Owing to Satoshi Nakamoto's brilliant idea, a P2P public ledger is shown to be implementable in anonymous network. Any Internet user can then join the anonymous network and contribute to the P2P public ledger by providing their computing power or proof-of-work. The proof-of-work is a clever implementation of one-CPU-one-vote by anonymous participants, and it protects the Bitcoin ledger from illegal modification. To compensate the nodes for their work, a cryptocurrency called Bitcoin is issued and given to nodes. However, the very nature of anonymity of the ledger and the cryptocurrency prevent the technology from being used in fiat money economy. Cryptocurrencies are not traceable even if they are used for money laundering or tax evasion, and the value of cryptocurrencies is not stable but fluctuates wildly. In this white paper, we introduce Gruut, a P2P ledger to implement a universal financial platform for fiat money. For this purpose, we introduce a new consensus algorithm called `proof-of-population,' which is one instance of `proof of public collaboration.' It can be used for multiple purposes; as a P2P ledger for banks, as a powerful tool for payment, including micropayment, and as a tool for any type of financial transactions. Even better, it distributes the profit obtained from transaction fee, currently dominated by a third party, to peers that cannot be centralized. Energy requirements of Gruut are so low that it is possible to run our software on a smartphone or on a personal computer without a graphic card.
We consider zero-knowledge proofs, a class of cryptographic protocols by which an agent (a Prover) can prove to another agent (a Verifier) that a statement is true without revealing any additional information. For example, a zero-knowledge proof allows one to prove knowledge of a password to somebody at the other end of the communication without actually revealing the password. \nWe present an introduction to and survey literature on zero-knowledge proofs, covering the history, formal definition, and classical applications of zero-knowledge proofs. In addition, we consider connections to complexity, demonstrating that all problems in the complexity class NP have zero-knowledge proofs, and also discuss more exotic applications of zero-knowledge, namely in electronic voting and nuclear disarmament. \nWe then consider applications of zero-knowledge to financial regulation, specifically in balancing transparency and confidentiality in financial reporting. Namely, we polled professionals in the financial industry to identify three major classes of regulatory problems. We then utilize zero-knowledge proofs to develop and present cryptographic protocols/mechanisms and solutions to these regulatory problems: (1) An employer verifying an employee has no financial holdings on a blacklist without revealing the other (allowed) holdings of the employee, (2) A fund convincing its investors that its holdings subscribe to particular risk constraints, without disclosing the actual holdings, (3) A collection of investors of a fund verifying aggregate information provided by the fund, while preserving pairwise anonymity. Applications (1) and (3) are novel applications developed in this paper, while (2) is drawn from [47].
For supporting the conceptualization and the management of enterprise models in a decentralized manner, this paper introduces an approach based on model versioning and blockchain technologies. The main contribution is twofold, consisting of a., the creation of models for inter-organizational business processes in a decentralized environment, and b., means for tracking process instances using meta-data at run time. Models for business processes, workflows, and instance states are collaboratively created as part of a decentralized architecture. Based on this approach, a hierarchical versioning and modeling approach is employed in order to create and manage public and private models in a transactional fashion. For forming relationships among decentralized participants, semi-formal models linked to a blockchain are suggested. The approach is evaluated with a supply chain use case and demonstrated in an implemented modeling tool.
Thomas Locher, Sebastian Obermeier, Yvonne-Anne Pignolet
The functionality that distributed ledger technology provides, i.e., an immutable and fraud-resistant registry with validation and verification mechanisms, has traditionally been implemented with a trusted third party. Due to the distributed nature of ledger technology, there is a strong recent trend towards using ledgers to implement novel decentralized applications for a wide range of use cases, e.g., in the financial sector and sharing economy. While there can be several arguments for the use of a ledger, the key question is whether it can fully replace any single trusted party in the system as otherwise a (potentially simpler) solution can be built around the trusted party. In this paper, we introduce an abstract view on ledger use cases and present two fundamental criteria that must be met for any use case to be implemented using a ledger-based approach without having to rely on any particular party in the system. Moreover, we evaluate several ledger use cases that have recently received considerable attention according to these criteria, revealing that often participants need to trust each other despite using a distributed ledger. Consequently, the potential of using a ledger as a replacement for a trusted party is limited for these use cases.
