Blockchain has emerged as a decentralized platform for managing digital assets and executing 'smart contracts', i.e., user-defined programs. While blockchain's suitability for a given use case should always be scrutinized, it does have the potential to disrupt many of the connection points between individuals, companies, and government entities. In this talk, I will provide an overview of selected topics from my blockchain research, including: 1. “Programmable money", i.e., blockchain-based money that checks where and how it can be spent: what is it, and what can we achieve with it? Examples under current discussion include Gesell money, Tobin tax, and values-based money with automatic discount for e.g. fair-trade organic produce. 2. Executing multi-party business processes, to enable collaboration among companies with low mutual trust. 3. Process-centric analysis of blockchain applications, to understand users, conduct audits, and more.

1. Programmable Money and
Business Process Management
on Blockchain
Ingo Weber | August 2022
ingo.weber@tu-berlin.de | linkedin.com/in/ingomweber/ | Twitter: @ingomweber
ingo.weber@tum.de
From Oct. 2022:

2. What is a Blockchain?
Live visualization of the Ethereum Blockchain: http://ethviewer.live
2

3. Blockchain 2nd gen – Smart Contracts
• 1st gen blockchains: transactions are financial transfers
• 2nd gen blockchain ledger can do that, and
store/transact any kind of data
• Blockchain can deploy and execute programs: Smart Contracts
• User-defined code, deployed on and executed by whole
network
• Can enact decisions on complex business conditions
• Can hold and transfer assets, managed by the contract itself
• Ethereum: pay per assembler-level instruction
3

4. Book: Architecture for Blockchain Applications
Xiwei Xu, Ingo Weber, Mark Staples.
Architecture for Blockchain Applications.
Springer, 2019.
➔ Includes definitions for terms like
blockchain network, platform,
distributed ledger vs. blockchain, etc.
➔ 55k chapter downloads on
Springer.com and >140 citations
since publication (March 2019)
4

5. Programmable Money:
Next-Generation Blockchain-
Based Conditional Payments
5
Most work done as part of a project with Commonwealth Bank of Australia and

6. Programmable Money: core idea
• Conditional payments: transfer money only when predefined rules hold
• Examples: welfare payments, employee expenses, insurance payouts, ...
• Traditionally: conditions are checked (manually) in reimbursement or pre-approval/
audit processes
• Violation of policies: no reimbursement (or similar)
• Programmable money: next-generation conditional payments, on decentralized
ledger / blockchain
• In our programmable money project: programmed policies are not attached to
accounts, but instead to money itself!
• Policies here specify under which conditions money may be spent
• When you try to spend money, the money itself checks automatically if a payment adheres to
the policies
→ no uncertainty whether you will get reimbursed (and other benefits)
6

7. “Smart Money” (NDIS) project overview
*Membership of the Reference Group does not connote endorsement nor responsibility for the project.
• In collaboration with Australia’s largest bank, we conducted the “Smart Money” project
• Scope: conceptualize, implement, and evaluate systems for blockchain-based programmable
money
• Engaged a broad range of stakeholders:

8. Slide title
• Slide subtitle
8

9. With greater choice and control, comes challenges
9
Challenge 1
Plan budget information is not
always automatically available
in real-time
Challenge 2
Service eligibility
determinations are not always
straightforward
Challenge 3
Payment interfaces and
reconciliation can be complex
for providers
Challenge 4
Misspending risks must be
identified through manual
audit activity
Challenge 5
Analytics potential to improve
participant outcomes is not
reached

10. How we make the money smart
10
Tokens and Contracts
Provider Registry
Contract
Pouches represent
different quantities of
tokens.
Tokens represent
value of AUD for
NDIS purchases.
Policy contracts stipulate
rules and enforcements
(e.g. ownership, eligible
services, nominations, etc).
Smart tokens are formed when policy
contracts are attached to pouches.
Contracts can be destroyed when no
longer required (e.g. after payment).
Participant plans
Providers are
registered on
a large policy
contract.
Participant plans have pouches of smart
tokens for different budgets, which can
be spent on services from providers.
Service Agreement Contracts
Service agreements provisionally
attach tokens to providers and enable
payments as services are delivered.
$
$
$
$
$
$

