The Study on Economics of Trustworthiness of Blockchain and Smart Contract

LIU Haitao, WANG Xianzhi

(1. Jiangxi Provincial State-Owned Enterprise Assets Operation (Holdings) Co., Ltd., 330038, Nanchang, PRC; 2. School of Computer Science of University of Technology Sydney, 2007, NSW, Australia)

Abstract：There have an increasing problem that many neonatal families cannot find a trustworthy and suitable postpartum doula when facing with asymmetric information. When they in an effort to find a postpartum doula at offline institutions, it is always inefficient, arduous, expensive, untrustworthiness, unsatisfactory, non evaluation and so on. Therefore, a novel online platform named YBJ was initially developed, which based on smart contract and blockchain, is for conceiving family to precisely find an appropriate postpartum doula efficiently. The YBJ consist of User Contract, Business Contract, Operation Contract. Like the smart contract, these three contracts also will execute the given code automatically. The principle of YBJ was explicitly depicted as well in this paper. As the blockchain, the YBJ also designed having an interesting mining function in additional. And the YBCoin was defined, it was designed as an integrals or virtual currency. It will be rewarded to the legal registered users after mined successfully. In fact, it should be to the benefit of users with this function. In the view of economics and commerce, YBJ and traditional ways was objectively evaluated and compared with some common parameters and index. Of course, as a matter of fact, the online YBJ more obviously favorite for families.

Key words：blockchain; smart contract; trustworthiness; economics

Received date：2020-05-19;Repair date：2020-05-25

Biography：Haitao LIU(1983-), Male, PhD, Senior Economist, Research: Blockchain, Cloud Computing, Bigdata.

doi:10.13990/j.issn1001-3679.2020.03.022

CLCNumber：TP311.13DocumentCode：AArticleNumber：1001-3679(2020)03-405-08

基于区块链技术与智能合约的商业性校验

刘海涛1，王献之2

(1.江西省省属国有企业资产经营(控股)有限公司，330038，南昌； 2. 悉尼科技大学计算机科学学院，2007, 新南威尔士，澳大利亚)

摘要：面对日益增长的服务业需求和并不很畅通的专业渠道，许多新生儿家庭无法通过更好的途径有效找到值得信赖、专业性强、责任心强的孕(育)婴师。有时当其费劲办法通过线下实体机构去寻找孕(育)婴师时，总是呈现费时费力、不满意、无法核实其技术背景、无法了解其行为品行等状况，究其原因，一方面是由于信息的不对称影响，另一方面或许是由于无更智能的寻找途径。为解决这一问题，针对母婴服务实际应用场景，基于区块链与智能合约技术，创新性提出并实际开发出智能母婴服务平台YBJ系统，其总体架构包括用户合约、商务合约、操作合约3个部分，旨在在线对雇主家庭与孕(育)婴师进行精准快速匹配，使其在短时间内找寻到满意的孕(育)婴师。同时为更好地实现自适应、自维护功能，类似于比特币的挖矿设计，YBJ系统也独特地设计了YBCoin功能，受到各方用户的欢迎。目的在于借助母婴服务场景，通过开发出的实际应用平台YBJ系统，对区块链和智能合约进行具体场景落地的技术性评价和商业性校验。

关键词：区域链；智能合约；可信；经济性

1 Introduction

The concept of smart contract was raised by Nick Szabo[1]firstly in 1994. In the concept, Szabo thought the contract will be automatically executed without any intermediaries when the conditions were met. But it was infamous until the Ethereum[2]was published for several years. The smart contract was described as automatic programming contract, that is a given code which automatically executed by itself when met all of the preconditions. Therefore, the code equals the relative conditions and vice versa. Such code will be more effective. However, there never had a technology which contains truth confidence between the trading parties until the Bitcoin and Blockchain[3]appeared in 2008. The technological advantages with decentralization, transparency and anti-tampering of blockchain could solve the real trustworthy problem of trading parties completely.

