It is widely accepted that Ethereum mining is highly centralized. Nonetheless, centralization has been mostly characterized by exclusively looking at the influence that independent miners or mining pools can have over the network. Moreover, models of mining behavior assume that miners are either unrelated or only relate via mining pools under highly structured and transparent agreements. If these assumptions and the predictions they entail were to be completely accurate, there would not be any evidence of on-chain transactions between miners, other than the ones expected from mining pool payouts. By looking at on-chain transactions between miners in the Ethereum Network we find that aside from the payouts from mining pools to small miners, there are also transactions that define relationships between mining pools, independent miners and between independent miners and mining pools. Furthermore, by characterizing the topology of the network of miner transactions, we find the emergence of highly connected clusters that control significant amounts of hashing power and exhibit relationships in the opposite direction of what theoretical models predict. This more nuanced characterization of mining centralization can help identify network vulnerabilities and inform protocol redesigns.
Advancements in distributed ledger technologies are rapidly driving the rise of decentralized crowdsourcing systems on top of open smart contract platforms like Ethereum. While decentralized blockchain-based crowdsourcing provides numerous benefits compared to centralized solutions, current implementations of decentralized crowdsourcing suffer from fundamental scalability limitations by requiring all participants to pay a small transaction fee every time they interact with the blockchain. This increases the cost of using decentralized crowdsourcing solutions, resulting in a total payment that could be even higher than the price charged by centralized crowdsourcing platforms. This paper proposes a novel suite of protocols called NF-Crowd that resolves the scalability issue by reducing the lower bound of the total cost of a decentralized crowdsourcing project to O(1). NF-Crowd is a highly reliable solution for scaling decentralized crowdsourcing. We prove that as long as participants of a project powered by NF-Crowd are rational, the O(1) lower bound of cost could be reached regardless of the scale of the crowd. We also demonstrate that as long as at least one participant of a project powered by NF-Crowd is honest, the project cannot be aborted and the results are guaranteed to be correct. We design NF-Crowd protocols for a representative type of project named crowdsourcing contest with open community review (CC-OCR). We implement the protocols over the Ethereum official test network. Our results demonstrate that NF-Crowd protocols can reduce the cost of running a CC-OCR project to less than $2 regardless of the scale of the crowd, providing a significant cost benefit in adopting decentralized crowdsourcing solutions.
This article proposes a self-organizing collaborative computing network with an approach to enhance the expectation of a collaborating node for joining the self-organizing network. The proposed approach relies on Ethereum cryptocurrency and Smart Contract to enhance the expectation of collaborating nodes by monetizing the services provided to the self-organizing network. Furthermore, an escrow based smart contract is formalized in the proposed framework to sustains the monetary trust issue between collaborating nodes. The proposed scheme can enforce an autonomic incentive management mechanism to any type of self-organizing networks such as self-organizing clouds, ad-hoc networks, self-organizing federated cloud networks, self-organizing federated learning networks, and self-organizing D2D networks to name a few. Considering the distributed nature of these self-organizing networks and the Ethereum blockchain network, a distributed agent-based methodology is materialized in the proposed framework. Following this, a proof of concept implementation for the general case of a self-organizing cloud is presented. Lastly, the article provides some insights into possible future directions using the proposed framework.
We propose a new Proof-of-Stake consensus protocol based on a Sequential Proof-of-Work constructed with a verifiable random function (VRF) and a verifiable delay function (VDF) that has the following properties: a) all addresses with positive stake can participate; b) is fair because the coin stake is proportional to the distribution of rewards; c) is resistant to several classic blockchain attacks such as Sybil attacks, Nothing-at-stake attacks and Winner-takes-all attacks. We call it Vixify Consensus. We introduce a variant of sequential Proof-of-Work puzzles with applications on Distributed Randomness Beacons.
We propose a new Proof-of-Stake consensus protocol constructed with a verifiable random function (VRF) and a verifiable delay function (VDF) that has the following properties: a) all addresses with positive stake can participate; b) is fair because the coin stake is proportional to the distribution of rewards; c) is resistant to several classic blockchain attacks such as Sybil attacks, "Nothing-at-stake" attacks and "Winner-takes-all" attacks. We call it Vixify Consensus.
