Decentralized digital currency systems known as cryptocurrencies are a breakthrough in electronic payments: the absence of a central authority can avoid the risk that a not fully reliable government seizes assets or causes hyperinflation, very small transactions can be made without incurring high costs and transactions can be traced, thus providing a tool to counter laundering and tax evasion. Furthermore, decentralization provides robustness against many attacks. Despite these advantages, cryptocurrencies have still not become mainstream solutions, because of scarce users’ inclination to adopt them as a privileged payment tool. This is mostly due to the absence of a structured form of control, which also prevents from having some credit insurance. Moreover, some present and future attacks, like quantum computer-based attacks, may threaten their security. In this paper we define new technical solutions to allow cryptocurrencies to become trusted tools for secure and verifiable digital transactions, and also for deposits, while preserving decentralization and users’ privacy. Based on a thorough security analysis, a new cryptocurrency model is first defined, exploiting a set of secure and post-quantum cryptographic primitives. Then, a secure supervision and authentication network is designed, which allows to control transactions, while guaranteeing users’ privacy. A robust reputation system for this context is also proposed, which helps to increase users’ trust and to reduce misconduct.
In recent years, with the development of the Internet, network currency has gradually emerged. Bitcoin which is produced on the basis of complex algorithms has developed rapidly and attracted wide attention in academia. This paper explores the influence factors of bitcoin market transaction by analyzing the interaction between agents in bitcoin market transaction. Applying complex adaptive system modeling method based on multi-agent, this paper establishes an agent-based bitcoin market transaction model, and designs behavioral rules as well as transaction mechanism in detail for each agent in the process of market transaction. Then, we carry out a simulation on the Starlogo simulation platform and analyze the impact of the change in trader’s number on market transaction.
Simplicity is a typed, combinator-based, functional language without loops and recursion, designed to be used for crypto-currencies and blockchain applications. It aims to improve upon existing crypto-currency languages, such as Bitcoin Script and Ethereum's EVM, while avoiding some of the problems they face. Simplicity comes with formal denotational semantics defined in Coq, a popular, general purpose software proof assistant. Simplicity also includes operational semantics that are defined with an abstract machine that we call the Bit Machine. The Bit Machine is used as a tool for measuring the computational space and time resources needed to evaluate Simplicity programs. Owing to its Turing incompleteness, Simplicity is amenable to static analysis that can be used to derive upper bounds on the computational resources needed, prior to execution. While Turing incomplete, Simplicity can express any finitary function, which we believe is enough to build useful ``smart contracts'' for blockchain applications.
Blockchain, an emerging decentralized security system, has been applied in many applications, such as bitcoin, smart grid, and Internet-of-Things. However, running the mining process may cost too much energy consumption and computing resource usage on handheld devices, which restricts the use of blockchain in mobile environments. In this paper, we consider deploying edge computing service to support the mobile blockchain. We propose an auction-based edge computing resource market of the edge computing service provider. Since there is competition among miners, the allocative externalities (positive and negative) are taken into account in the model. In our auction mechanism, we maximize the social welfare while guaranteeing the truthfulness, individual rationality and computational efficiency. Based on blockchain mining experiment results, we define a hash power function that characterizes the probability of successfully mining a block. Through extensive simulations, we evaluate the performance of our auction mechanism which shows that our edge computing resources market model can efficiently solve the social welfare maximization problem for the edge computing service provider.
Summary In a data sharing group, each user can upload, modify, and access group files and a user is required to generate a new signature for the modified file after modification. There is a situation that two or more users modify the same file at almost the same time, which should be avoided as it gives rise to a signature conflict. However, the existing schemes do not take it into consideration. In this paper, we proposed a new mechanism SeShare for data storing based on blockchain to realize signature uniqueness, which solves the problem of generating signatures for the same file meanwhile by different group users. Specifically, we record every signature of a file in a blockchain in chronological order, and only one user is allowed to add new signature at the end of the blockchain when modification conflicts occur. On the other hand, to provide a secure data sharing service, SeShare introduces an efficient public auditing scheme for file integrity verification when a group user leaves the group. We also prove the security of the proposed scheme and evaluate the performance at the end of this paper. Our experimental results demonstrate the efficiency of public auditing for user leaving.
IntroductionIdentity verification and authentication has long been a critical component in service delivery for both the private and public sectors, but changing citizen demands in the digital age have stressed the need for new approaches to verify that an individual is who they say they are – with surety.
