The article focuses on the advantages of distributed ledger technology in view to apply it within existing financial system. The article is highly relevant as the technology is a perfect opportunity to develop the financial system in terms of reducing costs and improving efficiency. The authors suggest a few brief definitions of such terms as distributed ledger, block-chain, bitcoin and mining. The article points out and describes special features of distributed ledger technology. Based on the definitions, the article outlines operation principles of the distributed ledger, block-chain, bitcoin and mining. Also, it compares cash against cryptocurrency - bitcoin. The article examines the possibilities of using distributed ledger technology in clearing, payment and settlement processes including ways of money transfer, payments for goods, securities and derivative financial instruments. Also, the article provides statistical data on the use of cryptocurrencies considering the cases of their capitalization, price, money supply and numbers of transactions submitted within 24 hours, 7 and 30 days. The article emphasizes the increase in volume of such transactions in the US, China, Ukraine and at the same time points to the decline in this type of transactions in Russia. In addition to statistical data, the article provides information on the types of distributed ledger systems along with comparison between different types of systems. The article describes processes of transferring money, as well as transactions with goods, securities and derivative financial instruments in modern infrastructure environment. For illustrative purposes, the authors outline how the process would proceed if distributed registry technology was implemented. The authors conclude that advantages of distributed ledger technology overweight its shortages if one takes into account operational, technical, financial and legal aspects. Application of distributed ledger technology would increase efficiency of payments, clearing and settlement, and in the long term, distributed ledger technology could eliminate most shortages of the system existing nowadays on the financial market.
Jeffrey Chu, Stephen Chan, Saralees Nadarajah, Joerg Osterrieder
With the exception of Bitcoin, there appears to be little or no literature on GARCH modelling of cryptocurrencies. This paper provides the first GARCH modelling of the seven most popular cryptocurrencies. Twelve GARCH models are fitted to each cryptocurrency, and their fits are assessed in terms of five criteria. Conclusions are drawn on the best fitting models, forecasts and acceptability of value at risk estimates.
Blockchain is an emergent technology concept that enables the decentralized and immutable storage of verified data. Over the last few years, it has increasingly attracted the attention of different industries. Especially in Fintech, Blockchain is hyped as the silver bullet that might overthrow today’s payment handling. Slowly, the logistics and supply chain management community realizes how profoundly Blockchain could affect their industry. To shed light on this emerging field, we conducted an online survey and asked logistics professionals for their opinion on use case exemplars, barriers, facilitators, and the general prospects of Blockchain in logistics and supply chain management. We found most of our participants are fairly positive about this new technology and the benefits it offers. However, factors like the hierarchical level, Blockchain experiences, and the industry sector have a significant impact on the participants’ evaluation. We reason that the benefits over existing IT solutions must be carved out more carefully and use cases must be further explored to get a rather conservative industry, like logistics, more excited about Blockchain.
In this paper, we consider the activities of hacker's social movement through the history of hacker culture and philosophy in modern times. Some social movements of contemporary hackers are called hactivism, but if hactivism aims for social reform, people’s support needs to be acquired it. Therefore, this paper considers the principle of winning the trust of citizens from the viewpoint of “justness and legitimacy” according to the theory of Giddens and Max Weber. Futhermore, through consideration of Wikileaks and bitcoin, we point out that there are many problems in hactivism.
A BlockChain is an open record of all digital money exchanges that have ever been executed. It is constantly growing as ‘completed’ blocks are added to it with a new set of recordings. The blocks are added to the blockchain in a linear, chronological order. Each PC associated with the Bitcoin systematize a customer that plays out the task of approving and handing-off exchanges gets a duplicate of the blockchain, which gets downloaded naturally after joining the Bitcoin arrange. The blockchain has finish data about the addresses and their adjusts ideal from the beginning piece to the most as of late finished square. Transactions between individuals have always been a part and parcel of human society for the division of labour made people interdependent. The medium of transaction has also been evolving along with the evolution of society and human consciousness from barter system to commodity money to fiat currency and now to digital currency or cryptocurrency. But as the evolution is a form of error correction, the problem of double spending in digital currency was solved by a distributed ledger system called BlockChain. Since 2008 onwards the blockchain technology has been separated from Bitcoins to be injected to many other problems related especially to banking transactions. Blockchain innovation empowers the production of decentralized monetary forms, savvy contracts and clever resources that can be controlled over the Internet.
