Recent work has demonstrated significant anonymity vulnerabilities in\nBitcoin's networking stack. In particular, the current mechanism for\nbroadcasting Bitcoin transactions allows third-party observers to link\ntransactions to the IP addresses that originated them. This lays the groundwork\nfor low-cost, large-scale deanonymization attacks. In this work, we present\nDandelion++, a first-principles defense against large-scale deanonymization\nattacks with near-optimal information-theoretic guarantees. Dandelion++ builds\nupon a recent proposal called Dandelion that exhibited similar goals. However,\nin this paper, we highlight simplifying assumptions made in Dandelion, and show\nhow they can lead to serious deanonymization attacks when violated. In\ncontrast, Dandelion++ defends against stronger adversaries that are allowed to\ndisobey protocol. Dandelion++ is lightweight, scalable, and completely\ninteroperable with the existing Bitcoin network. We evaluate it through\nexperiments on Bitcoin's mainnet (i.e., the live Bitcoin network) to\ndemonstrate its interoperability and low broadcast latency overhead.\n
In the world finance and technological development in finance, along with innovative financial instruments, have attracted investors. The most popular of these developments is undoubtedly Bitcoin, which is an output of the blockchain infrastructure .Bitcoin that is not connected to a central authority and contains cryptographic features, is one of the crypto moneys. The fact that Bitcoin does not depend on Central Authority and disclose the factors affecting its price by supply and demand have resulted in high volatility. In this study, firstly blockchain technology will be explained briefly and time-dependent price estimates for Bitcoin which is one of the important outputs of this technology, will be made. Artificial Neural Networks (YSA), which has become increasingly popular among estimation methods in recent years, has been used in the study and compared with ARIMA in traditional estimation methods. The sample of the study was created using daily closing prices between 02.02.2012 - 09.01.2018 dates. As a result of this study, both directions and values of estimated prices by artificial neural networks MPL (6-3-1) model between 10.01.2018 - 18.01.2018 have been more successful than ARIMA (1.1.6) model.
The first high-profile decentralized autonomous organization formed in 2016. Called “TheDAO,” it used smart contracts on a bitcoin-style blockchain to allow strangers to come together online to vote on and invest in venture capital proposals. Newspapers raved about the $160 million it quickly raised, even though it purported to have no central human authority, including no managers, executives, or board of directors.
Technologists have grand plans for smart contracts and autonomous organizations. Rather than staying at traditional hotels with elaborate human staff, we may pay for hotel rooms using bitcoin (or another cryptocurrency) which will automatically unlock the room door. If the toilet breaks, the room itself will contract with a plumber to fix it. Similarly, a smart contract may allow us to hire a self-driving car. The car will not only drive passengers around but arrange for its own routine maintenance.
TheDAO itself, however, is now a cautionary tale. A bug in its smart contract code was exploited to drain more than $50 million in value. Some purists denounced efforts to mitigate the problem, arguing that the alleged hacker simply withdrew money in accordance with the organization’s agreed-upon contractual terms in the form of computer code. Since the “code is the contract” in their minds, the alleged hacker did nothing wrong.
I defend two related claims. First, contra the purists, I argue that the code does not reflect the entirety of the parties’ agreement, and so the “code is the contract” slogan does not resolve whether TheDAO exploitation should have been mitigated. I take no position on whether mitigation was appropriate except to say that the matter depends on many considerations aside from smart contract code itself.
Second, I point to a broader danger lurking in the code-is-the-contract view. TheDAO had tremendous “artificial responsibility” in that we gave it considerable control that couldn’t be easily revoked or reined in. Not-so-smart contracts in the future may prove even more dangerous: hotel guests might be locked out of their rooms, and self-driving cars might drive off bridges. I argue that unadulterated commitment to the code-is-the-contract slogan increases artificial responsibility and its associated risks.
Even though blockchain is mostly popular for its cryptocurrency, smart contracts have become a very prominent blockchain application. Smart contracts are like classes that can be called by client applications outside the blockchain. Therefore it is possible to develop blockchain-oriented software (BOS) that implements part of the business logic in the blockchain by using smart contracts. Currently, there is no design standard to model BOS. Since modeling is an important part of designing a software, developers may struggle to plan their BOS. In this paper, we show three complementary modeling approaches based on well-known software engineering models and apply them to a BOS example. Our goal is to start the discussion on specialized blockchain modeling notations.
Christian Berger, Birgit Penzenstadler, Olaf Drögehorn
Innovation in the world of today is mainly driven by software. Companies need to continuously rejuvenate their product portfolios with new features to stay ahead of their competitors. For example, recent trends explore the application of blockchains to domains other than finance. This paper analyzes the state-of-the-art for safety-critical systems as found in modern vehicles like self-driving cars, smart energy systems, and home automation focusing on specific challenges where key ideas behind blockchains might be applicable. Next, potential benefits unlocked by applying such ideas are presented and discussed for the respective usage scenario. Finally, a research agenda is outlined to summarize remaining challenges for successfully applying blockchains to safety-critical cyber-physical systems.
