Blockchain Papers

Rumy Narayan, Annika Tidström

No abstract is available for this record.

Aiya Li, Xianhua Wei, Zhou He

In the digital economy era, the development of a distributed robust economy system has become increasingly important. The blockchain technology can be used to build such a system, but current mainstream consensus protocols are vulnerable to attack, making blockchain systems unsustainable. In this paper, we propose a new Robust Proof of Stake (RPoS) consensus protocol, which uses the amount of coins to select miners and limits the maximum value of the coin age to effectively avoid coin age accumulation attack and Nothing-at-Stake (N@S) attack. Under a comparison framework, we show that the RPoS equals or outperforms Proof of Work (PoW) protocol and Proof of Stake (PoS) protocol in three dimensions: energy consumption, robustness, and transaction processing speed. To compare the three consensus protocols in terms of trade efficiency, we built an agent-based model and find that RPoS protocol has greater or similar trade request-satisfied ratio than PoW and PoS. Hence, we suggest that RPoS is very suitable for building a robust digital economy distributed system.

Imlak Shaikh

Bitcoin is the digital currency of the digital economy. This article is an attempt to reveal the effects of policy uncertainty on Bitcoin returns with economic policy uncertainty (EPU) in the US, the UK, Japan , China, and Hong Kong . Furthermore, we also present the results of monetary policy uncertainty (MPU) on the Bitcoin market. The robust estimations from the quantile regression and Markov regime-switching model show that Bitcoin returns are affected by EPU. One of the essential findings is that Bitcoin returns are more responsive to EPU in the US, China, and Japan. In the US and Japan, uncertainty has a negative effect on the Bitcoin market whereas in China it has a positive effect. Global MPU uncertainty is also significant in explaining Bitcoin exchange rates. Moreover, the Bitcoin market is negatively affected by uncertainty in Federal Open Market Committee (FOMC), the gross domestic product, and other macroeconomic data. Uncertainty in the equity market and Bitcoin returns are negatively associated.

Lenny Koh, Alexandre Dolgui, Joseph Sarkis

Blockchain – also known as distributed ledger – technology is set to revolutionise data and business process management and transactions. Blockchain adoption, pioneered initially as a financial tec...

Irena Barjašić, Nino Antulov-Fantulin

In this paper, we analyze the time-series of minute price returns on the Bitcoin market through the statistical models of generalized autoregressive conditional heteroskedasticity (GARCH) family. Several mathematical models have been proposed in finance, to model the dynamics of price returns, each of them introducing a different perspective on the problem, but none without shortcomings. We combine an approach that uses historical values of returns and their volatilities - GARCH family of models, with a so-called "Mixture of Distribution Hypothesis", which states that the dynamics of price returns are governed by the information flow about the market. Using time-series of Bitcoin-related tweets and volume of transactions as external information, we test for improvement in volatility prediction of several GARCH model variants on a minute level Bitcoin price time series. Statistical tests show that the simplest GARCH(1,1) reacts the best to the addition of external signal to model volatility process on out-of-sample data.

Sergei Tikhomirov, Rene Pickhardt, Alex Biryukov, Mariusz Nowostawski

As Lightning network payments are neither broadcasted nor publicly stored. Thus LN has been seen not only as scalability but also as privacy solution for Bitcoin. The protocol guarantees that only the latest channel state can be confirmed on channel closure. LN nodes gossip about channels available for routing and their total capacities. To issue a (multi-hop) payment, the sender creates a route based on its local knowledge of the graph. As local channel balances are not public, payments often fail due to insufficient balance at an intermediary hop. In that case, the payment is attempted along multiple routes until it succeeds. This constitutes a privacy-efficiency tradeoff: hidden balances improve privacy but hinder routing efficiency. In this work, we show that an attacker can easily discover channel balances using probing. This takes under a minute per channel and requires moderate capital commitment and no expenditures. We describe the algorithm and test our proof-of-concept implementation on Bitcoin's testnet. We argue that LN's balance between privacy and routing efficiency is suboptimal: channel balances are neither well protected nor utilized. We outline two ways for LN to evolve in respect to this issue. To emphasize privacy, we propose a modification of error handling that hides details of the erring channel from the sending node. This would break our probing technique but make routing failures more common, as the sender would not know which channel from the attempted route has failed. To improve efficiency, we propose a new API call that would let the sender query balances of channels that it is not a party of. We argue that combining these approaches can help LN take the best of both worlds: hide private data when feasible, and utilize public data for higher routing efficiency.

