Developing Smart Contracts for Financial Payments as Innovation

Advancements in cryptography and computer science have given birth to blockchain technology. One of the most exciting evolutions of blockchain is the advancements in smart contract technology. Smart contracts can be used for a broad range of use cases, not just financial transactions. Smart contract technology on the public blockchain, represented by Ethereum, due to its public and opaque nature, is not a good choice for many scenarios that do not require full disclosure, such as many IoT applications. On the other hand, the existing blockchain smart contract system still has a strong connection with virtual currency, which also limits its application in non-financial scenarios. In order to solve the above problems and explore more of the potential of smart contracts for the IoT application domain, this paper mainly explores the construction of a smart contract system based on consortium blockchains associated with no virtual currency. Based on the smart contract system designed in this project, blockchain can be more easily applied in payment, product traceability, authority authentication, and other fields. Through a certain centralized way, the system is easier to manage, can reduce the management expenditure, and the power and other resource consumption is less, which is conducive to environmental protection. Results show that our smart contract system has the potential for IoT usage in the future.

The increasingly massive use of the internet is now affecting the economic world which is characterized by the birth of E-Commerce. E-Commerce mechanism that does not brings together sellers and buyers directly, this raises a variety of problems on the subjective and objective terms of the sale and purchase agreement. Smart Contracts are actually different from conventional contracts written on paper. They are also different from electronic contracts. A clause in the agreement, which takes the form of programming code, requires blockchain as a distributed storage technology, which sets them apart. In addition, Smart Contracts serve to execute contracts automatically. Therefore, the article aims to analyze the advantages of Smart Contracts compared to conventional contracts and how the validity of using smart contracts in Indonesian law, and why business transactions in Indonesia should start using smart contracts. The result obtained is that the use of Smart Contracts are completely automated and rely on software logic, making them transparent and visible to all parties involved. The use of Smart Contract in buying and selling transactions is considered very important considering the advantages in terms of security, verification, changes in the contents of the agreement, and evidentiary power. As for Indonesian law, the use of Smart Contracts is permissible as long as it does not violate the validity of the agreement as stated in the Civil Code. The use of Smart Contracts offer several advantages over traditional contracts, including trasparency, autonomy, speed, accuracy, security, and savings.

As Internet of Things (IoT) devices and other remote patient monitoring systems increase in popularity, security concerns about the transfer and logging of data transactions arise. In order to handle the protected health information (PHI) generated by these devices, we propose utilizing blockchain-based smart contracts to facilitate secure analysis and management of medical sensors. Using a private blockchain based on the Ethereum protocol, we created a system where the sensors communicate with a smart device that calls smart contracts and writes records of all events on the blockchain. This smart contract system would support real-time patient monitoring and medical interventions by sending notifications to patients and medical professionals, while also maintaining a secure record of who has initiated these activities. This would resolve many security vulnerabilities associated with remote patient monitoring and automate the delivery of notifications to all involved parties in a HIPAA compliant manner.

The world today has realized the vast technological evolution that has greatly shaped the production and management functions of business enterprises. Traditional contracts can take weeks or even months to initiate, and there have been numerous instances of breaches and lack of trust for contracts in both the private and public sector. A smart contract can be defined as a self-executing contract that utilizes blockchain technology to digitally enforce, verify, or facilitate the performance or negotiation of a contract. Owing to the security and decentralized system exhibited by blockchain technology, smart contracts can foster transaction credibility between contracting parties without the necessity of third parties as exhibited in traditional contracts. Any business organization that aims at achieving greater heights in management and production dimensions must consider utilizing robust technologies that are aimed at bolstering its competitive edge. Owing to the newness of smart contracts, characterized by very few studies on the same, this research reviews how smart contracts through blockchain technology can be implemented in an organization to enhance performance and outlines the applications, benefits, and limitations associated with such contracts. Keywords: Blockchain technology; smart contracts; smart contract applications; smart contract benefits; smart contract implementation; cryptography; cryptocurrency DOI : 10.7176/JIEA/9-5-07 Publication date :September 30 th 2019

