Massimo La Morgia, Alessandro Mei, Francesco Sassi, Julinda Stefa
In the last years, cryptocurrencies are increasingly popular. Even people who are not experts have started to invest in these securities and nowadays cryptocurrency exchanges process transactions for over 100 billion US dollars per month. However, many cryptocurrencies have low liquidity and therefore they are highly prone to market manipulation schemes. In this paper, we perform an in-depth analysis of pump and dump schemes organized by communities over the Internet. We observe how these communities are organized and how they carry out the fraud. Then, we report on two case studies related to pump and dump groups. Lastly, we introduce an approach to detect the fraud in real time that outperforms the current state of the art, so to help investors stay out of the market when a pump and dump scheme is in action.
Blockchain technology has been a phenomenal discovery since its use on Bitcoin, a crypto currency created by Satoshi Nakamoto. Featuring decentralization, it allows Bitcoin to escape the interference of third parties and governments. Departing from Keynesian Theory, this study used a mixed quantitative and qualitative approach. The econometric quantitative approach uses the Vector Error Correction Model (VECM) modeling to predict the impact of Bitcoin investment on Indonesia's transaction of capital. A qualitative approach is used to analyze the LOFT effects of Bitcoin on Indonesia's economic resilience. Unlike previous studies, this study attempts to provide an explanation from the standpoint of national resilience, especially in the field of economic resilience. VECM analysis found that Bitcoin had a significant positive effect on Indonesia's transaction of capital in both the short and long terms Even though the magnitude of the influence of bitcoin is relatively small, it needs to watch out for macro performance through capital transactions. Qualitative data indicate that there is a change of Bitcoin function in Indonesia, from a payment method, into an instrument of investment. The finding explains that Bitcoin has the potential to weaken the resilience of the Indonesian economy through a reduction in the balance of payments, while Blockchain can be the main foundation of the financial industry revolution in Indonesia.
Blockchain is a public distributed ledger, which has the characteristics of decentralization and anonymization, which leads to the frequent occurrence of money laundering and theft. Taking Bitcoin as an example, traders can have multiple addresses, and these addresses have nothing to do with their identities in real life, their identities are difficult to identify, and it is difficult to track the flow of transaction funds on the blockchain. This paper proposes a transaction tracking system that can effectively and accurately track the source and destination of a certain amount of funds on the blockchain, which is superior to existing Bitcoin transaction tracking methods and has a substantial reference value.
The Bitcoin system keeps its ledger consistent in a blockchain by solving cryptographic problems, in a method called "Proof-of-Work". The conventional wisdom asserts that the mining protocol is incentive-compatible. However, Eyal and Sirer in 2014 have discovered a mining attack strategy called selfish mining (SM), in which a miner (or a mining pool) publishes the blocks it mines selectively instead of immediately. SM strategy would have the impact of wasting resources of honest miners. Scholars proposed various extensions of the SM strategy and approaches to defense the SM attack. Whether selfish mining occurs in practice or not, has been subject of extensive debate. For the first time, in this paper we propose a method to identify selfish miners by detecting anomalies in the properties of consecutive blocks' statistics. Furthermore, we extend our method to detect the mining cartels, in which miners secretly get together and share timely information. Our results provide evidence that these strategic behaviors take place in practice.
Ida Musiałkowska, Agata Kliber, Katarzyna Świerczyńska, Paweł Marszałek
Purpose This paper aims to find, which of the assets: gold, oil or bitcoin can be considered a safe-haven for investors in a crisis-driven Venezuela. The authors look also at the governmental change of approach towards the use and mining of cryptocurrencies being one of the assets and potential applications of bitcoin as (quasi) money. Design/methodology/approach The authors collected the daily data (a period from 01 May 2014 to 31 July 2018) on the development of the following magnitudes: Caracas Stock Exchange main index: Índice Bursátil de Capitalisación (IBC) index; gold price in US dollars, the oil price in US dollars and Bitcoin price in bolivar fuerte (VEF) (LocalBitcoins). The authors estimated a threshold VAR model between IBC and each of the possible safe-haven assets, where the trigger variable was the IBC; then the authors modelled the residuals from the TVAR model using MGARCH model with dynamic conditional correlation. Findings The results show that that gold is a better safe-haven than oil for Venezuelan investors, while bitcoin can be considered a weak safe haven. Still, bitcoin can perform (to a certain extent) money functions in a crisis-driven country. Research limitations/implications Further research after the change of local currency from VEF into bolivar soberano might be looked at on the later stage. Practical implications The authors provide evidence on which of analysed asset is the best safe-haven for the investors acting in the time of the crisis. The evidence goes in line with other authors’ findings, thus, the results might bring implications for investors of more universal character. Additionally, the result might be helpful for governments and/or monetary authorities while projecting institutional frameworks and conducting monetary policy. Social implications The unprecedented economic crisis in Venezuela was one of the factors that fuelled the mining and use of cryptocurrencies in the daily life of its citizens. Nowadays, the country is a leader in terms of the use of bitcoin and other cryptocurrencies in Latin America. The results show a potential application of bitcoin as a store of value or even means of payments in Venezuelan (or in other countries affected by the crisis). Originality/value The paper builds on the original data set collected by the authors and brings evidence from the models the authors constructed to verify, which asset is the best option for investors in hard times of the crisis. The authors add to the existing literature on financial assets, cryptocurrencies and behaviour of investors under different economic conditions.