Dongfang Zhao

The cross-blockchain transaction remains one of the most challenging problems in blockchains. The root cause of the challenge lies in the nondeterministic nature of blockchains: A $n$-party transaction across multiple blockchains might be partially rolled back due to the potential forks in any of the participating blockchains---eventually, only one fork will survive in the competition among miners. While some effort has recently been made to developing hierarchically distributed commit protocols to make multi-party transactions progress, there is no systematic method to reason about the transaction outcome. This paper tackles this problem from a perspective of point-set topology. We construct multiple topological spaces for the transactions and blockchain forks, and show that these spaces are internally related through either homeomorphism or continuous functions. Combined together, these tools allow us to reason about the cross-blockchain transactions through the growing-fork topology, an intuitive representation of blockchains.

Liwen Yang, Jiehua Wang

Abstract This paper analyzes the current status of real estate transactions in China and puts forward some shortcomings. In response to these shortcomings, a real estate transaction platform based on blockchain technology is proposed. This platform uses the Hyperledger Fabric platform to effectively connect purchasers, sellers, financial institutions and government departments. Firstly, the whole transaction process of the platform is proposed. Then, the design framework of the system is proposed and the implementable scheme is given. At last, this work summarizes some points of the program, and points out the shortcomings and difficulties in the future work.

Nick Stockton

This month, an alliance of Chinese government groups, banks, and technology companies will publicly launch the Blockchain-based Service Network (BSN). It will be among the first blockchain networks to be built and maintained by a central government. Think of it like an operating system, where participants can use existing blockchain programs, or build their own bespoke tools, without having to design a framework from the ground up.

Aman Framewala, Sarvesh Harale, Shreya Khatal, Dhiren Patel · 6 authors

While cryptocurrencies like Bitcoin have the potential to break traditional financial barriers, there are growing concerns about such currencies being used to fund illegal activities. Blockchain keeps the complete history of all transactions ever performed and each node replicates it. The humongous data it contains can be analyzed to gain useful insights about user transactions as well as the blockchain as a whole. In this paper, we propose an approach to parse and visualize the data of Bitcoin blockchain in a graph structure and carry out analysis that includes tracking and tracing, address clustering and entity tagging. We also try to find patterns in the data at a macro level to provide insights about the overall system. Thus, these efforts lead to foundation work for an analysis tool for getting insights on the coin flow of any financial system including cryptocurrencies.

Sina Rafati Niya, Eryk Schiller, Ile Cepilov, Burkhard Stiller

In Industry 4.0 (I4), the Industrial Internet of Things (I2oT) data streams are prone to significant data manipulation risks. The integration of Blockchains (BC) with I2oT may become a solution preventing from this problem. This paper provides a blockchain-agnostic Blockchain I2oT (BI2oT) architecture called BIIT that allows developing a broad range of BC applications fully integrating Internet of Things (IoT). The mechanisms introduced in BIIT aim at solutions that provide data reliability, limit the computational overhead, and enhance energy efficiency. BIIT is evaluated through real-world experimentation.

Eder J. Scheid, Daniel Lakic, Bruno Rodrigues, Burkhard Stiller

Due to the growing interest in the blockchain (BC), several applications are being developed, taking advantage of the benefits that such technology promises to deliver, such as removal of Trust Third Parties (TTP) to verify transactions and data immutability. However, these applications require certain aspects, such as high transaction throughput or data privacy, that early BC implementations (e.g., Bitcoin) did not provide. Thus, a myriad of novel BC implementations was developed, which introduced the issue of choosing the right implementation for a specific use-case. This paper presents a framework, called PleBeuS, to address this selection issue by allowing users to specify policies that rule the automatic selection of the BC that data will be stored. The selection process relies on a cost-aware approach and considers both public and private implementations and their technical characteristics. Moreover, PleBeuS communicates with a BC-agnostic interoperability API to enforce transactions. The evaluation of the PleBeuS prototype showed that it is possible to automatically select a BC-based on user policies, considering cost thresholds and technical details (e.g., BC throughput, deployment), and reduce manual interaction.

