Monday , August 2 2021
Home / Constantin Gurdgiev: True Economics / 25/4/21: Impact Finance perspective of the systemic threats to blockchain applications

25/4/21: Impact Finance perspective of the systemic threats to blockchain applications

Summary:
New paper (pre-print version): Gurdgiev, Constantin and Fleming, Adam, Informational efficiency and cybersecurity threats: A Social Impact Finance perspective of the systemic threats to blockchain applications (April 25, 2021). Forthcoming, Chapter 12 in Innovations in Social Finance: Transitioning Beyond Economic Value, eds. Thomas Walker, Jane McGaughey, Sherif Goubran, and Nadra Wagdy, Palgrave Macmillan, 2021, Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3834032. Abstract: Crypto-assets and blockchain technologies hold the promise of providing more secure systems for managing public and private data, enhancing public trust in data collection, and increasing the efficiency of social impact finance transactions. However, to-date, blockchain technologies have

Topics:
[email protected] (TrueEconomics) considers the following as important: , , , ,

This could be interesting, too:

Cam Hui writes Bitcoin’s existential threat

[email protected] (TrueEconomics) writes 8/6/21: World is more VUCA. Less Risk.

[email protected] (TrueEconomics) writes 27/521: Euromoney on China’s Belt-and-Road Initiative

Gurdgiev Constantin writes 15/2/21: Pump & Dump, Illicit Finance and Market Inefficiency: Cryptos under Review

New paper (pre-print version): 

Gurdgiev, Constantin and Fleming, Adam, Informational efficiency and cybersecurity threats: A Social Impact Finance perspective of the systemic threats to blockchain applications (April 25, 2021). Forthcoming, Chapter 12 in Innovations in Social Finance: Transitioning Beyond Economic Value, eds. Thomas Walker, Jane McGaughey, Sherif Goubran, and Nadra Wagdy, Palgrave Macmillan, 2021, Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3834032

Abstract: 

Crypto-assets and blockchain technologies hold the promise of providing more secure systems for managing public and private data, enhancing public trust in data collection, and increasing the efficiency of social impact finance transactions. However, to-date, blockchain technologies have struggled to deliver on these promises. Specifically, cybersecurity threats to blockchain technologies are accelerating and becoming more impactful over time, generating growing risk to the use of the blockchain technologies in social impact finance services provision. Our analysis data on cybersecurity breaches involving cryptocurrencies trading platforms from 2014 through 2019 shows that cryptocurrencies markets have, to-date, failed to develop informational efficiencies necessary to sustain these technologies’ deployment in impact finance. Faced with increasing cybersecurity threats permissionless blockchain systems appear to be more vulnerable to shocks, than they were in the past. Cyber breaches in the cryptocurrency markets create major risk contagion pathways, which are dramatically increasing volatility of both directly attacked currencies and other major cryptocurrencies; as well as present an increased risk of system-wide attacks that threaten not only the accounting and transactional accuracy and efficiency of the crypto-based fintech solutions, but also the data stored using public blockchain protocols. These findings lead us to conclude that, absent dramatic improvements in the regulation of cryptocurrencies and exchanges, public blockchains based on traded crypto-assets are not suitable for large scale deployment in social impact finance applications.

25/4/21: Impact Finance perspective of the systemic threats to blockchain applications



Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.