Affordable and reliable supply chain visibility is becoming increasingly important as the complexity of the network underlying supply chains is becoming orders of magnitudes higher compared to a decade ago. Moreover, this increase in complexity is starting to reflect on the cost of goods and their availability to the consumers. Optimizing the physical distribution phase in supply chain by providing increased visibility to trading partners can directly reduce product cost. Current supply chain information systems often lack the ability to cost-effectively relay ground truth information in near real time to all stakeholders and most importantly to the supplier and the customer during the transport of the shipment. This thesis presents a solution that addresses this gap through a distributed architecture. The solution enables small, medium and large businesses to interact in a dynamic and shipment-centric manner through a private blockchain sub-ledger that digitizes the transfer of custody for each shipment. Information in this private ledger is augmented by a public event ledger that reflects the movement of the shipment in real time. Third party monitors are engaged in the validation of the geolocation of the shipments by posting their physical proximity in the form of events to the public ledger.
Aissam Outchakoucht, Hamza Es-Samaali, Jean Philippe
The Internet of Things (IoT) is now destroying the barriers between the real and digital worlds. However, one of the huge problems that can slow down the development of this global wave, or even stop it, concerns security and privacy requirements. The criticality of these latter comes especially from the fact that the smart objects may contain very intimate information or even may be responsible for protecting people’s lives. In this paper, the focus is on access control in the IoT context by proposing a dynamic and fully distributed security policy. Our proposal will be based, on one hand, on the concept of the blockchain to ensure the distributed aspect strongly recommended in the IoT; and on the other hand on machine learning algorithms, particularly on reinforcement learning category, in order to provide a dynamic, optimized and self-adjusted security policy.
Abstract Smart contracts on a blockchain behave exactly as specified by their code. To be sure that a smart contract behaves as expected, the end-user has to either analyze its code or trust a potentially anonymous developer or auditor to do so. This approach proposes a smart contract deployment and management platform that can execute development tools and code quality tools in a trusted way and uses this to reduce the trust required into the smart contract developer or auditor. Additionally, such a platform can provide new capabilities for developers aiding them in the creation of smart contracts.
The purpose of this Master's thesis is to explore blockchain technology and smart contracts as a way of building privacy-sensitive applications. The main focus is on a medication plan containing prescriptions, built on a blockchain system of smart contracts. This is an example use case, but the results can be transferred to other ones where sensitive data is being shared and a proof of validity or authentication is needed. First the problem is presented, why medication plans are in need of digitalisation and why blockchain technology is a fitting technology for implementing such an application. Then blockchain technology is explained, since it is a very new and relatively unfamiliar IT construct. Thereafter, a design is proposed for solving the problem. A system of smart contracts was built to prove how such an application can be built, and suggested guidelines for how a blockchain system should be designed to fulfil the requirements that were defined. Finally, a discussion is held regarding the applicability of different blockchain designs to the problem of privacy-handling applications.
Services known as Cryptocurrency “Tumblers” obfuscate the provenance, possession, and movement of cryptocurrencies through a process of “mixing” . While this speaks to the cryptoanarchist philosophical roots of cryptocurrencies, it poses various forms of risks, particularly those subsumed by the anti-money laundering (AML) category. This discussion paper examines that dichotomy, between cryptoanarchism and oversight, through the Tumbler lens, so as to consider the regulation, oversight, and legality of Tumblers themselves.
Bitcoin is a widely-spread payment instrument, but it is doubtful whether the proof-of-work (PoW) nature of the system is financially sustainable on the long term. To assess sustainability, we focus on the bitcoin miners as they play an important role in the proof-of-work consensus mechanism of bitcoin to create trust in the currency. Miners offer their services against a reward while recurring expenses. Our results show that bitcoin mining has become less profitable over time to the extent that profits seem to converge to zero. This is what economic theory predicts for a competitive market that has a single homogenous good. We analyze the actors involved in the bitcoin system as well as the value flows between these actors using the e3value methodology. The value flows are quantified using publicly available data about the bitcoin network. However, two important value flows for the miners, namely hardware investments and expenses for electricity power, are not available from public sources. Therefore, we contribute an approach to estimate the installed base of bitcoin hardware equipment over time. Using this estimate, we can calculate the expenses miner should have. At the end of our analysis period, the marginal profit of mining a bitcoin becomes negative, i.e., to a loss for the miners. This loss is caused by the consensus mechanism of the bitcoin protocol, which requires a substantial investment in hardware and significant recurring daily expenses for energy. Therefore, a sustainable crypto currency needs higher payments for miners or more energy efficient algorithms to achieve consensus in a network about the truth of the distributed ledger.
