A Book About Blockchain

A Book About Blockchain

How Companies Can Adopt Public
Blockchain to Leap into the Future

Rajat Rajbhandari, PhD

A Book About Blockchain: How Companies Can Adopt Public Blockchain to
Leap into the Future

Copyright © Business Expert Press, LLC, 2021.

All rights reserved. No part of this publication may be reproduced, stored

in a retrieval system, or transmitted in any form or by any means—
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First published in 2021 by

Business Expert Press, LLC
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ISBN-13: 978-1-95334-938-5 (paperback)

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 Advanced Quotes for A Book About Blockchain

I am impressed by the deep conceptual understanding that Rajat has. In

this book, he conveys to the reader a practical, down-to-earth version of
blockchain with all its elements.
As a business leader, and someone who pushed the envelope in applying
technology to the resources industry, I view this book as perhaps the simplest
end-to-end explanation of blockchain. It is a must read for any leader/
startup entrepreneur or consultant.
—Ricardo Escobar (Former CIO BHP Billiton)

It is quite simply the best book about blockchain for corporate executives.
It will prove invaluable to early adopting project managers, strategists, and
IT professionals as corporations experiment with blockchain and digital
currencies. It perfectly nails the sweet spot between breathless hype over the
technology’s enormous potential and a too deep technical dive.
—Chris Ballinger (CEO and Founder of MOBI),
Former Chief Financial Officer of Toyota Research Institute

Rajat’s technical understanding and real-world experience allows him to

pierce the hype bubble to deliver a sober look at the promise of blockchain.
This is an important book for professionals evaluating blockchain technology
and its implications for their businesses.
—Patrick Duffy, President of Blockchain in Transport Alliance
 Description
Executives, consultants, and strategists are wondering how to participate
in the blockchain economy. They are wondering whether new business
models that will emerge because of this novel technology will disrupt
theirs or whether they will ignore their businesses and create completely
different models. In this book I attempt to answer those questions. By the
time you finish, you will understand what blockchain economy is, how
to participate in it, and avoid being disrupted or, even worse, ignored.
Drawing from my own experiences as research scientist and entrepreneur,
the book describes methods to transform existing business by using digi-
tized trust that is industrialized at scale.

Keywords
Blockchain; trust machine; smart contract; autonomous networks; consen-
sus mechanisms; non fungible digital tokens; cryptocurrencies; tokenized
platforms; decentralized autonomous organization; crypto governance;
horizontal business innovation; risk management; interoperability.
 Contents
Acknowledgments..................................................................................xiii

Chapter 1 Introduction......................................................................1
Chapter 2 Evangelizing Blockchain.....................................................3
How Should One Evangelize Blockchain?..........................3
One Person’s Hype Is Another Person’s Headache...............6
Maximalist from the Inside, “Whatever Works”
from the Outside............................................................9
Defending Cryptocurrencies............................................10
Real Potential of Blockchain: Reduce
Information Asymmetry?..............................................10
Chapter 3 Explaining Blockchain Fundamentals...............................13
Ledger of Transactions......................................................13
Network of Nodes............................................................15
Cryptography...................................................................17
Consensus and Mining....................................................18
Smart Contracts...............................................................21
Cryptocurrencies and Tokens...........................................24
Merkle Trees.....................................................................26
Chapter 4 Protocols and Concepts to Watch for...............................29
Zero-Knowledge Proofs....................................................29
Identity to Interact with Blockchain Applications............33
Stable Cryptocurrencies...................................................36
Protocols to Implement NFTs..........................................37
Layer 2 Protocols and Scalability......................................39
Smart Contracts are Judges; Oracles are Attorneys............41
Cross-Chain Interoperability............................................43
Game-Theoretic Network Incentives................................46
x CONTENTS

Chapter 5 Private versus Public versus Consortium Blockchains.......49

Private Blockchains..........................................................49
Public versus Private Blockchains.....................................50
Debate about the Private Blockchain................................51
Here Comes Consortium Blockchain...............................53
Chapter 6 Deconstructing Smart Contracts......................................55
Self-Execution of Smart Contracts...................................55
Create, Use, and Kill........................................................57
Interacting with Smart Contracts.....................................58
Multisignature Smart Contracts.......................................58
Handling Service Exceptions............................................60
“Code Is Law”..................................................................61
Contracts and Hold-Up Problem.....................................62
Absence of Legal Jurisprudence........................................64
Wrapping It with a Ricardian Contract............................65
Chapter 7 Use of Decentralized Infrastructure for Businesses............69
What Does Decentralized Infrastructure Mean?...............70
Censorship Resistance of Decentralized Infrastructure.....71
Traditional Businesses Using Decentralized
Infrastructure................................................................71
Decentralized Applications Built on
Public Blockchain.........................................................73
Are Politically Decentralized Applications Feasible?..........74
Chapter 8 Know Blockchain’s Limits................................................75
Garbage in Garbage Stays.................................................76
Last Mile Problem............................................................77
Blockchain Is Not a Very Good File Storage.....................79
Vitalik Buterin’s Trilemma................................................80
Throughput and Latency..................................................81
Chapter 9 Focus on Creating Value..................................................83
Proof of {X}......................................................................84
Provenance of Decisions...................................................86
Chain of Custody of Assets..............................................88
Payments and Settlements................................................89
Tokenization of Nonfungible Assets.................................90
Less Verification Cost Means Reduced
Transaction Cost...........................................................93
 CONTENTS
xi

