The Department of Justice recently prosecuted a teenager from Manassas, Virginia, for attempting to provide material support to the Islamic State in Iraq and the Levant. The Department revealed that the teen had posted instructions on social media explaining how to use the cryptocurrency Bitcoin to support terrorist operations. United States law enforcement and intelligence organizations are increasingly concerned, and rightfully so, with how they are going to address the growing problems presented by terrorist and criminal use of cryptocurrency to launder money and otherwise support illicit operations. These organizations are specifically troubled by how difficult it is to monitor cryptocurrency systems, which largely stems from the fact that many cryptocurrencies are constructed on Block Chain technology. Block Chain technology, in the context of cryptocurrency, is a Distributed Ledger System that stores data in registers among many different computer systems using cryptography as a complimentary security protocol. The transfer of cryptocurrency using this decentralized system does not require an intermediary, such a bank or other financial institution, which increases its potential application for financing of illicit activities. These unique aspects of this game-changing technology make it very difficult for investigators to gather the information they need under the current law. Regulations and policy guidance built on the old authorities have left new companies fumbling through the dark, trying to abide by vague, strict, unfair, unforgiving, and expensive regulatory recordkeeping and reporting regimes. The outdated law that federal agencies depend upon for their authority not only ties their hands from coming up with new and innovative ways to address the obstacles posed by this new technology but also negatively affects the technology industry itself by stifling innovation. This paper asserts that new and inventive legislation, not just revised regulation, is required to address this crucial area of concern for national security while also balancing the importance of fostering and encouraging innovation in this groundbreaking technology. This paper recommends that Congress legislate now to create a collaborative environment where private entities are incentivized to voluntarily share information with federal agencies in order to address this growing concern. The legislation should solidify, in law, protections and immunities for the private entities that participate while also establishing a realistic but attractive incentive structure. This sort of legislation is not a wholly new concept, as Congress has successfully passed similar legislation in the past to create an information-sharing environment for the various cyber threats postured to damage the government and private industry equally. Ultimately, Congress should choose to reinvigorate the forward-thinking provisions found in the Cybersecurity Act of 2015 by particularizing its information-sharing scheme to cryptocurrency specific financial information and restructuring the Act’s immunity and incentives schemes. This will provide the industry with the flexibility it needs to grow and develop while providing law enforcement the information it requires to protect the security and the people of the United States.
The interest has grown around Bitcoin as a trustless and decentralized digital payment service. Along with the increase in users and transactions, Bitcoin suffers from challenges regarding scalability. Many solutions have been proposed over the years, but Bitcoin is still struggling with finding the solution that suits everyone. Lightning Network as one of the most promising solutions, will be in the scope of this thesis, along with why such a solution is needed.\n\nBy investigating Bitcoin, scalability challenges and proposed solutions, we evaluated Bitcoin s future. We explore challenges such as propagation time, block size and energy consumption. Increasing the block size, changing the consensus algorithm and off-chain payments are discussed. The Lightning Network as an off-chain solution is investigated further in-depth. Challenges and consequences of implementing the Lightning Network are discussed. Furthermore, this thesis discusses whether the Lightning Network is the solution Bitcoin needs or not.
In this thesis, I expand on the concept of algorithmic authority, a concept that I introduced in earlier work to understand the role of algorithms in daily life. Algorithmic authority is the legitimate power of algorithms to direct human action and to impact which information is considered true. In contrast to much other work on algorithms in sociotechnical systems, I argue for more precise use of the word âalgorithmâ, as well as for the importance of studying algorithmic systems that do consist of âblack box algorithmsâ. Through a study of the users of the cryptocurrency Bitcoin, I explore what it means to trust in algorithmic authority in an open source, decentralized system and contrast it with the authority of centralized and corporate software. My study utilizes data from my survey, interviews, and observation of the broader Bitcoin community. I examine the tensions between members of the Bitcoin community who would prefer to integrate Bitcoin into institutions and those that saw it as a radical use of algorithmic authority. I describe how my participants preferred algorithmic authority to the authority of conventional institutions that they saw as untrustworthy. However, they acknowledged the need for mediating algorithmic authority with human judgment. I examine these tensions between how they would like Bitcoin to be used and how it is being used, and what those tensions can tell us about algorithmic authority. Lastly, I suggest future research directions for examining a wider range of algorithms and better understanding the Bitcoin community.
