Blockchain Papers

Jelena Madir

No abstract is available for this record.

Kuo‐Hui Yeh, Chunhua Su, Jia-Li Hou, Wayne Chiu · 5 authors

Recently, the popularity and universality of smart-devices has led to rapid advancement in the development of applications for mobile commerce around the world. Novel mobile payment schemes, such as Apple pay, Android pay, and Samsung pay are becoming an increasingly popular ways to conduct online transactions, no matter what type of smart devices are used. Due to the attendant growth in the importance of security, significant attention has been devoted to the challenge of designing and implementing a robust mobile payment scheme for securing online transactions. In this paper, we demonstrate a robust mobile payment scheme based on sturdy certificateless signatures with bilinear pairing. We elegantly refine the proposed mobile payment scheme to make it suitable for computation-constrained mobile devices. The practicability of the proposed mobile payment scheme is then certified via a rigorous security analysis and thorough performance evaluation using the Raspberry PI as the implementation platform for our proposed scheme. Furthermore, we implement a transaction repository with the aid of smart contract technology. The simulation results, based on Ethereum, demonstrate the feasibility of employing the smart contract technology to secure mobile payments.

Hossein Nabilou, André Prüm

Abstract Cryptocurrencies are expected to have a significant impact on banking, finance, and monetary systems. Due to the uncertainty as to the possible future trajectories of the evolving cryptocurrency ecosystem, governments have taken a relatively hands-off approach to regulating such currencies. This approach may be justified within the theoretical information-economics framework of this paper, which draws parallels between the information economics of money and quasi-money creation within the current central banking, commercial banking, and shadow banking systems with that of the cryptocurrency ecosystem. In particular, drawing lessons from the literature on the role of information in creating ‘safe assets’, in this paper the authors find that by building on symmetric (common) knowledge as to the inner workings of the Bitcoin Blockchain—though in a different way—bitcoin possesses a degree of endogenous information insensitivity typical of safe assets. This endogenous information insensitivity could support bitcoin’s promise of maturing into a viable store of value and a niche medium of exchange. This finding should not be overlooked in the policy discussions for potential future regulatory interventions in the cryptocurrency ecosystem.

Cristina Pérez‐Solà, Sergi Delgado-Segura, Guillermo Navarro‐Arribas, Jordi Herrera‐Joancomartí

Unspent Transaction Outputs (UTXOs) are the internal mechanism used in many cryptocurrencies to represent coins. Such representation has some clear benefits, but also entails some complexities that, if not properly handled, may leave the system in an inefficient state. Specifically, inefficiencies arise when wallets (the software responsible for transferring coins between parties) do not manage UTXOs properly when performing payments. In this paper, we study three cryptocurrencies: Bitcoin, Bitcoin Cash and Litecoin, by analysing the state of their UTXO sets, that is, the status of their sets of spendable coins. These three cryptocurrencies are the top-3 UTXO-based cryptocurrencies by market capitalization. Our analysis shows that the usage of each cryptocurrency presents some differences, and led to different results. Furthermore, it also points out that the management of the transactions has not always been performed efficiently and therefore, the current state of the UTXO sets is far from ideal.

Geoffrey Goodell, Tomaso Aste

Modern retail banking creates a kind of panopticon for consumer behaviour, ultimately promising to implement a mechanism that binds all of the financial activities undertaken by an individual to a single, unitary identity. In the age of Big Data, consumers have legitimate reasons to resist such surveillance, particularly in cases wherein monitoring is carried out without their knowledge and judgments based upon such monitoring are used to disincentivise or punish legitimate activities. The risk to consumers increases with the ever-increasing share of financial transactions that are performed electronically. Cryptocurrencies offer an alternative to traditional methods of electronic value exchange, promising anonymous, cash-like electronic transfers, but in practice they fall short for several key reasons. We consider the false choice between total surveillance, as represented by banking as currently implemented by institutions, and impenetrable lawlessness, as represented by privacy-enhancing cryptocurrencies as currently deployed. We identify a range of alternatives between those two extremes, and we consider two potential compromise approaches that offer both the auditability required for regulators and the anonymity required for users

Neil Tiwari

Cryptocurrencies are digital tokens built on blockchain technology. This allows for a product that is fully decentralized, with no need for a third-party intermediary like a government or financial institution. Cryptocurrency creators use initial coin offerings (ICOs) to raise capital to build their tokens. Cryptocurrency ICOs are problematic because they do not fit neatly within either of two traditional categories—securities or commodities. Each of these categories has their own regulatory agency: the SEC for securities and the CFTC for commodities. At first blush, ICOs seem to be a sale of securities subject to regulation by the SEC, but this is far from clear and creates regulatory difficulties. This is because the Howey test, which determines whether an asset is a security or not, does not cleanly apply to nontraditional assets, like tokens. This Note argues for a revised standard that reconciles Howey with cryptocurrencies. This standard would require cryptocurrency creators to show how essential blockchain technology is to their token if they want to fall beyond the scope of the Howey test, and consequently SEC regulation. This standard would still preserve regulatory protections from fraud, which the CFTC provides for investors while loosening regulatory restrictions on the cryptocurrencies that leverage blockchain technology most usefully.

