This study examines the volatility of certain cryptocurrencies and how they are influenced by the three highest capitalization digital currencies, namely the Bitcoin, the Ethereum and the Ripple. We use daily data for the period 1 January 2018-16 September 2018, which represents the bearish market of cryptocurrencies. The impact of the decline of these three cryptocurrencies on the returns of the other virtual currencies is examined with models of the ARCH and GARCH family, as well as the DCC-GARCH. The main conclusion of the study is that the majority of cryptocurrencies are complementary with Bitcoin, Ethereum and Ripple and that no hedging abilities exist among principal digital currencies in distressed times.
SUMMARY Blockchain offers a drastically new way to record, process, and store financial transactions and information, and has the potential to fundamentally change the landscape of the accounting profession and reshape the business ecosystem. In this article, we introduce two types (i.e., permissionless and permissioned) of blockchain and lay out their technological features. We further discuss implications of blockchain to auditing and elaborate on opportunities and challenges of the two types of blockchain to auditors. We conclude by making specific recommendations for auditors to adapt, adjust, and elevate themselves to the role of strategic partners in blockchain implementation. JEL Classifications: M15; M41; M42; O14; O33; O55.
Mark Weber, Giacomo Domeniconi, Jie Chen, Daniel Karl I. Weidele · 7 authors
Anti-money laundering (AML) regulations play a critical role in safeguarding financial systems, but bear high costs for institutions and drive financial exclusion for those on the socioeconomic and international margins. The advent of cryptocurrency has introduced an intriguing paradox: pseudonymity allows criminals to hide in plain sight, but open data gives more power to investigators and enables the crowdsourcing of forensic analysis. Meanwhile advances in learning algorithms show great promise for the AML toolkit. In this workshop tutorial, we motivate the opportunity to reconcile the cause of safety with that of financial inclusion. We contribute the Elliptic Data Set, a time series graph of over 200K Bitcoin transactions (nodes), 234K directed payment flows (edges), and 166 node features, including ones based on non-public data; to our knowledge, this is the largest labelled transaction data set publicly available in any cryptocurrency. We share results from a binary classification task predicting illicit transactions using variations of Logistic Regression (LR), Random Forest (RF), Multilayer Perceptrons (MLP), and Graph Convolutional Networks (GCN), with GCN being of special interest as an emergent new method for capturing relational information. The results show the superiority of Random Forest (RF), but also invite algorithmic work to combine the respective powers of RF and graph methods. Lastly, we consider visualization for analysis and explainability, which is difficult given the size and dynamism of real-world transaction graphs, and we offer a simple prototype capable of navigating the graph and observing model performance on illicit activity over time. With this tutorial and data set, we hope to a) invite feedback in support of our ongoing inquiry, and b) inspire others to work on this societally important challenge.
Everyone in any collaborative business or industry has been discussing how to tab on the blockchain technology. While we are still trying to get a grasp of concepts such as consensus algorithms and distributed ledgers, top-notch industry developers are expanding and strengthening blockchain technology with highly complex, promising and intriguing innovations. Blockchain technology becomes the new logistic brain of the Internet as it involves the creation of data "blocks," detailing actions for a given business transaction or actions, and such information is finalized and locked into a chain. The chain is only added to with each transaction, so the origin of transaction details, such as financial records, product details, and location, can be traced. Thus, all subsequent business transactions can be verified and tracked, enhancing transparency and visibility into the transaction. In addition, blockchains may be public or private, granting or denying access to the chain details based on authorization, so private information can be protected, while allowing addresses to authorized parties. The future of using the Internet as the supply chain is limitless with the power of blockchain technology.

 
 
 The purpose of the article is to reveal the role of the state in the field of social protection of the population, to analyze the tendencies of development of budget financing of social security in Ukraine and to offer ways to improve the reform of the sphere of social protection of the population. The article describes the priority directions of the activity of the state and institutional features of the interaction of the legislative and executive power in the field of social protection, developed an adaptive model of state regulation of the sphere of social protection in the context of decentralization, analyzed the dynamics of spending on social protection and social security.
