exchange, and the store of value respectively. By doing so, the work claims that the stablecoin concept should not be characterised as a separate and self-contained asset class, but rather as an overarching and general meta-category from which a multitude of other classes and types of cryptoassets can be derived. By noting that different types of money and financial assets emerge from the different ways in which the three dimensions of value (and functions of money) interact, the work identifies five main cases from the various ways in which peg, token, and reserve are recombined. The work identifies the various types of traditional financial assets belonging to each of these five cases and discusses how the various types of cryptoassets (and stablecoins) should be mapped into each of them. By doing so, the work establishes a parallel between different types of traditional assets and different types of cryptoassets and further suggests how each cryptoasset should be classified and regulated according to the specific case it belongs to.
Collusion-Proof Decentralized Autonomous Organizations
We develop a normative blueprint for an incentive-compatible and collusion-proof decentralized autonomous organization (DAO). Incentive compatibility can be achieved through staked tokens, a digital form of collateral that carries voting rights. Higher stakes stimulate additional effort, but increase the risk of collusion. To be inherently collusion proof, DAOs either require a high revenue or a sufficient degree of decentralization in combination with a large network size. If neither one of these conditions is fulfilled, collusion can be precluded by confiscating the stake of malicious actors based on stochastic voting and having voting power concentrated among a few key token holders.
Your Sentiment Matters: A Machine Learning Approach for Predicting Regime Changes in the Cryptocurrency Market
JOSE’ PARRA-MOYANO, COPENHAGEN BUSINESS SCHOOL
It is proven that some cryptocurrency investors don’t follow a rational profit-maximizing behavior. This challenges the assumptions that need to be fulfilled for traditional financial models to adequately anticipate the returns on cryptocurrency investments. To overcome this challenge we develop a random forest model that we nurture with features from a sentiment analysis performed on data generated by cryptocurrency users in Google Trends and Reddit. Using features from such a sentiment analysis enables our model to capture the non-rationality of cryptocurrency investors and increases the ability of our model to anticipate regime changes (i.e., sharp return changes) in the cryptocurrency market. Our model outperforms the predicitve ability of the Log-Periodic Power Law (LPPL) model—which is the most widely used model to predict regime changes in financial markets. These results have significant implications for scholars in the fields of machine learning, cryptocurrencies, and text analytics, as well as for practitioners investing in the cryptocurrency market.
A Progressive Web3
QUINN DUPONT, UNIVERSITY COLLEGE DUBLIN
In this essay, I address persistent socio-economic criticisms levelled against Web3, offer three further criticisms drawn from the political economy of crypto, and develop an alternative sociological model for Web3 based on a neo-institutional analysis of social movements and collective identity. I find that, while financialization, assetization, and quantification; commodity fetishism; and digital inequality persist, they reflect an earlier culture within crypto. Based on a year of virtual ethnographic study of Decentralized Autonomous Organizations (DAOs), I describe a neo-institutional sociological model of Web3 that highlights economic surplus, an ethic of post/anti-work, leisure, and gamification. I find evidence of a progressive Web3 that defines itself in opposition to the political economy of crypto, suggesting a schismogenetic social process.
Blockchain and net-zero
JANE THOMASON, KASEI HOLDINGS
With the recent COP 26 backdrop – companies, celebrities, cities, countries, and organizations have committed to curbing their contributions to carbon emissions, if not eliminating them. The aim of achieving a net-zero world in less than 30 years is causing many to turn to the blockchain, buy carbon offsets, and spark renewed interest in carbon capture. Voluntary Carbon Markets hit a record $1 Billion in 2021. Voluntary carbon credits can also provide direct private financing to climate-action projects and investment into the innovation required to lower the cost of emerging climate technologies. This interest has resulted in the creation of a new class of Fintech, Green Digital Asset Solutions, which operates mainly in the voluntary markets. They comprise the carbon credit and environmental or biodiversity registries that track information about projects generating carbon credits, biodiversity credits, or environmental benefits used as commodities in a market system. Green Digital Asset companies tokenize green assets, or issue green asset classes in tokenized form and green security token offering platforms for fractionalized green asset ownership. These include green asset tokens – a tokenized carbon credit or biodiversity offset. The seminar will discuss selected use cases for Blockchain and Carbon Offsets, including tokenisation, NFTs and gamification.
Demystifying Governance in Enterprise Blockchain Networks
Blockchain has emerged as a particularly promising technology for governing interorganizational networks. Most importantly, blockchain technologies offer firms the possibility to collaborate across large networks without relying on intermediaries and traditional forms of governance such as contracts and trust. However, blockchain adoption comes with a variety of concerns and high complexity for stakeholders, especially in cases where co-opetitors participate in the same network. In this session, we will present insights from research and practice on hybrid forms of blockchain and platform governance, governance modes and scopes, and hierarchical governance layers in interorganizational networks. Drawing on recent empirical evidence, we show how firms implement and adapt mechanisms of coordination, control, and trust in large-scale, digitally enabled interorganizational networks. Our research is the result of extensive collaboration between researchers and practitioners at the University of Groningen and IBM from over 100 enterprise blockchain solutions around the world.