Cryptocurrencies record transactions in a decentralized data structure called a blockchain. Two of the most popular cryptocurrencies, Bitcoin and Ethereum, support the feature to encode rules or scripts for processing transactions. This feature has evolved to give practical shape to the ideas of smart contracts, or full-fledged programs that are run on blockchains. Recently, Ethereum's smart contract system has seen steady adoption, supporting tens of thousands of contracts, holding millions dollars worth of virtual coins. In this paper, we investigate the security of running smart contracts based on Ethereum in an open distributed network like those of cryptocurrencies. We introduce several new security problems in which an adversary can manipulate smart contract execution to gain profit. These bugs suggest subtle gaps in the understanding of the distributed semantics of the underlying platform. As a refinement, we propose ways to enhance the operational semantics of Ethereum to make contracts less vulnerable. For developers writing contracts for the existing Ethereum system, we build a symbolic execution tool called Oyente to find potential security bugs. Among 19, 336 existing Ethereum contracts, Oyente flags 8, 833 of them as vulnerable, including the TheDAO bug which led to a 60 million US dollar loss in June 2016. We also discuss the severity of other attacks for several case studies which have source code available and confirm the attacks (which target only our accounts) in the main Ethereum network.

This paper presents the findings of the research on the innovative component of the public procurement system in the Russian Federation in the context of the global transition of contemporary socio-economic systems to digital platform solutions. The relevance of this issue is confirmed by the high demand for advanced digital tools that would provide full automation of public procurement, transparent pricing, simplification of procurement procedures, and streamlining the powers of control bodies. The paper aims to comprehensively study the current situation in the system of functioning of digital public procurement processes and determine the development prospects from the introduction of new IT solutions into this area, including artificial intelligence, cognitive computing, blockchain technology, “smart contracts,” and others. During the research, the authors analyzed the dynamics of digitalization of procurement procedures from 2014 to 2020, presented a model of the Unified Information System in Procurement (UIS) in the context of Big Data, identified a new vector for the development of a smart (intelligent) contract system and its components, and provided recommendations for shaping long-term prospects for the development of state contract system.KeywordsPublic procurementDigitalization of procurement proceduresDigitalizationInnovationArtificial intelligenceBlockchainSmart contractJEL codesH57O32O38

As the Internet of Things (IoT) grows, there is a pressing need for secure and efficient management of device access rights. This paper presents Ureka, an open system that uses blockchain technology to manage IoT access rights in a transparent and bidirectional way. Ureka consists of a personal private system, a blockchain smart contract system, and a ticket processing system on an IoT device. Each user and IoT device are identified and authenticated through a unique asymmetric key pair, and access to devices is mediated through smart contracts and tickets. Ureka also implements regulation mechanisms to govern user behavior and prevent rule violations. Our evaluation shows that Ureka effectively manages IoT access rights and prevents unauthorized access. The contributions of this paper include the Ureka open standard, the implementation of a transparent and bidirectional smart contract and ticket system, and the regulation mechanisms for governing user behavior.

BackgroundAn estimated US $2.6 billion loss is attributed to health care fraud and abuse. With traditional health care claims verification and reimbursement, the health care provider submits a claim after rendering services to a patient, which is then verified and reimbursed by the payer. However, this process leaves out a critical stakeholder: the patient for whom the services are actually rendered. This lack of patient participation introduces a risk of fraud and abuse. Blockchain technology enables secure data management with transparency, which could mitigate this risk of health care fraud and abuse.ObjectiveThe aim of this study is to develop a framework using blockchain to record claims data and transactions in an immutable format and to enable the patient to act as a validating node to help detect and prevent health care fraud and abuse.MethodsWe developed a health care fraud and abuse blockchain technical framework and prototype using key blockchain tools and application layers including consensus algorithms, smart contracts, tokens, and governance based on digital identity on the Ethereum platform (Ethereum Foundation).ResultsOur technical framework maps to the claims adjudication process and focuses on Medicare claims, with the US Centers for Medicare and Medicaid Services (CMS) as the central authority. A prototype of the framework system was developed using the blockchain platform Ethereum (Ethereum Foundation), with its design features, workflow, smart contract functions, system architecture, and software implementation outlined. The software stack used to build the system consisted of a front-end user interface framework, a back-end processing server, and a blockchain network. React was used for the user interface framework, and NodeJS and an Express server were used for the back-end processing server; Solidity was the smart contract language used to interact with a local Ethereum blockchain network.ConclusionsThe proposed framework and the initial prototype have the potential to improve the health care claims process by using blockchain technology for secure data storage and consensus mechanisms, which make the claims adjudication process more patient-centric for the purposes of identifying and preventing health care fraud and abuse. Future work will focus on the use of synthetic or historic CMS claims data to assess the real-world viability of the framework.