Tiffany L. Minks

In a world full of new technology, the risk of fraud is constantly increasing. In the securities industry, this risk existed long before the use of technology. Congress enacted the Securities Act of 1933 to combat the risk of fraud and misrepresentation in the sale of securities. By requiring full disclosure, investors have the opportunity to make informed decisions prior to investing. However, Distributed Autonomous Organizations (“DAOs”), through the use of blockchains and smart-contracts, engage in the sale of securities without fully disclosing the risks or complying with the registration requirements of the Securities Act of 1933. Compliance with the burdensome requirements of registration, however, would destroy this new technology and method of conducting business. To avoid this set-back, Congress must amend the registration requirements to provide an exemption for DAOs. This exemption, although reducing current registration burdens, must still require DAOs to disclose certain information, thereby ensuring investors are informed prior to investing. Furthermore, due to the unique nature of the blockchain, smartcontract, and DAOs, Congress must impose a fiduciary duty on the creators of DAOs to ensure compliance with the disclosure requirements. Further, Congress should consider the allowance of burden-shifting following the initial crowdsale.

Ben R. Marshall, Nhut H. Nguyen, Nuttawat Visaltanachoti

No abstract is available for this record.

Emiliano Pagnotta

No abstract is available for this record.

Marius Kinderis, Marija Bezbradica, Martin Crane

Predicting currency prices remains a difficult endeavour. Investors are continually seeking new ways to extract \nmeaningful information about the future direction of price changes. Recently, cryptocurrencies have attracted \nhuge attention due to their unique way of transferring value as well as its value as a hedge. A method proposed \nin this project involves using data mining techniques: mining text documents such as news articles and tweets \ntry to infer the relationship between information contained in such items and cryptocurrency price direction. \nThe Long Short-Term Memory Recurrent Neural Network (LSTM RNN) assists in creating a hybrid model \nwhich comprises of sentiment analysis techniques, as well as a predictive machine learning model. The success \nof the model was evaluated within the context of predicting the direction of Bitcoin price changes. Findings \nreported here reveal that our system yields more accurate and real-time predictions of Bitcoin price fluctuations \nwhen compared to other existing models in the market.

Lawrence J. Trautman

No abstract is available for this record.

Tianyi Qiu, Ruidong Zhang, Yuan Gao

Abstract Blockchain technology is transforming traditional financial systems. Cross-border money remittance industry is in a crossroad being challenged. The traditional SWIFT system is facing new comers like Ripple system which is based on the blockchain distributed ledger technology with its own crypto tokens. This paper conducts a SWOT analysis on both technologies to find out whether the blockchain technology has the potential to transform a traditional industry and how this may be possible. We conclude that Ripple has all of the advantages over SWIFT despite some minor issues. In short-term, SWIFT will still take the lead in the remittance market due to the economy of scale. However, in long-term, emerging technology like Ripple will eventually revolutionize the remittance industry or even other financial systems.

Mohamad Kassem, Jennifer Lia, David Greenwood

Distributed ledger technology (DLT), commonly referred to as 'blockchain' and originally invented to create a peerto-peer digital currency, is rapidly attracting interest in other sectors. The aim in this paper is (1) to investigate the applications of DLT within the built environment, and the challenges and opportunities facing its adoption; and (2) develop a multi-dimensional emergent framework for DLT adoption within the construction sector.

Mark Fenwick, Erik P. M. Vermeulen

No abstract is available for this record.

Elli Androulaki, Christian Cachin, Angelo De, Eleftherios Kokoris-Kogias

No abstract is available for this record.

Ebru Gökalp, Mert Onuralp Gökalp, Selin Çoban, P. Erhan Eren

No abstract is available for this record.

Ivar Bengtsson, Michael Fichter

This paper is an attempt to analyze the role of transaction fees in a proof-of-stake cryptocurrency currently in development. The authors have employed a microeconomic, static equilibrium approach to model a market in which the cryptocurrency is exchanged for a physical good. Furthermore, the relationship between transaction capacity and the size of the network has been investigated. It has been shown that the total amount of validator capital and the number of validators can be controlled by setting a fixed fee on transactions as well as a minimum capital requirement on individual validators. The total surplus in the economy has then been optimized by setting a fee and the authors have discussed how a minimal capital requirement could be used to also optimize transaction capacity.