Akshaya Mani, Tavish Vaidya, David Dworken, Micah Sherr
Open proxies forward traffic on behalf of any Internet user. Listed on open proxy aggregator sites, they are often used to bypass geographic region restrictions or circumvent censorship. Open proxies sometimes also provide a weak form of anonymity by concealing the requestor's IP address. To better understand their behavior and performance, we conducted a comprehensive study of open proxies, encompassing more than 107,000 listed open proxies and 13M proxy requests over a 50 day period. While previous studies have focused on malicious open proxies' manipulation of HTML content to insert/modify ads, we provide a more broad study that examines the availability, success rates, diversity, and also (mis)behavior of proxies. Our results show that listed open proxies suffer poor availability--more than 92% of open proxies that appear on aggregator sites are unresponsive to proxy requests. Much more troubling, we find numerous examples of malicious open proxies in which HTML content is manipulated to mine cryptocurrency (that is, cryptojacking). We additionally detect TLS man-in-the-middle (MitM) attacks, and discover numerous instances in which binaries fetched through proxies were modified to include remote access trojans and other forms of malware. As a point of comparison, we conduct and discuss a similar measurement study of the behavior of Tor exit relays. We find no instances in which Tor relays performed TLS MitM or manipulated content, suggesting that Tor offers a far more reliable and safe form of proxied communication.
Blockchain and blockchain-related technologies are being rapidly invented to the point that it is difficult to define specifically which properties are necessary to constitute a blockchain. It may therefore seem far too early to meaningfully discuss the creation of international blockchain standards. This article will argue the opposite by summarising some existing international standards work related to blockchains, and propose directions for additional standards development that could meaningfully be explored in the near future without negatively impacting additional invention.
Spyros Makridakis, Antonis Polemitis, George M. Giaglis, Soula Louca
Blockchain technologies, once used exclusively for buying and selling bitcoins, have entered the mainstream of computer applications, fundamentally changing the way Internet transactions can be implemented by ascertaining trust between unknown parties. In addition, they ensure immutability (once information is entered it cannot be modified) and enable disintermediation (as trust is assured, no third party is required to verify transactions). These advantages can produce disruptive changes when properly exploited, inspiring a large number of applications. These applications are forming the backbone of what can be called the Internet of Value, bound to bring as significant changes as those brought over the last 20 years by the traditional Internet. This chapter investigates blockchain and the technologies behind it and explains their technological might and outstanding potential, not only for transactions but also as distributed databases. It also discusses its future prospects and the disruptive changes it promises to bring, while also considering the challenges that would need to be overcome for its widespread adoption. Finally, the chapter considers combining blockchain with Artificial Intelligence (AI) and discusses the revolutionary changes that would result by rapidly advancing the AI field.
The subjects of information legal relations are investigated in the scientific article. The authorities of the State Fiscal Service of Ukraine (next – SFS of Ukraine) as a subject of information legal relations are separately considered. It is noted that the participation of the subjects of power authorities in information legal relations has its peculiarities, the main of which is the fact that the main prerequisite for the participation of such a subject in the information legal relationship is his competence.
Hirschman’s Exit/Voice conception has stimulated an extensive literature across many disciplines. Exit/Voice was designed to shine explanatory light on the responses of stakeholders in firms and states in moments of decline. We apply it here to the Bitcoin blockchain, where the Exit/Voice apparatus illuminates strange and unencountered qualities of the reactive choices open to the blockchain’s varied stakeholders.
Chao Qu, Ming Tao, Jie Zhang, Xiaoyu Hong · 5 authors
With the fast development of mobile Internet, Internet of Things (IoT) has been found in many important applications recently. However, it still faces many challenges in security and privacy. Blockchain (BC) technology, which underpins the cryptocurrency Bitcoin, has played an important role in the development of decentralized and data intensive applications running on millions of devices. In this paper, to establish the relationship between IoT and BC for device credibility verification, we propose a framework with layers, intersect, and self-organization Blockchain Structures (BCS). In this new framework, each BCS is organized by Blockchain technology. We describe the credibility verification method and show how it provide the verification. The efficiency and security analysis are also given in this paper, including its response time, storage efficiency, and verification. The conducted experiments have been shown to demonstrate the validity of the proposed method in satisfying the credible requirement achieved by Blockchain technology and certain advantages in storage space and response time.
Alexander Chepurnoy, Vasily Kharin, Dmitry Meshkov
Turing-completeness of smart contract languages in blockchain systems is often associated with a variety of language features (such as loops). In opposite, we show that Turing-completeness of a blockchain system can be achieved through unwinding the recursive calls between multiple transactions and blocks instead of using a single one. We prove it by constructing a simple universal Turing machine using a small set of language features in the unspent transaction output (UTXO) model, with explicitly given relations between input and output transaction states. Neither unbounded loops nor possibly infinite validation time are needed in this approach.
