The Emerald Handbook of Blockchain for Business Praise for The Emerald Handbook of Blockchain for Business: Maximizing the potential of any technology to create value requires both vision and execution. Knowledge is a key to success in both. This book delivers in-depth coverage of both public and permissioned (business focus) types of Blockchains. The authors’ exploration of the advantages/limitations, risks/ rewards, and futures/realities is a door opener to the potential awaitinganyoneseriousaboutunderstandingorusingblockchain technologies to impact the world. – Francis D. Poeta, Serial Entrepreneur, CTO, IBM The Emerald Handbook of Blockchain for Business is a must- own book for anyone interested in blockchain. It offers readers an in-depth journey starting from the origins of blockchain technology and cryptoassets, to the evolution of the technology into multiple industries including global finance, real estate, healthcare, and more. It also discusses innovative, cutting-edge developments in this ecosystem, including token economics, interoperability, and blockchain’s impact on other emerging technologies. – Ron Quaranta, Chairman of the Board, Wall Street Blockchain Alliance TheEmeraldHandbookofBlockchainforBusinessshedslighton blockchain with 22 chapters deploying an easy-to-understand style. The book starts with fundamental concepts and extends to intricate cases. It blends the know-how and experience of academics and practitioners into the blockchain domain. This book is a candidate to be a worldwide handbook of blockchain for academics, students, practitioners, entrepreneurs, business people, consultants, researchers, policymakers, and all technology-lovers. – Professor Ibrahim E. Sancak, PhD, ZWIRN-Research Center, Ostfalia University of AppliedSciences, Germany, Founding (E) Director, Market Oversight and Enforcement Division, Capital Markets Board of Turkey In this book, the team of experts delivers a balanced introduction totheworldofblockchainanditsdiverseapplications.Theauthors first explain the theoretical fundamentals of blockchains and the different components and then cover a spectrum of industry and businessapplicationsofthistransformationaltechnology.Withthe widetopiccoverage,thisbookpresentsacomprehensivemust-read primerfor anyoneinterestedinthe study of blockchain. – PetrNovotny, PhD, Research Staff Member& MasterInventor,IBM Research This page intentionally left blank The Emerald Handbook of Blockchain for Business EDITED BY H. KENT BAKER American University, Washington, DC, US EHSAN NIKBAKHT Hofstra University, NY SEAN STEIN SMITH City University of New York, NY UnitedKingdom–NorthAmerica–Japan–India–Malaysia–China EmeraldPublishingLimited HowardHouse,WagonLane,BingleyBD161WA,UK Firstedition2021 Copyright©2021byEmeraldPublishingLimited Reprintsandpermissionsservice Contact:[email protected] Nopartofthisbookmaybereproduced,storedinaretrievalsystem,transmittedinanyformor byanymeanselectronic,mechanical,photocopying,recordingorotherwisewithouteitherthe priorwrittenpermissionofthepublisheroralicencepermittingrestrictedcopyingissuedinthe UKbyTheCopyrightLicensingAgencyandintheUSAbyTheCopyrightClearanceCenter. Anyopinionsexpressedinthechaptersarethoseoftheauthors.WhilstEmeraldmakesevery efforttoensurethequalityandaccuracyofitscontent,Emeraldmakesnorepresentation impliedorotherwise,astothechapters’suitabilityandapplicationanddisclaimsanywarranties, expressorimplied,totheiruse. BritishLibraryCataloguinginPublicationData AcataloguerecordforthisbookisavailablefromtheBritishLibrary ISBN:978-1-83982-199-8(Print) ISBN:978-1-83982-198-1(Online) ISBN:978-1-83982-200-1(Epub) Table of Contents List of Figures xi List of Tables xiii Acknowledgments xv About the Editors xvii About the Contributors xix List of Contributors and Institutions xxvii Part I Blockchain: History and Background Chapter 1 Blockchain: An Overview 3 H. Kent Baker, Ehsan Nikbakht and Sean Stein Smith Chapter 2 History of Blockchain 15 Joseph “Joey” Ryan and Sean Stein Smith Chapter 3 Review of Blockchain and Emerging Applications 31 Timothy Grief and Ehsan Nikbakht Chapter 4 Technical Aspects of Blockchain 49 Hak J. Kim viii Table of Contents Part II Types of Blockchain and Related Issues Chapter 5 Public Blockchains and Applications 67 Hugo Benedetti Chapter 6 Private and Hybrid Blockchains and Applications 83 Gina Pieters and Sean Stein Smith Chapter 7 Consensus Mechanisms and Related Issues 99 Deniz Appelbaum Chapter 8 Token Economies 121 Alim Khamisa Chapter 9 Proposed Modifications to Spur Consumer Adoption of Blockchain 141 Katherine McKechnie, Alexandra M. Dunn and Sayan Sarkar Part III The Frontier of Blockchain Technology Chapter 10 Blockchain: Speed, Efficiency, Decreased Costs, and Technical Challenges 157 Amanda Wilkie and Sean Stein Smith Chapter 11 The Importance of Interoperability, Decentralization, and Choice 171 Kirk Phillips Chapter 12 Convergence with Artificial Intelligence and Other Related Concepts 189 Lian Duan Chapter 13 Risk Management and Transference Issues in Blockchain Technologies 207 Joseph Brunsman Chapter 14 Legal and Regulatory Issues in the Temporary Regime 223 J. Scott Colesanti Table of Contents ix Chapter 15 Regulatory Ambiguity and Its Impact on Blockchain 241 Shehan Chandrasekera Part IV Blockchain Applications in Business Chapter16 ConsiderationsforBlockchainAdoptionandIntegration 259 Michael Nizich and Michael Campisi Chapter 17 Blockchain Applications in Finance 275 Steven Cosares, Kristin Kalish, Thomas Maciura and Andrew C. Spieler Chapter 18 Blockchain Applications in Healthcare 293 Alevtina Dubovitskaya Chapter 19 Blockchain Applications in Real Estate 311 Joshua Harris and Ehsan Nikbakht Chapter 20 Blockchain Applications in Supply Chain 325 Kaushik Sengupta Chapter 21 Crypto Accounting Valuation, Reporting, and Disclosure 341 Sean Stein Smith Chapter 22 Auditing and Examining Blockchain Information 359 John “Jack” Castonguay A Glossary of Blockchain Terms 373 Discussion Questions and Answers (Chapters 2–22) 383 Index 417