(1) Final Memo Write a business memo responding to one of the following prompts:RU-32 You're the CEO of a global pharmaceutical company. After decades of work (and the investment of hundreds of millions of dollars), your scientists have come up with a major breakthrough. Your new drug, RU-32, is a low-cost anti-diabetic medication that dramatically stabilizes insulin levels. If approved, your company will own the patent on a drug worth billions of dollars. However, during Phase III clinical trials, unexpected complications arose, and approval by the FDA is now unlikely. Without FDA approval, you cannot sell RU-32 in the U.S. and most developed countries. However, other countries—primarily developing countries—will allow you to market the drug without U.S. FDA approval. You must choose whether to stop all development and cancel the program, or proceed with manufacturing for sale to citizens of developing countries. Inform the Board of Directors of your decision. Write a memo explaining your position and your reasons. Be specific and use detailed examples to support your main points.Press-Enterprise A statistic taken from the Press-Enterprise states that the average American worker spends about 1.8 hours of every eight hour work day on non-work activities (e.g., personal phone calls, internet surfing, etc.). Estimates suggest this lack of productivity costs American business hundreds of millions of dollars annually, but workers say focusing eight hours a day strictly on work-related business is unreasonable and impossible considering we work more hours than ever before. Additionally, workers argue they need to schedule appointments and daily activities when businesses are open. In your opinion, which side makes a stronger case? Write a persuasive memo to your business arguing one side. Be specific and use detailed examples to support your main points.On-Line Profile Your firm has discovered that the majority of resumes submitted in the past few years have been inaccurate, misleading, and filled with misinformation. Because of this, your firm has been unable to hire qualified workers, which has caused many problems. The Hiring Manager, Sheila Lass, has decided to stop accepting traditional resumes. Instead, she will ask potential employees to submit an on-line, electronic profile. In addition to searching Google for applicant background, she plans to ask applicants to allow searching their Facebook posts, Twitter feeds, LinkedIn accounts, and so on. By examining their on-line profiles, Ms. Lass feels she can get to know the "real" person. Write the Hiring Manager a persuasive memo arguing for or against her proposal. Be specific and use detailed examples to support your main points.Smart or Attractive In the modern business world, which is more highly valued: being smart or being attractive? Write a business memo to your supervisor stating which is most important. Fully explain your reasons. Be specific and use detailed examples to support your.

1. (1)
Final Memo
Write a business memo responding to one of the following
prompts:RU-32
You're the CEO of a global pharmaceutical company. After
decades of work (and the investment of hundreds of millions of
dollars), your scientists have come up with a major
breakthrough. Your new drug, RU-32, is a low-cost anti-
diabetic medication that dramatically stabilizes insulin levels. If
approved, your company will own the patent on a drug worth
billions of dollars. However, during Phase III clinical trials,
unexpected complications arose, and approval by the FDA is
now unlikely. Without FDA approval, you cannot sell RU-32 in
the U.S. and most developed countries. However, other
countries—primarily developing countries—will allow you to
market the drug without U.S. FDA approval. You must choose
whether to stop all development and cancel the program, or
proceed with manufacturing for sale to citizens of developing
countries.
Inform the Board of Directors of your decision. Write a memo
explaining your position and your reasons. Be specific and use
detailed examples to support your main points.Press-Enterprise
A statistic taken from the Press-Enterprise states that the
average American worker spends about 1.8 hours of every eight
hour work day on non-work activities (e.g., personal phone
calls, internet surfing, etc.). Estimates suggest this lack of
productivity costs American business hundreds of millions of
dollars annually, but workers say focusing eight hours a day
strictly on work-related business is unreasonable and impossible
considering we work more hours than ever before. Additionally,
workers argue they need to schedule appointments and daily
activities when businesses are open. In your opinion, which side

2. makes a stronger case?
Write a persuasive memo to your business arguing one side. Be
specific and use detailed examples to support your main
points.On-Line Profile
Your firm has discovered that the majority of resumes submitted
in the past few years have been inaccurate, misleading, and
filled with misinformation. Because of this, your firm has been
unable to hire qualified workers, which has caused many
problems. The Hiring Manager, Sheila Lass, has decided to stop
accepting traditional resumes. Instead, she will ask potential
employees to submit an on-line, electronic profile. In addition
to searching Google for applicant background, she plans to ask
applicants to allow searching their Facebook posts, Twitter
feeds, LinkedIn accounts, and so on. By examining their on-line
profiles, Ms. Lass feels she can get to know the "real" person.
Write the Hiring Manager a persuasive memo arguing for or
against her proposal. Be specific and use detailed examples to
support your main points.Smart or Attractive
In the modern business world, which is more highly valued:
being smart or being attractive? Write a business memo to your
supervisor stating which is most important. Fully explain your
reasons. Be specific and use detailed examples to support your
main points.
(2)
http://www.watnik.net/306/margin/margin.htmlAssignment
Write a paper responding to one of the following prompts:
Paper 1
For the final paper, discuss the actions of the main characters in
the film. What were their motivations? Their options? How did
their "world view" influence their decision-making? Do you
agree with their choices or not, and why? Analyze their
predicament and discuss the merits of their actions.
Paper 2