Denna uppsats har två delsyften. Det första delsyftet är att ge en beskrivning av vad bitcoin är och hur tekniken bakom bitcoin fungerar. Det andra delsyftet är att redogöra för hur bitcoin ska värderas. Genom en selektiv litteraturöversikt med avseende på värderingsmodeller för bitcoin har det andra delsyftet besvarats. I litteraturen har tre olika ansatser till att värdera bitcoin återfunnits och denna uppsats presenterar respektive värderingsansats för bitcoin och de resultat som har framkommit av tidigare studiers empiriska test. I den första modellen har bitcoin klassificerats och värderats som ett betalningsmedel. Ansatsen för den andra modellen är att värdera bitcoin som en finansiell tillgång. Utgångspunkten för den tredje modellen är att bitcoin är ett nätverk och ska värderas utifrån den aspekten med hjälp av Metcalfe’s lag. Sammanfattningsvis kan alla tre modeller förklara bitcoins prisbildning till en viss del. Slutsatsen är att bitcoin i högre grad kan klassificeras och värderas som en finansiell tillgång, eller som ett nätverk, än som ett fungerande betalningsmedel.
Bitcoin is an arrangement expected to support the trading of noteworthy worth between parties. Bitcoins dislike traditional portion structures, which moves holds named in sovereign money related structures, Bitcoin has its own particular metric for an esteem called Bitcoin. Bitcoin is a complicated arrangement, and its utilization incorporates a mix of cryptography, circled figuring's, and inspiration driven lead. What's more, late enhancements prescribe that Bitcoin activities may incorporate dangers whose nature and degree are near nothing if by any methods, got on. In light of these considerations, the inspiration driving this paper is to give the basic establishment on the pricing aspects to appreciate crucial Bitcoin activities and chronicle a game plan of observational regularities related to Bitcoin utilize.
Today there exist no standardized payment solution for performing micropayments between Internet of Things (IoT) devices. This study was conducted to examine whether Distributed Ledger Technology (DLT) could be suitable as a micropayment solution for IoT. Also, a more general demand for a scalable micropayment solution was examined, along with its potential. A qualitative study was performed by first conducting eight unstructured interviews regarding the subjects DLT and IoT, to be used as a complement to the literature research. Then, one unstructured and five semi-structured interviews were held to answer the research questions. The Bitcoin blockchain does not work as a micropayment solution, due to scalability issues. This study identified a positive outlook on the idea of Lightning Network, solving the scalability problems with off-chain transactions. However, since a fully functioning network is yet to be implemented, there exist uncertainties, for example regarding how decentralized it will really become. Also, issues considering the usage of DLT:s on small IoT devices arose, stemming from CPU and storage constraints. A demand of a sustainable micropayment solution was identified, possibly being a catalyst of the emergence of pay-per-use business models. Considering more powerful IoT devices, the Lightning Network could function as a micropayment solution. Such a technology is sought after, and its applicability will only increase as IoT devices evolve.
Perceived price volatility of cryptocurrencies may distract practitioners from further developments in the blockchain space that may generate audit and other implications. As next step applications and developments are built on top of existing blockchain programming, the potential implications for both accounting and legal practitioners may be substantive. Especially as different blockchain tools and platforms become more robust and conducive for business and transactional use, the importance of being able to attest and report on this information will move closer toward the mainstream. This article discusses the rise of blockchain applications in a manner applicable for both practitioners and academics, as well as the implications these applications will have on attestation and compliance reporting.
The aim of the paper is to fit a regression model which can be used commonly for the four important crypto currencies: Bitcoin, Litecoin, Ethereum and Ripple to predict the prices. The data has information over the past six years regarding price, transaction volume, transaction count, exchange volume, generated coins etc of these currencies. Understanding the dynamics of crypto currency market can help to a certain extent to take wise investment decisions. Among the variables under consideration the study revealed that transaction volume can be used as an influencing variable to fit a quadratic regression model and predict the prices of the crypto currencies.