Chapter 10 Transforming Current Business Models............................95

Cross-Jurisdictional Payments..........................................95
Decentralized Arbitration.................................................98
Rise of Token-Powered Platforms...................................100
Smart Contract-Powered Data Renting..........................102
Invoiceless Payments......................................................104
Traceability 2.0..............................................................107
Smart Contract as Escrows.............................................108
Chapter 11 Creating Innovative Business Models.............................111
Horizontal Resource Sharing..........................................112
Fractional Ownership of Physical Assets.........................114
Collateralized Lending of Digital Assets.........................115
Prediction Markets.........................................................119
Machine-ro-Machine Micropayments............................121
Crypto-Enabled Automated Machines...........................124
Crossover with AI and Machine Learning......................126
Complex Tokenized Systems..........................................129
Crypto Asset Staking as a Business.................................130
Chapter 12 Rise of Decentralized Autonomous
Organizations.................................................................135
What is a DAO?.............................................................135
What Does Governance in a DAO Mean?......................136
On-Chain and Off-Chain Governance...........................137
Sybil Attack During On-Chain Elections.......................137
Low Participation Problems...........................................137
Kill Switch and Escape Hatch........................................138
Can a DAO Exist in Its Truest Meaning?.......................138
Misguided Push to DAOs..............................................140
DAO as a Public Utility Infrastructure...........................141
Why Should Traditional Businesses Care?......................142
Chapter 13 Selling Blockchain as Other Than Blockchain................145
Blockchain as an Evolution of Ledger.............................146
Do Not Sell Blockchain, Sell Transparency.....................147
Blockchain Is a Risk Management Tool..........................149
Sharing Threats and Risks..............................................150
Outsource Risk and Trust to a Network.........................151
xii CONTENTS

Chapter 14 Overcoming FOMO and Nudging Companies..............153

Meet, Greet, and Understand Pain Points.......................154
Push Back Against Familiarity Bias.................................156
Calling Out the Saying “Blockchain
Is Not Ready”.............................................................156
Don Quixote Problem of Finding a Problem
That Fits the Solution.................................................157
“Do You Need Blockchain?” Is That
the Right Question?....................................................158
Chapter 15 Understanding Implementation Risks Early On.............159
Risks Associated with Public Blockchain Infrastructure.......159
Be Realistic About Transaction Speed.............................162
Finding an Internal Champion.......................................162
Stakeholder Participation...............................................163
Identifying Pain Points Where Blockchain
Can Impact Is Critical................................................164
Dealing with Identity.....................................................165
Chapter 16 The Gold Rush of Blockchain Standards........................169
Standardizing Blockchain Data Elements.......................170
Industry Requirements from Blockchain Standards........172
Standards Should Not Conflict......................................174
Will Blockchain Compete with EDI Standards?.............176
Chapter 17 Engaging in Blockchain Implementation.......................181
Joining the Web 3.0 Movement.....................................181
Monetizing and Sharing Data in Marketplaces...............184
Participating in Consortia and Alliances.........................186
Prerequisites for Implementing Blockchain Projects.......187
Performing Proof of Concepts........................................188
Anchoring Transactions to Public Blockchain.................191
Decentralized Application Architecture..........................191
Hybrid Implementation Architecture.............................194
Epilogue..............................................................................................197
Glossary..............................................................................................199
About the Author.................................................................................203
Index..................................................................................................205
 Acknowledgments
A Book About Blockchain would not have been possible without the sup-
port of my family. They shared my belief that writing this book was a
once-in-a-lifetime opportunity and a novel way to share my experience with
others. They tolerated me locking myself in a room for hours during nights
and weekends. The dexFreight family kept me motivated – ­Hector Hernandez,
Ricardo Escobar, Adrian Giannini, Jim Handoush, Renat Khasanshyn.
Also, special thanks to Ginger Goodin, Juan Carlo Villa, Art Richards, Hector
Monsegur, Chris Ballinger, Santosh Shrestha, Rana Basu, Jorge Murillo,
Dominik Batz, Ocean Protocol team, MOBI team, RSK and IOV Labs team.
Much of this book is a result of experiences, heated discussions, and consulta-
tions we shared. I am grateful to Ken Melendez for proofreading the manu-
script and Dishebh Shrestha for an amazing cover design and to the eSatya
team for sponsoring the book website. Finally, I would not have started the
book if my brother-in-law and a fellow blockchain enthusiast, Ruchin Singh,
had not one day said to me, “Why don’t you write a book about blockchain?”
xiv ACKNOWLEDGMENTS