3. For this paper, discuss how the decisions made by the main
characters influence the "real world." What did their actions do
to the other Wall Street firms? How did they influence domestic
and global financial markets? What effect did they have on the
valuations of other securities? How did they influence lending,
mortgages, and retirement accounts? And finally, what effect
did they have on capital allocation and formation?Group
You can write the paper in a group. There is no limit to the size
of the group, and you can work with students from other
sections of 306. When you post your paper to Blackboard, list
everyone in the group on the top of the first page. Also, each
member of the group must post a copy of the (same) paper to
Blackboard.Characters
· Sam Rogers, Investment Floor Head (Kevin Spacey)
· Will Emerson, Head of Trading (Paul Bettany)
· John Tuld, CEO and Chairman of the Board (Jeremy Irons)
· Peter Sullivan, Senior Risk Analyst (Zachary Quinto)
· Seth Bregman, Junior Risk Analyst (Penn Badgley)
· Jared Cohen, Investment Division Head (Simon Baker)
· Eric Dale, Former Head of Risk Management (Stanley Tucci)
· Sarah Robertson, Chief Risk Management Officer (Demi
Moore)
· Ramesh Shah, Legal Counsel (Aasif Mandvi)Reviews
"...relentless in its honesty and shrewd in its insights and
techniques... an extraordinary feat of filmmaking"
—A. O. Scott, New York Times
"Margin Call is one of the strongest American films of the year
and easily the best Wall Street movie ever made."
—David Denby, New Yorker
"... this confident, crisply made piece of work does an expert
job of bringing us inside the inner sanctum of a top Wall Street
investment bank..."
—Kenneth Turan, Los Angeles Times
Margin Call "takes place over a 36-hour period at a large Wall
Street investment bank and highlights the initial stages of the
financial crisis of 2007-2008... Although the film does not

4. depict any real Wall Street firm, or similar corporate action
during the 2008 financial crisis, Goldman Sachs similarly
moved early to hedge and reduce its position in mortgage-
backed securities, at the urging of two employees. Other firms
like Lehman Brothers and Bear Stearns found themselves
similarly and catastrophically over-leveraged in mortgage-
backed securities. They scrambled, ultimately unsuccessfully, to
manage the financial and public panic that ensued when their
problems became apparent and the global financial markets
plunged as a result." (Margin Call (film))MLA Formatting
Your paper must follow MLA format. The simplest solution is
to use the Margin Call (Template).
Source: Purdue Online Writing Lab (OWL)
General Guidelines
· Use standard, white 8.5 x 11-inch paper.
· Double-space and use a legible font (e.g. Times New Roman).
The font size should be 12 pt.
· Set the margins to 1 inch on all sides.
· Indent the first line of paragraphs one half-inch from the left
margin.
Formatting the First Page
· In the upper left-hand corner of the first page, list your name,
your instructor's name, the course, and the date. Be sure to
double-space.
· Double space again and center the title. Do not underline,
italicize, or place your title in quotation marks; write the title in
Title Case (standard capitalization)—not in all capital letters.
· Double space between the title and the first line of the text.
· Create a header in the upper right-hand corner that includes
your last name, followed by a space with a page number;
number all pages consecutively with Arabic numerals (1, 2, 3,
4, etc.), one-half inch from the top and flush with the right
margin.
(3)Assignment

