@article{staples_m_chen_s_falamaki_s_ponomarev_a_rimba_p_tran_a_b_weber_i_xu_x_risks_2017,
	title = {Risks and {Opportunities} for {Systems} {Using} {Blockchain} and smart contracts},
	doi = {https://doi.org/10.4225/08/596e5ab7917bc},
	abstract = {Blockchain technologies originally emerged to support new forms of digital currency, but now hold promise as a new foundation for transactions in society. A blockchain is both a database recording transactions between parties, and also a computational platform to execute small programs (called ‘smart contracts’) as transactions. A blockchain is a distributed database, replicated across many locations and operated jointly by a collective. Blockchains transactions can support services for payments, escrow, notarisation, voting, registration, and process coordination. These are key in the operation of government and industry. Conventionally, these services are provided by specific trusted third-parties such as banks, legal firms, accountancy firms, government agencies, and service providers in specific industries. With a blockchain-based system, rather than relying on third-party organisations, we could instead choose to rely on the blockchain software and on a majority of the collective that jointly operates the blockchain system. The report describes some of the technical risks and opportunities in the application of blockchain technologies within government and industry, and how to assess whether blockchain-based systems will meet critical requirements. The project explores this primarily through the description and analysis of high-level design alternatives for illustrative ‘use cases’. Three use cases have been selected after a number of initial workshops and preliminary research: remittance payments, open data registries, and agricultural supply chain. These provide reasonable coverage of various kinds of requirements and regulatory concerns, against which we can evaluate design alternatives, and in turn learn more general lessons about blockchain technologies. In addition to this design-based analysis, we also report on some empirical results from testing prototype implementations. Compared to conventional centralised databases and computational platforms (on-premises or cloud), blockchains can reduce some counter-party and operational risks by providing neutral ground between organisations. Blockchain technologies may provide advantages for integrity and non-repudiation. However, they also currently have limitations for confidentiality, privacy, and scalability. For latency and availability, reading is improved but writing is worsened. Blockchains are also subject to a different cost model. Digital currency transfer and long-term storage of transactional data may be less expensive. However, program execution and storage of big data may be more expensive. Public blockchains provide very low barriers to entry for new participants, which can facilitate competition, innovation, and productivity. However, they do not mandate authentication of those participants, which creates challenges for regulation of money laundering, terrorism financing, and tax avoidance. Private blockchains can impose more controls on authentication and access, which can partly address those regulatory concerns. Still, for competitors within an industry consortium, private blockchains may not be private enough to provide normal levels of commercial confidentiality for business operations, competitive position, and customer relationships. When assessing business risk, regulatory acceptance, and assurance arguments for a blockchain-based system, we need to consider not just the blockchain, but also all of the other components that are integrated in the design of the whole system. Other components will provide user interfaces, cryptographic key management, and off-chain databases, communications, and processing. Judicious use of these other components may mitigate blockchain’s risks while still leveraging blockchain’s opportunities. Finally, blockchains are still a rapidly evolving technology, with ongoing developments especially to improve scalability and confidentiality. Globally, governments, enterprises, and startups are exploring the technology/ market fit in a wide variety of use cases and for a wide variety of requirements and regulatory demands. There is still much that is unknown about the development of trustworthy blockchain-based systems. Further research is required to improve our knowledge about how to create blockchain-based systems that work, and how to create evidence that blockchain-based systems will work as required.},
	number = {May},
	journal = {Csiro},
	author = {Staples, M., Chen, S., Falamaki, S., Ponomarev, A., Rimba, P., Tran, A. B., Weber, I., Xu, X., Zhu},
	year = {2017},
	keywords = {\#nosource},
}