 
 
Kolluru Venkata Nagendra, Govind K. Rajesh, Arun Prasad Desai
Block chain is as of late presented and changing the advanced world conveying another point of view to security, flexibility and productivity of framework. While at first promoted by Bit Coin, Block chain is significantly more than an establishment for digital money. It offers a safe method to trade any sort of good administration or exchange. This paper exhibits an exhaustive review on Block chain Technology and Bit coin. Bitcoin has emerged as the most successful crypto currency since its appearance back in 2009. Besides its security robustness, two main properties have probably been its key to success: anonymity and decentralization. In this paper, we provide a comprehensive description on the details that make such crypto currency an interesting research topic in the privacy community. We perform an exhaustive review of the bitcoin anonymity research papers that have been published so far and we outline some research challenges on that topic.
E-cash has its merits comparing with other payment modes. However, there are two problems, which are how to achieve practical/complete tracing and how to achieve it in compact E-cash. First, the bank and the TTP (i.e., trusted third party) have different duties and powers in the reality. Therefore, double-spending tracing is bank's task, while unconditional tracing is TTP's task. In addition, it is desirable to provide lost-coin tracing before they are spent by anyone else. Second, compact E-cash is an efficient scheme, but tracing the coins from double-spender without TTP results in poor efficiency. To solve the problems, we present a compact E-cash scheme. For this purpose, we design an embedded structure of knowledge proof based on a new pseudorandom function and improve the computation complexity from O(k) to O(1). Double-spending tracing needs leaking dishonest users' secret knowledge, but preserving the anonymity of honest users needs zero-knowledge property, and our special knowledge proof achieves it with complete proofs. Moreover, the design is also useful for other applications, where both keeping zero-knowledge and leaking information are necessary.
Santiago Figueroa-Lorenzo, Javier Añorga, Saioa Arrizabalaga
The growing adoption of Radio-frequency Identification (RFID) systems, particularly in the healthcare field, demonstrates that RFID is a positive asset for healthcare institutions. RFID offers the ability to save organizations time and costs by enabling data of traceability, identification, communication, temperature and location in real time for both people and resources. However, the RFID systems challenges are financial, technical, organizational and above all privacy and security. For this reason, recent works focus on attribute-based access control (ABAC) schemes. Currently, ABAC are based on mostly centralized models, which in environments such as the supply chain can present problems of scalability, synchronization and trust between the parties. In this manuscript, we implement an ABAC model in RFID systems based on a decentralized model such as blockchain. Common criteria for the selection of the appropriate blockchain are detailed. Our access control policies are executed through the decentralized application (DApp), which interfaces with the blockchain through the smart contract. Smart contracts and blockchain technology, on the one hand, solve current centralized systems issues as well as being flexible infrastructures that represent the relationship of trust and support essential in the ABAC model in order to provide the security of RFID systems. Our system has been designed for a supply chain environment with an use case suitable for healthcare systems, so that assets such as surgical instruments containing an associated RFID tag can only access to specific areas. Our system is deployed in both a local and Testnet environment in order to stablish a deep comparison and determining the technical feasibility.
The central institute of private international law — conflict of law — in the modern globalization and information context is evolving, which is largely due to the paradigm shifts in law, laid down and developed based on international commercial arbitration. The widely interpreted concept of «rules of law» actualizes a completely new view of conflicting arrays of rules: the law of the state and the system of non-state regulators. The medieval lex mercatoria, revived in the XX century, is modernized by cyberspace, acquires a new sound in the form of e-merchant or lex informatica, especially in the context of the parallel development of smart contracts and new decentralized forms of dispute resolution, one of which is blockchain arbitration. In particular, the issues of conflict of law, traditional for cross-border transactions, arise in relation to smart contracts, which, using blockchain technology, are inherently linked to several jurisdictions. It is important to reflect on the questions of applicability of traditional conflict-of-laws bindings to the regulation of relevant relations, including through forecasting the practice of choosing the law of a state, the substantive rules of which are adapted to the use of new technologies, or recourse to the rules of non-state regulation.