F. N. M. de Sousa Filho, J. N. Silva, Mário Augusto Bertella, Edgardo Brigatti

In this paper, we explore some stylized facts in the Bitcoin market using the BTC-USD exchange rate time series of historical intraday data from 2013 to 2018. Despite Bitcoin presents some very peculiar idiosyncrasies, like the absence of macroeconomic fundamentals or connections with underlying asset or benchmark, a clear asymmetry between demand and supply and the presence of inefficiency in the form of very strong arbitrage opportunity, all these elements seem to be marginal in the definition of the structural statistical properties of this virtual financial asset, which result to be analogous to general individual stocks or indices. In contrast, we find some clear differences, compared to fiat money exchange rates time series, in the values of the linear autocorrelation and, more surprisingly, in the presence of the leverage effect. We also explore the dynamics of correlations, monitoring the shifts in the evolution of the Bitcoin market. This analysis is able to distinguish between two different regimes: a stochastic process with weaker memory signatures and closer to Gaussianity between the Mt. Gox incident and the late 2015, and a dynamics with relevant correlations and strong deviations from Gaussianity before and after this interval.

Yunxia Zhu, Xiaoyuan Zhang, Zh Y Ju, Ch Ch Wang

Abstract Once blockchain technology is successfully applied, it will certainly trigger revolutionary changes in the military development and combat mode, which are beyond the traditional military command and management scope. In the future, blockchain technology, by combining with military artificial intelligence, Internet of things, cloud computing and big data, will have priority to be applied in military management, support, security and even command. It is of great significance to excavate the military application potential of blockchain technology and scientifically predict its impact and influence on the military field, so as to improve the combat effectiveness of the army and promote its transformation and development.

Hans‐Peter Burghof, Achim Fecker, Patrick Jaquart, Benedikt Notheisen

The 5th European Retail Investment Conference was hosted at Börse Stuttgart, Germany, from April 10th to 12th 2019. The conference chairs invited academics and practitioners to participate and discuss empirical and theoretical research focusing on retail investor products and services, the impact of technology on retail investors, investors’ decision-making, investor protection schemes, and market microstructure. Albert Menkveld, Professor of Finance at Vrije Universiteit Amsterdam and Fellow at the Tinbergen Institute, held the keynote about the fundamental value of bitcoin.

Chang Hyun Roh, Im Yeong Lee

No abstract is available for this record.

Fathullah Rahimi, Sahar Sharifian

Today, a new asset called cryptocurrency has entered the economic and financial realm of countries that have been able to stimulate governments to respond. Most governments have responded positively to these unsecured currencies, which are not monitored by any authority, and by considering these currencies as one of the complementary factors of the economic system, they have sought to develop this field and to enact principles. Of course, some countries have also reacted negatively to this currency, and some countries, such as the Islamic Republic of Iran, have reacted differently. It is clear that no country has declared cryptocurrencies as official "money" and now these currencies are mostly used as a commodity exchange tool. However, despite the negative attitude of some governments to this issue, international organizations and communities have expressed their willingness to accept these currencies and are seeking to expand their payments. It is expected that the power of cryptocurrencies will overcome the resistance of the opposing governments and eventually return to their international natural situation and away from any sovereignty.

Jerzy Kuck

Сьогодні криптовалюта набирає все більшої популярності. Використовуваний протягом кількох років, вона була незалежною, анонімною, стійкою до впливу банків чи уряду. У статті представлені носії цифрової цінності, які мають лише форму комп’ютерно-читаної інформації та не мають матеріального еквіваленту (наприклад, банкноти, монети чи жетони). У статті розглядається історія та характеристики біткойна, аналізується вплив криптовалюти на традиційні безготівкові розрахунки, методи та найпопулярніші майнери криптовалюти, а також як і де купувати та продавати криптовалюту на біржі. У висновку зазначено, що для правильної роботи з криптовалютою необхідне комплексне правове регулювання. Документ також містить інструкції, як зареєструватися на біржі CoinCasso і як використовувати посилання «рекомендація» для здійснення транзакцій на біржі

Д. Н. Месник

Currently, the migration fact of many transport enterprises to the Internet cloud has been noted, where the use of information technology is one of the factors for the active use of enterprise innovative potential, revealing new opportunity to increase revenue, improve efficiency and achieve better results. New concepts and terms have been developed with the emergence of the digital economy. Thus tariffs for transport services of enterprises engaged in international transport are replenished with new content. Introducing information systems, using an intelligent user interface, auto-indexed technological tools, transport companies strengthen their influence on international markets, increase volume of service export. Working with blockchain technology is not a particularly difficult task for transport enterprises. The use of the blockchain-based cryptocurrency mining mechanism to increase revenues encourages transport enterprises to improve their organizational structure, create IT departments, introduce new management methods and personnel remuneration systems without limitation to traditional approaches developed by practical activities. A topical issue in the study of cryptocurrency mining and closely related to the implementation of blockchain technology in the activities of transport enterprises remains the issue of the peculiarities forming the cost of services for an enterprise using blockchain technology. In the near future, artificial intelligence will become an indispensable tool for transport enterprises and service organizations. The rapid development of the digital eco-nomy and information technologies in the activity of transport enterprises will serve as the basis for formation of prerequisites for a transition to the V technological mode and development of market relations based on innovative technologies.

