This paper investigates the semiotics of Bitcoin, an electronic cash system that uses decentralized networking to enable irreversible payments. For enthusiasts, Bitcoin provides an alternative to currencies and payment systems that are seen to threaten users' privacy, limit personal liberty, and undermine the value of money through state and corporate oversight. Bitcoin's promise lies in its apparent capacity to resolve these concerns not through regulatory institutions or interpersonal trust, but through its cryptographic protocols. We characterize this semiotics as a âpractical materialismâ and suggest it replays debates about privacy, labor, and value.
Bid validity proof and verification is an efficiency bottleneck and privacy drawback in homomorphic eâauction. The existing bid validity proof technique is inefficient and only achieves honestâverifier zero knowledge (ZK). In this study, an efficient proof and verification technique is proposed to guarantee bid validity in homomorphic eâauction. The new proof technique is mainly based on hash function operations and only needs a very small number of costly public key cryptographic operations. Moreover, it can handle untrusted verifiers and achieve perfect ZK. As a result, efficiency and privacy of homomorphic eâauction applications are significantly improved. To the best of authorsâ knowledge, it proof technique is the first to handle untrusted verifiers in eâauction applications.
A virtual currency can be defined as a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community. The recent developments in widely spread internet and data mining activities, highlighted the issue of accepting and using virtual currencies for different purposes, including, buying commodities or services, saving, as well as converting into real currencies, such as US dollars, euro or other currencies. One of the most controversial and the most advanced virtual currency scheme to date is the one so-called Bitcoin, designed and implemented by the Japanese programmer Satoshi Nakamoto in 2009. Although the use of Bitcoin might have positive impact on financial innovation and the provision of additional payment alternatives to consumers, it also might increase the risks in financial payments, exchange rates of real currencies, as well as increase the possibility of money laundering, using them for illegal deeds. Therefore , the purpose of this paper to clarify the main characteristic of Bitcoin, and analyze its positive aspects as well as the threats that may occur to the modern world economy , in case the usage of this money , significantly increases .
In January 2009 the Japanese software-designer SATOSHI NAKAMOTO invented a virtual currency named Bitcoin and released software for managing transactions in the new money.It consists solely of bits and bytes, but we cannot see it as a coin or banknote on the market.There is no cover in terms of gold or stocks, for example -in fact, nothing but the source code of the software which consists of thirty-one thousand lines of code.NAKAMOTO wanted to create a currency immune to potentially predatory bankers and politicians and so the currency and the mechanism to acquire Bitcoin were controlled entirely by software.The payment system is completely decentralised and so contains no central organisation which monitors transactions.Many people use this new currency to pay for services or products on the Internet, since it is no less safe than traditional payment systems.In this paper I will first introduce the basic parameters and functions of the alternative currency, and will deal especially with security and privacy issues relating to the virtual money.After that I will examine the value of Bitcoin on the online market, especially answering questions such as how we can acquire it.After this the legal background will be presented and suggestions made for its possible regulation, whilst its likely role in criminal behaviour is suggested.The paper was written in order to stimulate interest in this special, new currency, its working mechanisms, advantages and possible dangers, and because it represents a unique paradigm-shift, not simply in cyberspace, but in real-world payment systems also.
Bitcoin is a new kind of money, which means a digital currency which can be used for commercial purposes. Over time, the trade has evolved from barter to the use of the precious metals as money, then to the coins with intrinsic value and to the symbol coins and later to the use of the electronic money, reaching at present to a virtual currency, created and used through the internet network. Bitcoin promises to its users getting high returns under conditions of low risk arising from transactions carried out instantly, without intermediary bank and almost no fees. At this moment, Bitcoin is still an experimental new currency, but in the future it can offer an alternative to previous costly systems and it can increase online business access to developing countries.
Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., network, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. During the last a few years, data security and integrity in cloud computing has emerged as a significantly important research area that has attracted increasing attention from both industry and academia. The virtual environment of cloud computing allows users to access computing power that exceeds what is contained within their own physical worlds. To enter this virtual environment, cloud users must transfer data throughout the cloud. Typically, cloud users know neither the exact location of their data nor the other sources of the data collectively stored with theirs. Consequently, several data security and integrity concerns have arisen, including key management, access control, searchable encryption techniques, remote integrity checks and proof of ownership in the cloud.\nThe first aspect of the work presented in this thesis is tree-based key management in cloud computing. Data encryption before outsourcing to the cloud is a common way to protect data privacy. Thus, key management is a challenging issue in cloud computing. It is the ability to correctly assign, monitor and secure keys which defines the level of operational security provided by any encryption implementation. The fundamental idea of this work is to design a secure and flexible key management mechanism for the outsourced data in cloud computing. In this thesis, an innovative tree-based key management scheme is proposed. The outsourced database remains private and secure, while some selected data and key nodes are shared with other parties in the cloud. Flexibility of key management is achieved and the security is proved in the standard model.\nThe second aspect of the work presented in this thesis is fine-grained access control. In order to secure the outsourced data in the cloud, designing efficient and secure access control is a challenging issue. Unlike traditional access control in which the data users and storage servers are in the same trust domain, access control techniques are very different in cloud computing, as the cloud servers are not trusted by most cloud users. The key idea of this work is to attribute sets-based access control. This thesis points out that any access policy can be defined as a logical expression formula over different attribute sets. Logical expression indicates what kind of user is allowed to access the data. A fine-grained and efficient access control is proposed, based on logical expression.\nThe third aspect of the work presented in this thesis is efficient searchable encryption techniques in cloud computing. Because the data is usually encrypted before being outsourced to the cloud, searching the encrypted data in cloud computing has recently gained attention and led to the development of efficient searchable encryption techniques. The fundamental idea of this work is to reduce the search cost on encrypted data. In this thesis, a practical keyword searching mechanism is proposed. The solution is very simple. It enables efficient multi-user keyword searches and hides the private information in the search queries. The security is proved in the standard model.\nThe fourth aspect of the work presented in this thesis is public remote data integrity checks. As the clients store important data in remote cloud storage without a local copy, it is important to check the remote data integrity. Design of efficient remote integrity check protocols without downloading the data is a challenging issue in cloud computing. The key idea of this work is a public remote integrity check based on zero-knowledge proof. In this thesis, an innovative public remote integrity check scheme (PRIC) is proposed. No information of either the verified data or the homomorphic tags is leaked. In addition, the experiment result shows that PRIC is efficient, especially when the data size is large or the integrity check is frequent. The security of PRIC is proved in the random oracle model.\nThe last aspect of the work presented in this thesis is proof of multiparty ownership for encrypted data in the cloud. There are many applications of ownership sharing by different users and the design of the proof protocols of joint ownership is a challenging issue. Meanwhile, the design of proof-of-ownership mechanisms for encrypted data is even more difficult. This is because encryption of the same file by different users with random keys results in different ciphertexts, and the cloud server cannot store the same hash root value for ownership verification. In this thesis, a proof of multiparty ownership solution (PMOW) with encrypted data is proposed. Every user can prove that he/she holds the plaintext of the encrypted file when the server stores one ciphertext only. In addition, a PMOW system is constructed. The security of PMOW is proved in the ideal cipher model.\nThe major contribution of this thesis is innovative and improved approaches to secure data in cloud computing. Using these approaches developed, a trustworthy cloud environment can be achieved.
In this article, we discuss a possible exploit in Bitcoin that arises from the simultaneous adoption of client versions 0.8.1 and 0.8.2 (or 0.8.3) in the network. In version 0.8.2, Bitcoin clients no longer accept transactions with non-strict signature encoding. As we show, this incompatibility with prior client versions can potentially lead to a double-spending attack in a fast payment setting in Bitcoin. The attack can only work when merchants operate on any client version prior to 0.8.2. Our aim is therefore to raise the awareness of merchants to adopt version 0.8.2 (or 0.8.3) if they are willing to accept fast payments [1].
Technological development and the increased use of the internet have led to the proliferation of virtual communities. Some of these communities have created and circulated their own currency for exchanging goods and services. Bitcoin is currently the most popular among these virtual or digital currencies and has been in news recently because of the wild fluctuations in its âvalueâ and also significant venture capital investment in entities associated with it.1 Bitcoin is relevant in several areas of the financial system and is therefore of interest to central banks, consumers and investors. Digital currencies are part of a broader group of virtual currencies that include credit card points, air miles, loyalty points and coupons (Chart 1). With the advent of the Internet, mobile devices and detailed consumer information, companies are increasingly using digital currencies as a marketing tool. As a result, there has been a sharp increase in the use of digital currencies, particularly for app-based coins and tokens, mobile coupons, and personal data exchanged for digital content. As these trends evolve, digital currencies have the potential to become more popular and compete with traditional currencies. This paper aims to provide some clarity in particular on Bitcoin, its role and potential future use in the financial system and the risks associated with this form of digital currency.. It will begin by providing a short introduction to the Bitcoin network as well as describe the benefits of allowing the Bitcoin network to develop and innovate. It will highlight concerns for consumers, policymakers and financial regulators. Next it will analyze the role that Bitcoin could play in the financial system. The paper will conclude by providing recommendations to address policymakersâ concerns while allowing for further innovation within the Bitcoin network. An initial comprehensive overview of this kind is absent from the existing literature. This paper intends to fill that gap in the literature.