2 The Advantages and Disadvantages of Blockchain and Smart Contract

In most of the success practices, the advantage of smart contract was found and applied perfectly. Especially combined with blockchain. The characteristics of blockchain and smart contract contains about several points as follow.

2.1 Individual

It means blockchain does not rely on any people, government or organization. It is executed not only cut the cost and improve effective of resource, but also defend the frauds come from the third party. Any people are not afraid of any bias from key organization for the decentralization of blockchain. In other words, blockchain has a feature of individualism, it can not be affected by any other generally.

2.2 Security

It means blockchain cannot be tampered by any measure on theory except others have 51% attack (someone who controlled 51% hash power of the whole chain). However, there have so far not any point for attack because the decentralization designed of blockchain. Moreover, the smart contract which are executed automatically is linked with blockchain are more secure.

2.3 Trustworthy

It means every person or organization could trust each other based on the established relationship on blockchain. The blockchain constructed the basic trust on each node. This design also make sure any part could be responsible for other when got a deal. Because the trustworthiness was established by each other. It contains the detail of past trade records, corporate credit, business and so forth.

2.4 Redundancy

For the data was stored at the whole chain entity nodes, and it must be broadcasted on the entire chain in time, thus the whole chain should know all the stored information when a stored event occurs. It could not have any effect on the chain when other node not worked. Moreover, it could make sure the information cannot be lost.

2.5 Efficient

It means blockchain and smart contract could be executed immediately, safely and efficiently when all the preconditions were met. The reason is that there have not any supervision by supervisor or manager. Therefore, that is a complete automatic executing processes, and it worked efficiently.

However, just like other new revolutionary technology, there have also some disadvantages of blockchain and smart contract. such as.

2.5.1 Anti-tampering Anti-tampering is an important advantage of blockchain based on the principles of distributed design. But this is also a disadvantage for some mistake of the agreement itself. In this case, it should be dropped off the stored information when found a mistake, and it could be corrected by the next new stored node. However, the mistake information cannot be changed, covered or substituted, and it will be stored forever.

2.5.2 Only used on digit assets for digit assets are simply and easily processed with computer program. Most of smart contract always was used on digit assets, not real assets. Nevertheless, almost the whole assets are real assets in our world. Not all of the real assets could be suitably digitalized. So how to deal digit assets and real assets with smart contract effectively is a hard question.

2.5.3 Lack regulation Smart contract could be executed smoothly only accordance with the given code. There is not any exterior influence on it. However, it is necessary for supervision in some field, such as finance, foods, drugs and so on. In that realm, people will be prudently when concluding a contract without regulation or approval. On the other hand, unlike traditional contract, the smart contract could not be repealed even if the mistake was found.

Nevertheless, for the huge advantages of smart contract, especially combined with the blockchain technology. It is widely for the application of smart contract, especially in the decentralization system, distributed filed as well as realm. Such as digital currency exchange, lottery, financial derivations, election, auction, Decentralized Autonomous Organization (DAO), digital music, digital copyright, justice, medicine and so on. In other words, the smart contract could be more applied where the changing scene of goods or services.

3 Some Questions

It is well known that blockchain always could be used on digit assets in general. But in our world many assets are real assets. There is a pending problem how could revise the wrong or mistake data or record but not spoil anti-tampering rule. How to integrate smart contract with the offline reality commercial scene mostly. How to solve the self-consistent problem between lacking regulation and the intrinsic features.

Around that questions, many researches and organizations attempted various ways to solve it completely. Such as used smart contract on justice based on blockchain by Hangzhou Internet Court in 2019. In that system, they achieved process records, series trustworthiness, node testimonies, all-round cooperation with internet data and behavior information through the whole processing which contains volunteering signature, automatic fulfilment, smart registration, smart adjudication, smart execution. They successfully constructed a justice application scene based on blockchain in practice. Furthermore, they also issued the blockchain of justice on Yangtze River Delta. The advantages of trustworthiness, efficiency, security of blockchain were shown better through practices.