Wireless sensor network (WSN) have become a prominent solution for various interesting applications like security surveillance and monitoring of geographical areas. Various types of sensors are used and deployed in the network to collect useful physical parameters and some highly sensitive information is then been transmitted between the nodes and to the base station, without any human intervention. Hence, message authenticity and security are major requirements in WSN. Since the cryptographic schemes used for wired networks tend to exhaust wireless sensor network resources, they cannot be directly used in sensor networks. In this, the zero knowledge protocol (ZKP) is investigated that it is an under applied authentication mechanism used to identify compromised nodes from genuine ones. Here the Zero Knowledge Protocol (ZKP) is implemented in the network for the authentication and verification of sender sensor nodes before transmitting any sensitive information. The proposed scheme addresses the improvement in the security while maintaining the message confidentiality. In proposed scheme an optimal number of challenge questions are also used to maintain a balance between the added security and the increase in cost. Increase in the number of challenge question makes up to the reduced key size thus providing an improved security. The proposed scheme was assessed based on the mat lab simulation and an analysis was performed.
Este artigo concentra-se principalmente na análise do nível de segurança associado às transações do sistema Bitcoin. Para isso, é inicialmente apresentada uma explicação detalhada de cada atividade que integra a execução de uma transação no sistema. Em seguida, através de modelagem matemática, são realizados experimentos para avaliar o nível de segurança de uma transação. Os resultados finais permitem conjecturar sobre a significativa robustez tecnológica do sistema Bitcoin. Por último, sugestões para futuras pesquisas, dentro deste tema de pesquisa, estão incluídas no final deste documento.
The recent growth of financial technology ventures involves several types of financial players, including stock exchanges. Many of them are exploring blockchain applications to their multiple business lines, focusing in particular on post trading activities. Potential benefits include the reduction in counterparty risk and post trading costs as well as the increase of liquidity and transparency. At current stage exchanges are mainly exploring the technology looking for proofs of concept, with the exception of some more advanced projects like at Nasdaq and ASX. The mass adoption will require longer efforts and is expected to come in a decade, at least. Fintech developments are receiving strong attention also by regulators and international organizations, given the potential of distributed ledger technology for both competition enhancement and cyber risk reduction. A coordination between market players and regulators is essential to guarantee the effective implementation of new technologies, as their benefits can be delivered only in presence of a common framework and a proper management of risks.
Elżbieta Jantoń-Drozdowska, Alicja Mikołajewicz-Woźniak
Research background: The year 2016 ended the period of the migration from national payment services to the SEPA instruments. At the same time, however, it has become apparent that some problems remained unresolved. Overcoming them requires finding suitable technological solutions. The potential of the distributed ledger technology (DLT) is currently being explored by the financial sector and its implementation may affect the SEPA schemes in a variety of dimensions. Purpose of the article: The aim of the article was to determine the potential impact that the DLT transfer to the banking sector may have on the functioning of the SEPA in the future. The paper presents SEPA?s assumptions and the current status of the project as well as the DTL?s concept. It describes the technology transfer implications for the banking industry and compares the SEPA schemes currently operating with those based on the DLT. It also indicates the opportunities and threats that are the consequence of the new technology implementation and examines their significance for the SEPA. Methods: In the article, a qualitative analysis is supplemented with a quantitative one. Elements of descriptive statistics have been used to characterize the functioning of the main pillars of the SEPA schemes. The final conclusions are based on the comparative analysis of the SEPA schemes and developed DLT applications. Findings & value added: The existing problems might be solved by supplementing the SEPA payment schemes currently operating with the applications based on the DLT. The systems that will be subsequently developed will provide the required real-time processing and a global reach. They will also extend the functionalities of the SEPA schemes with the ability to transfer other currencies. The implementation of this technology will result not only in new financial products but, first of all, in creating new business models. Consequently, we may expect a modification of the currently operating SEPA schemes, based on their supplementation rather than total replacement in a short time frame.
We present a mechanism that puts users in the center of control and empowers them to dictate the access to their collections of data. Revisiting the fundamental mechanisms in security for providing protection, our solution uses capabilities, access lists, and access rights following well-understood formal notions for reasoning about access. This contribution presents a practical, correct, auditable, transparent, distributed, and decentralized mechanism that is well-matched to the current emerging environments including Internet of Things, smart city, precision medicine, and autonomous cars. It is based on well-tested principles and practices used in a distributed authorization, cryptocurrencies, and scalable computing.