I employ vector autoregression to identify whether Bitcoin exchange volume shocks increase subsequent real Bitcoin transaction activity outside exchanges. This type of examination is not possible with traditional currency pairs on account of their lack of a perfect ledger mechanism like that of cryptocurrency systems. I find that increased exchange activity has asymmetric effects across user types, with exchange volume innovations tending to stifle the top 100 most popular user wallets than the remaining 2.9 million wallets, many of which are associated with gambling. If you suspect that the exchange activity is for anything other than speculative "hoarding'', the evidence should be found in the transactions between users, and its transmission is very weak. A very persistent response in the exchanges to news innovations was found and is a significant concern from a market manipulation standpoint. Dynamic multipliers were utilized to assess the degree to which money supply increases were distributed across wallet types via transactions. As the money supply increases, I find that the top 100 wallets tend to benefit in the form of increased transactions, while the effect for the millions of remaining wallets remains ambiguous.
This manuscript builds on my existing research program that (a) broadly seeks to analyze laws, regulations, instruments, and policy levers that inhibit a marketâs ability to recognize an assetâs intrinsic value, whether in terms of financial, social, or human capital, and (b) explores and advances interdisciplinary corporate governance theories by employing a heterodox economic analytic to derive its proposal to the paradox of an unregulated virtual currency market (Bitcoins) and an overly regulated crowdfunding market (Kickstarter). The manuscript functions not only as an homage to Charles MacKayâs legendary 1841 book, Extraordinary Popular Delusions and the Madness of Crowds, which described the human, social, and economic psychology of financial bubbles â particularly the Dutch tulip bulb bubble â but also as an offering of problems and proposals that crowdfunded and Kickstarted entrepreneurial businesses, including those funded by Bitcoin currencies, present for a wide swath of societal stakeholders. To describe the problem, this manuscript (i) describes behavioral finance, (ii) details the new entrepreneurial business possibilities that virtual currencies and crowdfunded entities can explore, (iii) describes how current rules and regulations represent unnecessary constraints to traditional equity-based funding models and concerning governance models of entrepreneurial enterprises, and (iv) questions why one form of capital deployment (currencies) may provide equity-like returns and unique governance, while the other form of investing (crowdfunding), provides only soft-dollar-like returns and no governance for middle-class investors. While both virtual currencies and crowdfunding represent risks, including economic bubble risk, this Article believes that a heterodox economic analysis demonstrates unnecessary constraints on entrepreneurial businesses imposed by extant regulation, regulators, and law and policymakers. To assuage these paradoxic problems for emerging business enterprises, this Article proposes a minarchist heterodox solution of modest statutory language that requires market-based solutions that employ needed risk reduction strategies while redeploying necessary capital to private startup business enterprises. This proposal thus benefits the middle class entrepreneurs, suppliers of capital, and job seekers harmed by the current regulatory regime, while permitting for an expansion of the U.S. and global economies.
The human innovation in the field of monetary freedom takes shape in the virtual communities. Developed and implemented through a decentralized algorithm, the bitcoin project has so far proved itself a success in the field of virtual currency. Beyond the technical part of operation, in this paper we will analyse the theoretical principles underlying the bitcoin. This study shows that the bitcoin largely meets the role of natural money of gold and silver, in compliance to the free marketâs behaviour. This allows us to observe the fact that people are aware of the negative implications the stateâs intervention has in the monetary filed, thus deciding to create and use their own currency in online transactions.
An innovative software technology known as Bitcoin makes it easier for software to operate with some degree of financial autonomy. In a meaningful sense, it is now possible for software to conduct business on its own account, without using the traditional financial system as an intermediary and without a financial existence tied to an existing natural or legal person. This Essay explores this possibility and suggests that legally autonomous entities, such as a limited liability company (LLC) with no members, are a useful legal structure for factually autonomous systems.