In the paper, the authors formulate a multidimensional concept of «cryptocurrency», which takes into account the technical, economic and legal nature of cryptocurrencies. In addition, the paper defines the relationship of the concepts of «cryptocurrency» with such commonly used terms as «digital currencies», «virtual currencies» and «electronic money». The authors understand cryptocurrencies as a kind of digital money, which is the result of the functioning of the corresponding computer program (digital code). Cryptocurrencies are created using the appropriate Protocol, operating in a decentralized manner, with the use of the blockchain technology. If the issue has a centralized issuer while maintaining other features inherent in these cryptocurrencies, then it is possible to talk not about cryptocurrencies, but about the issue of electronic money. The main difference between electronic money and cryptocurrencies is the presence of electronic money of the Central Issuer and the lack of it in cryptocurrencies. Another important difference between cryptocurrencies and electronic money is the way they are issued and stored. Cryptocurrencies are stored and issued in a decentralized manner, while the information about electronic money and transactions with them can be centralized on one server. There are also other differences, such as the mandatory use of asymmetric cryptographic encryption when creating cryptocurrencies, etc. Being digital money, cryptocurrencies at the same time are a kind of digital property that performs the functions of a means of payment in the society, does not have a physical form, that is, can not exist in the form of coins or banknotes. The authors support the addition of art.128 of the Civil Code of the Russian Federation with a new object of civil law (digital money) in the context of improving the draft law «On digital financial assets».
Emmanuelle Anceaume, Marina Papatriantafilou, Maria Potop-Butucaru, Philippas Tsigas
This paper continues the recent line of academic effort dedicated to formalizing distributed ledgers. This work is the first one to propose a specification of distributed ledger register that matches the Lamport hierarchy from safe to atomic. Moreover, we propose implementations of distributed ledger registers with safe, regular and atomic guaranties in a model of communication specific to distributed ledgers technology that we also formalize. Then, we propose an implementation of a distributed ledger register that satisfies the atomic specification and the k-consistency property that characterises the permissionless distributed blockchains such as Bitcoin and Ethereum.
The author examines the features of the use of smart contracts in transactions in virtual property, taking into account the fact that the smart contract is a way of fulfilling those obligations in which the transfer of property provision takes place in the virtual world with the help of appropriate technical means. It should be recognized that the list of virtual property is open, at the moment it includes, for example, cryptocurrency, domain names, «game property», virtual tokens. The question of the legal nature of objects related to virtual property is relevant: are they a new independent type of property requiring special legal regimes, or are they a form of known property rights? The paper also notes that smart contracts differ in both vulnerabilities in computer code and insufficiently effective legal regulation. Smart contract, in the opinion of the author, is a kind of written (electronic) form of a contract, the peculiarity of which is that the will of the subject is expressed by means of special technical means in the form of program code. In this case, the will to conclude the contract simultaneously means the will to its execution upon the occurrence of certain conditions of the contract circumstances. In conclusion, the author shows that the automation of performance of obligations in particular and the digitization of contract law in general should not create obstacles to the implementation of the fundamental principles of good faith and contractual justice, to assess the proportionality of the distribution of rights and obligations of the parties, the equivalence of their property.
Stephanie F. Cheng, Gus De Franco, Haibo Jiang, Pengkai Lin
This paper provides evidence on public firms’ initial 8-K disclosures that mention Blockchain and investors’ response to these disclosures. We categorize the description of Blockchain activities in firms’ 8-Ks as Speculative (e.g., a vague future plan that involves Blockchain) or Existing (e.g., a description of Blockchain product). We document a sharp increase in the number of initial 8-K disclosures of Blockchain, particularly by Speculative firms, coinciding with the rise of Bitcoin prices and excitement in Blockchain technology in the last quarter of 2017. Investors react positively to the Blockchain 8-Ks issued by Speculative firms in the initial seven-day event window although the reaction is mostly reversed over the 30 days following the disclosure. The reaction is stronger when Bitcoin returns are more positive. Overall, our results are consistent with a situation that troubles the SEC and the financial press: investors overreact to a firm’s first 8-K disclosure of a potential foray into Blockchain technology and that overreaction is a function of the Bitcoin price bubble. This paper was accepted by Brian Bushee, accounting.