This paper explores the predictive qualities of Bitcoin Miners Revenue on Bitcoin Returns. Using data on Bitcoin in the cryptocurrency market from July 1, 2010 to February 20, 2018, we reflect intervariable correlations not previously examined. We analyze those relationships with a conditional regression analysis adjusting for calendar effects. We separate the sample, and use the last 17 trading days (month) to test a strategy based on the probability of Bitcoin Returns moving higher. After a slight modification to the logistic regression analysis, we find a profitable trading strategy exists based solely on Bitcoin Miners Revenue and the probability of Bitcoin Returns moving higher.
Williams Kwasi Peprah, Amos Oppong Afriyie, Joseph Ahor Abandoh-Sam, Emmanuel Oppong Afriyie
Globalization aided by the internet has now come to stay, which has brought in cryptocurrency to support local and international financial transactions. This qualitative study used content analysis research techniques to assess the impact of cryptocurrency on traditional banking and fiat currency. The findings of this study were, firstly cryptocurrency has similar features and function of banks and fiat currency, as it operates through the internet. Secondly, cryptocurrency functions as a unit of account, medium of exchange, store of value and an intermediary on fund accumulation and distribution. Thirdly, cryptocurrency which is dollarization 2.0 has come to restore the confidence and convenience of financial globalization in that it eliminates the third party from interfering with the transactional process. Lastly, its influence on central banks and governments is the elimination of seigniorage. What cryptocurrency requires now is the legal tender status through regulations.
The Enterprise Ethereum Client Specification by the Enterprise Ethereum Alliance defines the requirements which Ethereum Clients offering private smart contract capabilities should comply with. This specification though ground breaking, misses some important blockchain requirements and does not fully consider the requirements of Ethereum Clients offering Private Sidechain capabilities. This paper presents the case for Private Sidechains and defines requirements to be complied with to deliver this technology. The capabilities of three blockchain clients have been analysed based on the requirements: Quorum, Parity, and Hyperledger Fabric. Quorum and Hyperledger Fabric operate as private consortium blockchains where as Parity delivers private transaction capabilities on top of Ethereum MainNet. These differing approaches has led to different strengths and weaknesses which has resulted in each client not complying with one or more key requirement. In particular, none of the reviewed blockchain clients support the ability to determine bootstrap information to establish on-demand blockchains and none of the clients support secure management and pinning from Ethereum MainNet. This paper presents Ethereum Private Sidechains and a range of technologies which allow it to deliver on complex sidechain requirements. Ethereum Registration Authorities are presented, which allow entities which have not previously interacted to securely obtain information to bootstrap a sidechain, and a Management and Pinning strategy is described which allows the state of a sidechain to be securely pinned to Ethereum MainNet without compromising privacy.
Staying abroad during their studies is increasingly popular for students. However, there are various challenges for both students and universities. One important question for students is whether or not achievements performed at different universities can be taken into account for either enrolling at a foreign university or for completing the studies at their home university. In addition to university achievements, an increasing proportion of the 195 million students worldwide increasingly receive certificates from MOOCs or other social media services. The integration of such services into university teaching is still in the initial stages and presents some challenges. In this paper we describe the idea to manage all these study achievements worldwide in a blockchain, which might solve the national and international challenges regarding the recognition of student achievements. The aim of this paper is to encourage discussion in the global community instead of presenting a finished concept. Some of the open research questions are: How to ensure student data protection, how to deal with fraud and how to deal with the possibility that students can analytically calculate the easiest way through their studies?
Fadhel Ayed, Marco Battiston, Federico Camerlenghi, Stefano Favaro
Given $n$ samples from a population of individuals belonging to different types with unknown proportions, how do we estimate the probability of discovering a new type at the $(n+1)$-th draw? This is a classical problem in statistics, commonly referred to as the missing mass estimation problem. Recent results by Ohannessian and Dahleh \citet{Oha12} and Mossel and Ohannessian \citet{Mos15} showed: i) the impossibility of estimating (learning) the missing mass without imposing further structural assumptions on the type proportions; ii) the consistency of the Good-Turing estimator for the missing mass under the assumption that the tail of the type proportions decays to zero as a regularly varying function with parameter $α\in(0,1)$. In this paper we rely on tools from Bayesian nonparametrics to provide an alternative, and simpler, proof of the impossibility of a distribution-free estimation of the missing mass. Up to our knowledge, the use of Bayesian ideas to study large sample asymptotics for the missing mass is new, and it could be of independent interest. Still relying on Bayesian nonparametric tools, we then show that under regularly varying type proportions the convergence rate of the Good-Turing estimator is the best rate that any estimator can achieve, up to a slowly varying function, and that minimax rate must be at least $n^{-α/2}$. We conclude with a discussion of our results, and by conjecturing that the Good-Turing estimator is an rate optimal minimax estimator under regularly varying type proportions.