Sergei Tikhomirov, Ekaterina Voskresenskaya, Ivan Ivanitskiy, Ramil Takhaviev · 6 authors
Ethereum is a major blockchain-based platform for smart contracts - Turing complete programs that are executed in a decentralized network and usually manipulate digital units of value. Solidity is the most mature high-level smart contract language. Ethereum is a hostile execution environment, where anonymous attackers exploit bugs for immediate financial gain. Developers have a very limited ability to patch deployed contracts. Hackers steal up to tens of millions of dollars from flawed contracts, a well-known example being "The DAO", broken in June 2016. Advice on secure Ethereum programming practices is spread out across blogs, papers, and tutorials. Many sources are outdated due to a rapid pace of development in this field. Automated vulnerability detection tools, which help detect potentially problematic language constructs, are still underdeveloped in this area.
Blockchain-based decentralized cryptocurrency platforms are currently one of the hottest topics in technology. Although most of the interest is generated by cryptocurrency related activities, it is becoming apparent that a much wider spectrum of applications can leverage the blockchain technology. The primary concepts enabling such general use of the blockchain are the so-called smart contracts, which are special programs that run on the blockchain. One of the most popular blockchain platforms that supports smart contracts is Ethereum. As smart contracts typically handle money, ensuring their low number of faults and vulnerabilities are essential. To aid smart contract developers and help to mature the technology, we need analysis tools and studies for smart contracts. As an initiative for this, we propose the adoption of some well-known OO metrics for Solidity smart contracts. Furthermore, we analyze more than 40 thousand Solidity source files with our prototype tool. The results suggest that smart contract programs are short, neither overly complex nor coupled too much, do not rely heavily on inheritance, and either quite well-commented or not commented at all. Moreover, smart contracts could benefit from an external library and dependency management mechanism, as more than 85% of the defined libraries in Solidity files code the same functionalities.
Santiago Bragagnolo, Henrique Rocha, Marcus Denker, Sté́phane Ducasse
Blockchains store a massive amount of heterogeneous data which will only grow in time. When searching for data on the Ethereum platform, one is required to either access the records (blocks) directly by using a unique identifier, or sequentially search several records to find the desired information. Therefore, we propose the Ethereum Query Language (EQL), a query language that allows users to retrieve information from the blockchain by writing SQL-like queries. The queries provide a rich syntax to specify data elements to search information scattered through several records. We claim that EQL makes it easier to search, acquire, format, and present information from the blockchain.
Grigory O. Krylov, A. Yu. Lisitsyn, Leonid I. Polyakov
The article provides a comparative analysis of the volatility of the leading national fiat currencies and their transnational anonymous analogues, which received the slang name “cryptocurrency”.Volatility is the most important financial indicator in the management of financial flows, as a measure of the risk of using a financial instrument at a specified period of time. Cryptocurrency mining technology is available to the general public and has become an innovative phenomenon. The latest fi phenomena need to be investigated, so it is necessary to conduct a multilateral scientific analysis, identification and comparison of cryptocurrency with fi currency. The aim of this study is to obtain new estimates of cryptocurrency based on the use of tools such as GARCH-model, simple historical volatility (SHV) and developed by the author’s toolkit, which is based on the Chaikin method. The methodological basis of the research is logical, econometric, economic and statistical methods of analysis, technical and fundamental analysis, and method of scientific visualization. The calculated volatility estimates are based on the Central Bank’s data on currency rates and investigated using named three models. The article for the first time presents the results of comparison of volatility of the leading fiat currencies (uS dollar, euro, Chinese yuan and Japanese yen) and the most popular today so-called cryptocurrencies (bicoin, litecoin, ethereum, and monero). Estimation of volatility showed that the volatility of bitcoin is significantly higher than fiat money. In this regard, it is concluded that the recognition of cryptocurrency, in particular bitcoin, as a real money is premature, not only due to the lack of regulations of a certain cryptocurrency as a legal tender, but also on the grounds of violation of essential requirements for the properties of the currency, such as a low level of volatility.