A Personal Preface
Dear Readers,
Are you a c-level executive, consultant, architect, strategist,
program manager wondering how you can participate in the
blockchain economy? Are you thinking about transforming your
businesses and implementing changes in your organization?
Are you wondering if new business models that will emerge
because of this novel technology will disrupt yours? Or will the
technology ignore your business and create completely new ones?
This book answers these questions and more at a fundamental
level in a way an executive can understand. By the time you’ve
finished the book, you’ll understand what the blockchain
economy is, how to participate in it, and avoid being disrupted
or, worse, ignored. You need a playbook to not only transform
but also architect your existing business into a new digital
economy, the one in which trust is industrialized at scale.
This book is also about my personal journey and the
challenges I faced as an entrepreneur in blockchain space. A
significant portion of this book includes my own experiences as
a researcher, CEO, CIO, and a startup cofounder. This book will
help you “short circuit” the challenges I faced and remove obstacles
for you early in the process of transforming your business.
I learned about blockchain in early 2013 but never bothered
to inquire about it. When the first Decentralized Autonomous
Organization (DAO) was hacked, in June 2016, I started to
look seriously into why it was hacked. Note: to learn more
about the hack, please read “The DAO, the hack, the soft fork,
and the hard fork” published in cryptocompare.com.1 I’m not a
security expert by any stretch of the imagination, but the idea of
somebody hacking an autonomous organization was intriguing.

1
CryptoCompare. June 2, 2018. “The Dao, the Hack, the Soft Fork
and the Hard Fork,” CryptoCompare. https://www.cryptocompare.com/
coins/guides/the-dao-the-hack-the-soft-fork-and-the-hard-fork/.
 ACKNOWLEDGMENTS
xv

What is an autonomous organization? What was the flaw in the

DAO’s smart contract? How did the smart contract function?
To understand how it was hacked, I had to learn about smart
contracts at the fundamental level. This took me to Vitalik
Buterin’s white paper on Ethereum first published in 2013.2
Unlike most people, who learned about blockchain via
Bitcoin, I learned about it because of smart contracts. Back
then, I was not a huge believer in Bitcoin compared with now.
I did not see Bitcoin making a significant contribution to
business process improvement.
I wanted to know how blockchain worked at the code
level and was drawn to Andreas Antonopoulos’ book Mastering
Bitcoin published in December 2014.3 The book helped me
understand nuances and intricacies of how Bitcoin worked and the
fundamentals of blockchain itself. Light bulbs went off in my head
everywhere after I read the book. Shortly thereafter, I read Satoshi
Nakamoto’s white paper several times.4 The engineer in me said that
I had to understand the fundamentals and go straight to the source.
I learned more, wrote code, and had long discussions with
friends about the technology. In 2017 I published a report
describing how blockchain will revolutionize the transportation
and mobility industries. At this point I was on a roll. I was invited
to dozens of events and delivered talks to several companies. I
also moderated and spoke on multiple blockchain panels. I felt a
sense of obligation to speak on stage at those events. Each event
motivated me (and still does), giving me a sense of purpose to
educate others about blockchain’s fundamentals and theory. I
developed a passion to evangelize blockchain to groups of people

2
V. Buterin. 2013. “A Next Generation Smart Contract and Decentral-
ized Application Platform,” Ethereum Foundation.
3
A. Antonopoulos. 2014. Mastering Bitcoin: Unlocking Digital Curren-
cies (New York, NY: O’Reilly Media.)
4
S. Nakamoto. 2008. “Bitcoin: A Peer-to-Peer Electronic Cash System,”
Bitcoin.org.
xvi ACKNOWLEDGMENTS

