**3. What is Blockchain technology?**

Blockchain technology is a public ledger where transactions (i.e., digital data) are stored in a chain of blocks [33]. What makes storing transactions in a chain of blocks special is the immutability property that will be created once transactions are structured in this way. To see this, let us compare blockchain technology with the traditional way of storing data. Traditionally, data is stored separately and independently. For example, transaction A will be stored in folder A while transaction B will be stored in folder B. An obvious problem with storing data this way is that someone could tamper with data in each folder (e.g., replace transaction B with transaction B\* and store it in folder B) and there is no way to know about this.

Blockchain technology will store data in a radically different way. First, transaction A which will be considered as the first transaction will be stored in block A (for blockchain technology, folder will be called "block"). The first block is usually called the genesis block. Next, a unique "fingerprint" or "digital signature" of transaction A which is called a "hash" value will be created. A hashing function is a function that transforms input data of any arbitrary size (e.g., transaction A has 20 words) into an output with fixed size values (e.g., 64 digits of numbers). Next, this "fingerprint" of transaction A is being stored together with transaction B in block B. This process will continue (fingerprint of transaction B will be stored together with transaction C in block C and so on and so forth) as long as there are new transactions to be recorded. An obvious advantage of storing data using blockchain technology is that tampering with recorded data is (almost) impossible. Suppose someone replaces a recorded transaction B with a false transaction B (e.g., B\*), this tampering can be detected because the fingerprint of transaction B that has already been recorded together with transaction C will be different from the fingerprint of transaction B\*. This is the immutability property that will be created once data are being stored using blockchain technology. To further enhance this immutability property, data recorded in the chain of blocks can be distributed over a large network of computers (i.e., making multiple copies instead of keeping the data at a centralized storage location) which also verifies the authenticity of each new block (i.e., mining) before being added to the network. The more the data is recorded in the distributed and decentralized chain of blocks, the stronger is the immutability property. This is the key reason why blockchain technology will radically improve the quality of our records from "records that might be trustworthy" to "records that trust is absolute".

Other than the immutability property, blockchain technology can be structured to provide other benefits. First, blockchain technology can be structured such that the identities of people who participate in the blockchain network (senders, receivers, and validators) are concealed. Anonymity can have several benefits especially in the context of CSR reporting. First, anonymity makes it impossible for dishonest external entities to interfere or manipulate the actions of anonymous agents in the blockchain network. Second, anonymity makes it impossible for agents in the blockchain

network to collude together and act dishonestly for their personal benefits beyond the reward they receive from the blockchain network.

Second, blockchain technology can be structured to allow smart contracts. A smart contract is a self-executable computer program stored in a blockchain network for executing terms of a contract [34]. The fact that a smart contract is a self-executable computer program allows it to perform various automation activities. A notable feature of smart contracts is that it allows the existence of decentralized autonomous organizations [34]. Participants in a decentralized autonomous organization are anonymous and perform tasks according to a pre-specified smart contract recorded on a blockchain network. Once certain conditions of the tasks are met (e.g., tasks are completed), smart contracts will reward the participants for their services (e.g., by automatically sending cryptocurrency to the participants).

Third, blockchain technology can be structured as a public blockchain (permissionless public blockchain) in which anyone can participate or a private blockchain (permissioned public blockchain) in which only the selected participants can participate. A major advantage of the public blockchain is that it can leverage the power of the "crowd" effectively either for strengthening the immutability property of the blockchain network or for gathering a large number of people to perform some common tasks as in "crowdsourcing".