The efficiency of decentralized book systems like Bitcoin and Ethereum has always been a challenge. It is usually measured by three major factors: scalability, throughput, and latency. Scalability refers to how the system capacity is increased by adding more physical resources. Throughput measures the volume of transactions for a given period of time, where most current solutions attempt to improve such as NEO, EOS, etc. Latency measures the processing time of any single transaction. In current blockchain based systems, the block generation rate is the main latency bottleneck. Off-chain processes such as state channels are the most recent work that can integrate partial inbound transactions, reducing latency. Unfortunately, the state channel introduces more issues at the same time, such as cross-channel synchronization, which makes the state channel unavailable for full adoption of current blockchain solutions. In order to solve the efficiency problem, we proposed an end-to-end solution called ALZA, which links the dedicated high-throughput blockchain with self-organizing payment fields. This mechanism allows arbitrary set of users to create payment fields that process extremely low latency transactions within each field. Therefore, users can make transactions almost immediately. Since all transactions are conducted within fields, transaction costs will be reduced by several orders of magnitude. In addition, ALZA distributes main ledger to each client through an innovative replication mechanism. Therefore, the system will be significantly more robust to blockchain system failures. In theory, ALZA can complete millions of transactions in one second, which naturally supports high-frequency trading.
James Tapsell, Raja Naeem Akram, Konstantinos Markantonakis
Bitcoin is a decentralised digital currency that relies on cryptography rather than trusted third parties such as central banks for its security. Underpinning the operation of the currency is a peer-to-peer (P2P) network that facilitates the execution of transactions by end users, as well as the transaction confirmation process known as bitcoin mining. The security of this P2P network is vital for the currency to function and subversion of the underlying network can lead to attacks on bitcoin users including theft of bitcoins, manipulation of the mining process and denial of service (DoS). As part of this paper the network protocol and bitcoin core software are analysed, with three bitcoin message exchanges (the connection handshake, GETHEADERS/HEADERS and MEMPOOL/INV) found to be potentially vulnerable to spoofing and use in distributed denial of service (DDoS) attacks. Possible solutions to the identified weaknesses and vulnerabilities are evaluated, such as the introduction of random nonces into network messages exchanges.
Freya Sheer Hardwick, Apostolos Gioulis, Raja Naeem Akram, Konstantinos Markantonakis
Technology has positive impacts on many aspects of our social life. Designing a 24hour globally connected architecture enables ease of access to a variety of resources and services. Furthermore, technology like Internet has been a fertile ground for innovation and creativity. One of such disruptive innovation is blockchain -- a keystone of cryptocurrencies. The blockchain technology is presented as a game changer for many of the existing and emerging technologies/services. With its immutability property and decentralised architecture, it is taking centre stage in many services as an equalisation factor to the current parity between consumers and large corporations/governments. One of such potential applications of the blockchain is in e-voting schemes. The objective of such a scheme would be to provide a decentralised architecture to run and support a voting scheme that is open, fair and independently verifiable. In this paper, we propose potentially a new e-voting protocol that utilises the blockchain as a transparent ballot box. The protocol has been designed with adhering to the fundamental e-voting properties in mind as well as offering a degree of decentralisation and allowing for the voter to change/update their vote (within the permissible voting period). The paper highlights the pros and cons of using blockchain for such a proposal from practical point view in both development/deployment and usage contexts. Concluding the paper with a potential roadmap for blockchain technology to be able to support complex applications.
The Banking Union is a framework composed of “Single Supervisory Mechanism （SSM）”, “Single Resolution Mechanism （SRM）” and “Deposit Guarantee Scheme （DGS）” and aims at strengthening regulation, observation and governance in the European financial sector. In the case that a bank goes into bankruptcy, it will be saved, without using public finance, between stockholders and creditors under the framework of banking union. Moreover, European Union （EU） integrates the responsibility of observation into the European Central Bank （ECB） and expects that ECB will be able to timely intervene banking system in member countries so that it can stop spreading financial crisis. On the other hand, European financial system is diversified and regional oriented in nature, reflecting its history, culture and policies. For example, in Germany, Landesbank/Sparkasse system, which is like a public bank owned by local government, and cooperative banks, which have close relationship with local businesses, has a larger share and influence. In France, large financial institutions such as Credit Agricole, BPCE group and Credit Mutuele, which are owned partly by public entity, make it possible to be both commercialization and localization at the same time by owning numerous small local banks under their umbrellas. In the Netherlands and Finland, which are economically successful in Euro zone, cooperative banks such as RaboBank and OP Group have also larger share and could keep sound banking even during European debt crisis. However, In Spain and Italy, which owns about 1/3 of bad loans in whole Euro zone, cooperative and saving banks also have larger share in their financial systems but it is criticized that its governance is one of major reasons causing financial crisis. Purpose of this paper is to overview how de-centralized financial system like saving banks and cooperative banks, which have larger influence in European countries, are overcoming the financial crisis in major European countries and to analyze and discuss effectiveness of both banking union and stability of regional financial system, emphasizing its importance as a stabilizer of money circulation in regional economy. This paper also tries to show the soundness of regional financial system during European debt crisis with recent business performance of cooperative banks which have decentralized financial structure and to complement precedent papers by indicating that characteristic of financial structure have some relationships with degree of financial crisis through comparing the characteristics of four major Euro countries such as Germany, France, Spain and Italy. （395 words）
Fei–Yue Wang, Yong Yuan, Chunming Rong, Jun Jason Zhang
Time flies fast, it has been already one year since I was appointed as the Editor-in-Chief of this great publication, and thanks to the strong support and dedication of our associate editors, editorial staff, anonymous reviewers, and authors, we have made solid progress and I really enjoy my work and our achievement so far. At this point, significant improvements in the timeliness and quality of the review process, as well as the numbers of manuscripts submitted and articles published have been accomplished.
