We examine the predictions of the resale option hypothesis (Scheinkman and Xiong, 2003) in cryptocurrency markets. The resale option hypothesis yields testable implications on the relationship between the level and volatility of mispricing, and the degree of heterogeneous beliefs. Using turnover as a proxy for heterogeneity, we find evidence supporting the resale option hypothesis. These findings are persistent across various types of cryptocurrencies, and support the notion that cryptocurrencies trade above intrinsic value. Futhermore, we conduct two backtests to show that portfolios with higher turnover or resale option characteristics underperform portfolios with lower turnover or resale option characteristics. This supports the theory that disagreement is negatively related to future returns for positive biased assets (see Atmaz and Basak, 2018).
From positions, attained by modern theoretical physics in understanding of the universe bases, the methodological and philosophical analysis of fundamental physical concepts and their formal and informal connections with the real economic measuring is carried out. Procedures for heterogeneous economic time determination, normalized economic coordinates and economic mass are offered, based on the analysis of time series, the concept of economic Plank's constant has been proposed. The theory has been approved on the real economic dynamic's time series, related to the cryptocurrencies market, the achieved results are open for discussion. Then, combined the empirical cross-correlation matrix with the random matrix theory, we mainly examine the statistical properties of cross-correlation coefficient, the evolution of average correlation coefficient, the distribution of eigenvalues and corresponding eigenvectors of the global cryptocurrency market using the daily returns of 15 cryptocurrencies price time series across the world from 2016 to 2018. The result indicated that the largest eigenvalue reflects a collective effect of the whole market, practically coincides with the dynamics of the mean value of the correlation coefficient and very sensitive to the crisis phenomena. It is shown that both the introduced economic mass and the largest eigenvalue of the matrix of correlations can serve as quantum indicator-predictors of crises in the market of cryptocurrencies.
Proof Of Work Blockchains such as Bitcoin and Ethereum exhibit a low Transaction Per Second (TPS) that impacts the scalability of the blockchain. Manipulating the block creation time can yield a higher TPS. A lower block creation rate results in a higher Stale Block rate that has a direct impact on the security of blockchain. We intend on using a novel Proof of Work Classification model under a varying level of difficulty to classify an instance of blockchain with a threshold (Block-time) on the basis of it’s resilience to selfish mining and double-spending attacks. Use of an ideal block creation time can help Proof of Work blockchains scale and attain a higher TPS without trading off security. The classification model can further be extended to find an optimal block-size.
Με τις πρόσφατες εξελίξεις στις τεχνολογίες της πληροφορίας και της επικοινωνίας και την διαδεδομένη δημοτικότητα των κινητών τηλεφώνων (π.χ. συσκευών Android και iOS), οι ψηφιακές πληρωμές και τα κρυπτονομίσματα όπως το Bitcoin, το Litecoin, το Ethereum και άλλα, γίνονται ολοένα και πιο δημοφιλή στο ηλεκτρονικό εμπόριο. \nΟι εγκληματίες - συχνά πρωτοπόροι των νέων τεχνολογιών - εκτίμησαν γρήγορα ότι το Bitcoin ως πρωτοπόρο, αλλά και τα λοιπά κρυπτονομίσματα στη συνέχεια, έχουν μοναδικές ιδιότητες που θα μπορούσαν ενδεχομένως να εξυπηρετήσουν το ενδιαφέρον τους για αποφυγή της επιβολής του νόμου. \nΤο Bitcoin εισάγει μια σειρά προκλήσεων στις ψηφιακές έρευνες που οφείλονται κυρίως στα στοιχεία της ψευδωνυμίας που παρέχει σε ένα χρήστη και το αποκεντρωμένο δίκτυο μέσα στο οποίο λειτουργεί, όπου με τη χρήση του μπορεί να μεταφερθεί χωρίς μεσάζοντες ακόμη και σε διεθνή σύνορα τόσο εύκολα όσο και η αποστολή ενός μηνύματος ηλεκτρονικού ταχυδρομείου. \nΑυτά τα χαρακτηριστικά το έχουν καταστήσει ελκυστικό μέσο ανταλλαγής για όσους ασχολούνται με εγκληματικές δραστηριότητες στο