KYC (know your customer) and AML (anti-money laundering) practices have been designed and implemented in traditional financial transactions for some years now. However, it has been complicated to find a balance between business efficiency, innovations, financial inclusion, and compliance, both in the specification of what should be done and in the implementation of a risk-based approach that satisfies the required specification during real business operation. This chapter presents a survey of traditional practices to KYC/AML, highlighting a subset of existing challenges in these practices, taking into consideration the innovation of cryptocurrencies transactions and related innovations, such as digital identity, and the financial inclusion of unbanked people without identity papers. The authors finish this chapter by discussing existing solutions to these challenges both by adopting new KYC/AML practices and by using innovative technological solutions.
This paper describes a simulation study on security attacks over Distributed\nLedger Technologies (DLTs). We specifically focus on attacks at the underlying\npeer-to-peer layer of these systems, that is in charge of disseminating\nmessages containing data and transaction to be spread among all participants.\nIn particular, we consider the Sybil attack, according to which a malicious\nnode creates many Sybils that drop messages coming from a specific attacked\nnode, or even all messages from honest nodes. Our study shows that the\nselection of the specific dissemination protocol, as well as the amount of\nconnections each peer has, have an influence on the resistance to this attack.\n
This paper describes the Distributed Ledger Network Analyzer (DiLeNA), a new software tool for the analysis of the transactions network recorded in Distributed Ledger Technologies (DLTs). The set of transactions in a DLT forms a complex network. Studying its characteristics and peculiarities is of paramount importance, in order to understand how users interact in the distributed ledger system. The tool design and implementation is introduced and some results are provided. In particular, the Bitcoin and Ethereum blockchains, i.e. the most famous and used DLTs at the time of writing, have been analyzed and compared.
Riccardo Longo, Alessandro Sebastian Podda, Roberto Saia
Currently, an increasing number of third-party applications exploit the Bitcoin blockchain to store tamper-proof records of their executions, immutably. For this purpose, they leverage the few extra bytes available for encoding custom metadata in Bitcoin transactions. A sequence of records of the same application can thus be abstracted as a stand-alone subchain inside the Bitcoin blockchain. However, several existing approaches do not make any assumptions about the consistency of their subchains, either (i) neglecting the possibility that this sequence of messages can be altered, mainly due to unhandled concurrency, network malfunctions, application bugs, or malicious users, or (ii) giving weak guarantees about their security. To tackle this issue, in this paper, we propose an improved version of a consensus protocol formalized in our previous work, built on top of the Bitcoin protocol, to incentivize third-party nodes to consistently extend their subchains. Besides, we perform an extensive analysis of this protocol, both defining its properties and presenting some real-world attack scenarios, to show how its specific design choices and parameter configurations can be crucial to prevent malicious practices.
Dimitris Vyzovitis, Yusef Napora, Dirk McCormick, David Dias · 5 authors
Permissionless blockchain environments necessitate the use of a fast and\nattack-resilient message propagation protocol for Block and Transaction\nmessages to keep nodes synchronised and avoid forks. We present GossipSub, a\ngossip-based pubsub protocol, which, in contrast to past pubsub protocols,\nincorporates resilience against a wide spectrum of attacks.\n Firstly, GossipSub's mesh construction implements an eager push model keeps\nthe fan-out of the pubsub delivery low and balances excessive bandwidth\nconsumption and fast message propagation throughout the mesh. Secondly, through\ngossip dissemination, GossipSub realises a lazy-pull model to reach nodes\nfar-away or outside the mesh. Thirdly, through constant observation, nodes\nmaintain a score profile for the peers they are connected to, allowing them to\nchoose the most well-behaved nodes to include in the mesh. Finally, and most\nimportantly, a number of tailor-made mitigation strategies designed\nspecifically for these three components make GossipSub resilient against the\nmost challenging Sybil-based attacks. We test GossipSub in a testbed\nenvironment involving more than 5000 VM nodes deployed on AWS and show that it\nstays immune to all considered attacks. GossipSub is currently being integrated\nas the main messaging layer protocol in the Filecoin and the Ethereum 2.0\n(ETH2.0) blockchains.\n
This project aims to create a blockchain-based model that addresses key challenges in digital voting. The goal is to develop a secure and transparent system that eliminates common issues such as delays in result announcements, voter identity verification concerns, and security risks [1]. Voting is the backbone of any democracy, and ensuring its integrity is crucial. Traditional digital voting systems often face problems like fraud, manipulation, and lack of transparency. Blockchain technology, with its decentralized and tamper-proof nature, offers a promising solution. It functions as a distributed ledger that records transactions securely in a peer-to-peer network, making it nearly impossible to alter past data [2]. This technology brings several benefits to voting, including decentralization, security, transparency, immutability, and voter anonymity [3]. A major highlight of this project is the integration of blockchain with smart contracts, which adds an extra layer of security and automation to the voting process [4]. The system is designed to work on the Ethereum blockchain, using smart contracts written in Solidity and accessed through blockchain wallets [5]. By eliminating the need for a central authority to oversee elections, this approach ensures a fair and transparent voting process where every vote is securely recorded and cannot be tampered with [6]. In essence, this project reimagines digital voting by leveraging blockchain’s strengths, making elections more secure, efficient, and trustworthy.