at conferences and summits. In return, I learned about their pain

points, blind spots in workflow, internal issues being discussed
at the c-level, their concerns about challenging environments to
implement blockchain, and much more.
That was not enough. I wanted to do something bigger.
In early 2018 I decided to jump ship and left the comfort
of academia and cofounded dexFreight to utilize blockchain
in the logistics industry. I did it partly because of what some
experts call “crypto-secession.” It means leaving/rejecting
the current corporate structure of centralized power to a
decentralized organization. I say “partly” because I still believe
in existing corporate structure; however, I wanted to explore
what potentials of this new and alternate power structure built
on blockchain.
While I was having this discussion with my brother-in-law,
he said, why don’t you write a book about your experience as
an entrepreneur in blockchain. So, I did, and much of this
book is a catalog of those experiences. Every piece of this book
contains thoughts that passed through my brain at some point,
while some are experiences I encountered along the way while
cofounding dexFreight. Hence, everything in this book reflects
my own opinions and no one else’s.
Along this journey, I met individuals moving into
blockchain—some left their cushy jobs or were on the verge
of leaving. Some are still working their old jobs but wish to
introduce blockchain into their company. I have seen their
struggle because I’ve experienced them myself. I dedicate this
book to my new friends who jumped into the rabbit hole.
The brave men and women who right now are on the brink of
leaving a cushy six-figure job and, like myself, say goodbye to
colleagues and pursue a journey toward the unchartered territory
of blockchain. Each one of them will dive into the rabbit hole to
start a blockchain startup, become a blockchain consultant, or
pivot a company to begin using blockchain technology.
 ACKNOWLEDGMENTS
xvii

I will call them brave because it takes a certain amount of

resolve to take that giant leap of faith. I know how it feels, because
I did it. I took that giant leap of faith, started a blockchain startup,
and became a blockchain evangelist. I also refuse to judge people
on the basis of how they want to use blockchain—integrate it with
their existing system and turn it into something more powerful or
create a decentralized system that goes against the ethos of power
centralization. To me, blockchain is a free-at-will technology.
This book is not about learning the fundamentals of blockchain,
because there are plenty of books, blogs, and videos out there for
that. In fact, I assume you already know a thing or two about
blockchain and how it works.
I didn’t want to write a book on how blockchain will change
the world and everything around us. Let’s leave that to notable
writers and thinkers like Don Tapscott, Melanie Swan, William
Mougayar, and many more. I also didn’t want to write about the
algorithms and mathematics of blockchain. Instead, I felt that
executives, managers, strategists, designers, and consultants who
operate between the 100,000-ft level of thinkers and the 100-ft
level of developers need a different kind of reference.
I wanted to write a book that takes a more pragmatic
approach to blockchain’s possibilities in transforming existing
business models and creating new ones. For example, if you have
read news headlines in 2017 or 2018, you would have thought
smart contracts have solved all the problems in the legal domain.
Well, guess what? They haven’t even scratched the surface yet.
At the same time, smart contracts are creating new possibilities
that were not feasible before. I also didn’t want to write about
algorithms and mathematics of blockchain. Instead, I felt
executives, managers, strategists, designers, and consultants who
operate between the 100,000-ft level of thinkers and the 100-ft
level of developers need a different kind of reference, one that
will assist them in developing and implementing actual business
models using the most pragmatic approach.
xviii ACKNOWLEDGMENTS

In addition to understanding the fundamentals, executives

need to know how to transform their businesses while
implementing changes in their organization to make it happen.
They will face strict challenges such as the harsh reality of
implementing blockchain—the same way I did. They need
a book to understand the power of the public blockchain
economy, and, most importantly, how to participate in it and
avoid being outdated. They need a book to gradually transition
from why to how—a guide that explains how to leap into the
future enabled by blockchain. So, here it is.

Sincerely,
Rajat
Dallas, Texas
 CHAPTER 1

Introduction

Foundational technologies like blockchain take decades to make a mas-

sive impact on society and economy. However, if you had read the news,
you would not have believed it. The hype machine was real, and the mes-
sage was  that the technology would not go through a natural cycle of
development. Instead, it will rapidly disrupt everything. This continuous
news cycle declared that blockchain will solve problems in finance, supply
chain, election, insurance, and more. The blockchain will soon drive the
global economy, and the disruption was well underway.
In 2017 and 2018, blockchain startups raised billions from  crypto
millionaires, venture capitalists, and other institutional investors via ini-
tial coin offerings. The market valued 1-year-old blockchain protocols of
several billion dollars, without a single practical use case. Executives
were ready to pay thousands of dollars to attend conferences to under-
stand what this new technology was about. Conferences charged accord-
ingly to listen to “so-called” investors because they had a few million dollars
in their crypto wallets. These conferences featured blockchain experts, who
cannot explain with a straight face what a smart contract was. However,
hype is not all that bad because reality always sets in thereafter. In 2019,
when projects failed, the market pushed scammers out in the open. Inves-
tors who poured billions on protocols began pushing for implementation
of real-world use cases. The new paradigm steered the blockchain technol-
ogy to a proper course of true innovation and scaling.
In 2020 people started talking about scaling blockchain applications.
Use cases that could scale widely became important for startups and in-
vestors. The paradigm of blockchain as being a trustless machine changed
to a trust machine. It is a trust at industrial scale. The true potential of
blockchain is to reduce information asymmetry between parties using
2 A BOOK ABOUT BLOCKCHAIN