Sina Rafati Niya, Florian Schüpfer, Thomas Bocek, Burkhard Stiller

Abstract This work introduces the design and implementation of an Android-based Peer-to-peer Purchase and Rental Application termed PuRSCA, which leverages Smart Contracts (SC) and the Ethereum public blockchain (BC). As a Device-to-device (D2D) communication protocol, WiFi-Direct is chosen to enable the P2P data transmission between two parties. This work results in a cost-efficient, secure, SC-based, P2P, and Decentralized application (Dapp). Evaluations on performance of this Dapp is specified in terms of its D2D deployment, transaction costs, scalability, security, and privacy.

Shaun Azzopardi, Gordon J. Pace, Fernando Schapachnik

Smart contracts have been proposed as executable implementations enforcing real-life contracts. Unfortunately, the semantic gap between these allows for the smart contract to diverge from its intended deontic behaviour. In this paper we show how a deontic contract can be used for real-time monitoring of smart contracts specifically and request-based interactive systems in general, allowing for the identification of any violations. The deontic logic of actions we present takes into account the possibility of action failure (which we can observe in smart contracts), allowing us to consider novel monitorable semantics for deontic norms. For example, taking a rights-based view of permissions allows us to detect the violation of a permission when a permitted action is not allowed to succeed. A case study is presented showing this approach in action for Ethereum smart contracts.

Paraskevi Katsiampa, Κωνσταντίνος Γκίλλας, François Longin

No abstract is available for this record.

Sheila Ainon Yussof, Abdullah Al‐Harthy

Fintech (or financial technology) is the current driving force behind innovations in the financial services industry. One of the most debated innovations is cryptocurrency, or digital currency, which uses blockchain technology to make a direct electronic payment between two people possible, without going through a third party (like a bank) or expensive intermediaries in order to save costs. This future money is pressurising central banks to manage the looming threat of redundancy as it overshadows fiat currency in a world of infinite fintech possibilities. Bitcoin, being the first decentralised cryptocurrency, will be the focus of this research. This digital currency is not produced by minting money in an unlimited supply, but through a virtual mining process designed to control the supply of money and make it more valuable. The increasing pace in financial innovation is pushing regulators to make a change in the way they define money and what money can be. Traditionally money is used to serve as a medium of exchange, legal tender for repayment of debt, standard of value, unit of accounting measure and a means to save or store purchasing power. Bitcoin may not fulfill all the functions of money but its scarcity value, anonymity (or pseudonymity), transparency, and autonomy from the government, make it attractive to users who are speculators, traders, merchants, consumers and netizens disenchanted with fiat money. Despite the alluring features of Bitcoin, it is not spared from potential abuses such as webcrimes, tax evasion, fraud, online black markets, money laundering and terrorism financing. In this paper, a forensic examination of Bitcoins benefits and risks will help regulators decide whether to adopt cryptocurrency and provide an appropriate framework to regulate it based on other jurisdictions approach. This paper recommends that Malaysia should fully embrace cryptocurrency due to global trends - the Islamic Development Bank is developing Shariah compliant contracts using blockchain technology; China is leading the drive to develop its own national cryptocurrency to complement fiat money; and a Shariah-compliant cryptocurrency has already entered the market backed by gold (Onegram). Financial and regulatory architectures in Malaysia should accommodate these changes to remain relevant. In addition, future research is recommended focusing on developing a Shariah compliant national cryptocurrency that is unique to Malaysia.

Rebecca M. Bratspies

No abstract is available for this record.

JT Hamrick, Farhang Rouhi, Arghya Mukherjee, Amir Feder · 7 authors

The surge of interest in cryptocurrencies has been accompanied by a proliferation of fraud. This paper examines a pervasive tactic long known to financial markets: pump and dump schemes. While the fundamentals of the ruse have not changed in the last century, the recent explosion of nearly 2, 000 cryptocurrencies in a largely unregulated environment has greatly expanded the scope for abuse. The paper first quantifies the scope of cryptocurrency pump and dump on Discord and Telegram, two widely popular group messaging platforms with 130 million users and 200 million users respectively. Both platforms can handle large groups with thousands of users, and they are the most popular outlets for pump and dump schemes involving cryptocurrencies. We identified 3, 767 different pump signals advertised on Telegram and another 1, 051 different pump signals advertised on Discord during a six-month period in 2018. The schemes promoted more than 300 cryptocurrencies. These comprehensive data provide the first measure of the scope of pump and dump schemes across cryptocurrencies and suggest that this phenomenon is widespread and often quite profitable. This should raise concerns among regulators. We then examine which factors that affect the "success" of the pump, as measured by the percentage increase in price near the pump signal. We find that the coin's rank (market capitalization/volume) is the most important factor in determining the profitability of the pump: pumping obscure coins (with low volume) is much more profitable than pumping the dominant coins in the ecosystem.

Shaen Corbet, Charles Larkin, Brian M. Lucey, Andrew Meegan · 5 authors

No abstract is available for this record.