Open access
3 source records
Blockchain Technology Applications and Security
Internet Traffic Analysis and Secure E-voting
Advanced Steganography and Watermarking Techniques
\n In the first part of this work, we present, model and analyze a randomized automated peering model, that can be implemented to any distributed system. We conclude that the scheme has some desirable properties (specifically, a reasonable message overhead, a reasonable distribution of the numbers of peers of a node, and a negligible probability of an attack by a malicious actor to be successful). In the second part, we present an article published in the volume 136 of the journal Computers & Industrial Engineering, in October of 2019 (DOI 10.1016=j.cie.2019.07.025). In the paper, we analyze the Nash Equilibria of a graph attachment game, defined to represent the different strategies that malicious actors can use to take certain advantages in a DAG-based (i.e., based on Directed Acyclic Graphs) distributed ledger system. We prove the existence of almost symmetric Nash equilibria for the system where a part of players tries to optimize their attachment strategies and another part follows a default one. We also present simulations that show that the selfish players will not choose strategies that are considerably different that the recommended one.\n
This paper presents an architecture, based on Distributed Ledger Technologies (DLTs) and Decentralized File Storage (DFS) systems, to support the use of Personal Information Management Systems (PIMS). DLT and DFS are used to manage data sensed by mobile users equipped with devices with sensing capability. DLTs guarantee the immutability, traceability and verifiability of references to personal data, that are stored in DFS. In fact, the inclusion of data digests in the DLT makes it possible to obtain an unalterable reference and a tamper-proof log, while remaining compliant with the regulations on personal data, i.e. GDPR. We provide an experimental evaluation on the feasibility of the use of DFS. Three different scenarios have been studied: i) a proprietary IPFS approach with a dedicated node interfacing with the data producers, ii) a public IPFS service and iii) Sia Skynet. Results show that through proper configuration of the system infrastructure, it is viable to build a decentralized Personal Data Storage (PDS).
A key performance metric in blockchains is the latency between when a transaction is broadcast and when it is confirmed (the so-called, confirmation latency). While improvements in consensus techniques can lead to lower confirmation latency, a fundamental lower bound on confirmation latency is the propagation latency of messages through the underlying peer-to-peer (p2p) network (inBitcoin, the propagation latency is several tens of seconds). The de facto p2p protocol used by Bitcoin and other blockchains is based on random connectivity: each node connects to a random subset of nodes. The induced p2p network topology can be highly suboptimal since it neglects geographical distance, differences in bandwidth, hash-power and computational abilities across peers. We present Perigee, a decentralized algorithm that automatically learns an efficient p2p topology tuned to the aforementioned network heterogeneities, purely based on peers' interactions with their neighbors. Motivated by the literature on the multi-armed bandit problem, Perigee optimally balances the tradeoff between retaining connections to known well-connected neighbors, and exploring new connections to previously-unseen neighbors. Experimental evaluations show that Perigee reduces the latency to broadcast by $33\%$. Lastly Perigee is simple, computationally lightweight, adversary-resistant, and compatible with the selfish interests of peers, making it an attractive p2p protocol for blockchains.