Q. Is internal audit ready for blockchain?A. Blockchain technology offers the promise of “a safe, transparent, rapid and affordable digital solution to many government challenges” (Policy Horizons, 2016). However, this same technology also poses challenges and opportunities to internal auditors wishing to provide maximum value to their organizations, whether governmental or
Permissionless blockchains protocols such as Bitcoin are inherently limited in transaction throughput and latency. Current efforts to address this key issue focus on off-chain payment channels that can be combined in a Payment-Channel Network (PCN) to enable an unlimited number of payments without requiring to access the blockchain other than to register the initial and final capacity of each channel. While this approach paves the way for low latency and high throughput of payments, its deployment in practice raises several privacy concerns as well as technical challenges related to the inherently concurrent nature of payments that have not been sufficiently studied so far. In this work, we lay the foundations for privacy and concurrency in PCNs, presenting a formal definition in the Universal Composability framework as well as practical and provably secure solutions. In particular, we present Fulgor and Rayo. Fulgor is the first payment protocol for PCNs that provides provable privacy guarantees for PCNs and is fully compatible with the Bitcoin scripting system. However, Fulgor is a blocking protocol and therefore prone to deadlocks of concurrent payments as in currently available PCNs. Instead, Rayo is the first protocol for PCNs that enforces non-blocking progress (i.e., at least one of the concurrent payments terminates). We show through a new impossibility result that non-blocking progress necessarily comes at the cost of weaker privacy. At the core of Fulgor and Rayo is Multi-Hop HTLC, a new smart contract, compatible with the Bitcoin scripting system, that provides conditional payments while reducing running time and communication overhead with respect to previous approaches. Our performance evaluation of Fulgor and Rayo shows that a payment with 10 intermediate users takes as few as 5 seconds, thereby demonstrating their feasibility to be deployed in practice.
Ethan Cecchetti, Fan Zhang, Yan Ji, Ahmed E. Kosba · 6 authors
Blockchains and more general distributed ledgers are becoming increasingly popular as efficient, reliable, and persistent records of data and transactions. Unfortunately, they ensure reliability and correctness by making all data public, raising confidentiality concerns that eliminate many potential uses.
IntroductionBlockchain (distributed ledger technology) is a network software protocol that enables the secure transfer of money, assets, and information via the Internet, without the need for a third-party intermediary such as a bank (Swan, 2015). Transactions are validated, executed, and recorded chronologically in an append-only tamper-resistant database, where they remain
IntroductionStewart Macaulay’s seminal 1963 article “Non-Contractual Relations in Business” explored why merchants and manufacturers often fail to plan their commercial relationships and why they seldom resort to legal sanctions to settle disputes. Macaulay found that, in many business exchanges, detailed planning and legal sanctions play only a small role. His tentative
Muhamed Turkanović, Marko Hölbl, Kristjan Košič, Marjan Heričko · 5 authors
Blockchain technology enables the creation of a decentralized environment, where transactions and data are not under the control of any third party organization. Any transaction ever completed is recorded in a public ledger in a verifiable and permanent way. Based on the blockchain technology, we propose a global higher education credit platform, named EduCTX. This platform is based on the concept of the European Credit Transfer and Accumulation System (ECTS). It constitutes a globally trusted, decentralized higher education credit, and grading system that can offer a globally unified viewpoint for students and higher education institutions (HEIs), as well as for other potential stakeholders, such as companies, institutions, and organizations. As a proof of concept, we present a prototype implementation of the environment, based on the open-source Ark Blockchain Platform. Based on a globally distributed peer-to-peer network, EduCTX will process, manage, and control ECTX tokens, which represent credits that students gain for completed courses, such as ECTS. HEIs are the peers of the blockchain network. The platform is a first step toward a more transparent and technologically advanced form of higher education systems. The EduCTX platform represents the basis of the EduCTX initiative, which anticipates that various HEIs would join forces in order to create a globally efficient, simplified, and ubiquitous environment in order to avoid language and administrative barriers. Therefore, we invite and encourage HEIs to join the EduCTX initiative and the EduCTX blockchain network.
Over the past few years, Bitcoin has emerged as the first decentralized, global currency. The rise of Bitcoin has brought attention not only to digital currencies but also to the underlying technology empowering digital currencies: blockchain technology. A blockchain is a distributed ledger that records and secures transactions in a peer-to-peer network. Besides empowering digital currencies, blockchain technology has given innovators the capability of creating digital tokens to represent scarce assets, potentially reshaping the landscape of entrepreneurship and innovation. Blockchain tokens may democratize (1) entrepreneurship by giving entrepreneurs new ways to raise funds and engage stakeholders, and (2) innovation by giving innovators a new way to develop, deploy, and diffuse decentralized applications. Blockchain technology and tokens have sparked a new wave of innovation, which may start to revolutionize entrepreneurship and innovation.