This paper will discuss and evaluate the design features of Bitcoin in relation to the libertarian and metallist philosophies that have shaped the cryptocurrency. Bitcoin has failed to be perfectly decentralized or particularly anonymous. Furthermore, its hyperdeflationary design features have made Bitcoin a currency dependent on outside, more stable currencies (e.g., the U.S. dollar), which serve as units of account. Finally, despite the view of money taken by its creators, this supposedly stateless currency is far from apolitical in nature. Although its creators tend to espouse apolitical accounts of money, Bitcoin has been from the beginning a political project -- an evolving, distributed constitutional project, with many goals, visions, and factions. Furthermore, depending on the shape of these political goals, Bitcoin advocates may or may not have a vested interest in creating mechanisms to stabilize the currency and make it a viable unit of account. This paper was written for Christine Desan's seminar, "The Constitutional Law of Money," at Harvard Law School.
Cryptocurrencies are digital alternatives to traditional governmentâissued paper monies. Given the current state of technology and skepticism regarding the future purchasing power of existing monies, why have cryptocurrencies failed to gain widespread acceptance? I offer an explanation based on network effects and switching costs. In order to articulate the problem that agents considering cryptocurrencies face, I employ a simple model developed by Dowd and Greenaway (1993) (Dowd, K., and D. Greenaway. âCurrency Competition, Network Externalities, and Switching Costs: Towards an Alternative View of Optimum Currency Areas.â The Economic Journal , 103(420), 1993, 1180â89). The model demonstrates that agents may fail to adopt an alternative currency when network effects and switching costs are present, even if all agents agree that the prevailing currency is inferior. The limited success of bitcoinâalmost certainly the most popular cryptocurrency to dateâserves to illustrate. After briefly surveying episodes of successful monetary transition, I conclude that cryptocurrencies like bitcoin are unlikely to generate widespread acceptance in the absence of either significant monetary instability or government support. ( JEL E40, E41, E42, E49)
We maintain that the crypto-currency bitcoin is a practical application of what is termed âmemoryâ in the monetary economics literature. After reviewing the theoretical literature on money and memory, we offer a brief overview of the bitcoin protocol and argue that, like memory, bitcoin functions as a public record-keeping device. Finally, we provide evidence that â in line with the standard theoretical account of memory â bitcoin use has soared as the expected cost of storing traditional monies increased.
ďťżA bona fide currency functions as a medium of exchange, a store of value, and a unit of account, but bitcoin largely fails to satisfy these criteria. Bitcoin has achieved only scant consumer transaction volume, with an average well below one daily transaction for the few merchants who accept it. Its volatility is greatly higher than the volatilities of widely used currencies, imposing large short-term risk upon users. Bitcoinâs daily exchange rates exhibit virtually zero correlation with widely used currencies and with gold, making bitcoin useless for risk management and exceedingly difficult for its owners to hedge. Bitcoin prices of consumer goods require many decimal places with leading zeros, which is disconcerting to retail market participants. Bitcoin faces daily hacking and theft risks, lacks access to a banking system with deposit insurance, and it is not used to denominate consumer credit or loan contracts. Bitcoin appears to behave more like a speculative investment than a currency.
Auctions have a long history, having been recorded as early as 500 B.C. [Auction Theory, Academic Press, San Diego, USA, 2002]. Nowadays, electronic auctions have been a great success and are increasingly used in various applications, including high performance computing [Concurrency and Computatio n: Practice and Experience 14(13â15) (2002), 1507â1542]. Many cryptographic protocols have been proposed to address the various security requirements of these electronic transactions, in particular to ensure privacy. Brandt [International Journal of Information Security 5 (2006), 201â216] developed a protocol that computes the winner using homomorphic operations on a distributed ElGamal encryption of the bids. He claimed that it ensures full privacy of the bidders, i.e. no information apart from the winner and the winning price is leaked. We first show that this protocol â when using malleable interactive zero-knowledge proofs â is vulnerable to attacks by dishonest bidders. Such bidders can manipulate the publicly available data in a way that allows the seller to deduce all participantsâ bids. We provide an efficient parallelized implementation of the protocol and the attack to show its practicality. Additionally we discuss some issues with verifiability as well as attacks on non-repudiation, fairness and the privacy of individual bidders exploiting authentication problems.