5. Write a paper analyzing a business book. Choose one book from
the list.Book List
1. Rich Dad Poor Dad ▸ 336 pages
2. The Greatest Salesman in the World ▸ 128 pages
3. The New One Minute Manager ▸ 112 pages
4. The Richest Man in Babylon ▸ 144 pages
5. Think and Grow Rich ▸ 320 pages
6. Who Moved My Cheese? ▸ 95 pagesLength
The minimum required length is 5 pages. There is no
maximum.Benefit
The assignment is worth one full letter grade. For example, if
you earn a "B" and you complete the Extra Credit assignment at
Professional Level or above, your course grade will be an
"A."Group
You can write the paper in a group. There is no limit to the size
of the group, and you can work with students from other
sections of 306. When you post your paper to Blackboard, list
everyone in the group on the top of the first page. Also, each
member of the group must post a copy of the (same) paper to
Blackboard.Analysis
Your analysis paper should contain two parts. The first part is a
brief summary of the book—a simple explanation of what the
book was about. Because this is an extra credit assignment, it
only needs to be a short, simple summary.
The second part is your own personal reaction to the book. What
do you think of the book's ideas? Tell me what you personally
think. Yes, you can write in first person. There's no right or
wrong answer, so be confident in your opinions!
REVIEW

6. Blockchain and the related issues: a review of current research
topics
Yang Lua,b*
aDepartment of Information System and Decision Sciences,
University of Kentucky, Lexington,
KY, USA; bAlliance Manchester Business, University of
Manchester, Manchester, UK
(Received 31 January 2018; revised 13 August 2018; accepted
23 August 2018)
The blockchain represents emerging technologies and future
trends. For the
traditional social organization and mode of operation, the
development of the
blockchain is a revolution. As a decentralized infrastructure and
distributed
general ledger agreement, the blockchain presents us with a
great opportunity to
establish data security and trust for automation and intelligence
development in
the Internet of Things (IoT) and it creates a new un-centralized
programmable
smart ecosystem. Our research synthesizes and analyses extant
articles that focus
on blockchain-related perspectives which will potentially play
an important role
in sustainable development in the world. Blockchain
applications and future
directions always attract more attention. Blockchain technology
provides strong
scalability and interoperability between the intelligent and the
physical worlds.

7. Keywords: blockchain; blockchain-as-a-service (BaaS); smart
contract; Internet of
Things (IoT); cryptocurrency; Bitcoin; Ethereum; Hyperledger
Introduction
The blockchain consists of non-destructive and immutable
decentralized shared
ledgers that can group data blocks into specific data structures
in chronological
order (Narayanan, Bonneau, Felten, Miller, & Goldfeder, 2016).
Alternatively, the
blockchain is an entirely new approach that uses distributed
consensus mechanisms
to generate, verify, process, and update data, uses a
cryptographic chain block struc-
ture to validate and store data, and uses automatic scripting
code (smart contracts) to
program and manipulate data (Wright &De Filippi, 2015). The
blockchain is an inno-
vative approach that provides us with secure, transparent,
anonymous, decentralized,
low-cost, and reliable data or asset transactions in a
decentralized network (Crosby,
Pattanayak, Verma, &Kalyanaraman, 2016; Iansiti & Lakhani,
2017). Bitcoin (Naka-
moto, 2008) is not the starting point of the distributed system,
but it has ignited the
blockchain.
According to Gartner’s report of hyper cycle for emerging
technologies (Gartner
Report, 2015, 2016, 2017), cryptocurrency and the blockchain
are emerging technol-
ogies, among the 2000 technologies. Specifically,
cryptocurrency was at a “Trough of

8. Disillusionment” in 2015, and blockchain was at a “Peak of
Inflated Expectations” in
both 2016 and 2017 (Figure 1). Cryptocurrency is one of the
most successful of the
many blockchain applications. Globally, more and more
businesses are accepting
© 2018 Antai College of Economics and Management, Shanghai
Jiao Tong University
*Email: [email protected]
Journal of Management Analytics, 2018
Vol. 5, No. 4, 231–255,
https://doi.org/10.1080/23270012.2018.1516523
mailto:[email protected]
http://www.tandfonline.com
http://crossmark.crossref.org/dialog/?doi=10.1080/23270012.20
18.1516523&domain=pdf
cryptocurrency as actual currency in transactions. As of June
2018, there are 1591
cryptocurrencies worldwide, with a total market value of over
247 billion U.S.
dollars. Among them, Bitcoin’s market value accounts for about
42.5% of the total
market value, while Ethereum and Ripple ranked second and
third, respectively. In
the beginning, except for a few professionals who know about
the blockchain, a lot
of people knew about Bitcoin because of speculative investment
and profits. According
to Blockchain.info and Coinmarketcap.com, the peak of bitcoin
appeared on 17
December 2017, when it reached a record high value of USD