We Must Conceptualize and Measure Separately Decentralization and Distribution
JEAN-PHILIPPE VERGNE, UNIVERSITY COLLEGE LONDON
The terms “distributed” and “decentralized” have been used somewhat interchangeably in the fields of management and computer science to refer to the dispersion of authority, broadly speaking. Here, I distinguish between distribution as decision-making dispersion and decentralization as information dispersion to relax the implicit assumption that decision-making and information always go hand in hand (or the idea that agents who make decisions have, by design, access to relevant information, and vice versa). I then differentiate between distributed and decentralized digital platforms, and propose new measures, actionable in a blockchain setting, to capture these two dimensions. Finally, I draw practical implications for regulating a wide range of decentralized platforms, ranging from youtube.com to Bitcoin or Polkadot, as well as conceptual implications for revisiting the elusive notion of power in the digital economy.
Not All Words are Equal: Sentiment and Jumps in Cryptocurrency Market
AHMED F. AYSAN, HAMAD BIN KHALIFA UNIVERSITY
This paper aims to decipher the relation between price jumps and news sentiment on cryptocurrencies. We use minute-by-minute sentiment data, Thomson Reuters MarketPsych Indices (TRMIs), on a large set of cryptocurrencies prices based on complex natural language processing to score sentiment-laden content in news and social media. We first detect jumps at the intra-day level, and then correlate their occurrence with TRMI-scored events through logistic regressions. Our results show that the release of information increases the probability of price jumps, especially within 60 minutes from the TRMI event. By examining the content of the news stories, we find that sentiment on topics limited to emotions such as ”optimism and ”anger” and a more extensive set of topics related to market fundamentals such as ”market risk”, ”price direction”, ”price forecast”, and ”volatility” is identified as the possible causation of price jumps, suggesting that ”words are not all created equal”. The jump sensitivity to news sentiment also varies across different cryptocurrency characteristics such as adoption (community vs. firm driven), market cap (big vs. small), and market dominance (Bitcoin vs. altcoins).
2021 Open Seminars
Blockchain in the energy sector. A valid climate technology?
ALEXANDER FREIER, ENERGIEQUELLE
Renewable energy expansion is at the forefront when it comes to the discussion of viable options to decarbonize the fossil fuel-dominated global energy matrix. However, the volatility of renewable energy generation and insufficient storage options continue to call the attainability of this ambitious goal into question.
Against this background, blockchain technology has emerged within the debate on possible solutions contributing to the balancing of renewable energy production and consumption through the implementation of flexibility platforms. Real time energy trade on a blockchain basis is therefore regarded as a means to make renewable energy exchange more efficient, to increase its final consumption and to subsequently reduce GHG emissions.
Taking these observations into account, this presentation will focus on new consumer trends in the field of renewable energy and looks at experiences in New York and Northeastern Germany in order to highlight both the advantages and possible challenges to the application of blockchain in the energy sector.
Adding Blockchain to Antitrust
THIBAULT SCHREPEL, VU AMSTERDAM / STANFORD UNIVERSITY
On October 28th, Professor Schrepel (VU Amsterdam/Stanford) gave a talk on the relationship between blockchain and antitrust, highlighting the mutual benefits that stem from cooperation between the two and providing a unique perspective on how law and technology could cooperate. To this end, Professor Schrepel drew upon legal, economic, and technical insights to introduce blockchain and antitrust mutual flaws and the limitations when they ignore each other. He explored the anticompetitive practices that may arise in the ecosystem and will cover enforcement issues before showcasing the potential of blockchain and antitrust to complement one another. In a nutshell, this talk addressed the benefit of a “law + technology” instead of “law & technology” approach.
An inclusive CBDC: policy and technology issues
A retail CBDC as a new payment instrument could contribute to broaden financial inclusion while improving the domestic (retail) payments infrastructure. The issuance of a retail CBDC has been motivated by -among other drivers- the interest of central banks to improve the (underdeveloped) domestic payments infrastructure and low levels of financial inclusion.. There are three areas that may deserve special attention for an inclusive CBDC: 1) accessibility, including a widespread physical and digital payment infrastructure; 2) product design, comprising a two-tier system made of the central bank, banks, nonbanks and other payment service providers as well as a large merchants base; and, 3) digital financial literacy, consisting of supporting mechanisms for dispute resolution, fraud prevention and other possible risks for the less prepared to use digital fiat money.