Despite the spread of sharing economy platforms, as the best of our knowledge, no online solution has been proposed to handle the negotiation of new agreements and contracts between the participants in such platforms, which entails losing major business opportunities due to a lack of negotiation frameworks enabling mutual business and legal agreements. This paper describes an innovative smart contract-based negotiation framework integrated into sharing economy platforms to enable dynamic negotiation and electronic signature of digital agreements between partners. The proposed framework itself is technology agnostic. It can be used with any distributed collaborative platform regardless of the used technologies (web service, blockchain, etc.). We have used smart contract system as a mean to initiate and submit negotiated calls for tenders to respond to a business opportunity by multiple actors. The implementation uses the Orcha language, a new high-level smart contract language, to validate the framework concepts.

Blockchain technology, smart contract and microgrid systems have facilitated innovations and breakthroughs in the electricity industry. The once bundled electricity market dominated by a few key players is now gradually becoming unbundled to a more consumer-centric market due to these new technologies. To facilitate the use of community microgrids, this study develops a new trend in peer-to-peer energy trading. In this work, a model for a smart microgrid system, a decentralized energy trading platform based on blockchain, and smart contract technologies is proposed, considering an islanded community microgrid network of energy prosumers. Smart meters were used to ensure the bi-directional flow of data and power, thereby giving prosumers control over their power usage. Storage and validation of participants’ data are stored on the blockchain network, which has a strong feature of decentralization, transparency, security and data immutability. The smart contract automatically executes power delivery and transfer of tokens from the buyer’s wallet to the seller’s energy wallet based on the transaction logic and protocol. A web-user interface was designed to enable the ease of transactions by market participants and the web-user interface was designed on React.Javascript while the smart contract codes were done on the solidity programming language. Algorithms were also developed for the market trade operations in real time and sets of mathematical equations were formulated for energy pricing based on the supply and demand philosophies to curtail over-pricing and underpricing of energy.

The construction supply chain often faces challenges such as contract disputes, inefficient payments, and difficult claim management due to its complexity and the involvement of multiple parties. Most existing solutions focus on optimizing contract terms or improving local processes, but they lack systemization, automation, and transparency. Therefore, this study proposes a claim and payment process management model based on blockchain and smart contracts, aiming to achieve digital and automated governance of the construction supply chain. The study constructs three types of smart contracts: The supply chain decomposition smart contract automatically divides engineering projects into independent billing cycles. The billing unit smart contract monitors the compliance of construction. The negotiation and settlement smart contract automatically handles disputes and payments. These three types of smart contracts work together to form a decentralized dynamic management framework. Through simulation experiments comparing the traditional process with the smart contract model, the results show that in scenarios with a high probability of claims and a large proportion of construction defects, the capital flow efficiency of the smart contract model is increased by more than 20%, and it shows stronger stability under high claim risks. The contribution of this study lies in combining blockchain technology with the logic of supply chain decomposition, proposing a smart contract system applicable to dynamic engineering projects, thus providing a digital processing method for the integrated management of claims and payments in the construction supply chain. This digital dynamic management method can ultimately systematically solve the island problem in supply chain claim research. Its automated and transparent characteristics help reduce dispute costs and enhance trust among multiple parties, which has important practical significance for improving the overall efficiency of the industry.