9. 20,089.00 per coin.
As a decentralized infrastructure and distributed computing
paradigm, blockchain
can construct new protocols to help countries or organizations
to perform previously
unsolved affairs. As marijuana became a legitimate consumer
product in North
America, state by state, Canada (Government of Canada, 2016,
2017) launched a
“seed-to-sale” blockchain-embedded supply chain tracking
system to reduce regulat-
ory costs, to enhance public safety, and to undermine illicit
markets. The system has
now been extended to some states in the United States
(Abelseth, 2018). To solve
78% of unregistered land and related corruption issues
(Ogundeji, 2016), a non-
profit company uses Bitland to provide property registration and
authentication ser-
vices to the Ghana Land Commission (Kshetri & Voas, 2018).
Three other countries
(India, the United Arab Emirates (UAE), and Sweden) have also
begun to use block-
chain technology to develop property registration systems
(LawFuel Editors, 2017).
Some international organizations also use the blockchain to
help. For example, The
UN’s World Food Program (WFP) helped refugees from
Pakistan (Menezes, 2017)
and Syrian refugees in Jordan (Wong, 2017).
The blockchain is expected to reshape human social activities
and Internet. The
development of the blockchain has attracted broad attention
from leading high-tech

10. Figure 1. Development position of blockchain in Gartner hype
cycle.
232 Y. Lu
companies and from business markets. IBM first proposed the
concept of BaaS (block-
chain as a service) in 2016. Baas (Samaniego &Deters, 2016) is
a service platform, and
the company hopes to use blockchain similar to the way
Infrastructure-as-a-service
(IaaS), Platform-as-a-service (PaaS), and Software-as-a-service
(SaaS) are used, in
order to provide services to customers. Microsoft launched
blockchain research
in 2014 and cooperated with Consens. In December 2015,
NASDAQ took the lead
in launching the Linq, a securities trading platform based on
blockchain technology,
which has become an important milestone in the
decentralization trend of financial
and security markets. In 2016, Microsoft opened a sandbox
blockchain service
based on the Azure platform. Google and Amazon also joined
the BaaS business in
2016.
The paper conducted an extensive literature review by exploring
relevant articles
from five major academic databases (IEEE Xplore, Web of
Science, ACM digital
library, INSPEC, and ScienceDirect) to describe and to
recognize the current status

11. and the potential research directions regarding the issues of
blockchain. Our survey
pays attention to identifying the principles and functions of the
blockchain process
and highlighting practical applications in diversified industries.
According to the
five databases, there exist a large number of journal articles and
conference papers
related to blockchain, regarding its expertise in smart contract,
IoT, security, and
other applications.
The structure is outlined below. Section 2 depicts an in-depth
review of blockchain
features and open source projects, and we proposed a three-
phase blockchain develop-
ment trend to explain the blockchain in detail. Two important
components, the smart
contract and security, are illustrated in Sections 3 and 4,
respectively. The major block-
chain applications are discussed in Section 5. Section 6
discusses research challenges
and future trends. The conclusion is Section 7.
Background and current research in blockchain
Blockchain technology is a miracle, and it is developing so
quickly. The blockchain is
still in its infancy, but it is already in its second phase. The
uniqueness of the block-
chain is the reason that more and more practitioners and
scholars are paying attention
to this technology. The development of the blockchain is
discussed and explained
below (Figure 2). Then, common features and three types of
blockchains are described

12. in details. In addition, we will introduce two outstanding
blockchain-based platforms
and projects: Ethereum and Hyperledger.
Developing trend
Swan (2015) described the overall development of the
blockchain in his book. We
classify the development of the blockchain into three streams.
The first and second
streams are the same as Swan’s (2015) categorization. The first
stream is Blockchain
1.0, which basically comprises Bitcoin and other
cryptocurrencies in the capital
markets. The second stream is Blockchain 2.0, which is mainly
embedded in distrib-
uted ledger agreements and the related core technologies, such
as smart contracts
and modified consensus protocols. The next generation
blockchain is referred to
Extensive Blockchain. The blockchain will revolutionize
people’s lives and
Journal of Management Analytics 233
interactions. Blockchain systems with different functions will
seamlessly connect
and interact.
Blockchain 1.0 & 2.0
Blockchain 1.0 is basically Bitcoin and other cryptocurrencies.
With the booming of
Bitcoin, the basic technology of the blockchain solves the

