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PhD Defense: Blockchain-enabled Traceability and Immutability for Financial Applications

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Speaker: Nida Khan
Event date: Monday, 20 July 2020 02:00 pm - 03:03 pm

Registration and event link: https://unilu.webex.com/unilu/onstage/g.php?MTID=e4f1b95396b6ff8ec70213a9482ed3645

Members of the defense committee:

  • Chairman: Prof. Dr. LEHNERT Thorsten, University of Luxembourg
  • Deputy Chairman: A-Prof. Dr. LAHMADI Abdelkader, University of Lorraine, Nancy, France
  • Supervisor: A-Prof. Dr. STATE Radu, University of Luxembourg
  • Member: Dr. KRÄUSSL Zsofia, University of Luxembourg
  • Member: Prof. Dr. CHERKAOUI Omar, UQAM, Canada

Blockchain is an emerging, foundational, disruptive technology with the potential to completely overhaul the existing financial infrastructure. The finance sector is leading in the deployment of blockchain to resolve endemic issues related to transparency, third-party fraud as well as time-consuming and expensive transactions. The finance sector has not been able to serve the underbanked and unbanked populations of the world so far. COVID-19 in 2020 has indicated that a strong digital infrastructure is needed to be able to deal better with disruption and blockchain can play a pivotal role in establishing this digital infrastructure. The dissertation explores the efficacy of exploiting the transparency and immutability characteristics of blockchain platforms in a financial ecosystem.

The dissertation elaborates on blockchain technology employing a succinct approach, which serves as the foundation to comprehend the contributions of the present research work. Blockchain governance is an unresolved facet of the technology, in the absence of which, the distributed network can fail to function optimally or even stall. The dissertation gives a verified mathematical model, derived using Nash equilibrium, to function as a framework for blockchain governance. The usage of blockchain in financial organizations entails the requirement of a sound management strategy to obfuscate the complexities of the technology and replicate the administrative functions existing in legacy systems. The research work elucidates the design, implementation and evaluation of a management plane to monitor and manage blockchain-based decentralized applications. Privacy of financial data is extremely important for any financial organization but blockchain, by virtue of its inherent infrastructure, poses a challenge in this respect. This is also one of the overarching factors that makes usage of blockchain questionable from the European GDPR perspective. Privacy-preserving blockchain platforms have also proved to be vulnerable to data breaches. The dissertation solves this problem by the development and evaluation of a management plane for differential privacy preservation through smart contracts. The research work discusses the compliance of the privacy management plane to GDPR using a permissioned blockchain platform.

The new economic paradigm enforced by blockchain, decentralized finance, presents novel challenges and unprecedented strategic advantages. The dissertation is a pioneer in conducting an implementation-based, comparative and an exploratory analysis of tokenization of ethical investment certificates. Social finance markets have been developing in Europe and are viewed as sustainable finance by the European Commission. The research work verifies the utility of blockchain to solve some prevalent issues in social finance. The work accomplishes this through the development and testing of a blockchain-based donation application. A qualitative review of the economic impact of blockchain-based micropayments has also been conducted. The discussion on the economic impact also includes a proposition for extending the access of blockchain-based financial services to the underbanked and unbanked people.

The work concludes with a hypothetical model of a financial ecosystem, depicting the deployment of the major contributions of this dissertation.