Smart contracts are programs that run atop of a blockchain infrastructure. They have emerged as an important new programming model in cryptocurrencies like Ethereum, where they regulate flow of money and other digital assets according to user-defined rules. However, the most popular smart contract languages favor expressiveness rather than safety, and bugs in smart contracts have already lead to significant financial losses from accidents. Smart contracts are also appealing targets for hackers since they can be monetized. For these reasons, smart contracts are an appealing opportunity for systematic auditing and validation, and formal methods in particular. In this paper, we survey the existing smart-contract ecosystem and the existing tools for analyzing smart contracts. We then pose research challenges for formal-methods and program analysis applied to smart contracts.

This study delves into the integration of force majeure and exceptional events into smart contracts. As much as smart contracts simplify the process and guarantee efficiency, the rigidity of these contracts inherently cannot handle unexpected eventualities that might be provided for in a traditional contract with a force majeure clause. This paper explores the impacts of such rigidity and uncovers both practical and theoretical implications for the legal and technological frameworks governing smart contracts through a qualitative analysis of interviews with legal experts, including (attorneys, judges, and academics). The findings show that the immutability of smart contracts leads all too often to disputes, financial risks, and a lack of legal clarity in an unexpected event. Rather than advocating full automation of legal judgment, the study proposes a governance-oriented and legally-grounded framework in which predefined contractual clauses, oracle-based event verification, AI, conditional execution logic, and escalation mechanisms enable controlled and proportionate responses to exceptional events while preserving contractual consent and human oversight. These mechanisms are presented as conceptual and illustrative design strategies through which legal effects can be technically implemented (e.g., suspension, adjustment, termination) under clearly predefined conditions. By integrating empirical legal insights with conceptual technical models, such as a systematic taxonomy of exceptional events, a high-level governance-oriented framework and a procedural flowchart regarding regulatory alignment, the paper contributes to inter-disciplinary literature concerning adaptive governance of smart contracts; the analysis serves as an example how legal doctrines can influence automated contracting without undermining interpretative authority, or legal certainty in cross-border and volatile settings.

In recent years, the rapid development of cryptocurrencies and their underlying blockchain technology has revived Szabo’s original idea of smart contracts, i.e., computer protocols that are designed to automatically facilitate, verify, and enforce the negotiation and implementation of digital contracts without central authorities. Smart contracts can find a wide spectrum of potential application scenarios in the digital economy and intelligent industries, including financial services, management, healthcare, and Internet of Things, among others, and also have been integrated into the mainstream blockchain-based development platforms, such as Ethereum and Hyperledger. However, smart contracts are still far from mature, and major technical challenges such as security and privacy issues are still awaiting further research efforts. For instance, the most notorious case might be “The DAO Attack” in June 2016, which led to more than $50 million Ether transferred into an adversary’s account. In this paper, we strive to present a systematic and comprehensive overview of blockchain-enabled smart contracts, aiming at stimulating further research toward this emerging research area. We first introduced the operating mechanism and mainstream platforms of blockchain-enabled smart contracts, and proposed a research framework for smart contracts based on a novel six-layer architecture. Second, both the technical and legal challenges, as well as the recent research progresses, are listed. Third, we presented several typical application scenarios. Toward the end, we discussed the future development trends of smart contracts. This paper is aimed at providing helpful guidance and reference for future research efforts.

More than eight million smart contracts have been deployed into Ethereum, which is the most popular blockchain that supports smart contract. However, less than 1% of deployed smart contracts are open-source, and it is difficult for users to understand the functionality and internal mechanism of those closed-source contracts. Although a few decompilers for smart contracts have been recently proposed, it is still not easy for users to grasp the semantic information of the contract, not to mention the potential misleading due to decompilation errors. In this paper, we propose the first system named STAN to generate descriptions for the bytecodes of smart contracts to help users comprehend them. In particular, for each interface in a smart contract, STAN can generate four categories of descriptions, including functionality description, usage description, behavior description, and payment description, by leveraging symbolic execution and NLP (Natural Language Processing) techniques. Extensive experiments show that STAN can generate adequate, accurate, and readable descriptions for contract's bytecodes, which have practical value for users.