The Bitcoin Lightning network is a mechanism to enable fast and inexpensive off-chain Bitcoin transactions using peer-to-peer (P2P) channels between nodes that can also be composed into a routing path. Although the resulting possible channel graphs are well-studied, there is no empirical data on the network's reliability in terms of being able to successfully route payments at a given moment in time. In this paper we address this gap and investigate two forms of availability that are a necessary ingredient to achieve such reliability. We first study the Lightning network's ability to route payments of various sizes to nearly every participating node, over most available channels. We establish an inverse relationship between payment volume and success rate and show that at best only about a third of destination nodes can be successfully reached. The routing is hampered by a number of possible errors, both transient and permanent. We then study the availability of nodes in the network longitudinally and determine how long-lived they are. Churn in the network is actually low, and a considerable number of nodes are hosted on cloud providers. By testing node liveness, we find that the propagated network information is relatively often stale, however, both for IP addresses and Tor onion addresses. We provide recommendations how the Lightning network can be improved, including considerations which trade-offs between privacy and decentralization on the one hand and reliability on the other hand should at least be reconsidered by the community developing the Lightning network.
We consider a particular instance of user interactions in the Bitcoin network, that of interactions among wallet addresses belonging to scammers. Aggregation of multiple inputs and change addresses are common heuristics used to establish relationships among addresses and analyze transaction amounts in the Bitcoin network. We propose a flow centric approach that complements such heuristics, by studying the branching, merger and propagation of Bitcoin flows. We study a recent sextortion campaign by exploring the ego network of known offending wallet addresses. We compare and combine different existing and new heuristics, which allows us to identify (1) Bitcoin addresses of interest (including possible recurrent go-to addresses for the scammers) and (2) relevant Bitcoin flows, from scam Bitcoin addresses to a Binance exchange and to other other scam addresses, that suggest connections among prima facie disparate waves of similar scams.
Factors affecting the reliability of data transmission in networks with nodes with periodic availability were considered. The principles of data transfer between robots are described; the need for global connectivity of communications within an autonomous system is shown, since the non-availability of information on the intentions of other robots reduces the effectiveness of the robotics system as a whole and affects the fault tolerance of a team of independent actors performing distributed activities. It is shown that the existing solutions to the problem of data exchange based on general-purpose IP networks have drawbacks; therefore, as the basis for organizing autonomous robot networks, we used developments in the domain of topological models of communication systems allowing us to build self-organizing computer networks. The requirements for the designed network for reliable message transfer between autonomous robots are listed, the option of organizing reliable message delivery using overlay networks, which expand the functionality of underlying networks, is selected. An overview of existing popular controlled and non-controlled overlay networks is given; their applicability for communication within a team of autonomous robots is evaluated. The features and specifics of data transfer in a team of autonomous robots are listed. The algorithms and architecture of the overlay self-organizing network were described by means of generally accepted methods of constructing decentralized networks with zero configurations. As a result of the work, general principles of operation of the designed network were proposed, the message structure for the delivery algorithm was described; two independent data streams were created, i.e. service and payload; an algorithm for sending messages between network nodes and an algorithm for collecting and synchronizing the global network status were developed. In order to increase the dependability and fault tolerance of the network, it is proposed to store the global network status at each node. The principles of operation of a distributed storage are described. For the purpose of notification on changes in the global status of the network, it is proposed to use an additional data stream for intra-network service messages. A flood routing algorithm was developed to reduce delays and speed up the synchronization of the global status of a network and consistency maintenance. It is proposed to provide network connectivity using the HELLO protocol to establish and maintain adjacency relations between network nodes. The paper provides examples of adding and removing network nodes, examines possible scalability problems of the developed overlay network and methods for solving them. It confirms the criteria and indicators for achieving the effect of self-organization of nodes in the network. The designed network is compared with existing alternatives. For the developed algorithms, examples of latency estimates in message delivery are given. The theoretical limitations of the overlay network in the presence of intentional and unintentional defects are indicated; an example of restoring the network after a failure is set forth.