immutable ledgers anchored on an open network that operates globally

using an open protocol.
Blockchain is a revolutionary technology, and, like other revolution-
ary technologies, it will not disrupt existing business models but ignore
them and create innovative ones we have not seen before. I describe these
innovative business models later in the book. These innovative business
models will challenge the existing ones and even become a viable alterna-
tive, the same way cryptocurrency is challenging traditional finance.
In due course, existing businesses, especially the smart ones, will grow
and start adopting blockchain (along with other nascent technologies)
because they will want to stay relevant and transform. This book provides
you with three key ingredients to implement blockchain and take part
in the new economy by helping understand the fundamental compo-
nents of blockchain, risks, and challenges of innovative business models,
and ways to take part in the blockchain world. After reading the book,
you’ll be able to evangelize the use of blockchain within your organization
and with your customers, design breakthrough and innovative business
models, and analyze risks and opportunities—legal, administrative, and
technical.
 Index
Absence of legal jurisprudence, 64–65 BitPesa, 97
Accenture, 9 Black, Adam, 13
Access control, 49 Blockchain applications, 33–35
AI and machine learning, Crossover, Blockchain fundamentals
126–129 consensus and mining, 18–21
AI. See Artificial intelligence cryptocurrencies and tokens,
Airbnb, 7, 100, 101, 112 24–26
Akerlof, George, 10 cryptography, 17–18
Algorithmic central bank/seigniorage ledger of transactions, 13–15
shares, 37 Merkle trees, 26–27
Amazon, 7, 78, 82, 101 network of nodes, 15–17
Amazon Web Service/Azure, 163 smart contracts, 21–24
Anchoring transactions, 193 Blockchain implementation
Antonopoulos, A., 13 anchoring transactions, 193
Apple, 8 consortia and alliances, 188–189
Application programming interface decentralized application
(API), 58 architecture¸ 193–195
Architectural decentralization, 69 hybrid implementation architecture,
Artificial intelligence (AI), 60, 61, 196–197
121, 124, 126–128 marketplaces, monetizing and
Assets, chain of custody, 88–89 sharing data, 186–187
Augur, 119–120 POC, 190–193
Axiom, 102 Web 3.0, 183–186
Blockchain in Transport Alliance
B2B, 70, 74 (BITA), 155, 173, 177, 188
Basu, Rana, 168 Blockchain’s potential, 10–11
Beautiful Mind, 46 Blockchain standards, the gold rush of
Beedham, Matthew, 174 EDI standards, 178–182
BIP. See Bitcoin Improvement industry requirements, 174–176
Proposals standardizing blockchain data
Birch, David, 168 elements, 172–174
BITA. See Blockchain in Transport standards should not conflict,
Alliance 176–178
Bitcoin Improvement Proposals (BIP), BlockFi, 116
137 Bloomberg, 101
Bitcoin, 5, 7, 9, 10, 11, 13, 19, 21, Bluetooth, 171
25, 26, 34–37, 39–41, 48, Bolychevsky, Irina, 135
69, 70, 75, 81, 97, 117, 129, Brynjolfsson, 140
140, 141, 149, 151, 154, Burke, Shelita, 156
163, 164, 166–168 Buterin, Vitalik, 22, 44, 45, 48, 69,
BitID, 35 70, 80, 195
206 INDEX
Campos, Jose E., 158
Cardano, 82
Censorship resistance, 71
Centralized database versus private
blockchain, 52
Centralized Trusted Identity, 34
Centrifuge’s method, 117
Chain Interoperability, 44, 45
Chamber of Digital Commerce, 64
Chicago Mercantile Exchange, 90
CISCO, 8
CIVIC, 35
Code and Other Laws of Cyberspace, 62
“Code is law”, 61–62
Coinbase, 70
Communication, 44
Complex tokenized systems, 129–130
Consensus and mining, 18–21
Consortia and alliances, 188–189
Consortium blockchain, 53–84
Consurgo, 168
Contract codes, 56
Contracts and hold-up problem,
62–63
Corda Fabric, 22
Cosmos network, 46
Create, use, and kill, smart contracts,
57–58
Cross-chain interoperability, 43–46