11. Our NDIS proof of concept
11
Blockchain
NDIA Participant
Participant books
eligible services
using the app
Service
Provider
Conditions
checked
Agency
Manager
Plan
Manager
Carers /
Guardians
Service providers
receive smart
tokens for eligible
services
Policy contracts
reflect budget
rules
Policy contracts can blend plan management approaches
New Payments
Platform
Service provider redeems
smart tokens for payment
NDIA facilitates data-rich
payments in near real-time
Smart
Tokens
Blockchain
tokens reflect
plan budgets
Pouch of
Tokens

12. User testing achieved an 89% NPS score
12
User testers were asked to rate on a scale of 0-10 on how likely they would be to recommend the app to a friend (n=9)
* A Net Promoter Score measures the willingness of customers to recommend a company's products or services to others. The NPS is calculated as the percentage of promoters (those who
rated their likelihood as an 8 or 9 out of 10 of recommending the product or service to friends or family) less the percentage of detractors (those who rated their likelihood as 6 or below).

13. We evaluated our proof of concept against 10 criteria
13
Design Criteria The Proof of Concept
1. Choice Maximises the potential of participants to make informed decisions about the services they access
2. Control Maximises the potential of participants to take control of their plans and delegate control as they choose
3. Accessibility Is accessible to all participants regardless of their disability and all service providers, including plan managers and eMarkets
4. Simplicity Makes payments simple for participants, carers, plan managers, service providers and government
5. Efficiency Reduces administration time and costs for participants, plan managers, service providers and government
6. Confidentiality Ensures the confidentiality of personal and commercially sensitive information
7. Integrity Ensures funds are spent as intended and enables government to identify any potential instances of misspending
8. Performance Achieves low latency, sufficient throughput and real-time payments
9. Cost Can be implemented and maintained at low cost
10. Modifiability Can accommodate changes in policy settings and be applied across a range of conditional payment environments

14. Test Results: Efficiency Criterion
14
Service Providers
estimate
$160 M to $420 M
per year in cost savings across the
Australian economy
Participants & Carers
estimate
1-15 hours per
week in time
savings
(avg. 3 hours)
save 0.3%-0.8% of
costs as percentage
of revenue
CBA Economic Modelling

15. Payment success rates
• Existing centralized NDIS system used in production:
• Payment success rates are reported publicly
• Recent report (week ending 07 February 2021):
• 96.7% success rate of payment requests out of approx. 1.3M requests
• 44,377 payment requests were unsuccessful in that week
• More than half of those failures were because the claimed amount was greater than
the budget that was available
• Desire of NIDS participants to have immediate payment certainty is very
understandable
• Inherent feature of the programmable money solution
15

16. Technical evaluation: throughput
• Based on our analysis: the system could be made to scale to adequate
throughput for the NDIS use case across Australia
• Starting point: estimation from the NDIS of an average load of 2.17 payments
per second (July 2020)
• Based on latest actual numbers, the average load in Feb. 2021 was about 2.2 payments
per second
• In our solution, some payments would require more than one transaction, so estimated
on average:
• 1 payment → approx. 1.5 blockchain transactions
• → average throughput of 3,3 blockchain transactions per second (peak demand will be higher)
• Such throughput could likely be handled by a deployment like the public
Ethereum network (if NDIS were the only application)
• Average number of transactions has been above 10 per second since mid-2020
• Achieving higher throughput in a private deployment is not hard in our experience
16

17. We evaluated the proof of concept (POC) with respect to
alternative solution options
17

18. Alternative use cases for smart money
Values-based money that
respects ethical or other rules
which relate to societal values
or social norms. Examples:
• sustainability & ecological goals
• organic foodstuff
• fair trade
Enhance public policy programs
to achieve better citizen
outcomes
• outcomes-based funding
• cross-jurisdictional funding
• benefits, rebates and taxes
Empowering individuals to
optimise their spending
• smart savings plans
• smart diets
• smart pocket money
• self-selected limits on addictive
substances
Reducing friction and costs for
businesses, and not-for-profits
• insurance payouts
• corporate procurement
• providing transparency for funds
managed by trusts and charities
18