Thanks to the new global order established after the Second World War and the communication networks that have become widespread. Due to this, the electronic payment systems that have started to be used since the second half of the 20th century in the world and the credit cards called plastic money have started to be widely used in our country since the 80 '. From the beginning of 2000's, it is observed that cash-based transactions are lagging e-money-based transactions. Since the beginning of the 90's the Internet and social media emerged with new media technologies and after 2004, it has become a dominant idea that these environments provide freedom and even create disorder. In the last 5-6 years we have seen the trade of crypto currencies like Bitcoin. Bitcoin is a method of payment that people use for their purchases based on mutual trust, without an authority issuing it. It works independently of the state authority and the banking system. From this point of view, it is seen as the reflection of freedom originally envisaged for the internet environment. In this context, the question of how bitcoin systems are perceived, and the level of entrepreneurship are issues that needs to be investigated. In this study, a survey was conducted to measure the level of entrepreneurship of bitcoin miners, buyers and sellers. Twitter users were selected for the sample. The research is designed to examine the impact of entrepreneurship motivated by investors' interest in entering the arena that is said to be quite new and risky, and which sub-factors may dominate, which deals with bitcoin and similar crypto currencies. The findings show that users who are interested in mining, buying-selling and trading have very high level of entrepreneurial points.
Cryptocurrencies have recently experienced a new wave of price volatility and interest; activity within social media communities relating to cryptocurrencies has increased significantly. There is currently limited documented knowledge of factors which could indicate future price movements. This paper aims to decipher relationships between cryptocurrency price changes and topic discussion on social media to provide, among other things, an understanding of which topics are indicative of future price movements. To achieve this a well-known dynamic topic modelling approach is applied to social media communication to retrieve information about the temporal occurrence of various topics. A Hawkes model is then applied to find interactions between topics and cryptocurrency prices. The results show particular topics tend to precede certain types of price movements, for example the discussion of 'risk and investment vs trading' being indicative of price falls, the discussion of 'substantial price movements' being indicative of volatility, and the discussion of 'fundamental cryptocurrency value' by technical communities being indicative of price rises. The knowledge of topic relationships gained here could be built into a real-time system, providing trading or alerting signals.
This paper presents a comprehensive survey of the existing blockchain protocols for the Internet of Things (IoT) networks. We start by describing the blockchains and summarizing the existing surveys that deal with blockchain technologies. Then, we provide an overview of the application domains of blockchain technologies in IoT, e.g., Internet of Vehicles, Internet of Energy, Internet of Cloud, Edge computing, etc. Moreover, we provide a classification of threat models, which are considered by blockchain protocols in IoT networks, into five main categories, namely identity-based attacks, manipulation-based attacks, cryptanalytic attacks, reputation-based attacks, and service-based attacks. In addition, we provide a taxonomy and a side-by-side comparison of the state-of-the-art methods toward secure and privacy-preserving blockchain technologies with respect to the blockchain model, specific security goals, performance, limitations, computation complexity, and communication overhead. Based on the current survey, we highlight open research challenges and discuss possible future research directions in the blockchain technologies for IoT.