13. problems of integrity, secur-
ity, and authenticity, quickly attracting public attention
(Tschorsch & Scheuermann,
2016). Blockchain technology guarantees the integrity, the non-
repudiation, and the
security of transaction data through digitally signed transaction
chains, blockchain
(including pre-hash blocks), and negotiation mechanisms, and
there is no trust
between related parties.
The importance of the blockchain has been gradually discovered
and applied.
Satoshi Nakamoto introduced and explained the concept of
Bitcoin and Blockchain.
The following features have received extensive attention. (1)
Decentralization.
Without central control, blockchain technology does not rely on
third-party organiz-
ations or hardware facilities. (2) Openness (Lin & Liao, 2017).
Blockchain technology
is open source, and its data is open to anyone. Anybody can
query blockchain data and
can develop related applications through open interfaces. (3)
Independence (Conos-
centi, Vetro, & De Martin, 2016). Based on agreements and
protocols, all nodes can
automatically and securely verify and exchange data within the
system, without any
intervention. (4) Safety. Security is a complex issue that is
affected by internal and
external factors. Theoretically, if you can control 51% of all of
the data nodes
(Karame, Androulaki, & Capkun, 2012), you can falsify or alter
the data in the block-
chain system. In practice, no one will try this, because of the

14. costs. (5) Anonymity
(Christidis & Devetsikiotis, 2016; Reid &Harrigan, 2013).
Unless it is legally required,
there is no need to disclose or to verify the identity or the
related information of each
node.
Figure 2. The potential developing trend of blockchain.
234 Y. Lu
For example, in July 2013, Mastercoin (Omni) extended the
Bitcoin function
through a meta-protocol. In December 2013, NXT (Future Coin)
became the first
complete PoS blockchain. In 2013, Bitshares (bit stock)
appeared, and NXT and
CounterParty formed “digital assets.” In addition to Lisk,
TheDAO was proposed
in May 2016. These cryptocurrencies are based on blockchain
technology.
Smart contracts have strengthened the mutual trust mechanism
among users in
IoT and have become the core technology of Blockchain 2.0.
There are two main
aspects. One is the digitization of assets, if the assets need to be
or could be digitalized
in blockchain. The other is the smart contract, which is also the
biggest difference in
the advancement of Blockchain 2.0, compared with Blockchain
1.0. The smart con-
tract can implement real-world logic in Blockchain through an
advanced program-

15. ming language, such as Ethereum and Hyperledger. Many real-
world complex
systems can be achieved through smart contract in the
blockchain system.
Digital assets and smart contracts exist in digital form and, as
such, they are
becoming more and more popular. Blockchain technology
applied to digital assets
and smart contracts can more effectively track how their content
is generated and
can prove the attribution and the authenticity of the content.
Blockchain 3.0
The first two streams were similar, but the explanation of the
next generation of Block-
chain was vague. Swan (2015) only enumerated its potential
application, defined as
justice, efficiency, and coordination applications that it will
reach in the future. It is
not easy to precisely define the next generation of the
blockchain, because of its
rapid development. In the near future, the blockchain will have
the ability to integrate
and to interoperate (Lu, 2016, 2017) IoT, Artificial Intelligence
(AI), and other emer-
ging technologies to provide high quality services for society.
The blockchain has
potential to be the organizational structure for internetting
everything and for hetero-
geneous data. Blockchain 3.0 describes the era of programmable
society. The decen-
tralization and the consensus mechanism of blockchain
technology will develop to
new heights, affecting both human ideology and social form.

16. This phase is the third
phase of the development of the blockchain. Blockchain
technology is likely to be
applied across all aspects of people’s lives and society.
Common features of blockchain
The blockchain has a decentralized structure without central
control. Blockchain tech-
nology does not rely on third-party organizations or on
hardware facilities (Croman
et al., 2016). There is no top-down centralized or hierarchical
management structure
in the blockchain, but rather, a macro-auto-adapted system in
which moves from
bottom to top, micro-interaction and competition, among
network nodes. The
rights and obligations of any node in the blockchain are the
same, and each node
has a complete record of transactions. Thus, the damage to, or
loss of, one or any
node or nodes will not affect the blockchain system
(Viriyasitavat & Hoonsopon,
2018; Yli-Huumo, Ko, Choi, Park, & Smolander, 2016).
The blockchain employs a consensus-based data update
mechanism. The newly
generated data must be verified by all or most of the nodes
before it can be written
into the shared ledger maintained by all blockchain nodes.
Hence, it is difficult to
Journal of Management Analytics 235