Sustainable and inclusive growth in emerging Asian economies requires continued high levels of public sector investment in areas such as infrastructure, education, health, and social services. These responsibilities, especially with regard to infrastructure investment, need to be devolved increasingly to the regional government level. However, growth of sources of revenue and financing for local governments has not necessarily kept pace, forcing them, in some cases, to increase borrowing or cut spending below needed levels. This chapter reviews alternative models of the relationship between central and local governments, and provides an overview and assessment of different financing mechanisms for local governments, including tax revenues, central government transfers, bank loans, and bond issuance, with a focus on the context of emerging Asian economies. The chapter also reviews financing mechanisms for local governments and mechanisms for maintaining fiscal stability and sustainability at both the central and local government levels. Based upon the evidence on the decentralization process in Asia, it proposes some policy implications for improving central–local government relations and fiscal sustainability.
Numerous studies ranging from concept papers and reviews were conducted on the matter of blockchain and digital currencies. However, those two areas are not well researched due to its being a new area of research. Furthermore, the research on blockchain applications in the Islamic financial system precisely the potential of digital currency in providing a better alternative to current fiat money system which will be the scope of this article. The aim of revolves around exploring the potential and capability of introducing a digital currency that fulfills the Islamic law (Shari’ah) functions of money and provides a more stable currency than fiat money. The method used for analyzing this object includes a library research on related topics that helps understanding the functions of money and digital currencies and study of several cases that can assist in fulfilling the objectives of this paper in introducing an Islamic digital currency through detailed research of Islamic theory of money and civilization as well as the developments of blockchain, our findings point towards the ability of introducing a Shari’ah-compliant digital currency if all the issues on validity are addressed and resolved. However, the area of digital currencies and blockchain requires further research from a Shari’ah perspective to facilitate a better understanding on the topic.
Without much preparation, Indonesia, in 2000, at a stroke replaced the previous system of centralized government and development planning with a wide range of decentralization programs. The reforms gave greater authority, political power, and financial resources directly to regencies and municipalities, bypassing the provinces. The powers transferred include those of executing a wide range of responsibilities in the areas of health, primary and middle-level education, public works, environment, communication, transport, agriculture, manufacturing, and other economic sectors. At the same time, the government replaced the antiquated cash-based, single-entry system of public finance with a modern double-entry accounting system that uses a single treasury account; is performance based; and has transparent management of the public treasury, tight expenditure and financial controls with performance indicators, computerized reporting, and a tightly scheduled auditing system. On the positive side, unlike in many developing and transition countries, the decentralization program in Indonesia has not caused major political or economic problems. However, the decentralization program was ill prepared and not carried out in a logical order for two reasons. First, the capacity of subnational governments to produce public and private goods, increase productivity and employment, and promote economic growth in their jurisdictions, was not increased. Because of the long tradition of centralization, local government never built the capacity to carry out economic planning and undertake initiatives to promote local economic growth. Before the reform, the local governments had mainly functioned as implementing agencies of national policies and programs. Second, the number of good financial managers, as required by the new laws of public treasury and auditing, was also limited and needed to be trained. The rising revenues of local governments do not follow their increasing government functions to promote economic development that could potentially cause fiscal imbalances.
The recent expansion of the Internet of Things (IoT) and the consequent explosion in the volume of data produced by smart devices have led to the outsourcing of data to designated data centers. However, to manage these huge data stores, centralized data centers, such as cloud storage cannot afford auspicious way. There are many challenges that must be addressed in the traditional network architecture due to the rapid growth in the diversity and number of devices connected to the internet, which is not designed to provide high availability, real-time data delivery, scalability, security, resilience, and low latency. To address these issues, this paper proposes a novel blockchain-based distributed cloud architecture with a software defined networking (SDN) enable controller fog nodes at the edge of the network to meet the required design principles. The proposed model is a distributed cloud architecture based on blockchain technology, which provides low-cost, secure, and on-demand access to the most competitive computing infrastructures in an IoT network. By creating a distributed cloud infrastructure, the proposed model enables cost-effective high-performance computing. Furthermore, to bring computing resources to the edge of the IoT network and allow low latency access to large amounts of data in a secure manner, we provide a secure distributed fog node architecture that uses SDN and blockchain techniques. Fog nodes are distributed fog computing entities that allow the deployment of fog services, and are formed by multiple computing resources at the edge of the IoT network. We evaluated the performance of our proposed architecture and compared it with the existing models using various performance measures. The results of our evaluation show that performance is improved by reducing the induced delay, reducing the response time, increasing throughput, and the ability to detect real-time attacks in the IoT network with low performance overheads.