Another, MedRec was developed by the group consisted of Ariel Ekblaw, Asaf Azaria, Thiago Vieira and Andrew Lippman[4], that is an electronic medical records management system, which used to manage medical records with Ethereum. The development group constructed a content management system by smart contract for medical agency, so that may satisfy for patients, researchers, doctors and the like. For Medrec stored and managed the electronic medical records by blockchain and smart contract, so all of the records of it cannot be tampered and deleted. This system generally contains Registrar Contract, Patient Provider Relationship Contract, and Summary Contract. In that system, patients and other permissible users could access the record easily. It supplied the robustness security when processing sensitive data based on blockchain and smart contract. Moreover, it could work efficiently for used the smart contract technology. Interestingly enough, MedRec encourages patients, researchers and legal users mining and obtain digit currency in order to maintain and protect the records continuously with the help of the feature of blockchain. Thus, it could keep this system better working and iterating.

The other instance is OneConnect, it was developed by OneConnect Financial Technology Co. Pte. Ltd. in order to supply the whole solution of ‘Technology + Business’ for financial organization. They also issued ALFA smart contract cloud platform, aimed at achieving the smart contract between node to node online. So that the whole process and whole period contract will be smartly managed by financial institutions.

Furthermore, the smart contract company named DocSign which business is electronic signature also had initial publish offered (IPO) at NASDAQ in USA on 2018. And the product of it was already used on financial service, insurance, real estate and so forth. Moreover, owing to the important of electronic signature, Salesforce, Morgan Stanley, Bank of America, Cisco, Comcast, HP also are customer of it. It follows that the application of smart contract is very prosperous.

For the characteristics and advantages of blockchain and smart contract, although a lot of scientists, researchers, engineers and institutions in an effort to apply blockchain and smart contract in reality scene, in order to create new commercial pattern, advance service ways, improve efficiency, reduce expense, enhance trustworthiness, break through existing problem. And many already achieved success. But nowadays there are not successful application and complete creation at relative maternal and infant field with blockchain and smart contract yet.

4 Our Study

4.1 The Scene

Nowadays, many jobs about baby keeper appeared with universal liberalization of the Two-Children Policy of China. High demand spurs high supply. With an increasing awareness of the significance of taking care of mothers and newborns, postpartum doulas (maternity matrons) saw a more growth in demand.

Reportedly, many families want to hire a good postpartum doula should make an appointment half a year in advance in many cities of china. Especially in holiday, such as spring festival, national day, postpartum doulas are more difficultly appointed in china.

But how to look for a suitable, professional, expert, responsible, trustworthy, good moral, careful, good behavior and kindly person is a difficult problem for a newborn family when facing many different postpartum doulas. And where could they look for? When do they start to appoint? Where can they see the experience records of postpartum doula? How should they believe the words and records of postpartum doula? How efficient may they are able to look for the postpartum doula? How could they find the past service records of the postpartum doula? After all, family need to find a postpartum doula to take care their newborn baby, not other things. Therefore, they might be very interested in these questions.

Generally speaking, family could contact postpartum doula through introduced by acquaintances, friends, advertisements or special institutions offline. Family should also appoint several postpartum doulas which having schedule as candidates in advance. And it needs more times interview with them in order to find the most suitable one. This process will be repeated if any party do not satisfy. How slowly and inefficiently of it! How imprecisely and amateurishly of it! But it is an urgent demand in present.

4.2 YBJ Platform

After many full market surveys were investigated in an effort to solve that problem of asymmetric information between employer and postpartum doula. A novel system named YBJ (YingBaoJia) platform was developed fundamentally for solving the supply and demand based on trustworthiness design with smart contract and distributed architecture of blockchain. Figure 1 illustrated one of the interfaces of YBJ Platform. YBJ can automatically match the supply and demand between employer and postpartum doula online. Furthermore, YBJ could select the suitable postpartum doula for employer by the set conditions as soon as possible.

Figure 1. One of the Interfaces of YBJ Platform

The system was designed as an organic combination with smart contract and database. The smart contract contains about User Contract, Business Contract and Operation Contract. Figure 2 shown the composition of YBJ Platform.