Mark Weber, Giacomo Domeniconi, Jie Chen, Daniel Karl I. Weidele · 7 authors
Anti-money laundering (AML) regulations play a critical role in safeguarding\nfinancial systems, but bear high costs for institutions and drive financial\nexclusion for those on the socioeconomic and international margins. The advent\nof cryptocurrency has introduced an intriguing paradox: pseudonymity allows\ncriminals to hide in plain sight, but open data gives more power to\ninvestigators and enables the crowdsourcing of forensic analysis. Meanwhile\nadvances in learning algorithms show great promise for the AML toolkit. In this\nworkshop tutorial, we motivate the opportunity to reconcile the cause of safety\nwith that of financial inclusion. We contribute the Elliptic Data Set, a time\nseries graph of over 200K Bitcoin transactions (nodes), 234K directed payment\nflows (edges), and 166 node features, including ones based on non-public data;\nto our knowledge, this is the largest labelled transaction data set publicly\navailable in any cryptocurrency. We share results from a binary classification\ntask predicting illicit transactions using variations of Logistic Regression\n(LR), Random Forest (RF), Multilayer Perceptrons (MLP), and Graph Convolutional\nNetworks (GCN), with GCN being of special interest as an emergent new method\nfor capturing relational information. The results show the superiority of\nRandom Forest (RF), but also invite algorithmic work to combine the respective\npowers of RF and graph methods. Lastly, we consider visualization for analysis\nand explainability, which is difficult given the size and dynamism of\nreal-world transaction graphs, and we offer a simple prototype capable of\nnavigating the graph and observing model performance on illicit activity over\ntime. With this tutorial and data set, we hope to a) invite feedback in support\nof our ongoing inquiry, and b) inspire others to work on this societally\nimportant challenge.\n
We consider the problem of varying the security of blockchain transactions according to their importance. This adaptive security is achieved by using variable size consensus committees. To improve performance, such committees function concurrently. We present two algorithms that allow adaptive security by forming concurrent variable size consensus committees on demand. One is based on a single joint blockchain, the other is based on separate sharded blockchains. For in-committee consensus, our algorithms may use various available byzantine-robust fault tolerant algorithms (BFT). We implement synchronous BFT, asynchronous BFT and proof-of-work consensus. We thoroughly evaluate the performance of our adaptive security algorithms.
Ghareeb Falazi, Vikas Khinchi, Uwe Breitenbücher, Frank Leymann
Traditional distributed transaction processing (TP) systems, such as replicated databases, faced difficulties in getting wide adoption for scenarios of enterprise integration due to the level of mutual trust required. Ironically, public blockchains, which promised to solve the problem of mutual trust in collaborative processes, suffer from issues like scalability, probabilistic transaction finality, and lack of data confidentiality. To tackle these issues, permissioned blockchains were introduced as an alternative approach combining the positives of the two worlds and avoiding their drawbacks. However, no sufficient analysis has been done to emphasize their actual capabilities regarding TP. In this paper, we identify a suitable collection of TP criteria to analyze permissioned blockchains and apply them to a prominent set of these systems. Finally, we compare the derived properties and provide general conclusions.
Felipe Zimmerle da N. Costa, Ruy J. Guerra B. de Queiroz
Distributed consensus and Blockchains are popular among the cryptocurrencies where no one except the coins users, owns the data and transactions. No different to open source repositories, where the data belongs to the users. In this work it is presented a manner of having a repository for software packages in a Blockchain with distributed consensus, supported by the idea of the also demonstrated proof-of-download.
One of the new technologies that will determine our future is Blockchain. The article describes the technology of the Blockchain, analyzes the world experience of using the technology, gives examples of the use of the Blockchain in public administration. Special attention is paid to mathematical methods of evaluating the effectiveness of technology implementation in the public sector.