Much significant research has been done to investigate various facets of the link between Bitcoin price and its fundamental sources. This study goes beyond by looking into least to most influential factors-across the fundamental, macroeconomic, financial, speculative and technical determinants as well as the 2016 events-which drove the value of Bitcoin in times of economic and geopolitical chaos. We use a Bayesian quantile regression to inspect how the structure of dependence of Bitcoin price and its determinants varies across the entire conditional distribution of Bitcoin price movements. In doing so, three groups of determinants were derived. The use of Bitcoin in trade and the uncertainty surrounding China's deepening slowdown, Brexit and India's demonetization were found to be the most potential contributors of Bitcoin price when the market is improving. The intense anxiety over Donald Trump being the president of United States was shown to be a positive determinant pushing up the price of Bitcoin when the market is functioning around the normal mode. The velocity of bitcoins in circulation, the gold price, the Venezuelan currency demonetization and the hash rate were found to be the fundamentals influencing the Bitcoin price when the market is heading into decline.
Abstract By declaring an item legal tender or making it publicly receivable, governments might generate sufficient demand to determine the medium of exchange. How do private actors launch a new money? There are two views in the literature. The first requires offering an item with a use value to some agents that is distinct from its role as a medium of exchange. The second suggests that agents might coordinate on an intrinsically useless item. With these views in mind, I survey the logs from the original bitcoin forum, bitcoin-list. I find that early participants in the bitcoin community understood the importance of coordination and took steps to coordinate users.
This paper presents the design and implementation of a reward system for collaborative care of elderly based on distributed ledger technologies. The work is motivated by the demographic change, where an aging population consequently increases the need for care. This causes a great tension in our society, as care resources become increasingly constrained, both regarding costs and availability of care staff. Much of the daily care of the elderly is today done by family members (spouses, children) and friends, often on a voluntarily basis, which adds to the tension. The core idea of this work is to help broaden the involvement of people in caring for our elderly, enabled by a system for collaborative care. The proposed system benefits from recent advances in distributed ledger technologies, which similarly to digital currencies, are build on the ability for mutual agreements between people who do not know each other. The system also benefits from recent gamification techniques to motivate people to collaborate on a larger scale through performing simple daily tasks. The system builds on rewards automatically given when these smart contracts are fulfilled, a gamification technique that is believed to maintain motivation of the volunteers. In this paper, we thus describe a reward system designed to connect elderly and volunteers by mutual agreements implemented as smart contracts.
Abstract This article studies the origin and continuity of the identity of the entities inscribed in a distributed ledger. Specifically, it focuses on the differences between the identities of the entities that exist in a distributed ledger and those of the entities that exist outside the ledger but must be represented in the ledger in order to interact with it. It suggests that a distributed ledger that contains representations of entities that exist outside the ledger can yield a continuum of interconnected existing and past identities that is constantly redefined to represent new conceptual entities. This continuum can be understood as a metasortal—or a sortal of sortals—that resembles the mathematical structure of a set of sets. Further, the article presents the dilemma that arises when representing the identities of entities in a distributed ledger, and it draws an analogy between this dilemma and Russell's Paradox.
Kamanashis Biswas, Vallipuram Muthukkumarasamy, Wee Lum Tan
The necessity of wine supply chain traceability system is inevitable due to increase in counterfeiting, adulteration, and use of excessive preservatives and hazardous chemicals. To overcome these issues, wine industry is in need of a traceability system which enables a consumer to verify the composition of each batch of wines from the grape growers to the retailers. However, most of the current systems are RFID and web based and thus it is possible to counterfeit stored information as required. This study proposes a blockchain based wine supply chain traceability system where every transaction is recorded as a block in the chain and is visible to the relevant participants. These blocks of information is immutable since any change to the recorded information will break the chain. In addition to providing quality information management framework, the proposed traceability system enables transparency, safety, and security in the overall process from the grape to the bottle.
Lan Ge, Christopher Brewster, J.C. Spek, Anton Smeenk · 9 authors
This report documents experiences and findings from the public private partnership (PPP) project 'Blockchain for Agrifood' that was started in March 2017. The project aims to contribute to a better understanding of the blockchain technology (BCT) and its implications for agrifood, especially how it can impact specific aspects of supply chains and what is needed to apply BCT in agrifood chains. A second aim of this project is to conceptualise and develop a proof of concept in an application based on a use case concerning table grapes from South Africa where BCT could be applied. This has been done by building a demonstrator that keeps track of different certificates involved in the table grapes supply chain. The code of this demonstrator is published at Github. 1 Furthermore, the project explored issues regarding the relevance, applicability and implications of BCT for the agrifood sector through literature study and stakeholder consultation.