This paper describes the proof of concept of a blockchain based organization of a local low voltage energy community. The focus of the concept is efficient use of shared resources to minimize external dependence, and not energy trading. A previously proposed control algorithm, which exploits the power dependency of the efficiency of electrical energy storages, is implemented as a smart contract on a private instance of an Ethereum blockchain to coordinate the operation. It is implemented using four connected Raspberry Pis representing the participating households with pre-given electrical load and photovoltaic conversion as well as a battery. Each household runs an Ethereum full node and an interfacing software. Only the energy technology components are simulated, while the blockchain is actually running on the Raspberry Pis in order to mind the full complexity of the technology. The practicability is proved in a test run and positive effects on the efficiency and the self-sufficiency within the community are observed. A first cost-benefit estimate is given and a further research agenda is presented.
Optimization methods are used to determine equilibria of investment in cryptocurrencies. The basic assumptions involve existence of a core group (the "wealthy") that fears the loss of substantial assets through government seizure. Speculators constitute another group that tends to introduce volatility and risk for the wealthy. The wealthy must divide their assets between the home currency and the cryptocurrency, while the government decides on the probability of seizing a fraction the assets of this group. Under the assumption that each group exhibits risk aversion through a utility function, we establish the existence and uniqueness of Nash equilibrium. Also examined is the more realistic optimization problem in which the government policy cannot be reversed, while the wealthy can adjust their allocation in reaction to the government's designation of probability. The methodology leads to an understanding the equilibrium market capitalization of cryptocurrencies.
Stake systems which issue stakes as well as coins are proposed. Two subadditive stake systems are studied: one is the radical stake system, the other is the logarithmic stake system. Securities of both systems are analysed.
A proof of balance plus transaction fees block-chain cash system as well as a proof of logarithmic stake block-chain system are proposed. Securities of both systems are analysed.
Stake systems which issue stakes as well as coins are proposed. Two subadditive stake systems are studied: one is the radical stake system, the other is the logarithmic stake system. Securities of both systems are analysed.
This paper addresses a secure caching scheme for information-centric network (ICN)-based wireless sensor networks (WSNs). In order to achieve the above mechanism, we utilize both the public-key cryptography technique and the blockchain technique, which enable data to be safely gathered and the decentralized and crossverified sensing data to be copied and stored. In addition, we propose a protocol design for introducing the proposed structure into an ICN-based WSN system. Furthermore, we formulate statistical models and demonstrate numerical results by performing computer simulations and hardware-based experiments.
We propose to use the terms Verfügungsmacht (power to dispose, analogous to possession) and Verfügungsrecht (right to dispose, analogous to ownership) to discern whom a Bitcoin belongs to in case of a bankruptcy. Using the example of Tezos, we demonstrate that the storage location of private keys alone does not suffice to meaningfully answer the question to whom the foundation's assets belong. Instead, the context and the contractual arrangement, from which the right to these assets can be derived, also need to be taken into account. This view provides a legal basis for the storage of Bitcoins on behalf of a client without taking them onto one's balance sheet, ensuring that the client's assets are not included in the bankruptcy estate. Furthermore, we classify the Internet currency Bitcoin as a rival, fictive, intangible asset sui generis and opine that there is a gap in the law regarding Aussonderung (removing an asset from the bankruptcy estate and returning it to the rightful owner) and Admassierung (adding an asset to the bankruptcy estate from a third party) of Bitcoins. Courts and bankruptcy administrators are encouraged to fill this gap in accordance with article 1 of the Swiss Civil Code when faced with Bitcoins in a bankruptcy case.
In the Internet of Things (IoT) vision, conventional devices become smart and autonomous. This vision is turning into a reality thanks to advances in technology, but there are still challenges to address, particularly in the security domain e.g., data reliability. Taking into account the predicted evolution of the IoT in the coming years, it is necessary to provide confidence in this huge incoming information source. Blockchain has emerged as a key technology that will transform the way in which we share information. Building trust in distributed environments without the need for authorities is a technological advance that has the potential to change many industries, the IoT among them. Disruptive technologies such as big data and cloud computing have been leveraged by IoT to overcome its limitations since its conception, and we think blockchain will be one of the next ones. This paper focuses on this relationship, investigates challenges in blockchain IoT applications, and surveys the most relevant work in order to analyze how blockchain could potentially improve the IoT.