Blockchain Applications in the Maritime Sector
KYRIACOS PAVLOU, ELECTI CONSULTING LTD
The seminar provides an overview of the potential of blockchain technologies to transform shipping and usher in a new era of maritime sector operations. We will cover possible applications as well as current initiatives in the industry that involve blockchain and how such emergent technologies can greatly contribute to the value chain. Particular emphasis will be given to two blockchain-based solutions: TradeLens, the A.P. Moller–Maersk and IBM ecosystem for global supply chain partners and NACRE, the MSC Shipmanagement and Electi Consulting Ltd decentralized platform for securing maritime training certification.
The Impact of Taproot and Schnorr on Address Clustering Analysis of Bitcoin Transactions
ALEXI ANANIA, CAMBRIDGE CENTRE FOR ALTERNATIVE FINANCE
Bitcoin Core developers have two new technological improvements planned for the Bitcoin Core client in 2020: Taproot and Schnorr. These upgrades were formally suggested in BIPs 340, 341, 342 and provide solutions to improve the privacy and anonymity of bitcoin transactions. Thus far, a technique called address clustering has been successfully used by law enforcement organizations and other forensic investigators to trace pseudonymous bitcoin transactions to a real world identity. In this paper, we examine the implications of Taproot and Schnorr on clustering analysis, to conclude that the aforementioned BIPs are anticipated to have minor impacts. Thus address clustering analysis will continue to be a useful heuristic for forensic investigators, once Taproot and Schnorr are fully implemented.
Building markets around keystone species’ ecosystem services for fighting climate change and protecting biodiversity
WALID AL SAQQAF, REBALANCE EARTH
According to the IMF, the tusks of an African Forest Elephant are valued at $40,000. However, the value of the carbon sequestration services done by these elephants, over their 60-year average lifespan, is $1.75m. We have a market for a dead elephant but we don’t have one for a living elephant.
Carbon sequestration is just one of the many ecosystem services provided by these elephants. The IMF didn’t value the other ecosystem services such as evapotranspiration that elephants provide within a rainforest. This water evaporation ensures stability, agricultural productivity and resilience for populations all around the Congo basin for example.
Join us in this seminar to discover how Rebalance Earth is using innovative technologies such as blockchain, artificial intelligence and internet of things to “augment” natures’ solutions such as forest elephants and other keystone species’ ecosystem services for fighting climate change and protecting biodiversity.
Accounting Information Systems and Blockchain. X-Accounting.
Modern organizations are heavily reliant on Information Systems (IS) for management. Among information systems, Accounting Information Systems (AIS) play the protagonist role. The more developed AISs are integrated with Enterprise Resource Planning (ERP) and other IS systems and constitute their essential fulcrum. A main objective of this paper is to justify the importance of AIS mainly from a legal and risk perspective. Another aim of the paper is to present the risks and challenges to AIS. We argue that in order to manage existing and emerging risks a new paradigm is needed.
Some attempts have been made both in the academic and industrial fields to implement blockchain in accounting. However, the blockchain applications in accounting has so far been relatively limited. We propose X-Accounting a three-book and three-axis accounts system based on the use of blockchain. X-Accounting is an innovative method that first of all assist in managing risks and attempts to overcome other challenges in terms of privacy and security, implementation, transparency, and effective audit and compliance
Keywords: AIS, Triple Entry Accounting, X-Accounting, Risk Management.
2020 Open Seminars
If I Ruled the World: The Role of Personal Values in Blockchain Adoption Decisions
CONSTANTIN LICHTI, JOHANNES GUTENBERG UNIVERSITY OF MAINZ
Given the growing pervasiveness of information technology (IT) in people’s everyday lives, understanding the impact of personal values (i.e., motivational goals that serve as guiding principles in the life of a person or group) on the individual decision-making process towards contemporary technology adoption becomes increasingly important. However, little is known how personal values may shape the perception of IT towards its intention to use. In this vein, blockchain technology (BT, i.e., a distributed ledger for conducting disintermediated transactions of digital assets) poses a novel case where values play an especially important role from the very inception of the concept by Bitcoin. To address this lacuna, we draw on the Schwartz value theory and develop and test a model of individual antecedents of BT adoption decision-making. Using a metric conjoint experiment, we study use intention judgments of public-permissionless BT made by potential users. Next to the understanding of how BT characteristics can enhance its adoption in society, our multi-level approach investigates the moderating importance of potential users’ personal values on use intention decisions, which offer novel insights into the individual adoption of IT. We derive implications for IT adoption and offer practical implications for blockchain developers as well as managers.