Cross-chain message relay, 45–46
Cross-jurisdictional payments, 95–98
Crowe, Russell, 46
Crypto asset staking, 130–133
Crypto-asset backed, 37
Cryptocurrencies/tokens, 7, 10,
24–26, 33, 36, 37, 78, 96
Crypto-enabled automated machines,
124–126
Cryptography, 17–18
Cuofano, Gennaro, 111
The Curse of Cash, 5
Dai, Wei, 13
DAO. See Decentralized autonomous
organizations
Decentralized application
architecture, 193–195
Decentralized applications, 73–74
Decentralized arbitration, 98–100
Decentralized autonomous
organizations (DAO)
governance, 136–137
kill switch and escape hatch, 138
low participation problems, 137
on-chain and off-chain
governance, 137
on-chain elections, Sybil attack, 137
public utility infrastructure,
141–142
traditional businesses care, 142–143
Decentralized infrastructure, 69–74
Decentralized networks, 151–152
Decentralized Trusted Identity, 34–35
Delegated Proof of Stake, 20, 48
Deloitte, 97, 188
Department of Defense, 126
dexFreight, 9, 60, 62, 130, 173
Digital assets, 112, 115–119
Digital hashes, 114
Digital token, 91
Digital transactions, 14
Do not sell blockchain, sell
transparency, 147–149
Don Quixote, 158
EAC. See Ethereum alarm clock
Economic Sciences, 10
EDI. See Electronic data interchange
EEA. See Enterprise Ethereum
Alliance
Electronic data interchange (EDI),
55, 175, 178–181
Enabling Blockchain Innovations, 41
Enterprise Ethereum Alliance
(EEA), 177
Entrepreneurs See a Web Guided by
Common Sense, 183
EOS, 21, 22, 24, 48, 58, 66, 82, 163
ERC-20 standards. See Ethereum
Request for Comments
ERC-20 tokens, 118
ERC-721, 38, 91
ERC-998, 38
Essentia.one, 184
Ethereum alarm clock (EAC), 56
Ethereum JavaScript API, 58
 INDEX
207
Ethereum Request for Comments
(ERC-20) standards, 23,
91, 123
Ethereum virtual machine (EVM), 56
Ethereum, 9, 10, 19, 21–26, 33, 34,
37, 39, 41, 44, 48, 56, 58,
69, 70, 81, 82, 93, 101, 117,
119, 120, 129, 135, 137,
138, 139, 141, 142, 151,
152, 154, 156, 162, 163, 168
Evangelizing blockchain
cryptocurrencies, 10
maximalist, 9
one person’s hype is another person’s
headache, 6–8
real potential of blockchain, 10–11
EVM. See Ethereum virtual machine
Evolution of ledger, blockchain,
146–147
Expedia, 101
Experian, 102
FAA. See Federal Arbitration Act
Facebook, 34, 100, 101, 184
Farrington, Allen, 120, 121
Fear of missing out (FOMO), 153,
154
Federal Arbitration Act (FAA), 98–99
File storage, blockchain, 79–80
Filippi, 62
Finestone, Mathew, 47
Finney, Hal, 13
Fleet management systems
(FMS), 173
FMS. See Fleet management systems
FOMO. See Fear of missing out
FOMO/Nudging companies,
153–159
Forbes, 158
Foregoing model, 67
Fortune, 150
FourWeekMBA, 111
Full nodes, 17
Fungible assets, 90
Game Theory and Blockchain, 47
Game-theoretic network incentives,
46–48
Garbage In Garbage Stays (GIGS)
system, 76
Garbage, blockchain’s limits, 76–77
Gartner, 6–7, 101
General Motors (GM), 114
Georgetown Law Technology Review, 64
GIGS system. See Garbage In Garbage
Stays
Gini coefficient, 70
Global positioning system (GPS),
79, 107
GM. See General Motors
Gnosis, 119–120
Goldfeder, Steven, 110
Google, 5, 34, 101
GPS. See Global positioning system
Grigg, Ian, 65, 66
GS1, 143
handling service exceptions, 60–61
Harvard Business Review, 5, 79
Hash lock time contracts, 45
Hassan, 62
Hedera Hashgraph, 174
Holden, 62, 63
Horizontal resource sharing, 112–114
HTTP, 171
Hybrid designs, 9
Hybrid implementation architecture,
196–197
Hyperion Consulting, 168
Hyperledger, 21, 22, 24, 82
Hypertext markup language
(HTML), 58
IBM, 9, 86
ICO. See Initial coin offering
ID.me, 35
IDchainZ, 35
IEEE. See Institute of Electrical and
Electronics Engineers
Initial coin offering (ICO), 59
Innovative business models
AI and machine learning, Crossover,
126–129
complex tokenized systems,
129–130
crypto asset staking, 130–133
208 INDEX