Blockchain technology has evolved from being an immutable ledger of transactions for cryptocurrencies to a programmable interactive the environment for building distributed reliable applications. Although, blockchain technology has been used to address various challenges, to our knowledge none of the previous work focused on using blockchain to develop a secure and immutable scientific data provenance management framework that automatically verifies the provenance records. In this work, we leverage blockchain as a platform to facilitate trustworthy data provenance collection, verification, and management. The developed system utilizes smart contracts and open provenance model (OPM) to record immutable data trails. We show that our proposed framework can efficiently and securely capture and validate provenance data, and prevent any malicious modification to the captured data as long as the majority of the participants are honest.
Abstract The tension between the right to family reunification as laid down in European Directives and Member States’ concern to protect their sovereignty in regulating migration has resulted in growing attention to and concern about fraudulent family relationships (especially marriages of convenience). This contribution addresses the question of what forms of control are permissible from a European law perspective and whether national practices are in conformity with European law and fundamental rights. Looking at these national practices several problems are identified: definitions of ‘marriages of convenience’ extending beyond what European law allows; systematic checks of certain nationalities/ethnic groups, mixed couples and/or gender may amount to discrimination and the burden of proof seems to be shifting to couples. Comparing control practices for marriages of convenience with those of homosexual asylum seekers, it is argued that human dignity is at stake.
Blockchain technology has evolved from being an immutable ledger of\ntransactions for cryptocurrencies to a programmable interactive the environment\nfor building distributed reliable applications. Although, blockchain technology\nhas been used to address various challenges, to our knowledge none of the\nprevious work focused on using blockchain to develop a secure and immutable\nscientific data provenance management framework that automatically verifies the\nprovenance records. In this work, we leverage blockchain as a platform to\nfacilitate trustworthy data provenance collection, verification, and\nmanagement. The developed system utilizes smart contracts and open provenance\nmodel (OPM) to record immutable data trails. We show that our proposed\nframework can efficiently and securely capture and validate provenance data,\nand prevent any malicious modification to the captured data as long as the\nmajority of the participants are honest.\n
Nuclear disarmament treaties are not sufficient in and of themselves to neutralize the existential threat of the nuclear weapons. Technologies are necessary for verifying the authenticity of the nuclear warheads undergoing dismantlement before counting them towards a treaty partner's obligation. This work presents a novel concept that leverages isotope-specific nuclear resonance phenomena to authenticate a warhead's fissile components by comparing them to a previously authenticated template. All information is encrypted in the physical domain in a manner that amounts to a physical zero-knowledge proof system. Using Monte Carlo simulations, the system is shown to reveal no isotopic or geometric information about the weapon, while readily detecting hoaxing attempts. This nuclear technique can dramatically increase the reach and trustworthiness of future nuclear disarmament treaties.
Áron Lászka, Abhishek Dubey, Michael Walker, Douglas C. Schmidt
Power grids are undergoing major changes due to rapid growth in renewable energy resources and improvements in battery technology. While these changes enhance sustainability and efficiency, they also create significant management challenges as the complexity of power systems increases. To tackle these challenges, decentralized Internet-of-Things (IoT) solutions are emerging, which arrange local communities into transactive microgrids. Within a transactive microgrid, "prosumers" (i.e., consumers with energy generation and storage capabilities) can trade energy with each other, thereby smoothing the load on the main grid using local supply. It is hard, however, to provide security, safety, and privacy in a decentralized and transactive energy system. On the one hand, prosumers' personal information must be protected from their trade partners and the system operator. On the other hand, the system must be protected from careless or malicious trading, which could destabilize the entire grid. This paper describes Privacy-preserving Energy Transactions (PETra), which is a secure and safe solution for transactive microgrids that enables consumers to trade energy without sacrificing their privacy. PETra builds on distributed ledgers, such as blockchains, and provides anonymity for communication, bidding, and trading.