Blockchain and Sustainability: Past, Present and Future
HORST TREIBLMAIER, MODUL UNIVERSITY VIENNA
Among many other things, blockchain has been hailed as a technology that can help mankind to solve numerous sustainability issues. Simultaneously, the proof-of-work consensus algorithm, which is frequently applied in public and permissionless blockchains, has been described as a disaster for the environment, indicating that this technology has both positive and negative repercussions when it comes to sustainability. In this presentation I am going to summarize previous academic research on how blockchain can positively and negatively impact environmental, social and economic sustainability. Furthermore, I will present several promising industry projects and a framework to categorize the sustainability impact of blockchain technology. The main goal of this talk is to create awareness for the sustainability implications of blockchain and to encourage systematic research in this field.
REA, Triple-Entry Accounting and Blockchain: Converging Paths to Shared Ledger Systems
JUAN IGNACIO IBAÑEZ, UNIVERSIDAD CATÓLICA DE CÓRDOBA, ARGENTINA
In recent years, the concept of shared ledger systems offering a single source of truth has begun to put traditional bookkeeping into question. To date, its historical development remains unclear and under-researched. This paper conducts a genealogical analysis of shared ledger systems from their early forms such as Resource-Event-Agent (REA) accounting and triple-entry accounting (TEA) to their present incarnation in blockchain. We show how accounting frameworks developed between the 1980s and the early 2000s constitute the historical roots of TEA and have impacted much-discussed blockchain applications of today. As such, we duly acknowledge the influence of each individual contributing to this development, correct common misconceptions and map out how the paths of REA, TEA and blockchain converge in the realm of shared ledger systems.
New Sources of Risk (and the case for building antifragile systems)
NAVROOP SAHDEV, MIT MEDIA LAB AND THE DIGITAL ECONOMIST
“The natural world embodies antifragility as a key systemic property. But when it comes to human-made artificial systems, we aren’t very good at building antifragile systems just yet. The loophole is our limited understanding of how “reality” — the sum total of processes and natural laws that bound us — works and how to construct systems that mimic it. Instead, we’ve built systems that are at odds with the antifragility of the natural world. The defining question is that when the dust settles down, would we come out stronger or would it be business as usual? What does building an antifragile system — that gains from volatility and stressors — look like and how to design them?”
Dynamics of fintech terms in news and blogs and specialization of companies of the fintech industry
ROSARIO NUNZIO MANTEGNA, PALERMO UNIVERSITY, ITALY AND COMPLEXITY SCIENCE HUB, VIENNA, AUSTRIA
We perform a large scale analysis of a list of fintech terms in (i) news and blogs in English language and (ii) professional description of companies operating in many countries. The occurrence and co-occurrence of fintech terms and locutions shows a dynamics revealing a semantic stratification and a progressive evolution of the list of fintech terms in a technical vocabulary. By using methods of complex networks that are specifically designed to deal with heterogeous systems, our analysis of a large set of professional description of companies shows that companies dealing with fintech topics, services, and products are specialized to some degree with respect to the attributes of country, city, and economic sector. By using the approach of statistically validated networks, we detect geographical and economic specialization of a set of companies operating in the multi-industry, geographically and economically distributed fintech movement.
Antitrust in the Blockchain Era
GIOVANNA MASSAROTTO, UNIVERSITY OF IOWA
Similar to the Internet Era, which generated new value chains based on digital marketplaces, the blockchain has the potential to be the next cutting-edge technology which will revolutionize markets. Blockchain technology built on a consensus mechanism can make intermediaries [or third parties] unnecessary and reduce the market power of today’s centralized platforms. Antitrust enforcers should oversee the transformation of digital markets by means of blockchain technology to prevent anticompetitive conduct that might block the path to innovation. Using the Web as a model of reference, a public blockchain could run on universal and open protocols; with goods and services traded in a single universal blockchain. Antitrust enforcers are fundamental in keeping blockchain markets open and free. Rather than leading to the death of antitrust and regulation, blockchain will require more sophisticated versions of both.
War of Attrition and the cost of smart contracts in Ethereum
NICOLA DIMITRI, UNIVERSITY OF SIENA
Ethereum has been the first peer-to-peer decentralized platform to allow for the execution of smart contracts. These are contracts which are implemented automatically, hence do not need a third party for their enforcement. Users wishing to execute smart contracts in Ethereum have to pay the miners for their computational costs. To do so they invest a sum before running the contract, and so before knowing exactly how much the computational cost will be. Such sum, called gas fee, is the product of the so called gas limitwithgas price. If the gas limitis higher than the amount of gas used by the platformfor computing the contractthen the user pays only for the contract cost and is reimbursed the exceeding investment. If instead the gas limitis below the gas needed for contract computation then the user pays the gas fee, because the platform spent resources in computation, but the contract will not be implemented. In the paper we argue that such payment scheme for smart contracts is analogous to a War of Attrition, that is to a second price all-pay type of context. Based on this we discuss how users could optimally choose how much to invest to pay for smart contracts in Ethereum.