Rens W. van der Heijden, Felix Engelmann, David Mödinger, Franziska Schönig · 5 authors
In this paper, we propose a new Blockchain-based message and revocation accountability system called Blackchain. Combining a distributed ledger with existing mechanisms for security in V2X communication systems, we design a distributed event data recorder (EDR) that satisfies traditional accountability requirements by providing a compressed global state. Unlike previous approaches, our distributed ledger solution provides an accountable revocation mechanism without requiring trust in a single misbehavior authority, instead allowing a collaborative and transparent decision making process through Blackchain. This makes Blackchain an attractive alternative to existing solutions for revocation in a Security Credential Management System (SCMS), which suffer from the traditional disadvantages of PKIs, notably including centralized trust. Our proposal becomes scalable through the use of hierarchical consensus: individual vehicles dynamically create clusters, which then provide their consensus decisions as input for road-side units (RSUs), which in turn publish their results to misbehavior authorities. This authority, which is traditionally a single entity in the SCMS, responsible for the integrity of the entire V2X network, is now a set of authorities that transparently perform a revocation, whose result is then published in a global Blackchain state. This state can be used to prevent the issuance of certificates to previously malicious users, and also prevents the authority from misbehaving through the transparency implied by a global system state.
Decentralization, on one hand, brings more transparency and trust to the parties involved in transactions,but on the other hand, it narrows possibilities for central control. Distributed Ledger Technology(DLT) is a recent decentralized innovation in the field of information and communication technology(ICT) that acts as self-sustainable ledger for documenting transactions self-protected against counterfeitingand hacker attacks. The aim of the current research paper is to reveal opportunities and barriersfor utilization of distributed ledgers in the context of EU digital single market strategy. The main tasksare (1) to analyze functionality dynamics of existing distributed ledgers, (2) to analyze utilization areasof distributed ledgers, (3) to analyze digital trends related to utilization of distributed ledgers within theEU. The current research paper utilizes methods of content analysis, grounded theory, descriptive statistics,correlation analysis and regression analysis. The research has revealed that half of EU DigitalSingle Market priorities can be facilitated through distributed ledgers.DOI: http://dx.doi.org/10.5755/j01.eis.0.11.18134
Bitcoin is a cryptocurrency attracting a lot of interest both from the general public and researchers. There is an ongoing debate on the question of users' anonymity: while the Bitcoin protocol has been designed to ensure that the activity of individual users could not be tracked, some methods have been proposed to partially bypass this limitation. In this article, we show how the Bitcoin transaction network can be studied using complex networks analysis techniques, and in particular how community detection can be efficiently used to re-identify multiple addresses belonging to a same user.
In this letter we propose Meta-key, a data-sharing mechanism that enables users share their encrypted data under a blockchain-based decentralized storage architecture. All the data-encryption keys are encrypted by the owner's public key and put onto the blockchain for safe and secure storage and easy key-management. Encrypted data are stored in dedicated storage nodes and proxy re-encryption mechanism is used to ensure secure data-sharing in the untrusted environment. Security analysis of our model shows that the proxy re-encryption adopted in our system is naturally free from collusion-attack due to the specific architecture of Meta-key.
In the last several years, a discreet $100 billion financial system has emerged in the form of cryptocurrency markets. The extraordinary returns generated by cryptocurrencies such as Bitcoin has led to a frenzy of investment activity and interest from traditional investors. This interest has, in turn, spawned dozens of cryptocurrency-focused hedge funds to service this growing demand. Moreover, although this trading activity is highly speculative, it is subject to almost no regulatory oversight. Regulators at the IRS, CFTC, and most notably the SEC have only recently established a regulatory framework to govern cryptocurrency activity. Notably, that framework is a functional one, classifying each cryptocurrency either as a security or commodity based on its particular uses. However, most of the established and highly traded cryptocurrencies, such as Bitcoin and Ether, qualify as commodities rather than securities, and thus they are not subject to securities laws. Hedge funds that trade in these cryptocurrency commodities, or “crypto funds,” fall almost entirely outside the extensive securities regulations that would apply to traditional hedge funds.
This article argues that these crypto funds constitute a new type of financial institution that is not, and cannot be, governed by traditional hedge fund regulation because doing so would disregard the unique operational and technological features of cryptocurrencies. Existing rules and best practices for hedge funds in key areas — such as investor asset custodianship, capital formation, and distribution of returns — are frequently nonsensical or even counterproductive in the context of crypto funds. Without regulatory guidance, crypto funds will need — and have the opportunity — to develop a set of best practices tailored to cryptocurrency trading. In doing so, crypto funds also present a significant opportunity for much-needed financial innovation and problem-solving in the cryptocurrency markets. However, crypto funds also present a far greater risk of fraud or investor losses than a traditional hedge fund, as cryptocurrency markets lack the liquidity, stability, and regulatory certainty of traditional securities markets.