Figure 2. The Composition of YBJ Platform

The principle of YBJ Platform is as follows.

User Contract is described as a public key of blockchain. It is mean that each identity of postpartum doula, employer and manager was written and stored on the relative address of blockchain. That could be able to call by legal function or program.

Business Contract is defined as a series of data pointer and relevant access rights of blockchain. Each pointer points one of the relevant business contracts. And it may be called by defined legal functions. It is used to recognize the record held by user.

Operation Contracts often used to query the current records and the past records by user. It contains a reference list relevant to the Business Contract. It means that all of the interactive contract records between the relative participants and other nodes of YBJ.

All of the user must be registered in YBJ. A user account will be constructed firstly before using. And the user contains employer, postpartum doula and manager.

In Business Contract, as the design, each data pointer consists of a character string. It will return a data subset about postpartum doula when the employer queries the database, or about the whole past employ information which represented a postpartum doula was employed when they access the database. The main function of Business Contract is that it was issued a new contract by employer. In other words, a new contract should be issued when employer applied for uploading a record.

It must apply for operation nodes when user wants to access database by their nodes. The database keeper of the operation nodes will check the legality of the application. Then returned the location address for user nodes to access. Thus, user could look for, access and download that data.

In that system, all the records are stored on database. It will be issued on blockchain automatically when Business Contract executed completely.

Therefore, the system is trustworthy, secure, efficient and convenient with the help of the advantages of blockchain and smart contract.

4.3 YBCoin

Another important and interesting feature about YBJ is mining like Bitcoin. The designed logic is when the employer selected and employed a postpartum doula, the postpartum doula provided the good services according to the public rules for the employer on the given services period, and the evaluation of the services was concluded by employer and postpartum doula each other, then it will produce 10 YBCoin automatically according to the principle of system, it will be allocated to the employer and the postpartum doula on average. So, the employer and postpartum doula will gain 5 YBCoin each other when the whole services process was ended. The YBCoin is designed as an integrals or virtual currency, it rewards for the employer and postpartum doula when the given whole services were completed. The YBCoin could be used to pay for the next services fee in YBJ. It can also be exchanged some goods and services in YBJ. It could certainly be swapped by each other. It could be topped up and withdrawn naturally from their account without doubt. The 1YBCoin equals 1 unit currency in amount in YBJ. The service is also named mining in YBJ like Bitcoin. The employer and postpartum doula who legally registered are miners in YBJ. It promotes the harmony between the employer and postpartum doula, and encourages the employer select the suitable postpartum doula, supports the better services are provided by postpartum doula, encourages the system are maintained by participators consciously, advances the ecological system are constructed spontaneously.

4.4 Economics

For many advantages with the use of YBJ, it was mainly analysed the economic value and innovation in the view of commerce, and explicitly studied the advantages of new feature.

YBJ set up a consortium chain of decentralization on services. It could help the family select and employ a suitable postpartum doula efficiently, promote supervision each other consciously, make trustworthiness between them much further, exempt the intermediary fee but not reduce the salary of postpartum doula effectively, and protect the privacy of them safely. In addition, the novel designed YBCoin can improve the user stickiness effectively. Hence it will be burgeoned between user and platform concordantly.

YBJ completely revolutionized the present pattern of selecting and hiring an appropriate postpartum doula. It can directly supply the useful information for family and postpartum doula without any intermediary or institution. So that they should quickly make a smart decision in time.

All the records and data were stored on YBJ with distributed ways based on blockchain. Therefore, the records and data will be more secure than centralized single storage. And it can not also be tampered at will. Moreover, it makes sure the records and data trustworthy. Furthermore, it could be accessed by user in any time and any place.

It is noteworthy that the records of YBJ could be used to partly predicted the birth level of one region, and analyzed market supply and demand of employer and postpartum doulas, also described market supply and demand curve of employer and postpartum doulas, certainly made market supply and demand index of employer and postpartum doulas.

YBJ could remarkably reduce the resource expenses compared with the traditional ways for the decentralized designed idea based on blockchain.