διαδίκτυο. Κατά το παρελθόν έχει χρησιμοποιηθεί για τη νομιμοποίηση εσόδων από παράνομες δραστηριότητες και για φοροαποφυγή, ενώ έχει χρησιμοποιηθεί εκτεταμένα για την αγορά παράνομων προϊόντων, αγαθών και υπηρεσιών μέσω διαδικτυακών αγορών, όπως το Silk Road στο Dark Web. \nΧρησιμοποιήθηκε και χρησιμοποιείται επιπλέον από επίδοξους χάκερ ως τρόπος πληρωμής για επιθέσεις ransomware που έχουν σημειώσει τεράστια ανάπτυξη κατά τη διάρκεια των τελευταίων χρόνων από την δημιουργία του. \nΠαρά το γεγονός ότι το Bitcoin αλλά και τα άλλα εικονικά νομίσματα (κρυπτονομίσματα) αποτελούν πηγή αποδεικτικών στοιχείων, έχει υπάρξει περιορισμένη έρευνα στην εγκληματολογική εξέταση τους. Η υπάρχουσα εγκληματολογική έρευνα σχετικά με το Bitcoin επικεντρώνεται κυρίως στο Blockchain (το καθολικό ledger στο οποίο καταγράφονται οι συναλλαγές) και όχι στο Bitcoin, ως λογισμικό του χρήστη (π.χ. την εφαρμογή πορτοφολιού για κινητά τηλέφωνα) προκειμένου να βρεθούν και να ανακτηθούν δεδομένα σχετικά με τις συναλλαγές που έχει πραγματοποιήσει ένας χρήστης χρησιμοποιώντας την συγκεκριμένη εφαρμογή ή και άλλα στοιχεία που σχετίζονται με την συμπεριφορά του χρήστη κατά την χρήση της εφαρμογής πορτοφολιού Bitcoin. Αυτό είναι το κενό που επιδιώκουμε να αντιμετωπίσουμε σε αυτή την εργασία.
Genomgår pengar en revolution? Ett mycket centralt ämne i ekonomi är pengar, pengar har genomgått många utvecklingar och därmed har även synen på pengar förändrats över tid. Vi har använt varor och råvaror som pengar. En bytesekonomi där snäckor, stenar och fjädrar ansågs vara värdefulla att handla med, för att sedan övergå till dyrbara metaller som guld och silver. Denna övergång utvecklades och vi fick våra första sedlar som tillverkade i Kina, därefter tillkom papperssedlar, kreditkort och digitala pengar. Nu har det uppkommit en ny typ av valuta på marknaden som kan innebära nästa steg i utvecklingen. Nämligen kryptovalutan, som är omfattande för alla digitaliserade valutor, men valutan kan också vara decentraliserad. Den virtuella valutan har många kritiker, men användningen av valutan fortsätter att expandera. Bitcoin är den första och mest använda kryptovalutan (Bitcoin, 2018). Syftet med denna studie är att genom intervjuer med fem Bitcoin investerare förstå vad som är värdeskapande och att dessutom förstå vilka fördelar och nackdelar den virtuella valutan Bitcoin har för sina investerare. Värdeskapande är subjektivt och sker i samband med att investerare interagerar med varandra. Investerare i Bitcoin menar att det som är värdeskapande är sex faktorer: lönsamhet, risk, tillit, överförbarhet och transparens, säkert och kontroll samt kontroverser.
With increasing popularity, the scalability of blockchain-based crypto-currencies becomes an urgent concern. Bitcoin, among other crypto-currencies, have known limitations in transaction throughput and speedbut no agreed upon solution. Many of the proposals increasing throughput also increase the load on the Bitcoin network. Lightning is a proposal enabling payments to be conducted without affecting the Bitcoin network. Lightning is a protocol using payment channels to enable instant and cheap payments using the blockchain for security. With Lightning, payments can be sent through a network of nodes connected by payment channels. In this thesis, the current state of Lightning is explored and an evaluation for use on Bitcoin exchanges is performed. The usability, privacy and security of Lightning are the topics evaluated. In order to evaluate the usability, an exchange interface application was built allowing deposits and withdrawals using Lightning. The protocol specification and relevant literature are examined in order to evaluate the security and privacy of Lightning. The exchange interface showed that Lightning can be integrated into an exchange and provide a fast and cheap way to deposit and withdraw money for clients. In this paper some integration designs are proposed and ways to improve the client user experience are discussed. The Lightning node implementations need to mature a bit before real usage and there are some security issues that also need to be considered. With monitoring and network analysis the privacy can be compromised.