Innovative business models (contd.) Lessig, Lawrence, 62

crypto-enabled automated Lewis, Andrew, 101
machines, 124–126 Light nodes, 17
digital assets, 115–119 Lightning Network, 39, 40
horizontal resource sharing, LinkedIn, 34
112–114 Litecoin, 26
M2M micropayments, 121–124 Logical decentralization, 69
physical assets, 114–115 Low participation problems, 137
prediction markets, 119–121
Institute of Electrical and Electronics M2M micropayments. See Machine-
Engineers (IEEE), 177 to-machine (M2M)
Interacting, smart contracts, 58 micropayments
Internal champion, 164–165 Machine Platform Crowd, 140
The International Standards Machine-to-machine micropayments,
Organization (ISO), 176 121–124
International Telecommunication Maersk, 9
Union-Telecommunication MakerDAO, 101, 116
(ITU-T), 177 Malani, 62, 63
Internet of Things (IoT), 121, 122 Marketplaces, monetizing and sharing
Internet, 6, 62, 111, 171 data, 186–187
InterPlanetary File System (IPFS), Markoff, John, 183, 184
162 Martyn, Paul, 149
Invoiceless payments, 104–107 Massachusetts Institute of
Invoices, portability and encumbrance Technology, 40
of, 44–46 Mastering Bitcoin, 13
IoT. See Internet of Things Maximalist, blockchain, 9
IOTA, 174 McAfee, 140
IPFS. See InterPlanetary File System Membership-based consortium
ISO. See The International Standards blockchain, 53
Organization Merkle trees, 26–27, 114
ISO. TC 307, 177 MetaMask, 33
ITU-T. See International Metcalf ’s law, 162
Telecommunication Microsoft, 156
Union-Telecommunication Mining and validator nodes, 50
Mining nodes, 17, 19
JavaScript, 58 MOBI. See Mobility Open
JPMorgan Chase and Co., 149 Blockchain Initiative
Mobile phones, 107
Kill switch and escape hatch, 138 Mobility Open Blockchain Initiative
Know Your Customer (KYC), 35, 97, (MOBI), 177, 188
117, 169 Monegro, Joel, 111
KYC. See Know Your Customer Moody, 171
Multisignature smart contracts, 58
Last mile problem, blockchain’s limits,
77–79 Nakamoto, Satoshi, 13, 15, 129, 145,
Layer 2 protocols and scalability, 161
39–41 Nannra, Anoop, 8
Ledger of transactions, 13–15 Narula, Neha, 40
 INDEX
209