Alessandra Cretarola, Gianna Figà‐Talamanca, Marco Patacca
In recent literature it is claimed that BitCoin price behaves more likely to a volatile stock asset than a currency and that changes in its price are influenced by sentiment about the BitCoin system itself; in Kristoufek [10] the author analyses transaction based as well as popularity based potential drivers of the BitCoin price finding positive evidence. Here, we endorse this finding and consider a bivariate model in continuous time to describe the price dynamics of one BitCoin as well as a second factor, affecting the price itself, which represents a sentiment indicator. We prove that the suggested model is arbitrage-free under a mild condition and, based on risk-neutral evaluation, we obtain a closed formula to approximate the price of European style derivatives on the BitCoin. By applying the same approximation technique to the joint likelihood of a discrete sample of the bivariate process, we are also able to fit the model to market data. This is done by using both the Volume and the number of Google searches as possible proxies for the sentiment factor. Further, the performance of the pricing formula is assessed on a sample of market option prices obtained by the website deribit.com.
Shayan Eskandari, Jeremy Clark, Vignesh Sundaresan, Moe Adham
In this paper, we present Velocity, a decentralized market deployed on Ethereum for trading a custom type of derivative option. To enable the smart contract to work, we also implement a price fetching tool called PriceGeth. We present this as a case study, noting challenges in development of the system that might be of independent interest to whose working on smart contract implementations. We also apply recent academic results on the security of the Solidity smart contract language in validating our codes security. Finally, we discuss more generally the use of smart contracts in modelling financial derivatives.
We discuss Russia's underlying motives for issuing its government-backed cryptocurrency, CryptoRuble, and the implications thereof and of other likely-soon-forthcoming government-issued cryptocurrencies to some stakeholders (populace, governments, economy, finance, etc.), existing decentralized cryptocurrencies (such as Bitcoin and Ethereum), as well as the future of the world monetary system (the role of the U.S. therein and a necessity for the U.S. to issue CryptoDollar), including a future algorithmic universal world currency that may also emerge. We further provide a comprehensive list of references on cryptocurrencies.
Digital currencies and cryptocurrencies have hesitantly started to penetrate the investors, and the next step will be the regulatory risk management framework. We examine the Value-at-Risk and Expected Shortfall properties for the major digital currencies, Bitcoin, Ethereum, Litecoin, and Ripple. The methodology used is GARCH modelling followed by Filtered Historical Simulation. We find that digital currencies are subject to a higher risk, therefore, to higher sufficient buffer and risk capital to cover potential losses.
We present efficient protocols for amortized secure multiparty computation with penalties and secure cash distribution, of which poker is a prime example. Our protocols have an initial phase where the parties interact with a cryptocurrency network, that then enables them to interact only among themselves over the course of playing many poker games in which money changes hands. The high efficiency of our protocols is achieved by harnessing the power of stateful contracts. Compared to the limited expressive power of Bitcoin scripts, stateful contracts enable richer forms of interaction between standard secure computation and a cryptocurrency. We formalize the stateful contract model and the security notions that our protocols accomplish, and provide proofs using the simulation paradigm. Moreover, we provide a reference implementation in Ethereum/Solidity for the stateful contracts that our protocols are based on. We also adopt our off-chain cash distribution protocols to the special case of stateful duplex micropayment channels, which are of independent interest. In comparison to Bitcoin based payment channels, our duplex channel implementation is more efficient and has additional features.
Attempts to accurately measure the monetary velocity or related properties of Bitcoin have often attempted to either directly apply definitions from traditional macroeconomic theory or to use specialized metrics relative to the properties of the Blockchain such as bitcoin-days destroyed. In this paper, it is demonstrated that beyond being a useful metric, bitcoin-days destroyed has mathematical properties that allow one to calculate the average dormancy (time since last use in a transaction) of the bitcoins used in transactions over a given time period. In addition, transaction volume and average dormancy are shown to have unexpected significance in helping estimate the average size of the pool of traded bitcoins by virtue of the expression Little's Law, though only under limited conditions.
Adán Sánchez de Pedro Crespo, Luis Iván Cuende García
A method for timestamping, anchoring and certification of a virtually unlimited amount of data in one or more blockchains, focusing on scalability and cost-effectiveness while ensuring existence, integrity and ownership by using cryptographic proofs that are independently verifiable by anyone in the world without disclosure of the original data and without the intervention of the certifying party.