17. modify or forge. Any node in a distributed system can
participate in the process of
reading, writing, validating data, and building consensus on the
chain, and can
obtain incentives based on one of four common consensus
mechanisms: Proof-of-
Work (PoW), Proof-of-Stake (PoS), Delegate Proof of Stake
(DPoS), or Practical
Byzantine Fault Tolerance (PBFT).
The difference among the first three consensus mechanisms is
who has authority
rights. Specifically, in PoW, all nodes compete for the rights
fairly through computing
power (Gervais et al., 2016). PoW is the popularly deployed
consensus mechanism in
existing blockchains (Garay, Kiayias, & Leonardos, 2015). With
PoW, the probability
of mining a block depends on the work done by the miner. In
PoS, account permissions
belong to the node of highest interest with less vulnerability to
attacks (Szabo, 1997).
PoS is an energy-saving alternative to PoW. In DPoS, the
delegates are selected by sta-
keholders to control the permissions for verification and for
accounting (Larimer, 2014).
DPoS is the backbone of Bitshares (Wright, 2015). PBFT is a
replication algorithm to
tolerate byzantine faults (Castro & Liskov, 1999). Hyperledger
is one blockchain plat-
form that implements PBFT. How to improve scalability poses a
challenge to the devel-
opment of consensus mechanisms. Vukolić (2015) integrated
PoW with the PBFT
protocol to achieve a high level of scalability. With the
different requirements of block-

18. chain applications, a diversity of modified protocols has been
established.
The blockchain system establishes a privacy-based reliable
public data reading
mechanism (Narayanan et al., 2016). Based on agreements and
protocols, all nodes
can automatically and securely verify and exchange data within
the system without
any intervention. The data in the blockchain system is encrypted
and has varying
degrees of anonymity (Heilman, Baldimtsi, & Goldberg, 2016).
SHA-256 series are
the most popular hash functions used in blockchain and
cryptocurrency.
Unless legally required, there is no need to disclose or verify
the identity or the
related information of each node. Data needs to be verified with
a timestamp before
it is written into the blockchain. The entire blockchain system is
open and transparent;
everyone can access and read data and nodes with maintenance
functions. Anyone can
query blockchain data and can develop related applications
through open interfaces
(Bonneau et al., 2015).
Basic types of blockchain
Blockchain technology has evolved into three modes: the public
blockchain, the
consortium (hybrid) blockchain, and the private blockchain. The
public chain is a
fully decentralized blockchain. Bitcoin is public cryptocurrency
that represents the

19. public chain. The consortium blockchain is a partially
distributed (or multi-
center) blockchain. It applies to the union of multiple entities.
The consensus
process is controlled by a set of predefined nodes. For example,
the generated
block needs to be verified by at least five of the ten pre-selected
consensus nodes.
Hyperledger lies on this scale; it is employed to financial
markets and healthcare pro-
jects. The private blockchain is a centralized blockchain. It
applies to internal data
management and to the auditing of specific organizations. The
written permission is
controlled by the central management authority, and the read
permission can be
selectively opened by related entities. Healthcare management
and governance are
potential areas for adopting the private blockchain (He et al.,
2016; Lin & Liao,
2017; Zheng, Xie, Dai, Chen, & Wang, 2017).
236 Y. Lu
Key open source projects of blockchain
Ethereum
Ethereum1 (Buterin, 2013) is a good blockchain smart contract
platform that runs
arbitrary user-defined programs, optimizes the number of tree
structures in the
block, and improves scalability, security, and flexibility. It is a
platform to facilitate

20. the development of decentralized applications on top of the
blockchain. The data
structure is the Merkle Patricia tree, which is an encrypted
authentication data struc-
ture for storing key-value pairs. Ethereum uses different trees
for different objects: a
transaction tree, a receipt tree, and a status tree. Each tree, in
the three trees, has its
own responsibility and handles different tasks. The transaction
tree handles trans-
action information, such as whether a transaction occurs, which
transaction is
blocked, transaction queries, etc. The receiving tree is
responsible for recording all
operations. The status tree handles information such as account
validity, account
balance, and so on (Wood, 2014).
Ethereum (Buterin, 2015) also provides a good upper
service/application develop-
ment platform: EVM language (Ethereum Virtual Machine
code). The EVM runs as a
sandbox and provides an isolated execution environment.
Ethereum is a widely used
open-source smart contract application platform based on the
blockchain; this
system is specifically designed to use Solidity language
(compiler). Solidity language
can implement various types of smart contracts, such as supply
chain, accounting,
and shopping. Ethereum provides Json-RPC, JavaScript, Geth
for external interfaces
(Wood, 2014).
Hyperledger