Permissionless distributed ledgers provide a promising approach to deal with the Internet of Things (IoT) paradigm. Since IoT devices mostly generate data transactions and micropayments, distributed ledgers that use fees to regulate the network access are not an optimal choice. In this paper, we study a feeless architecture developed by IOTA and designed specifically for the IoT. Due to the lack of fees, malicious nodes can exploit this feature to generate an unbounded number of transactions and perform a denial of service attacks. We propose to mitigate these attacks through verifiable delay functions. These functions, which are non-parallelizable, hard to compute, and easy to verify, have been formulated only recently. In our work, we design a denial of service prevention mechanism which addresses network heterogeneity, limited node computational capabilities, and hardware-specific implementation optimizations. Verifiable delay functions have mostly been studied from a theoretical point of view, but little has been done in tangible applications. Hence, this paper can be considered as a pioneer work in the field, since it builds a bridge between this theoretical mathematical framework and a real-world problem.
Payment Channel Networks or PCNs have gained prominence ensuring faster relaying of transactions. However, this Layer-two solution has its own fair share of problems. Topological analysis on Lightning Network reveals that Griefing Attack is a major problem whereby an adversary intentionally exhausts the channel capacity of the network. It can be used for mounting series of targeted attacks like Denial-of-Service Attack, Node Isolation Attack and Channel Exhaustion Attack on honest participants as well. Though the attack does not always result in a direct monetary gain of the attacker, blocking of channel capacity for several days prevented several nodes from processing any future transaction request, leading to substantial collateral damage. Certain portions of the payment channel network get stalled which hampers the throughput and utility of the network. Mitigating Griefing Attack still remains an open problem. In this paper, we propose an efficient countermeasure for the attack, known as Griefing-Penalty. Mounting such an attack requires the attacker to pay a penalty proportional to the collateral cost of executing a payment. The penalty is used for compensating parties who incurred loss by locking funds. Our proposed strategy works for any timelock based payment protocol and ensures faster resolution of payments. To illustrate it, we propose a new payment protocol HTLC-GP or Hashed Timelock Contract with Griefing-Penalty. It not only preserves privacy but also ensures that an attacker cannot ascribe blame on any honest intermediary present in the path relaying a payment.
Inspired by Bitcoin, many different kinds of cryptocurrencies based on blockchain technology have turned up on the market. Due to the special structure of the blockchain, it has been deemed impossible to directly trade between traditional currencies and cryptocurrencies or between different types of cryptocurrencies. Generally, trading between different currencies is conducted through a centralized third-party platform. However, it has the problem of a single point of failure, which is vulnerable to attacks and thus affects the security of the transactions. In this paper, we propose a distributed cryptocurrency trading scheme to solve the problem of centralized exchanges, which can achieve secure trading between different types of cryptocurrencies. Our scheme is implemented with smart contracts on an Ethereum blockchain and deployed on an Ethereum test network. In addition to implementing transactions between individual users, our scheme also allows transactions among multiple users. The experimental result proves that the cost of our scheme is acceptable.
Diego Pennino, Maurizio Pizzonia, Andrea Vitaletti, Marco Zecchini
Proving that an endpoint (e.g. URL, telephone number, ecc.) is controlled by a subject is crucial in many applications. In the web, this is witnessed by the widespread adoption of HTTPS. In centralized architectures, this task is usually carried out by trusted certification authorities (CAs). In decentralized applications, for example based on blockchains, or for self-sovereign identity management (SSI), it would be desirable to perform these checks in a decentralized way, relying on the collective behavior of a society of individuals rather than on a single trusted entity. In any case, the result should be a widely usable certificate, as in the centralized CA case. In this paper, we show two blockchain-based methods to prove the association between a subject and an endpoint in a decentralized manner. Our methods are compatible with a wide variety of endpoints and contribute to fill the gap of the current SSI approaches with respect to decentralization. We analyze the security of our proposal and provide a proof-of-concept implementation. We also evaluate performances, costs, and compatibility with current standardization efforts about SSI.
Blockchain is a public distributed ledger, which has the characteristics of decentralization and anonymization, which leads to the frequent occurrence of money laundering and theft. Taking Bitcoin as an example, traders can have multiple addresses, and these addresses have nothing to do with their identities in real life, their identities are difficult to identify, and it is difficult to track the flow of transaction funds on the blockchain. This paper proposes a transaction tracking system that can effectively and accurately track the source and destination of a certain amount of funds on the blockchain, which is superior to existing Bitcoin transaction tracking methods and has a substantial reference value.