Defending against distributed denial of service (DDoS) attacks in the Internet is a fundamental problem. One practical approach to addressing DDoS attacks is to redirect all destination (e.g., via DNS or BGP) to a third-party, DDoS protection-as-a-service provider (e.g., Cloudflare and Akamai), which is well provisioned and equipped with proprietary filtering mechanisms to remove attack traffic before passing the remaining traffic to the destination. Although such an approach is appealing, as it requires no modification to the existing Internet infrastructure and can scale to handle very large attacks, recent industrial interviews with more than 100 interviewees from over 10 industry segments reveal that this approach alone is not sufficient, especially for large organizations (e.g., Web hosting companies and government) that cannot afford to allow third-parity security-service providers to terminate their network connections. Instead, these organizations have to rely on their ISPs to filter attack traffic. In this paper, we discuss the challenges faced by the ISPs in order to disrupt the Internet security-service market and sketch our solutions, powered by smart contracts.
This article presents the analyze of the cryptocurrency market, the practice of state regulation of the cryptocurrency. During the market research of the cryptocurrency and the experience of its regulation, author identified certain similarities. First, each state strives to create a favorable climate for the development of new technologies (blockchain), seeing a great potential for using technology in the public and private sectors. Secondly, there is a rapid growth of the cryptocurrency market, and the state, not adapting the existing national legislation to the existing challenges of the digital economy, faces a lack of revenue to the budget, since the cryptocurrency is outside the legal jurisdiction. Third, today there are over a thousand different cryptocurrencies, accordingly, unified standards for their regulation should be developed.
Cryptocurrency is a relatively new form of investment. Its concept was first introduced in 2009, and has grown ever since. To this day, there are thousands of cryptocurrencies. Just as other currencies, cryptocurrency can be related to a crime. Ever since its introduction nearly a decade ago, there have been crimes where cryptocurrency are related. According to ACIC’s crime types, cryptocurrency are related to two crime categories: cybercrime, and illicit drugs. There are also other cases where the type of crimes is not listed as a part of ACIC’s. In response to the crimes that have occurred throughout the years, several governments have moved to establish laws regarding cryptocurrency. Some governments chose to ban cryptocurrency completely, whereas others opted for regulation.
Since the current cryptocurrencies has failed to reach the level of normality of standard fiat currencies and banking systems there exist a need for a new cryptocurrency if this shall ever be the case. This project will be a part of creating and designing such a cryptocurrency that hope to compete with the fiat currencies of our time. This with the following research question: In the examined network, would increasing the reward received by the participants who successfully validate a transaction result in faster validation time and thereby faster transactions? This question is examined with basis in game theory and simplified simulations to be able to draw conclusions about how the network behaves. Conclusions such as when the participants increases the system speed decreases or that when the money in the system increases there exist an incentive for the participants to work faster. Possible Nash equilibriums are also examined to guide the participants when deciding strategies. Since the purpose of this project is to create a cryptocurrency that can compete with fiat currencies a short comparison between cryptocurrencies and fiat currencies are discussed.
Bitcoin, first introduced in 2008, and other virtual currencies (litecoin, ripple, ethereum, dash, etc. – known as “altcoins”) are a phenomenon of the 21st century. When speaking about bitcoins, views on cryptocurrency-related risks and benefits vary significantly. However, in this article, we will not focus on bitcoin here to illustrate how virtual currencies work. The aim of this article is to show how the borrowed Anglicism bitcoin is used in the Czech and the French languages. The purpose of the theoretical framework is to clarify concepts of neologism, Anglicism and internationalism and propose relationships among the concepts in a study. In the practical section, using the word bitcoin, we show how the loanword is used in both languages and how its integration into the language is similar. The main result of the analysis is a list of derived and compound words from the word bitcoin in Czech and French. The article deals with derived and compound words from the point of view of their quantitative evaluation using Aranea web corpora. In this article, we have shown the possibilities of their derivatives and adaptation to the given system of the language.
Vincenzo Ferrari, João Pedro Quintais, Αλεξάνδρα Γιαννοπούλου, Balázs Bodó
The EU Blockchain Observatory and Forum (an initiative led by DG CONNECT) organized the “Workshop on GDPR, data policy and compliance” event in June 2018 to discuss data protection issues as well as privacy-enhancing features of blockchain technologies. The meeting gathered stakeholders and experts to examine the main challenges and opportunities of distributed ledger technologies (DLTs), so supporting the European Commission’s efforts to provide practical guidelines for the industry. Ms. Valeria Ferrari, of the Blockchain & Society Policy Research Lab participated in the workshop, and compiled this report.