21. Hyperledger2 was originally an Open Blockchain project
developed by IBM. It was
later donated to the HyperLedger Project under the Linux
Foundation to form the
current hyperledger. According to HyperLedger’s design goals,
different regions
require different networks and different types of blockchains.
Hyperledger satisfies
the common attributes of multiple networks: identity
verification of asset affiliation
and trading parties, confidential transactions using disconnected
identities and trans-
actions, confidential encryption for contracts, value-added
system portability, and
interoperability between different services. Hyperledger
incubates and develops a
series of business blockchain technologies, including distributed
ledger frameworks,
smart contract engines, client libraries, graphical interfaces,
utility libraries and
sample applications: SAWTOOTH, IROHA, FABRIC,
BURROW, INDY,
CALIPER, CELLO, COMPOSER, EXPLORER, QUILT.
Hyperledger is mainly an enterprise application solution with
customizable net-
working rules that help different consensus protocols operate.
For instance, (1) IBM
provides a smart contract solution for the Bank of Tokyo-
Mitsubishi UFJ (BTMU).
This is one of the first projects of the Hyperledger Fabric
(Androulaki et al., 2018).
Under one Master Service Agreement (MSA), the hyperledger is
used to manage a
series of complex contracts that involve service level
agreements (SLAs), payments,

22. and penalties. The solution increases the efficiency of dispute
resolution and,
ideally, prevents disputes by providing clear evidence of
synchronization among all
parties in the network (IBM News Room, 2016). (2) Walmart.3
Walmart’s food
origin tracking system provides a single view of the purchase
order lifecycle
Journal of Management Analytics 237
throughout the supply chain, and identifies the source of the
damaged food. It will
reduce recalls and make regulation easier to implement
(Higgins, 2017). By integrating
hyperledger, smart contract, and cross-chain technology, the
blockchain establishes a
consensus and a co-governance mechanism. This mechanism
employs computer pro-
gramming to solidify the data stream, consisting of time, space,
and instant multi-
dimensional stacks, and to form recordable, traceable,
definable, priced, and tradable
technical constraints.
Blockchain technology is not limited to cryptocurrency and
capital markets. It also
conducts in-depth practice on smart contracts, network security
and privacy, and
other applications and platforms.
Blockchain and smart contract
The concept of a smart contract was first proposed by scholar

23. Nick Szabo in 1994.
Due to the lag in computing methods and the lessened
development of application
scenarios, smart contract has not received much public
attention. The boom in
Bitcoin and the development of the blockchain have redefined
smart contracts.
Smart contract uses computer language instead of legal
provisions to record trans-
action (Christidis & Devetsikiotis, 2016). It can be seen as a
program that can be auto-
matically run on the blockchain. Smart contract consists of
programming languages,
compilers, virtual machines, events, state machines, fault-
tolerance mechanisms, etc.
The smart contract is one of the core components of the
blockchain and the computer
program running on the duplicable shared ledger. Smart contract
supports the active
or passive processing of data, the acceptance, storage, and
delivery of an asset, as well
as the control and management of smart assets on blockchains
(Luu, Chu, Olickel,
Saxena, & Hobor, 2016).
Smart contract is responsive procedural rules and logic. It is
distributed and
trusted shared code that is deployed on the blockchain. Smart
contract makes trade
possible between untrusted or unknown parties. Smart contracts
also have the
general characteristics of the blockchain, such as distributed
accounting, storage,
and verification. They are undeniable and unforgeable. Smart
contract is deployed
in the blockchains and represents entities that do not rely on

24. central organizations
to execute contracts. The programmability of smart contracts
allows the addition of
arbitrarily complex terms (Delmolino, Arnett, Kosba, Miller, &
Shi, 2016).
Smart contracts are used to form logical information chains and
to bridge the
lower information logic chains and the upper services
(Christidis & Devetsikiotis,
2016). Smart contracts are self-guaranteed agreements between
trading parties.
Party A submits a transaction request to party B, and Party B
provides information.
If the two parties can make an agreement, this is the deal;
otherwise, there is no
response. A smart contract is a blocking program code that runs
while waiting for
the required data or action. The currently popular smart contract
platforms are Ether-
eum and Hyperledger fabric.
Smart contract is blockchain activator that provides flexible
programmable mech-
anisms and algorithms for static underlying blockchain data
(Luu et al., 2016). Smart
contract will provide support for building programmable
financial systems and social
systems in the Blockchain 2.0 and 3.0. The automation and
programmable features of
smart contract make it possible to encapsulate the complex
behavior of each node in a
distributed blockchain system into a software agent robot
formed by blockchains in
238 Y. Lu