This article concludes with concrete recommendations regarding several of the most salient, cryptocurrency-specific concerns currently facing crypto funds, including (i) the types of cryptocurrencies that should be traded, (ii) the types of potential investors who can provide funding, (iii) internal procedures for safeguarding client assets, (iv) optimizing tax treatment for the fund and its investors, and (v) cryptocurrency-related disclosures to investors. By encouraging the development of uniform best practices across the crypto fund industry, this article provides a starting point for regulators to adopt policies that can address investor protection concerns without strangling the innovation of the emerging cryptocurrency markets.
A recente expansão global do uso de moedas virtuais passou a ser objeto de debate nos três últimos Fóruns das Nações Unidas sobre Governança da Internet (IGF), de 2014, 2015 e 2016. A capitalização e a rápida expansão geográfica do uso de criptomoedas chamaram a atenção de pesquisadores e mobilizaram representantes da sociedade civil e empresários em várias partes do mundo, que demonstraram interesse no desenvolvimento de inovações impulsionadas pela expansão do uso globalizado desse novo tipo de atividade econômica. Os principais objetivos deste trabalho são: analisar como a recente crise financeira do capitalismo influiu no surgimento e na expansão geográfica do uso de criptomoedas; refletir sobre serviços e atividades que usam criptomoedas, bitcoin e blockchain; e debater os desafios colocados pelo crescimento desse uso.
Permissioned blockchains are arising as a solution to federate companies prompting accountable interactions. A variety of consensus algorithms for such blockchains have been proposed, each of which has dierent benets and drawbacks. Proof-of-Authority (PoA) is a new family of Byzantine fault-tolerant (BFT) consensus algorithms largely used in practice to ensure better performance than traditional Practical Byzantine Fault Tolerance (PBFT). However, the lack of adequate analysis of PoA hinders any cautious evaluation of their eectiveness in real-world permissioned blockchains deployed over the Internet, hence on an eventually synchronous network experimenting Byzantine nodes.<br> In this paper, we analyse two of the main PoA algorithms, named Aura and Clique, both in terms of provided guarantees and performances. First, we derive their functioning including how messages are exchanged, then we weight, by relying on the CAP theorem, consistency, availability and partition tolerance guarantees. We also report a qualitative latency analysis based on message rounds. The analysis advocates that PoA for per-missioned blockchains, deployed over the Internet with Byzantine nodes, do not provide<br> adequate consistency guarantees for scenarios where data integrity is essential. We claim that PBFT can t better such scenarios, despite a limited loss in terms of performance.
John Dixon, Stefano Penazzi, Amar Ramudhin, Ken Hawick
Blockchain technologies have been shown to be able to successfully underpin secure online financial services (e.g. Bitcoin), and have since developed a reputation as a fix-all solution for transparency, accountability and security issues in storing data and transactions in both public and private settings. However, cross-business consortiums with obvious use-cases, such as those evident in the logistics supply chain, are not yet regularly adopting a common blockchain for transaction storage and accountability because of a lack of understanding and trust. Furthermore, because blockchains are commonly designed to send raw data, visible to every connected node, the potential for competitors or unauthorized parties to analyze the common ledger and discover business secrets is a clear cause for apprehension. In this paper, we analyze the problems facing the uptake of blockchain technologies in supply chain management, inspect a relevant supply chain scenario with reference to the place of the blockchain within real-world logistics data management, and describe a technical and architectural approach which allows scalable, private sharing of business data whilst retaining the accountability and integrity of the blockchain.
Bitcoins are bought and sold with most major currencies, and the resulting prices are ‘exchange rates’ of currencies per Bitcoin. The price of Bitcoins in national currencies have been quite volatile over the brief period of Bitcoin’s existence. Among national currencies, the possibility of triangular arbitrage leads to near equality of bilateral exchange rates and exchange rates obtained via triangular trade. We explore the relationship between a bilateral exchange rate of two major national currencies and the exchange rate that can be obtained via triangular trade through Bitcoins. Features of the Bitcoin exchanges make it difficult to meet conditions necessary for strict (risk-free) arbitrage, but market pressures from the threat of arbitrage constrain the national currency prices of Bitcoins to adjust toward the bilateral foreign exchange rate obtained in the traditional foreign exchange market. In this paper, we compare the Bitcoin implied exchange rate between the US Dollar and the Chinese Renminbi to the market US Dollar/Renminbi exchange rate, and show that the Bitcoin implied rate adjusts toward the FOREX market rate due to market pressures from the threat of triangular arbitrage. One implication is that the bilateral rate and the triangular trade rate obtained from trade in Bitcoins are cointegrated, and we study the adjustment process when these exchange rates are misaligned.