The current global financial market is witnessing the activation of cryptocurrency as a payment instrument and a means of accumulation. However, the risks of money laundering, terrorism financing and tax evasion that cryptocurrency transactions imply lead to the need to implement their state regulation, an important component of which is tax control.Therefore, the purpose of the article is to substantiate the value orientations when forming the system of cryptocurrency transactions tax control in Ukraine taking the positive experience of developed countries into account. The scientific results of the study consist in the emphasizing structural, functional, systemic and institutional approaches to understanding tax control, which became the basis for identifying the features of cryptocurrency transactions as a tax control object.It was revealed that the lack of personalization of the agreement parties, the relatively high level of information security, free international turnover and a decentralized payment system are the factors of the cryptocurrency market further development. On the other hand, this leads to the loss of tax revenues for Ukrainian budgetary system, taking into account the forecasted trends in the development of the cryptocurrency market by 2022 through methods of sums, least squares and expert estimates. Given the institutional approach to the understanding of tax control, an institutional structure of the cryptocurrency transactions tax control in Ukraine is proposed.It is established that domestic state institutions are able to carry out tax control over these transactions. It is also determined that introducing fiscal control will result in the receipt of additional revenues by budgets, reduction of shadow economy, counteraction to cybercrime and terrorism financing.The practical importance of the results is in the need to form an effective system of cryptocurrency transactions tax control as a function of public administration.It has been determined that transactions on cryptocurrency supply, on the determining exchange rates and transactions on cryptocurrency disposal should be an object of tax control in Ukraine. Mining transactions, receipt of income (profits) in the cryptocurrency are subject to general taxes, depending on the taxpayer’s legal status, in particular, personal income tax, corporate income tax and a unified social tax (UST). Taking into account the EU recommendations on the non-application of value added tax in the cryptocurrency transactions taxation, it is not appropriate to implement it in this area. Establishing tax control over cryptocurrency transactions will expand the powers of state authorities that are empowered to control observing financial discipline by economic agents in Ukraine and the financial capabilities of state and local budgets.
In many countries, sustainable public procurement is a powerful tool to reflect on national strategic intentions and promote scientific and technological innovation. Based on the perspective of an institutional structure, we filtered out the core policies. Using policy bibliometrics, we analyzed Chinese public procurement policies on promoting scientific and technological innovation, revealed policy-making characteristics, and concluded that the Ministry of Finance should appropriately decentralize the policy-making work to other relevant agencies of the State Council. This article compares the main policy tools from four dimensions in China, the U.S., the United Kingdom, Japan, Germany, France, and South Korea. We issued these pertinent strategies: establishing the vendor database for small and medium enterprises, developing a grade system and the post-evaluation system, formulating detailed implementation methods for high-tech products (services), and carrying out classification management for imported products. For sustainable public procurement policies on promoting scientific and technological innovation, this article provides an effective reference to organize the agencies and formulate the detail measures. This article’s research framework could be applied to analyze other industry policies.
This paper discusses the mining-trading of cryptocurrency in Islamic law as a digital asset that has recently been traded in cyberspace. The value of cryptocurrency is soaring and fluctuation and it is influenced by the demand of buying and selling. Indodax.com is the official digital asset site in Indonesia that trades more than 13 digital currencies. As we know, digital currencies are not electronic money, even though the characteristic is similar. Starting from this, I analyze whether cryptocurrency is worthy of being value as money that has a certain value. Until now, the Indonesian government through Bank Indonesia has published regulation Number 16/8/PBI/ 2014, which explicitly prohibits using bitcoin and altcoin on financial transactions. Otherwise, MUI (Indonesian Ulema Council) has not issued a fatwa yet related to cryptocurrency. From here, I focuse on this study to the law of cryptocurrency in Islamic law. Bitcoin has advantages and disadvantages. Among its advantages are the user can use exchange or transaction without third service (bank), and it can be traded in merchandise shops. But, the disadvantages of bitcoin are mach more, such as fluctuating value every times, it is not listed as a commodity, it is not watched by Financial Services Authority (OJK), it presents the element of gharar (uncertainty) and maysir (gambling or bet), which makes it possible to be used for money laundering and drugs. On the other hand, until now, the Indonesian people have not considered that bitcoin as a treasure like gold or silver
A fundamental problem for electronic commerce is the buying and selling of digital goods between individuals that may not know or trust each other. Traditionally, this problem has been addressed by the use of trusted third-parties such as credit-card companies, mediated escrows, legal adjudication, or reputation systems. Despite the rise of blockchain protocols as a way to send payments without trusted third parties, the important problem of exchanging a digital good for payment without trusted third parties has been paid much less attention. We refer to this problem as the Buyer and Seller's Dilemma and present for it a dual-deposit escrow trade protocol which uses double-sided payment deposits in conjunction with simple cryptographic primitives, and that can be implemented using a blockchain-based smart contract. We analyze our protocol as an extensive-form game and prove that the Sub-game Perfect Nash Equilibrium for this game is for both the buyer and seller to cooperate and behave honestly. We address this problem under the assumption that the digital good being traded is known and verifiable, with a fixed price known to both parties.