Jon Crowcroft

The stages of digital technology readiness are viewed through the lens of three contemporary and widely discussed examples, namely distributed ledger technology, machine learning, and the internet of things. I use these examples to clarify when there is really just an old technology being re-branded, when there is something genuinely new and useful, and whether there may be over-claiming.

Xun Yi, Russell Paulet, Elisa Bertino, Fang-Yu Rao

In this paper we consider the problem where a client wishes to subscribe to some product or service provided by a server, but maintain their anonymity. At the same time, the server must be able to authenticate the client as a genuine user and be able to discontinue (or revoke) the client's access if the subscription fees are not paid. Current solutions for this problem are typically constructed using some combination of blind signature or zero-knowledge proof techniques, which do not directly support client revocation (that is, revoking a user before expiry of their secret value). In this paper, we present a solution for this problem on the basis of the broadcast encryption scheme, suggested by Boneh et al., by which the server can broadcast a secret to a group of legitimate clients. Our solution allows the registered client to log into the server anonymously and also supports client revocation by the server. Our solution can be used in many applications, such as location-based queries. We formally define a model for our anonymous subscription protocol and prove the security of our solution under this model. In addition, we present experimental results from an implementation of our protocol. These experimental results demonstrate that our protocol is practical.

Anna Vital'evna Tikhonova

This article is dedicated to the question of taxation and tax management of a number of operation in digital environment, namely related to the use of cryptocurrency. Special attention is paid to blockchain technologies as a promising tool for improvement of tax management and automation of business processes. The relevance of this work on the one hand is substantiated by the increasing trade volume on the digital markets hand, while on the other – weak foundation, insufficient technical capabilities of tax management of such operations and univerdsally accepted approaches. The results of research can be used by the Ministry of Finances and Government of the Russian federation in development of strategies for improvement of tax policy. The author determines the global trends of recognition/non-recognition of cryptocurrency as a specific type of property, assets of payment method. A brief overview of foreign approaches towards tax regulation of cryptocurrency is presented. The author systematizes the Russian legislative framework on taxation of digital currency, describes the evolution of national approaches to fiscal regulation in this area. A formulation of modern interpretation of cryptocurrency as the object of taxation by different types of taxes (corporate tax, value-added tax, corporate property tax, personal property tax) is provided. The author determines the possibilities for development of tax management with the use of blockchain technologies, as well as forecasts main consequences of such transformations for businesses and the state.

Инна Хаванова

No abstract is available for this record.

Frederik Temmermans, Deepayan Bhowmik, Fernando Pereira, Touradj Ebrahimi · 5 authors

Privacy and security, copyright violations and fake news are emerging challenges in digital media. Social media and data leaks increase risk of user privacy. Creative media particularly images are often susceptible to copyright violations which poses a serious problem to the industry. On the other hand, doctored images using photo editing tools and computer generated images may give a false impression of reality and add to the problem of fake news. These problems demand solutions to protect images and associated metadata as well as methods that can proof the integrity of digital media. For these reasons, the JPEG standardization committee has been working on a new Privacy and Security standard that provides solutions to support privacy and security focused workflows. The standard defines tools to support protection and integrity across the wide range of JPEG image standards. Related to image integrity, blockchain technology provides a solution for creating tamper proof distributed ledgers. However, adopting blockchain technology for digital image integrity poses several challenges at the technology level as well as at the level of privacy legislation. In addition, if blockchain technology is adopted to support media applications, it needs to be closely integrated with a widely adopted standard to ensure broad interoperability. Therefore, the JPEG committee initiated an activity to explore standardization needs related to media blockchain and distributed ledger technologies (DLT). This paper explains the scope and implementation of the JPEG Privacy and Security standard and presents the current state of the exploration on standardization needs related to media blockchain applications.