Michael A. Walker, Abhishek Dubey, Aron Laszka, Douglas C. Schmidt
With the advent of blockchain-enabled IoT applications, there is an increased need for related software patterns, middleware concepts, and testing practices to ensure adequate quality and productivity. IoT and blockchain each provide different design goals, concepts, and practices that must be integrated, including the distributed actor model and fault tolerance from IoT and transactive information integrity over untrustworthy sources from blockchain. Both IoT and blockchain are emerging technologies and both lack codified patterns and practices for development of applications when combined. This paper describes PlaTIBART, which is a platform for transactive IoT blockchain applications with repeatable testing that combines the Actor pattern (which is a commonly used model of computation in IoT) together with a custom Domain Specific Language (DSL) and test network management tools. We show how PlaTIBART has been applied to develop, test, and analyze fault-tolerant IoT blockchain applications.
Karla Kvaternik, Aron Laszka, Michael Walker, Douglas Schmidt · 7 authors
Transactive energy systems (TES) are emerging as a transformative solution for the problems faced by distribution system operators due to an increase in the use of distributed energy resources and a rapid acceleration in renewable energy generation. These, on one hand, pose a decentralized power system controls problem, requiring strategic microgrid control to maintain stability for the community and for the utility. On the other hand, they require robust financial markets operating on distributed software platforms that preserve privacy. In this paper, we describe the implementation of a novel, blockchain-based transactive energy system. We outline the key requirements and motivation of this platform, describe the lessons learned, and provide a description of key architectural components of this system.
Transactive microgrids are emerging as a transformative solution for the\nproblems faced by distribution system operators due to an increase in the use\nof distributed energy resources and a rapid acceleration in renewable energy\ngeneration, such as wind and solar power. Distributed ledgers have recently\nfound widespread interest in this domain due to their ability to provide\ntransactional integrity across decentralized computing nodes. However, the\nexisting state of the art has not focused on the privacy preservation\nrequirement of these energy systems -- the transaction level data can provide\nmuch greater insights into a prosumer's behavior compared to smart meter data.\nThere are specific safety requirements in transactive microgrids to ensure the\nstability of the grid and to control the load. To fulfil these requirements,\nthe distribution system operator needs transaction information from the grid,\nwhich poses a further challenge to the privacy-goals. This problem is made\nworse by requirement for off-blockchain communication in these networks. In\nthis paper, we extend a recently developed trading workflow called PETra and\ndescribe our solution for communication and transactional anonymity.\n
We consider a problem we call StateIsomorphism: given two quantum states of n qubits, can one be obtained from the other by rearranging the qubit subsystems? Our main goal is to study the complexity of this problem, which is a natural quantum generalisation of the problem StringIsomorphism. We show that StateIsomorphism is at least as hard as GraphIsomorphism, and show that these problems have a similar structure by presenting evidence to suggest that StateIsomorphism is an intermediate problem for QCMA. In particular, we show that the complement of the problem, StateNonIsomorphism, has a two message quantum interactive proof system, and that this proof system can be made statistical zero-knowledge. We consider also StabilizerStateIsomorphism (SSI) and MixedStateIsomorphism (MSI), showing that the complement of SSI has a quantum interactive proof system that uses classical communication only, and that MSI is QSZK-hard.
Áron Lászka, Abhishek Dubey, Michael Walker, Douglas C. Schmidt
Power grids are undergoing major changes due to rapid growth in renewable\nenergy resources and improvements in battery technology. While these changes\nenhance sustainability and efficiency, they also create significant management\nchallenges as the complexity of power systems increases. To tackle these\nchallenges, decentralized Internet-of-Things (IoT) solutions are emerging,\nwhich arrange local communities into transactive microgrids. Within a\ntransactive microgrid, "prosumers" (i.e., consumers with energy generation and\nstorage capabilities) can trade energy with each other, thereby smoothing the\nload on the main grid using local supply. It is hard, however, to provide\nsecurity, safety, and privacy in a decentralized and transactive energy system.\nOn the one hand, prosumers' personal information must be protected from their\ntrade partners and the system operator. On the other hand, the system must be\nprotected from careless or malicious trading, which could destabilize the\nentire grid. This paper describes Privacy-preserving Energy Transactions\n(PETra), which is a secure and safe solution for transactive microgrids that\nenables consumers to trade energy without sacrificing their privacy. PETra\nbuilds on distributed ledgers, such as blockchains, and provides anonymity for\ncommunication, bidding, and trading.\n