Nash, John, 46 blockchain applications, 33–35

NEM, 21 cross-chain interoperability,
NEO, 82 43–46
Network of nodes, 15–17 game-theoretic network incentives,
New York Convention, 99 46–48
New York Times, 183 layer 2 protocols and scalability,
NFTs. See Nonfungible tokens 39–41
Nielsen, 102 NFTs, 37–39
Noncrypto assets, 117 smart contracts, 41–43
Nonfungible tokens (NFTs), 37–39, stable cryptocurrencies, 36
117, 118 ZKP, 29–33
Provenance of decisions, 86–88
Ocean Protocol, 102–103 Public blockchain infrastructure,
Off-chain asset backed, 36–37 161–163
On-chain and off-chain Public utility infrastructure,
governance, 137 141–142
On-chain elections, Sybil attack, 137 Public versus private blockchains,
Ondiflo, 168 50–51
OneName, 34
OpenBazaar, 59, 66, 74, 99, 110 Radio frequency identification
OpenLaw, 58 (RFID), 78, 79, 107
Oracle, 42, 62 Return on investment (ROI), 165
RFID. See Radio frequency
p2p, 73, 110 identification
Parity Technologies, 184 Ricardian contract, 65–67, 99
Parker, G., 100 Risk management tool, blockchain,
Payments and settlements, 89–90 149–150
PDF. See Portable document format Rogoff, Kenneth
Peak of Inflated Expectation, 7 ROI. See Return on investment
Physical assets, 114–115 Ruskin. Max, 64, 65
Platform Revolution, 100
POC. See Proof of concept Salt Lending, 116
Poex, 84 SAP, 9
Political decentralization, 69 SEC. See Securities and Exchange
Ponzi scheme, 24 Commission
Portable document format (PDF), 55 Secure Hash Algorithm (SHA-256),
PoS. See Proof-of-stake 20
PoW. See Proof of work Securities and Exchange Commission
Prediction markets, 119–121 (SEC), 139
Privacy, 51–52 Self-destruct, 57
Private blockchains, 49–50, 51–53 Self-execution, 55–57
Private/public key, 33, 35, 43, 57, 89 Self-sovereign identity, 34
Proof of {X}, 84–86 Service exceptions, smart
Proof of concept (POC), 190–193 contracts, 61
Proof of Elapsed Time, 20 Sharing threats and risks, blockchain,
Proof of work (PoW) , 20, 130, 162 150–151
Proof-of-stake (PoS), 20, 130, 131 ShoCard, 35
Protocols and concepts Sklaroff, Jeremy, 65
210 INDEX
Smart contracts, 21–24, 41–43, 99,
103, 106, 108–110
absence of legal jurisprudence,
64–65
“code is law”, 61–62
contracts and hold-up problem,
62–63
create, use, and kill, 57–58
handling service exceptions, 60–61
interacting, 58
multisignature, 58
ricardian contract, 65–67
self-execution of, 55–57
Smart contract-powered data renting,
101–104
Smart Contracts: Building Blocks for
Digital Markets, 21
Sovrin, 34
Spence, Michael, 10
Srinivasan, Balaji, 70
Stable cryptocurrencies, 36
Stakeholder participation, 165–166
Stakeholders, 33, 86, 87, 97–98, 101,
102, 129, 130, 153, 186
Stampery, 84
State of Stable Coins, 36
Steiner, Jutta, 184
Stellar, 82
Stiglitz, Joseph, 10
Surowiecki, James, 120
SWIFT, 143
SxSW, 156
Szabo, Nick, 21, 22
TCP/IP. See Transmission control
protocol/Internet protocol
TCR. See Token-curated registry
Technological hypes, 6
ThirtyK, 120
Throughput and latency, 81–82
Tierion, 84, 193
Time Node, 57
Token engineering, 129
Token-curated registry (TCR), 132,
133
Tokenization of Nonfungible Assets,
90–92, 112
Tokenized Data Sharing, 185
Token-powered platforms, 100–101
Toner, Mark, 120, 121
Toyota, 114
TPS. See Transaction throughput/
transactions per second
Traceability 2.0, 107–108
Trading/swapping assets, 43–44
Traditional businesses, 71–73,
142–143
Transaction throughput/transactions
per second (TPS), 52
Transforming current business models
cross-jurisdictional payments,
95–98
decentralized arbitration, 98–100
invoiceless payments, 104–107
smart contract, 108–110
smart contract-powered data
renting, 101–104
token-powered platforms, 100–101
traceability 2.0, 107–108
Transmission control protocol/
Internet protocol (TCP/IP),
6, 112
Transportation Alliance, 3
Transportation Arbitration Board, 98
Transportation Security
Administration, 14
Trusted notary mechanism, 45
The Truth about Blockchain, 5
UAA. See Uniform Arbitration Act
Uber, 7, 100, 112, 184
Unconfirmed transaction (UTXO),
164
Uniform Arbitration Act (UAA),
98–99
United States Postal Service (USPS),
77
Universal Product Code (UPC), 107,
108
UPC. See Universal Product Code
uPort, 33, 34
Users sign transactions, 18
USPS. See United States Postal Service
USV, 111
Utility Tokens, 25
UTXO. See Unconfirmed transaction
 INDEX
211
Value creation
chain of custody of assets, 88–89
payments and settlements, 89–90
proof of {X}, 84–86
provenance of decisions, 86–88
Tokenization of Nonfungible
Assets, 90–92
verification cost, 93
Verification cost, 93
Vitalik buterin’s trilemma, 80–81
W3C. See World Wide Web
Consortium
Walmart, 9, 108
Web 3.0, 183–186
WEF. See World Economic Forum
Wi-Fi, 171
World Economic Forum (WEF),
176, 178
World Wide Web Consortium
(W3C), 177–178
World Wide Web, 6, 146
Wozniak, Steve, 8
YouTube videos/video tutorials, 4
Zago, Matteo, 184
Zero-knowledge proof (ZKP),
29–33
Zero-knowledge succinct non-
interactive argument of
knowledge (zk-SNARK),
31–33
ZKP. See Zero-knowledge proof
zk-SNARK. See Zero-knowledge
succinct non-interactive
argument of knowledge
 BUSINESS LAW AND CORPORATE RISK MANAGEMENT
COLLECTION
John Wood, Editor
• Guerrilla Warfare in the Corporate Jungle: Adaptations for Survival by K.F. Dochartaigh
• Successful Cybersecurity Professionals: How To Change Your Behavior to Protect Your
Organization by Steven Brown
• Artificial Intelligence for Security by Archie Addo
• Artificial Intelligence Design and Solution for Risk and Security by Archie Addo
• Artificial Intelligence for Risk Management by Archie Addo
• The Business-Minded CISCO: How to Organize, Evangelize, and Operate an Enterprise-wide IT
Risk Management Program by Bryan C. Kissinger
• Getting the Best Equipment Lease Deal: An Equipment Leasing Guide for Lessees
by Richard M.Contino
• Equipment Leasing and Financing: A Product Sales and Business Profit Center Strategy
by Richard M. Contino
• AI Concepts for Business Applications by Nelson E. Brestoff
• How New Risk Management Helps Leaders Master Uncertainty by Robert B. Pojasek
• Understanding Cyberrisks in IoT: When Smart Things Turn Against You
by Carolina A. Adaros Boye
• The Business of Cybersecurity: Foundations and Ideologies by Ashwini Sathnur
• Cybersecurity Law: Protect Yourself and Your Customers by Shimon Brathwaite
• Conversations in Cyberspace by Giulio D’Agostino
• Board-Seeker: Your Guidebook and Career Map into the Corporate Boardroom by Ralph Ward
• Contract Law: A Comparison of Civil Law and Common Law Jurisdictions
by Claire-Michelle Smyth

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