S. Raj Anand, Rama Chaithanya Tanguturi, D S Soundarrajan
The latest trend in the research filed implies the importance of data security in wireless sensor networks. There are various approaches identified for securing the data by using trust wide security such as cryptographic systems and routing protocols. However, these approaches are very critical to identify the optimal path in the network and attacks by unauthorized node cannot be prevented. In this paper, a new algorithm for combining the AODV (Ad Hoc On-Demand Distance Vector) routing protocol and particle swarm optimization (PSO) is implemented to produce trustable routing in every location through block chain. The possible routing procedure will enhance the routing nodes to acquire routing information among all the nodes but will never allow the node to capture the information. The routing protocol on the blockchain is used to utilize the path efficiently without deviation caused by other anchor nodes. It also identifies the congestion in the entire path of the particular network and avoids tampering of information between the nodes. The blockchain enabled with PSO algorithm and AODV routing protocol provides the simulation results about the efficient packet delivery system. The Security has been performed in every node used to identify the best route for producing the efficient throughput and quality of services.
The scale of criminal networks (e.g. drug syndicates and terrorist networks) extends globally and poses national security threat to many nations as they also tend to be technologically advance (e.g. Dark Web and Silk Road cryptocurrency). Therefore, it is critical for law enforcement agencies to be equipped with the latest tools in criminal network analysis (CNA) to obtain key hidden links (relationships) within criminal networks to preempt and disrupt criminal network structures and activities. Current hidden or missing link predictive models that are based on Social Network Analysis models rely on ML techniques to improve the performance of the models in terms of predictive accuracy and computing power. Given the improvement in the recent performance of Deep Reinforcement Learning (DRL) techniques which could train ML models through self-generated dataset, DRL can be usefully applied to domains with relatively smaller dataset such as criminal networks. The objective of this study is to assess the comparative performance of a CNA hidden link prediction model developed using DRL techniques against classical ML models such as gradient boosting machine (GBM), random forest (RF) and support vector machine (SVM). The experiment results exhibit an improvement in the performance of the DRL model of about 7.4% over the next best performing classical RF model trained within 1500 iterations. The performance of these link prediction models can be scaled up with the parallel processing capabilities of graphical processing units (GPUs), to significantly improve the speed of training the model and the prediction of hidden links.
Internet of Things (IoT) is growing at an exponential rate but the area of privacy and security in IoT still remains unexplored. The existing algorithms or methods are mainly centralized and hence they are vulnerable due to their single point authentication topology. As it has been estimated that by 2020 there will be more ‘things’ than people on this earth the problem of security becomes a major concern in IoT networks, as a person having control to an IoT network will be able to control a large portion of an organization. Blockchain has recently been used to provide security to peer-to-peer networks. Blockchains are computationally expensive, heavyweight and are considered unsuitable for IoT architecture. In this paper a new lightweight and secure architecture for IoT by using Ethereum Blockchain retaining most of its security providing powers is proposed. Since Blockchain is decentralized it solves the single point authentication problem existing in IoT networks. A Smart Home System as a representative case study has been implemented for broader IoT applications. The two parameters measured are temperature and intrusion detection. The proposed model tackles some more challenges that exist in IoT networks. The Qualitative evaluation of the proposed architecture highlights how it tackles various attacks.
From hairbrushes to scales, all devices have sensors embedded in them to collect and communicate data. Smart Healthcare is proving to be an exciting and dynamic area with lots of room for new innovations and the increasing consumer demand for proactive health monitoring devices. Having India poised to spend a lot on healthcare, recent innovations using IoT devices and big data analytics can propel the healthcare industry into the future. Smart healthcare providers are leveraging cloud computing with fog computing to optimize their healthcare services. These smart healthcare applications depend mainly on the raw sensor data collected, aggregated, and analyzed by the smart sensors. Smart sensors these days generate myriad amount of data like text, image, audio, and video that require real-time or batch processing. Aggregating these diverse data from various types of resources remains a dispute till date. To resolve this issue, we have proposed a softwarized infrastructure that integrates cloud computing and fog computing, message brokers, and Tor for supple, safe, viable, and a concealed IoT exploitation for smart healthcare applications and services. Our proposed platform employs machine-to-machine (M2M) messaging, data fusion and decision fusion, and uses rule-based beacons for seamless data management. Our proposed flexBeacon system provides an IoT infrastructure that is nimble, secure, flexible, private, and reasonable. We have also proposed an M2M transceiver and microcontroller for flawless data incorporation of smart healthcare applications and services. Based on the IoT devices’ technical capabilities and resource availability, some systems are capable of making use of homomorphic encryption and zero knowledge proofs. The proposed flexBeacon platform offers seamless management and data aggregation without loss of accuracy. The cost of implementing a softwarized IoT for smart healthcare is also greatly reduced.
