Abstract
Contracts and transactions are at the heart of our modern society. Their paper-based and digital records define the most important structures of our administrative economic, legal, political, and social systems by setting associated regulatory boundaries. They govern interactions among nations, public and private organizations, communities, and individuals worldwide [1]. This is why they are frequently subject to digital abuse and fraud, which is why cybersecurity is more important than ever in the digital age. Blockchain technology promises to play a crucial role in this context since it might be as disruptive for data integrity and recording as the Internet has been for data access and exchange.
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Notes
- 1.
At one point, according to The Wall Street Journal, the USD price of Bitcoin rose by 40% in 40 hours on no clear news [4]. Such very high volatility is just one typical evidence for hypes.
- 2.
See www.metzdowd.com/.
- 3.
The word “blockchain” did actually not exist until the creation of the first Bitcoin as it is not mentioned in the white paper explicitly. This term was rather embedded in the comments of the Bitcoin source code only that was written in one of the most popular programming languages called C++ originally.
- 4.
The first clay tablet was found in the Mesopotamian city Uruk, dates back to about 3300 B.C., and is now part of the famous British Museum’s collection [9].
- 5.
In literature, the terms “decentralized network” and “distributed network” are often used alike but a final convention has not been established yet. A reasonable differentiation is depicted in Figure 3-1 for clarity.
- 6.
Besides SHA-1, people also use the older “message digest algorithm” MD5 with a shorter output as well as SHA-256 and SHA-512 with a 64- and 128-bit output, respectively. SHA-1 is also employed for signing PDF files by a digital signature in Adobe Acrobat, for instance.
- 7.
Mathematicians say that the output of cryptographic hash functions approximates the properties of a series of random symbols.
- 8.
There is in fact a very small chance that two different inputs will have the same output mathematically, but this chance is so small that we can ignore it in practice.
- 9.
Metadata refers to data that provides information about other data or “data about data.” There are many types of metadata including descriptive, structural, and administrative metadata.
- 10.
SWIFT is the acronym for “Society for Worldwide Interbank Financial Telecommunication,” an organization that operates a telecommunication network for transferring money internationally.
- 11.
One Bitcoin block typically contains about 500 transactions.
- 12.
This algorithm was proposed by the three cryptographers Ron Rivest, Adi Shamir, and Leonard Adleman back in 1978 [12]. It is nowadays used by various web browsers, chat applications, email services, and VPN clients for exchanging information over the Internet securely.
- 13.
This target hash value can be defined by associating each letter with a certain number and calculating the overall checksum, for instance.
- 14.
This effect describes the value added by an increasing number of users that join a network. Just think about the value to a Facebook user of having connections to an increasing number of friends.
- 15.
The Bitcoin blockchain does not reveal this functionality since Bitcoin has only been designed as a P2P cash system.
- 16.
A private-sector, international nonprofit organization that allows people to create a digital identity for credential exchange of information via the Internet. It is in fact the world’s first self-sovereign identity network.
- 17.
The Ethereum blockchain, for example, is capable of processing up to 15 tps, while Bitcoin is slightly slower and able to process about 7 tps only, which is one of the major disadvantages that limit its adoption on a broad scale.
- 18.
Governance generally refers to structures and processes that are designed to ensure accountability and responsiveness.
- 19.
Further information is available on www.hyperledger.org/projects/fabric.
- 20.
See www.hashcash.org for further information.
- 21.
ICOs are generally comparable to initial public offerings (IPOs), where a token representing a company share or security is offered to the public in a new stock issuance.
- 22.
A consortium blockchain is sometimes also referred to as federated blockchain.
- 23.
See www.we-trade.com for further details.
- 24.
Further information is available on www.goquorum.com
- 25.
Acronym for “Anonymous Zero-Knowledge Transactions with Efficient Communications.”
- 26.
See www.car-ewallet.de for further information.
- 27.
The Chinese technology company Baidu was also reported to work on the implementation of a similar blockchain service for businesses called “Xuperchain” [40].
- 28.
Further details can be found at www.dlt.mobi/.
- 29.
See www.lo3energy.com/ for further details.
- 30.
China’s tax law requires companies to pay tax in advance on their future sales. For this purpose, the State Administration of Tax requires them to purchase so-called fapiaos in advance. A fapiao is a legal receipt that serves as a paper warranty against tax evasion, unlike other countries where invoices itself serve as a tax receipt. The blockchain-powered invoice system is officially called e-fapiao and combines the issuance of invoice with online payment by integrating the invoice application, issuance, reimbursement, and tax payment into an integrated invoice and capital flow.
- 31.
See, for example, www.forbes.com/sites/michaeldelcastillo/2019/04/16/blockchain-50-billion-dollar-babies/#812b2b57ccb2/ for further examples.
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Lang, V. (2021). Blockchain Technology. In: Digital Fluency. Apress, Berkeley, CA. https://doi.org/10.1007/978-1-4842-6774-5_3
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