19. Programmable Money: further notes
• More details contained in the papers [10, 11]
• Including lessons learnt and some open questions, for programmable money
and development of blockchain apps in general. Examples:
• How to present the policies in a way that the users can understand them?
• How to horizontally scale components that create and submit transactions on behalf of
a single party?
• Main focus of this laboratory study was feasibility & useability of
programmable money
• Full supports for e.g. privacy/confidentiality, performance were not fully developed
• Programmability is one potential differentiating benefit for CBDCs (Central
Bank Digital Currencies)
• Many of the lessons from this study are relevant
19

20. Business Process Execution
on Blockchain
20

21. Business Processes on Blockchain –
Motivation
• Integration of business processes across organizations:
a key driver of productivity gains
• Collaborative process execution
• Doable when there is trust – supply chains can be tightly integrated
• Problematic when involved organizations have a lack of trust in each other
→ if 3+ parties should collaborate, where to execute the process that ties
them together?
• Can any participant be trusted with operating an authoritative database?
• Cross-organizational processes: by now a common use case for
blockchain applications
21

22. Motivation: Example
Issues:
- Knowing the
status, tracking
correct execution
- Handling
payments
- Resolving
conflicts
22

23. Original Approach [1] in a Nutshell
• Goal: execute collaborative business processes as smart contracts
• Translate (enriched) BPMN process models to smart contract code
→ Model-driven engineering (MDE)
• Triggers act as bridge between Enterprise world and blockchain
• Smart contract provides:
• Independent, global process monitoring
• Process enforcement: messages are only accepted if they are expected,
given the state of the process, and only if sent from the participant playing
the respective role
• Automatic payments & escrow
• Data transformation
• Encryption
23

24. Advantages of MDE vs. coding in the blockchain context
• Code generation can implement best practices and well-tested building blocks
• Code can adhere to blockchain “standards” (like ERC-20, ERC-721, …)
• Improved productivity, especially for novices in a particular technology
• However: someone should understand the code and review it
• Models can be independent of specific blockchain technologies or platforms
• Avoid lock-in to specific blockchain technologies
• Models are often easier to understand than code – particularly useful in
communicating with business partners about smart contracts
• Facilitates building trust
• Domain experts can understand how their ideas are represented in the system
• With my team at Data61, we used MDE in all blockchain industry projects, in
2/3rds of the cases also process models
24

25. Architecture
25

26. Runtime
• Instantiation:
• New instance contract per process instance
• Assign blockchain accounts to roles during initialization
• Exchange keys and create secret key for the instance
• Messaging:
• Instead of sending direct WS calls: send through triggers & smart contract
• Instance contract handles:
• Global monitoring
• Process enforcement (conformance checking)
• Automated payments
• Data transformation
Bulk Buyer BB Trigger
Smart
Contract
Manufact-
urer
Mf. Trigger
API call:
Order goods
Blockchain
Transaction
(BCTX)
Smart Contract effect
Check
conformance
API call
Middleman
Mm. Trigger
API call:
Place order
Execute
internal logic
BCTX
Smart Contract effect
Check
conformance
API call
26

27. Translator
• Translate subset of BPMN elements to Solidity
• BPMN Choreography diagrams or regular BPMN models with lanes
Order goods
Bulk Buyer
Manufacturer
Place order for
supplies
Manufacturer
Middleman
+
Forward order for
supplies
Middleman
Supplier
Place order for
transport
Middleman
Special carrier
+
Deliver supplies
Special carrier
Manufacturer
Report start of
production
Manufacturer
Bulk Buyer
Deliver goods
Manufacturer
Bulk Buyer
Send waybill
Supplier
Special carrier
Request details
Special carrier
Supplier
Provide details
Supplier
Special carrier
27

28. Combining process and data/token models [3]
Generated code implements secure
methods for payment, escrow of
money and assets, asset swaps, etc.
34

29. Incentive Alignment [4]
35
Given this process model:
Now we annotate monetary
effects, for instance:
“payment” results in -100$ for
the customer, and +100$ for the
supplier
Are the incentives aligned with
the process?
Approach: translate to a game (as
per game theory), check if there
is a strategy that results in
positive pay-out for all possible
paths and each reachable state &
“player”
What if we execute the process
repeatedly, or have escrow on
blockchain?