Cryptocurrencies have received important attention as alternative mediums of exchange that can complement or even replace traditional ones. For this reason, cryptocurrencies have become an attractive investment vehicle with a constantly growing market cap. Cryptocurrencies’ role and economic impact cannot be concluded further than just a disruptive technology to the conventional financial system. The unstable and highly speculative value fluctuations coupled with a relatively new technological system have resulted in a lack of research to predict the future cryptocurrency market development. The research method used in this legal research is the juridical-normative method. The juridical-normative method is intended to seek or find rules, principles, and legal doctrines, which are then applied to analyze a phenomenon that is a legal subject. The presence of cryptocurrency has its own impact on social life. These impacts stem from the main feature of cryptocurrencies, the blockchain. Blockchain offers a revolution in the paradigm of the financial system, which was initially centered on the existence of central authorities such as governments and banks to become user-centered or user-centered. In addition, the philosophical values applied in cryptocurrency and blockchain reflect ideas that are synonymous with the collegial collective spirit, such as decentralization, transparency, equality, and accountability. Abstrak Mata uang kripto telah mendapat perhatian penting sebagai media pertukaran alternatif yang dapat melengkapi atau bahkan menggantikan yang tradisional. Karena alasan ini, Mata uang kripto telah menjadi sarana investasi yang menarik dengan kapitalisasi pasar yang terus berkembang. Untuk saat ini, peran dan dampak ekonomi dari Mata uang kripto tidak dapat disimpulkan lebih jauh dari sekadar teknologi yang mengganggu sistem keuangan konvensional. Fluktuasi nilai yang tidak stabil dan sangat spekulatif ditambah dengan sistem teknologi yang relatif baru mengakibatkan kurangnya penelitian untuk memprediksi perkembangan pasar Mata uang kripto di masa depan. Metode penelitian yang digunakan dalam penelitian hukum ini adalah metode yuridis normatif. Metode yuridis-normatif dimaksudkan untuk mencari atau menemukan kaidah, asas dan doktrin hukum yang kemudian diterapkan untuk menganalisis suatu fenomena yang menjadi subjek hukum. Kehadiran cryptocurrency memiliki dampak tersendiri dalam kehidupan sosial. Dampak ini berasal dari fitur utama Mata uang kripto, blockchain. Blockchain menawarkan revolusi paradigma sistem keuangan yang awalnya berpusat pada keberadaan otoritas pusat seperti pemerintah dan bank menjadi user-centered atau berpusat pada pengguna. Selain itu, nilai-nilai filosofis yang diterapkan dalam cryptocurrency dan blockchain mencerminkan ide-ide yang identik dengan semangat kolektif kolegial seperti desentralisasi, transparansi, kesetaraan, dan akuntabilitas. Kata kunci: Mata uang kripto, Bitcoin, Hukum, Ekonomi, Malaysia
The Blockchain for Education platform helps us to make the tamper-proof certificates and their correct and the overall permanent allocation of these certificates to learners, as well as verification of certificates. It can reduce the overall frauds and tampering of the degrees and certificates. Blockchain technology can be used to solve many educational problems and can help educators as well as learners to monitor the learning outcomes. The data can be stored securely and tamper proof format when it’s stored onto the blockchain network. Here smart contracts can be designed and deployed on to the Ethereum blockchain that can be designed using the solidity programming language. Blockchain can be applied to private, public and consortium sectors depending upon the usage and the scope of the blockchain. Education system can take benefit of this scalability of the blockchain and can be effectively useful in the educational institutions.