{"_id":"BpHLgPpLxS46xQgAJ","bibbaseid":"staples-chen-falamaki-ponomarev-rimba-tran-weber-xu-risksandopportunitiesforsystemsusingblockchainandsmartcontracts-2017","author_short":["Staples, M.","Chen, S.","Falamaki, S.","Ponomarev, A.","Rimba, P.","Tran, A. B.","Weber, I.","Xu, X."],"bibdata":{"bibtype":"article","type":"article","title":"Risks and Opportunities for Systems Using Blockchain and smart contracts","doi":"https://doi.org/10.4225/08/596e5ab7917bc","abstract":"Blockchain technologies originally emerged to support new forms of digital currency, but now hold promise as a new foundation for transactions in society. A blockchain is both a database recording transactions between parties, and also a computational platform to execute small programs (called ‘smart contracts’) as transactions. A blockchain is a distributed database, replicated across many locations and operated jointly by a collective. Blockchains transactions can support services for payments, escrow, notarisation, voting, registration, and process coordination. These are key in the operation of government and industry. Conventionally, these services are provided by specific trusted third-parties such as banks, legal firms, accountancy firms, government agencies, and service providers in specific industries. With a blockchain-based system, rather than relying on third-party organisations, we could instead choose to rely on the blockchain software and on a majority of the collective that jointly operates the blockchain system. The report describes some of the technical risks and opportunities in the application of blockchain technologies within government and industry, and how to assess whether blockchain-based systems will meet critical requirements. The project explores this primarily through the description and analysis of high-level design alternatives for illustrative ‘use cases’. Three use cases have been selected after a number of initial workshops and preliminary research: remittance payments, open data registries, and agricultural supply chain. These provide reasonable coverage of various kinds of requirements and regulatory concerns, against which we can evaluate design alternatives, and in turn learn more general lessons about blockchain technologies. In addition to this design-based analysis, we also report on some empirical results from testing prototype implementations. Compared to conventional centralised databases and computational platforms (on-premises or cloud), blockchains can reduce some counter-party and operational risks by providing neutral ground between organisations. Blockchain technologies may provide advantages for integrity and non-repudiation. However, they also currently have limitations for confidentiality, privacy, and scalability. For latency and availability, reading is improved but writing is worsened. Blockchains are also subject to a different cost model. Digital currency transfer and long-term storage of transactional data may be less expensive. However, program execution and storage of big data may be more expensive. Public blockchains provide very low barriers to entry for new participants, which can facilitate competition, innovation, and productivity. However, they do not mandate authentication of those participants, which creates challenges for regulation of money laundering, terrorism financing, and tax avoidance. Private blockchains can impose more controls on authentication and access, which can partly address those regulatory concerns. Still, for competitors within an industry consortium, private blockchains may not be private enough to provide normal levels of commercial confidentiality for business operations, competitive position, and customer relationships. When assessing business risk, regulatory acceptance, and assurance arguments for a blockchain-based system, we need to consider not just the blockchain, but also all of the other components that are integrated in the design of the whole system. Other components will provide user interfaces, cryptographic key management, and off-chain databases, communications, and processing. Judicious use of these other components may mitigate blockchain’s risks while still leveraging blockchain’s opportunities. Finally, blockchains are still a rapidly evolving technology, with ongoing developments especially to improve scalability and confidentiality. Globally, governments, enterprises, and startups are exploring the technology/ market fit in a wide variety of use cases and for a wide variety of requirements and regulatory demands. There is still much that is unknown about the development of trustworthy blockchain-based systems. Further research is required to improve our knowledge about how to create blockchain-based systems that work, and how to create evidence that blockchain-based systems will work as required.","number":"May","journal":"Csiro","author":[{"propositions":[],"lastnames":["Staples"],"firstnames":["M."],"suffixes":[]},{"propositions":[],"lastnames":["Chen"],"firstnames":["S."],"suffixes":[]},{"propositions":[],"lastnames":["Falamaki"],"firstnames":["S."],"suffixes":[]},{"propositions":[],"lastnames":["Ponomarev"],"firstnames":["A."],"suffixes":[]},{"propositions":[],"lastnames":["Rimba"],"firstnames":["P."],"suffixes":[]},{"propositions":[],"lastnames":["Tran"],"firstnames":["A.","B."],"suffixes":[]},{"propositions":[],"lastnames":["Weber"],"firstnames":["I."],"suffixes":[]},{"propositions":[],"lastnames":["Xu"],"firstnames":["X."],"suffixes":[]}],"year":"2017","keywords":"#nosource","bibtex":"@article{staples_m_chen_s_falamaki_s_ponomarev_a_rimba_p_tran_a_b_weber_i_xu_x_risks_2017,\n\ttitle = {Risks and {Opportunities} for {Systems} {Using} {Blockchain} and smart contracts},\n\tdoi = {https://doi.org/10.4225/08/596e5ab7917bc},\n\tabstract = {Blockchain technologies originally emerged to support new forms of digital currency, but now hold promise as a new foundation for transactions in society. A blockchain is both a database recording transactions between parties, and also a computational platform to execute small programs (called ‘smart contracts’) as transactions. A blockchain is a distributed database, replicated across many locations and operated jointly by a collective. Blockchains transactions can support services for payments, escrow, notarisation, voting, registration, and process coordination. These are key in the operation of government and industry. Conventionally, these services are provided by specific trusted third-parties such as banks, legal firms, accountancy firms, government agencies, and service providers in specific industries. With a blockchain-based system, rather than relying on third-party organisations, we could instead choose to rely on the blockchain software and on a majority of the collective that jointly operates the blockchain system. The report describes some of the technical risks and opportunities in the application of blockchain technologies within government and industry, and how to assess whether blockchain-based systems will meet critical requirements. The project explores this primarily through the description and analysis of high-level design alternatives for illustrative ‘use cases’. Three use cases have been selected after a number of initial workshops and preliminary research: remittance payments, open data registries, and agricultural supply chain. These provide reasonable coverage of various kinds of requirements and regulatory concerns, against which we can evaluate design alternatives, and in turn learn more general lessons about blockchain technologies. In addition to this design-based analysis, we also report on some empirical results from testing prototype implementations. Compared to conventional centralised databases and computational platforms (on-premises or cloud), blockchains can reduce some counter-party and operational risks by providing neutral ground between organisations. Blockchain technologies may provide advantages for integrity and non-repudiation. However, they also currently have limitations for confidentiality, privacy, and scalability. For latency and availability, reading is improved but writing is worsened. Blockchains are also subject to a different cost model. Digital currency transfer and long-term storage of transactional data may be less expensive. However, program execution and storage of big data may be more expensive. Public blockchains provide very low barriers to entry for new participants, which can facilitate competition, innovation, and productivity. However, they do not mandate authentication of those participants, which creates challenges for regulation of money laundering, terrorism financing, and tax avoidance. Private blockchains can impose more controls on authentication and access, which can partly address those regulatory concerns. Still, for competitors within an industry consortium, private blockchains may not be private enough to provide normal levels of commercial confidentiality for business operations, competitive position, and customer relationships. When assessing business risk, regulatory acceptance, and assurance arguments for a blockchain-based system, we need to consider not just the blockchain, but also all of the other components that are integrated in the design of the whole system. Other components will provide user interfaces, cryptographic key management, and off-chain databases, communications, and processing. Judicious use of these other components may mitigate blockchain’s risks while still leveraging blockchain’s opportunities. Finally, blockchains are still a rapidly evolving technology, with ongoing developments especially to improve scalability and confidentiality. Globally, governments, enterprises, and startups are exploring the technology/ market fit in a wide variety of use cases and for a wide variety of requirements and regulatory demands. There is still much that is unknown about the development of trustworthy blockchain-based systems. Further research is required to improve our knowledge about how to create blockchain-based systems that work, and how to create evidence that blockchain-based systems will work as required.},\n\tnumber = {May},\n\tjournal = {Csiro},\n\tauthor = {Staples, M., Chen, S., Falamaki, S., Ponomarev, A., Rimba, P., Tran, A. B., Weber, I., Xu, X., Zhu},\n\tyear = {2017},\n\tkeywords = {\\#nosource},\n}\n\n","author_short":["Staples, M.","Chen, S.","Falamaki, S.","Ponomarev, A.","Rimba, P.","Tran, A. 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