This paper proposes optimization mechanisms for a multi – layered IoT network model, backed up by Blockchain Technology. This paper focuses on optimizing the computational load such that the model can meet the feasible conditions for deployment purpose. Though, dividing the IoT network into multiple layers reduces the computational load at each stage, the load split isn’t quite proportional to the amount of work done at each level. Flexibility to monitor computational load at each level and distribute the workload has been introduced at each level.
Bitcoin, but there are other serious players in the game such as Ethereum, NEO, and Ripple, to name just a few. 2 Cryptocurrencies extend beyond the pre-established limits, and thus do not fit easily into the existing paradigm. 3 In fact, their scope is so vast, it is almost impossible to predict their future impact. 4 It is a bit like attempting to estimate the possible size and magnitude of an unknown type of fully mature tree from its tiny infant seed.*So, perhaps we should not limit our imaginations too much with rapidly redundant frameworks and limiting definitions.*The objective of this article is to widen and expose the field of interpretations and understanding of cryptocurrencies while providing some stimulating, inspirational thoughts regarding the unprecedented opportunities and dilemmas cryptocurrencies face.*This mini-thesis has been written almost like a stream of thought, rather than a concisely researched document.*This is because it does not attempt to meet all the criteria of empirically proven research.*As such, some of its statements are unproven, unquantifiable, and unquoted.*Currently, complete examination is impossible because cryptocurrency, and the blockchain technology supporting it behind the scenes, is a rapidly evolving organic phenomenon-it is swirling, moving, and adapting. 5 At this stage, it is impossible to predict accurately what will global simulations.He is a regular contributor to the World Bank doing business reports from 2015 through 2018.
The topic of cryptocurrencies has been on the forefront of investors’ minds as they have seen ridiculous returns from the volatile swings in price. Its value highly debated because the asset is not backed by a hard asset. If we look back at the beginning of our country, we see how each state had its own currency and the difficulties that users faced around who would accept that as legal tender. The birth of a federal currency was accepted because it served as a medium of exchange and was backed by gold through the U.S. government. The final evolution of the U.S. dollar was moving away from the gold standard to a fiat currency backed only by the confidence in the U.S. government’s word. Today, we live in a globalized world where there is significant communication between countries around the globe that it seems that we have almost come to the same crossing point that our country saw when it first adopted a federal currency. For cryptocurrencies to be adopted as the standard around the world, we must first discuss why they would carry the same value as the current federal currencies that are already set in place and why there may be a shift. The paper will be investigating the reasons that cryptocurrencies may gain popularity first as a flight to quality asset before a widespread adoption throughout business and individuals. This carries great importance as the adoption of cryptocurrencies would mark a new era of untested, autonomous free markets around the globe. We will look at current debt levels, different asset class correlations, perceived stable currencies, and if cryptocurrencies can act as an alternative asset. The current idea of flight to quality assets is moving away from more risky assets like equities or unstable currencies to fixed income or stable currencies like the USD but what if investors lose faith in some of the U.S. denominated assets?
This paper considers the design, the developed and the experimental evaluation, a blockchain based smart contract specifying the operating rules of a real time, uniform-price double auction energy market. Producers and consumers interact with this contract sending their offers and bids accordingly and the contract clears the market based on a double auction model. We propose four different approaches for implementing, through the Ethereum platform, both the P2P network as well as the smart contract. We systematically compare the above approaches on the basis of their decentralization nature, operating costs, computational costs, effectiveness, security, privacy and beyond. This comparison is achieved through large scale, real time simulations based on the GridLAB-D platform.
Bitcoin is a digital currency raised by Satosghi Nakamoto, which is Completely decentralized, Highly anonymous, cross-border. Nowadays it has became one of the most widely used currency. Recently, as the used capacity has approached the capacity limitation of each block, the time needed to confirm a transaction increase dramatically. As a result, bitcoin cannot satisfy the need of a large number of bitcoin transactions. This paper aims to apply merged mining technology to bitcoin blockchain scaling, which builds another blockchain called auxiliary blockchain based on bitcoin blockchain and stores some of small rapid transactions in auxiliary blockchain. This paper also proves the merged mining technology can concentrate computing power and design a special miner reward program.
This thesis introduces blockchain, the underlying technology of cryptocurrencies such as Bitcoin, and discusses how best to conceptualize it relative to other technologies. Following an explanation of the fundamentals of blockchain, also known as the distributed ledger, I identify the characteristics of the technology. Building upon blockchain’s inherent strengths and limitations, I explore potential business applications of blockchain. Finally, I recommend that leaders continue to track the development and adoption of blockchain technology, even if they decide that implementing it does not align with their organization’s strategy at present.