25. the virtual world. This helps to build blockchain technology in
distributed applications
of artificial intelligence systems: Decentralized Application
(Dapp), Decentralized
Organization (DO), Decentralized Autonomous Organization
(DAO) (Wright & De
Filippi, 2015), Decentralized Autonomous Corporation (DAC),
Decentralized Auton-
omous Society (DAS), etc.
Smart contract is the key of blockchain 2.0. The extant studies
illustrate many
potential models and applications to adopt or modify the
principles and functions
of smart contract to improve the existing blockchain systems
from different angles.
Hawk is a decentralized blockchain system that embraces
private intuitive smart con-
tracts (Kosba, Miller, Shi, Wen, & Papamanthou, 2016). The
goal is to make the trans-
action more private and secure. Yuan, Xia, Chen, Zang, and Xie
(2018) constructed
another private smart contract system named ShadowEth. In
addition, smart con-
tracts can be employed in broad fields, such as in car insurance
(Lamberti et al.,
2018), digital certificates (Cheng, Lee, Chi, & Chen, 2018),
logistics management
(Álvarez-Díaz, Herrera-Joancomartí, & Caballero-Gil, 2017),
governance, etc.
Blockchain and security

26. Blockchain can solve the problem of centralization and can
prevent individual entities
from controlling the system. The nodes of blockchain are
independent of each other.
In order to ensure the safe operation of the system, when certain
events occur, all of the
nodes need to reach an agreement (Puthal, Malik, Mohanty,
Kougianos, & Yang,
2018). However, it is impossible that the blockchain would not
encounter security
issues (Karame, 2016). For instance, Mt. Gox, a Japanese
bitcoin exchange, was
attacked twice, in June 2011 and in February 2014, and was shut
down thereafter
(Norry, 2018). Such attacks are not directly related to the
blockchain technology,
but are still partial blockchain-related attacks.
The security of the network depends on each single node. Each
node records com-
prehensive data information. When a node receives data from
another node, that node
will verify the identity of the other node. If the verification is
successful, the node will
spread the information to the entire network. Meanwhile,
because of decentralization,
the data transmission between nodes is open without trust. This
feature can increase
the transparency and efficiency of the transaction (Bonneau et
al., 2015). Blockchain
implements time stamps to verify and record transactions,
adding time dimension and
traceability to the data. Blockchain uses asymmetric
cryptography to encrypt and sign
data by public and private keys associated with the smart
contract. This ensures high

27. data security and privacy (Atzei, Bartoletti, & Cimoli, 2017).
The blockchain-based network covers massive data, but most of
these data appear
to be fragmented. Traditional data storage and control
management often rely on
trusted central supervision. Security attacks, or centrally
controlled flaws, can lead
to private data leaks or even to network crash (Zyskind &
Nathan, 2015). Blockchain
can effectively prevent and enhance potential security. The
blockchain is used to estab-
lish a decentralized architecture in which all nodes participate
in operations to manage
data and to avoid network security incidents caused by central
control failures. The
blockchain does not depend on central intervention to store or
to update information.
Instead, each user has a “Ledger” and keeps recording and
updating verified infor-
mation. Hence, the blockchain provides a higher-level security
platform that is irrevoc-
able, traceable, reliable, and usable (Karafiloski & Mishev,
2017). However, the
Journal of Management Analytics 239
blockchain gives rise to many problems, such as data
management and privacy protec-
tion, IoT device permissions and communications (which is
discussed in the IoT of
Blockchain Applications), and DDoS (distributed denial of
service) attacks. Many
studies have been conducted to resolve these issues.

28. Data management and privacy protection
The blockchain-based data management system uses a
decentralized architecture and
separates data and data access permissions. Blockchain-based
systems eliminate the
security risks that exist in central supervision. All of the
processes are recorded to
ensure data security and privacy (Aitzhan & Svetinovic, 2016).
Integration of blockchain technology with out-of-chain
databases is an effective
approach to implement a decentralized personal data
management system and to sep-
arate data and data permissions (Azaria, Ekblaw, Vieira, &
Lippman, 2016). The
blockchain consists of fundamental technical components:
Cryptographic Hash Func-
tion, Merkel Tree, and Blockchain. Hash Functions are
mathematical equations that
construct a complex string of characters for the inputs (Shi,
2016). For example, a
vehicle’s basic information (brand, color, and price) can be
mathematically trans-
mitted into a series of unique hashing codes. The hash function
is an important
part of the blockchain. Its common features are that the unique
…