30. Tooling: Lorikeet at Design Time
38

31. Tooling: POD-Viz at Runtime
39

32. Process Mining
on Blockchain App Data
40

33. Process Mining / Analytics
• Process mining can be used to understand how clients and software interact
• Also for blockchain applications and dapps
• But: understanding log data from blockchain is hard [5]
• Our approach: extract blockchain data for analytics / process mining, then use
available tools for analysis
• Our extraction tools: BlockXES [6], ELF [7], and BLF [8]
• Case study: Augur [9]
41

34. ELF Overview
42
For data analytics
Standard log files
For process mining

35. Augur case study [9]
• Augur is a prediction and betting marketplace on public Ethereum BC
• Example market: “Will Donald Trump win the presidential election 2020?”
• We looked at ~2700 markets (~22k events) created on Augur v1.0
• One discovered process model (unfiltered):
• Process Mining analyses we performed:
• Exploration
• Process Discovery
• Conformance Checking
Dispute
handling
Creation
Trading
Initial
report
Settlement
43

36. 44
Timing patterns

37. Augur case study [9] continued
• Conformance checking means comparing a normative model against event
logs
• To obtain the normative model, we relied on the Augur white paper, their UI
and further explanations, but filtered activities such that the model only
used events present in the log
• We also verified and contextualized our findings by interviewing Augur’s
lead architect
• One conformance checking result:
This is a bug in the smart contracts!
45

38. Programmable Money and
Business Process Management
on Blockchain
Ingo Weber | August 2022
ingo.weber@tu-berlin.de | linkedin.com/in/ingomweber/ | Twitter: @ingomweber
ingo.weber@tum.de
From Oct. 2022:

39. References
1. Ingo Weber, Sherry Xu, Regis Riveret, Guido Governatori, Alexander Ponomarev and Jan Mendling. Untrusted business process
monitoring and execution using blockchain. In BPM : International Conference on Business Process Management, 2016
2. L. Garcia-Banuelos, A. Ponomarev, M. Dumas, and I. Weber, “Optimized execution of business processes on blockchain,” in BPM :
International Conference on Business Process Management, 2017, pp. 130–146.
3. Qinghua Lu, An Binh Tran, Ingo Weber, Hugo O'Connor, Paul Rimba, Xiwei Xu, Mark Staples, Liming Zhu, and Ross Jeffery. Integrated
model-driven engineering of blockchain applications for business processes and asset management. Software: Practice and
Experience, 51(5):1059-1079, 2021.
4. Tobias Heindel and Ingo Weber. Incentive alignment of business processes. In BPM'20: International Conference on Business Process
Management, 2020.
5. Di Ciccio, Claudio; Cecconi, Alessio; Mendling, Jan; Felix, Dominik; Haas, Dominik; Lilek, Daniel; Riel, Florian; Rumpl, Andreas; Uhlig,
Philipp. Blockchain-Based Traceability of Inter-organisational Business Processes. In BMSD 2018.
6. Christopher Klinkmüller, Alex Ponomarev, An Binh Tran, Ingo Weber, and Wil van der Aalst. Mining blockchain processes: Extracting
process mining data from blockchain applications. In Blockchain Forum of the International Conference on Business Process
Management (BPM), 2019. Best Blockchain Forum Paper Award winner.
7. C Klinkmüller, I Weber, A Ponomarev, AB Tran, W van der Aalst. Efficient logging for blockchain applications. arXiv preprint
arXiv:2001.10281, 2020.
8. Paul Beck, Hendrik Bockrath, Tom Knoche, Mykola Digtiar, Tobias Petrich, Daniil Romanchenko, Richard Hobeck, Luise Pufahl,
Christopher Klinkmüller, and Ingo Weber. BLF: A blockchain logging framework for mining blockchain data. In BPM'21: International
Conference on Business Process Management, Demo & Resources track, 2021.
9. Richard Hobeck, Christopher Klinkmüller, H.M.N. Dilum Bandara, Ingo Weber, and Wil van der Aalst. Process mining on blockchain
data: A case study of Augur. In BPM'21: International Conference on Business Process Management, pages 306-323, 2021.
10. Ingo Weber and Mark Staples. Programmable money: Next-generation conditional payments using blockchain - keynote paper. In
CLOSER'21: International Conference on Cloud Computing and Services Science, April 2021
11. Ingo Weber and Mark Staples. Programmable money: Next-Generation Blockchain-Based Conditional Payments. Accepted for
publication in DFIN: Digital Finance journal, Springer, 2022
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