Eventually the statistics method was used to analyze the economics and efficiency of YBJ compared with various traditional offline ways. In the view of different dimension, many data and conclusion were gained through many surveys, strict computation, and explicit analysis. The dimensions of the Scheduled Time, the Accumulative Accuracy Rate, and the Average Cost are emphatically used to analyze and compare the performance between YBJ and other traditional offline ways.

The Scheduled Time denotes the time when a family commonly spent from interview to sign and employ an appropriate postpartum doula after they found, selected and appointed several postpartum doula candidates. It represents the efficiency of system or platform. From Table 1 we can see the comparison between YBJ and other traditional offline ways. And the average scheduled time is about 1 day in YBJ platform but 5 days in other traditional methods. Furthermore, the family will gain additional services, such as Free Change, Care Record, Home Visit, Dual-Evaluate, YBCoin and so forth. But none in traditional methods.

Table 1. The Comparison of Scheduled Time between YBJ and other Traditional Offline Ways

For showing the high accuracy of YBJ scientifically, AAR (Accumulative Accuracy Rate) was defined represents the average accumulative accuracy rate of ways. Specifically, it means the matching accuracy when the family select the appropriate postpartum doula after made one or more times interview. Accumulation denotes the match times in there. The average AAR of other traditional offline ways were calculated for comparing conveniently in Table 2. Table 2 shown the AAR between YBJ and other traditional offline ways. It could be seen the AAR is 95% in YBJ when matched at first time, but Other are lower than 50%. The AAR is also 100% in YBJ when matched at second time, that means the algorithm of YBJ already quickly converged, however Others are lower than 80% yet. The AAR always is 100% in YBJ when matched at third time, but Others are lower than 94%, and have not be converged. During the trustworthiness of YBJ, the public service information and experiences are beforehand known by the family and postpartum doula, and they could acquaint each other in advance, so that the match accuracy of YBJ is more accurate than Others.

Table 2. The Comparison of AAR between YBJ and other Traditional Offline Ways

The cost of postpartum doula is very significant for a family when they wanting to select and employ a suitable postpartum doula. The cost mainly consists of salary of postpartum doula and fee of intermediary. YBJ can reduce the fee of intermediary because the characteristic of decentralization based on blockchain. For comparing the Average Cost between YBJ and other traditional offline ways, we surveyed the cost no less than 200 postpartum doula institutions at the same region and selected the same kind and level of postpartum doula. The level of postpartum doula was often divided as One-Star, Two-Star, Three-Star, Four-Star, Five-Star and Gold-Level according on the knowledge, skill, experience, and appraisal by individual professional evaluative institutions. In Table 3 we selected the Gold-Level postpartum doula of all the postpartum doula institutions as the comparison objects. Obviously, we could see the cost of YBJ always is less than Others no matter what the family have a single infant or twins. For the decentralized designed based on blockchain, the YBJ have not any fee of intermediary, can also save money for family and not reduce the salary of postpartum doula.

Table 3. The Comparison of Average Cost between YBJ and other Traditional Offline Ways

5 Conclusion

A new online platform named YBJ was put forward for resolving the problem looking for suitable postpartum doula. Due to basing on smart contract and blockchain, it has the feature of decentralization, security, trustworthiness, anti-tampering, high-efficiency, and get high score and good commercial value through compared with other traditional ways. Actually, it supplied a novel and online ways for many neonatal families to find trustworthy and appropriate postpartum doula when facing with asymmetric information. And made a forward exploration for solving the problem integrating the digit assets and real assets. Also made a successful example for applying on maternal and infant field. Helped postpartum doula improving skill and knowledge too. For benefitting to neonatal family and postpartum doula, it is more favorite used by them on account of the advantages. It must say YBJ supplied a novel, quick and efficient way for finding an appropriate postpartum doula, especially in nowadays.

Acknowledgement: We should like to thank families and postpartum doulas for their acceptance our survey gladly, also would thank offline institutions for supplied their commercial data.