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What research initiatives are universities exploring with blockchain?
A quick overview of blockchain technology:
It is a new type of auditable data storage technology for tracking all kinds of transactions. It represents a decentralized, digitized, date-stamped and immutable transparent record of ledger entries documenting who transferred what to whom.
Blockchain is decentralized in that identical versions of its sequentially dependent leger entries or “blocks” are simultaneously stored on approximately 11,000 blockchain participants’ computers around the world called “nodes.” Bitcoin and other cryptocurrencies set the rules for the chain and function as value tokens for exchange between users.
The authentication and verification process relies on a complex cryptographic algorithm that provides each new block with a digital ID or “hash”. This computing-power-intensive process involves “mining” which allows Bitcoin nodes to reach a secure, tamper-resistant consensus while the blockchain grows.
Moreover, those blockchain participants who offer their computing resources to validate transactions are offered rewards.
Once a new block is added to the blockchain, it is secure, immutable, and highly resistant to third-party attack.
Current Issues in Technology Transfer
There are major bottlenecks hindering the flow of academic early-stage technologies to commercial entities and ultimately, to patients.
One is the identification of a truly unique technology.
The second is chain of title issues related to such technologies.
Currently, early-stage technology entrepreneurs, venture capitalists and larger pharmaceutical companies must hack through a difficult information thicket related to university tech transfer. Additionally, inventors creating these valuable technologies frequently collaborate with scientists at other universities, corporations, and private research service providers.
These complex arrangements of funding sources, inventors, technicians, institutions, and employers are a minefield with respect to issues of technology control and ownership.
Exchanging Technologies via Blockchain-Based Platforms
As Thomas Haag and Rolf Haag1explained, currently, blockchain-based platforms are being developed in which registered scientists and investors can efficiently exchange early-stage technologies in a manner that directly addresses the technology identification and chain of title bottlenecks described above.
These decentralized peer-to-peer networks allow scientists to upload their confidential and non-confidential research project summaries and partnership proposals in blocks to the blockchain.
Once verified in the blockchain, these documents are in effect date-stamped and “notarized” with respect to the information they contain, e.g. invention disclosure records, patent applications, scientific data, business plans, and identities of all inventors and principals. As additional collaborators involved in a project in other locations add supplemental analysis and data, this online “discussion” is captured in the blockchain as additional appending blocks.
Subsequent additional blocks containing the associated formalized invention assignments records for each of the identified inventors to their respective institution can be added. Applications can be generated so they can be reviewed and executed online and then directly uploaded to the blockchain.
Investors can then search the blockchain by way of author, institution/owner, submission date and subject matter (e.g., small molecules, biologics, regenerative medicine, etc.) in order to identify those technologies most relevant to their particular business aim or model.
Blockchain technology promises to revolutionize all aspects of medicine.
Research on Value of Blockchain to Users
Singapore’s Management University (SMU) is investigating whether the use of blockchain generates value for the users.
“It is unclear at this stage whether the nascent technology generates any value for the firms,” said Professor Qiang Cheng, Dean of the School of Accountancy at SMU.
Professor Cheng believes that it is critical to empirically document the economic value of blockchain applications.
“To our knowledge, there is no academic publication that provides rigorous empirical analysis of the economic value of blockchain in a commercial environment or financial markets.”
Professor Chang and his team, which includes other professors of accounting from SMU and Tsinghua University have been awarded a research grant to study the value of blockchain applications in the financial market2.
Another professor at SMU Dr. Lingxiao Jiang, an associate professor of Computer Science at Singapore Management University, is also doing research on blockchain technology.
Dr Jiang is also one of the directors at the university’s Research Lab for Intelligent Software Engineering, where he researches the challenges, and opportunities, for the growing use of smart contracts in financial services.
His research involves using machine learning techniques that can understand and analyze code across various programming languages and software packages for multiple industries, and therefore provides bug detection and quality assurance capabilities for various kinds of modern software packages.
More specifically, the research focuses on the use of machine learning techniques for detecting bugs in smart contracts and blockchain systems in the financial technology (or fintech) industry, as smart contracts and blockchains are gaining more popularity and acceptance in the financial industry, and their usage is growing exponentially.
Stanford Center for Blockchain Research
Stanford’s Center for Blockchain Research (CBR) is a focused research effort on cryptocurrencies and blockchain technologies.
The center brings together engineering, law, and economics faculty, as well as post-docs, students, and visitors, to work on technical challenges in the field. The center’s primary mission is to support the thriving ecosystem by developing new technologies needed to advance the field. The center also runs an extensive education and outreach program, including on-campus courses, MOOCs, workshops, and conferences for the blockchain community.