This paper provides an overview on the viability and performance of bitcoins as a payment alternative. The history of the Crypto-currency is briefly covered followed by the operation and potential technology failure. The paper then discusses consumer acceptance of bitcoins by analyzing a survey conducted by and the positive and negative observation of the results will be discussed. Fiat Currencies, Traditional E-commerce and Alt-Coin are identified as bitcoins direct competitors and a comparison done on bitcoins against its competitors. The regulatory issues and the legality of bitcoin are also discussed
Block Chain is the emerging technology in today’s world. Its main implementation is in digital currency now days but it can in applicable in every field. Main motive of Block Chain is to improve distributed database. It allows to make any kind of transaction from one node to another without using any third party and bitcoin is the implementation of the blockchain
The digital currency Bitcoin has attracted a lot of attention lately, partly because of its high volatility and rising popularity. The purpose of this study was to find out why companies have chosen to implement and accept Bitcoin as a payment method. Furthermore, investigate what costs and benefits companies experience from accepting Bitcoin as a means of payment, as well security concerns and risks related to Bitcoin. The scientific method of observation used to gather information was through qualitative research where interviews were conducted with six different companies that accepts Bitcoin as a means of payment. The study's results indicate that there are several factors that lead to companies choosing to implement Bitcoin as a payment method. It is perceived to be of high level of security as well the risks associated with Bitcoin are not perceived to be major among the respondents. The result showed that the costs of accepting Bitcoin as a means of payment are low for companies but unlike previous studies, it showed very high transaction fees for consumers.
The true innovation behind the Bitcoin protocol is blockchain technology. Blockchain is the underlying distributed database and encryption technology that enables trustless transactions that can be verified, monitored, and enforced without a central institution. This master’s report presents the core concepts behind blockchain that are concerned with carrying instructions for storage, sharing of non-financial data, including an examination of the byzantine fault tolerant cryptography model.\nA literature review describes the types of blockchains, nodes, proof of work, disadvantages, and risks and provides a survey of future applications related to state government records, such as birth certificates, automobile registrations, land deeds, and voting. This review will answer the question: Is it possible for a state government to use blockchain employing trusted nodes given that the nature of blockchain is that of a distributed network of peers accompanied by a public ledger without a central authority?\nFinally, the requirements for a specific application case study will be defined and developed. The desired application will be a smart contract to invoke a statutory durable power of attorney using blockchain technology for oneself in case of incapacitation while still living.
Open access
Cryptography and Data Security
Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
The purpose of this thesis is to examine, scrutinize and deduce, The current issues \non accounting for cryptocurrency, to obtain views of accounting and finance \nprofessionals on current issues on accounting for cryptocurrencies. The title of the \nthesis was chosen to point out to a reader that there are logical and technical issues \nthat needs clarification regarding accounting for cryptocurrencies. The thesis also \nincludes a brief summary of blockchain, just to understand the basics and evaluate \nthe appropriateness of cryptocurrencies as they are derived from the process of \nblockchain. \nThis thesis advices managers to examine and better understand the key features of \ncryptocurrencies that are relevant to their business as so to be able to correctly \naccount for them as cryptocurrencies have a quasi-asset and quasi-currency feature \nand also can be an inventory to some business models. In addition, it states that the \npreparers of financial statements should evaluate the appropriateness of their \naccounting policies for cryptocurrencies and validate their disclosures about \ncryptocurrencies are material and sufficiently transparent to users of financial \nstatements. \nThis thesis warrants for standard- setters to undertake research of this area so as to \nprovide guidance and clarity in accounting for the cryptocurrencies in areas such as \nasset classification, revenue recognition, valuation and disclosures. They must also \nensure that the accounting guidance for cryptocurrencies is relevant and useful to \nthe preparers of financial statements and the users of financial statements. \nThe research of the thesis will focus on key accounting themes relevant to \ncryptocurrencies. Although the literature on the topic of the thesis available, is \nlimited and narrow. Accounting standards are studied in depth in order to deduct \ntheir appropriateness on cryptocurrencies for the literature review. Further seven \ninterviews were conducted with accounting professionals to obtain their views on the \naccounting themes for cryptocurrencies.
First it has to be stated that Cryptocurrencies are mostly used for legal transfers between legitimate partners and are becoming more and more popular in our society. Any heavy regime of new regulations would make all transactions costlier and less convenient. Such negative economic impact is opposing the need of monitoring the financing structures of organized criminal and terrorist organisations. With the increasing importance of cryptocurrencies, a completely new field of complex problems is arising through the implied anonymity and complexity or sheer impossibility to track transfers in the dark net. As regulations in this new financial market will be difficult to enforce, it is necessary to establish international cooperation and capacity building to implement some possibilities for law- enforcement and intelligence entities to monitor the illegal parts of the capital flowing in these systems. To solve this situation, the focus should lie on the attempts to make the risk of detection of such transfers higher for the parties involved. Without interfering too strongly with the new financing system developing, this process asks for improved compliance and cooperation on all levels and capacities.
