The value of Information in a blockchain of supply

Presenters

Presented by Dr Patrick O’Callaghan and Dr Elnaz Irannezhad.

Abstract

The value of information is one of the most fundamental economic concepts. We wish to know the conditions under which the value of the information that a blockchain can provide is positive. In particular, for a given chain of supply, when is the expected benefit of synchronisation, transparency and controlled sharing of verified information greater than the redundancy costs associated with running concurrent, decentralised databases? In the fragmented market for transporting freight, inefficiencies frequently arise as a result of delay, disputes and cancellations. In many supply chains, firms refrain from making commitments that would increase overall value because of asymmetric information: the “hold-up” problem. In international markets, small producers, such as farmers, find it difficult to signal the quality of their product: the market-for-lemons problem.

Distributed ledger technology such as blockchain may well have the potential to resolve such problems, but our agenda is to establish the conditions such that this will indeed be the case. We develop a formal model to explore the value of information in a variety of market structures and for a variety of blockchain designs. Finally, we conduct experimental simulations on an actual blockchain (a side chain of Ethereum). This will allow for a realistic evaluation of the logistics and costs of processing transactions and the potential for improved trade.

The Future of personal data: two models

Presenter

Alyssa Cowie

Abstract

As everyday objects become digitally connected – referred to as the Internet of Things (IoT) – the generation of personal digital data is set to soar. Presently, personal digital data has been monetised by a select few highly powerful corporations. The business model of said companies revolves, almost exclusively, around the provision of various free internet platforms/services in exchange for access to digital personal data which can be collated, mined and ultimately on-sold to a range of buyers. Conversely, individual internet users have free access to a range of internet platforms. They do not reap any of the financial profits generated from the trade of their personal digital data. This service-for-data transaction typically involves absolute forfeiture of both privacy and control of personal digital identity. Does a competitive alternative personal data economy model exist? The emergence of new blockchain technology suggests that it does. Given the paucity of research conducted to date on personal data monetisation, AIBE proposes to explore a range of future scenarios in which bockchain technology is utilised to increase market efficiency and personal privacy on the internet.

Blockchain and Central Banking

Presenter

Tim O'Brien

Abstract

“Blockchain and Central Banking: an investigation into distributed ledger technology and central bank digital currency” is a paper written by Tim O’Brien through his time at AIBE, and it investigates the potential for central banks to integrate blockchain technology into their currency. It begins by outlining blockchain technology, cryptocurrency, as well as some broader applications of the technology, and this is followed by a brief analysis of the perspectives held by central banks around the world with respect to the technology. This all builds to the crux of the paper, being the application of blockchain technology in central banking and the implementation of central bank digital currency. This could be treated as an ‘upgrade’ to the current system of currency, allowing central banks to set an interest rate upon the currency, potentially as a tool to avoid the zero-lower bound. The paper concludes by suggesting that there is a case for the Reserve Bank of Australia to look into experimental research on the implications of introducing a central bank digital currency and investigate further the current limitations of blockchain technology from the Reserve Bank's perspective.

 

 

About AIBE Thought Leadership Discussion Series

Events in this series are held at the UQ Business School Executive Venue, Boardroom, 293 Queen Street, Brisbane unless otherwise specified.