The CBR is sponsoring research on many aspects of blockchain, including “Side-Channel Attacks on Anonymous Transactions,” and “Prism: Scaling Bitcoin by 10,000x”.
Blockchain technology can offer advantages to inventors in universities and hospitals. Speak to an expert today to find out how blockchain can help your university or research institute.
Potential Issues with Blockchain Commercialization
One potential issue is the concern that blockchain is somehow a bit shady.
The problem was particularly acute when many new cryptocurrencies were being launched with great fanfare, only to disappear months later, taking the investors’ money with them.
But blockchain technology is far more than cryptocurrencies. However, in many cases, blockchain startups have sought to fund themselves and the operation of their technology, through an ICO, initial coin offering.
If these tokens are exchangeable for money, then they may be considered a security token, and then fall under the SEC’s jurisdiction.
Thus, the potential use of any token for financial transactions, according to how it is organized for exchange, has led to regulatory problems. Fear of such issues has dampened enthusiasm for blockchain commercialization.
One way that blockchain startups sought to mitigate these problems was by blocking the involvement of US investors in their token sales.
As Labaton Sucharow3 noted, “Similarly, a new trend has begun to emerge, further complicating litigation in this area. Seizing upon Supreme Court precedent establishing that the federal securities laws apply only to domestic transactions, i.e., those that occur within the United States, companies selling cryptocurrency have begun to structure their offerings so that they take place solely outside the US and have added provisions to the sale ostensibly barring the participation of US-based investors.
“As a result, these offerings are effectively shielded from the reach of the federal securities laws and the United States Securities and Exchange Commission (“SEC”). In many instances, however, these terms and conditions are illusory, and US-based investors are able to, and often encouraged to, participate in the offering.”
Now the SEC is moving to regulate various aspects of financial transactions through blockchain, bringing regulatory certainty.
Commissioner Caroline Crenshaw of the SEC4 wrote:
“DeFi (decentralized finance) is a shared opportunity and challenge. Some DeFi projects fit neatly within our jurisdiction, and others may struggle to comply with the rules as currently applied. It is not enough to just say it is too hard to regulate or to say it is too hard to comply with regulations.
“It is a positive sign that many projects say they want to operate within DeFi in a compliant way. I credit their sincerity on this point, and hope they commit resources to collaborating with the SEC staff in the same spirit. For DeFi’s problems, finding compliant solutions is something best accomplished together.
“Reimagining our markets without appropriate investor protections and mechanisms to support market integrity would be a missed opportunity, at best, and could result in significant harm, at worst. In conceiving a new financial system, I believe developers have an obligation to optimize for more than profitability, speed of deployment, and innovation. Whatever comes next, it should be a system in which all investors have access to actionable, material data, and it should be a system that reduces the potential for manipulative conduct.
“Such a system should lead capital to flow efficiently to the most promising projects, rather than being diverted by mere hype or false claims. It should also be designed to advance markets that are interconnected, but with sufficient safeguards to withstand significant shocks, including the potential for rapid deleveraging. In decentralized networks with diffuse control and disparate interests, regulations serve to create shared incentives aligned to benefit the entire system and ensure fair opportunities for its least powerful participants.
Research needed on the Application of Blockchain to E-commerce
At the same time that regulatory bodies are examining how best to regulate blockchain, research is needed on the application of blockchain to e-commerce.
Science Direct.com5 recently reported:
“Recent research indicates that while blockchain will also have a major impact on e-commerce (Subramanian, 2018), it remains under-researched (Liu and Li, 2020).
“Given the ongoing evolution of blockchain applications and their potential implications for commercial organizations and customers alike, pending issues related to e-commerce in several areas need to be addressed. These areas include the potential impact of blockchain, the role of virtual assets, the emergence of new topics and the design and deployment of systems:
All of the above questions from Sciencedirect.com are ones which university researchers can undertake in helping to explain the potential impact of blockchain.
Tips for Universities for Blockchain Commercialization
The blockchain patent wars are in full swing! We did a study that showed that Alibaba was set to overtaken IBM as the company with the most blockchain patents6.
There are two important takeaways from our study:
For commercialization, it makes a big difference whether your university licenses blockchain IP to a startup or to a large, well-established corporation. Startups may not be aware of the rapidly changing landscape of laws and regulations in the US.
Even if they plan to initially commercialize outside the US, the many court cases indicate that the SEC may not accept this premise, especially for companies that are based in the US.
Technology transfer organizations need to be vigilant with such partnerships, to guard the value of the university’s IP against potential regulatory risk.
Our platform can help you assess the effect of blockchain technology commercially – and also help you find the best partners for your blockchain technology research projects.
Works Cited