This paper looks at two measure of the value of Bitcoin (the price and volume traded in the last month of Bitcoin) and sees if investor attention causes any changes in the values of Bitcoin. This paper also adds exchange rates, the S&P 500, and the price of gold as other possible explanations for the value of Bitcoin. This paper examines the variables at a worldwide level and at the countries with the top 10 GDP in the world. The results of this paper find that investor attention has a significant positive relationship with the value of Bitcoin. Specifically at the country level, Russia consistently has a significant relationship with the value of Bitcoin.
Sondre Bergløff, Markus Øverli, Jacob Emil Tønnesen
Liquidity is one of the most important characteristics of an asset. While it has been studied extensively in conventional markets, little research has been done on the liquidity of bitcoin markets. We investigate determinants of liquidity in the bitcoin markets, both on an hourly and a daily basis. As a measure of liquidity, we use the bid-ask spread, calculated from high-frequency data from four different exchanges located around the world. We find that contemporaneous traded volume and volatility are positively related with the bid-ask spread. We also find that high absolute returns predict high bid-ask spread in the next period. Our findings indicate that bitcoin market makers tend to increase the bid-ask spread in more uncertain times and that higher traded volume can be interpreted as new information arriving in the market.
This paper studies the efficiency of the cryptocurrency market by looking at the distribution of bitcoin prices over time and across exchange-currency pairs. We document persistent differences in relative bitcoin prices (or discounts), with a half-life of 1 day, and a distribution which is leptokurtic, skewed to the right, with a standard deviation of 3.9%. The variability of discounts is larger in countries with tighter capital controls due to the combined effect of market segmentation and local supply and demand shocks, which we relate to location-specific mining activities and investor attention.
This research examines existence of Bitcoin bubble in the year of 2017 by studying time series data within four main paradigms of the modern bubble theory. All four models suggest that Bitcoin closing price was overstated during the period. The analysis also detects Bitcoin features that could lead to the behavioral bias on the cryptocurrency market. The study suggests that investors’ behavior on the crypto market should be investigated more within behavioral finance.
This report describes two projects created by the author which are based on ideas which originate from the Bitcoin community. The first, bmd, is a re-implementation of the Bitmessage protocol in go. Bitmessage is an anonymous and secure messaging system invented by Jonathan Warren, who was inspired by the design of Bitcoin's p2p network. [WARR1] The second is Shufflepuff, an implementation of a protocol called CoinShuffle[RUFF1] which allows several people to construct a Bitcoin transaction with an input and an output for each participant without any participant knowing who owns which output. CoinShuffle was invented by Tim Ruffing et al, and it is an upgrade of a protocol called CoinJoin, invented by Gregory Maxwell. This paper discusses the background, properties, applications, and design of bmd and Shufflepuff. There is also a report of a performance analysis on bmd.
In In recent years, new virtual currency which is born on the Internet, has attracted more and more attention. Especially represented by the bitcoin, which is decentralized and has limited amount, has become active in the global market. Digital storage, decentralization, limited amount, complete anonymity and confidentiality, all make the strong monetary attribute. However, whether bitcoin, whose nickname is gold 2.0, could complete monetary attribute, and whether it could perfect the monetary functions, need to be researched and demonstrated. In addition, the public awareness of bitcoin isn't much. They don't realize the superiority and the shortcomings of bitcoin. In this paper, we start from the introduction of bitcoin, discuss the monetary attribute in detail, and analyze the problems and challenges which bitcoin faces. At last, make a summary, and discuss the meaning and the future.
Blockchains have been embraced by many industries where transactions, either financial\nor non-financial, are involved. Furthermore, blockchains have been proven to\nsupport transactions, without the need for a third-party or other middlemen. Given\nthe distributed properties of blockchains, they are very suitable as the underlying\nfoundation of peer-to-peer applications. Among the peer-to-peer applications that\ncould be improved with the support of blockchains, is the microgrid. Microgrids\nare finite energy systems where peers may purchase energy among themselves.\n\nThis thesis investigates the blockchains ability to work as the underlying technology\nto support settlement in a microgrid. The blockchain is essentially a distributed,\nimmutable ledger. However, there exists many versions of this ledger based on implementation\nfeatures such as governance and consensus etc. A thorough background\nstudy of blockchains, and the differences in the blockchain features are presented.\nFurthermore, existing systems using blockchains for settlement in peer-to-peer\nenergy systems are presented. Based on the findings in the background study and\nrelated work, a new blockchain as the technology for supporting these transactions\nis proposed and implemented. Results from the tests show that the proof-of-concept\nblockchain developed in this thesis works well as the underlying technology for\nsettling energy flow in a microgrid. However, further development and testing is\nrequired for a real system.