While cryptocurrencies like Bitcoin have the potential to break traditional financial barriers, there are growing concerns about such currencies being used to fund illegal activities. Blockchain keeps the complete history of all transactions ever performed and each node replicates it. The humongous data it contains can be analyzed to gain useful insights about user transactions as well as the blockchain as a whole. In this paper, we propose an approach to parse and visualize the data of Bitcoin blockchain in a graph structure and carry out analysis that includes tracking and tracing, address clustering and entity tagging. We also try to find patterns in the data at a macro level to provide insights about the overall system. Thus, these efforts lead to foundation work for an analysis tool for getting insights on the coin flow of any financial system including cryptocurrencies.
Today, a new asset called cryptocurrency has entered the economic and financial realm of countries that have been able to stimulate governments to respond. Most governments have responded positively to these unsecured currencies, which are not monitored by any authority, and by considering these currencies as one of the complementary factors of the economic system, they have sought to develop this field and to enact principles. Of course, some countries have also reacted negatively to this currency, and some countries, such as the Islamic Republic of Iran, have reacted differently. It is clear that no country has declared cryptocurrencies as official "money" and now these currencies are mostly used as a commodity exchange tool. However, despite the negative attitude of some governments to this issue, international organizations and communities have expressed their willingness to accept these currencies and are seeking to expand their payments. It is expected that the power of cryptocurrencies will overcome the resistance of the opposing governments and eventually return to their international natural situation and away from any sovereignty.
Edimara Mezzomo Luciano, Odirlei Antônio Magnagnagno, Rodrigo Couto de Souza, Guilherme Costa Wiedenhöft
The recent popularization of distributed ledger technologies, which is better known in the financial sector due to digital currencies, has led to the appearance of numerous applications developed for the blockchain environment. The goal of this research is to investigate how a blockchain can contribute to the reduction of the vulnerabilities to corruption in the Brazilian context. Two stages of a literature review have been performed. The first identified the vulnerabilities to corruption in the Brazilian context and the second one identified the effective uses of blockchain characteristics. Subsequently, a deductive analysis was performed, aiming to verify which of the Blockchain initiatives presented could be potentially applied in the fight against corruption. This study points out ways to mitigate fraud and other causes of corruption to help regain society's trust in state institutions in Brazil, which has been suffering over the years from corruption scandals. Additionally, a research agenda leading to anti-corruption studies has been discussed.
Bitcoin being a safe-haven asset is one of the traditional stories in the cryptocurrency community. However, during its existence and relevant presence, i.e., approximately since 2013, there has been no severe situation on the financial markets globally to prove or disprove this story until the COVID-19 pandemic. We study the quantile correlations of Bitcoin and two benchmarks—the S&P 500 and VIX—and make comparison with gold as the traditional safe-haven asset. The Bitcoin safe haven story is shown and discussed to be unsubstantiated and far-fetched, while gold comes out as a clear winner in this contest even when a broader cryptocurrency index (CRIX) is considered.
The invention of the Internet has changed the way social resistance, revolutionary movements and terror groups are organized with new features such as loose network organization, netwars, social media campaigns, and lone wolf attacks. This article argues that blockchain technology will lead to more far-reaching changes in the organization of resistance to authority. Blockchain is a distributed ledger that records transactions using a consensus protocol, and when it meets objective conditions, it also enables smart contracts that execute transactions. Blockchain technology is not only a system for transferring value, but also it is a trustless system in which strangers can cooperate without the need for having to trust each other, as computer code governs their interactions. Blockchain will not only allow resistance/ terror organizations to easily receive donations globally, to have assets that a government can easily confiscate, and to disseminate censorship-resistant propaganda, but more importantly, to operate and cooperate across the world in a truly leaderless, coordinated, and highly decentralized fashion. Governments will need to be more proactive in the area of blockchain technology to mitigate some of the dangers to political stability that may emerge from it.
Abstract A vast digital ecosystem of entrepreneurship and exchange has sprung up with Bitcoin’s digital infrastructure at its core. We explore the worldwide spread of infrastructure necessary to maintain and grow Bitcoin as a system (Bitcoin nodes) and infrastructure enabling the use of bitcoins for everyday economic transactions (Bitcoin merchants). Specifically, we investigate the role of legal, criminal, financial, and social determinants of the adoption of Bitcoin infrastructure. We offer some support for the view that the adoption of cryptocurrency infrastructure is driven by perceived failings of traditional financial systems, in that the spread of Bitcoin infrastructure is associated with low trust in banks and the financial system among inhabitants of a region, and with the occurrence of country-level inflation crises. On the other hand, our findings also suggest that active support for Bitcoin is higher in locations with well-developed banking services. Finally, we find support for the view that bitcoin adoption is also partly driven by cryptocurrencies’ usefulness in engaging in illicit trade.
Bitcoin has been one of the most interesting financial innovations in the last ten years. In this essay, we set out to discover why it has not spread as a medium of payment and how it has become a high-risk form of investment instead. We examine the operational mechanisms of bitcoin technology and explain the ideological background for the popularity of bitcoin. We conclude that, in its present form, bitcoin is not suitable to become a generally accepted medium of payment.
Since Bitcoin's inception in 2008, it has became attractive investments for both trading and mining. To mine Bitcoins, a miner has to invest in computing power and pay for electricity to solve cryptographic puzzles for rewards, if it becomes the first to solve a puzzle, paid in Bitcoin. Given that mining is such a resource intensive effort, miners seek new strategies trying to make the mining process more profitable.
Cryptocurrencies are nowadays one of the most important alternative investment markets and therefore have been in spotfor regulatory purposes. One of the main characteristics is to be easy traded all over the world without governmentalinterference
The article considers the problematic issues of the functioning of cryptocurrency in Ukraine. The risks that provoke cryptocurrency as a tool for the money laundering and the financing terrorism in Ukraine are studied. The level of crime and the use of cryptocurrency in the sphere of money laundering are determined. Topical issues affecting the features of the detection and investigation of a crime are considered.<br> Anti-money laundering law of Ukraine openly conflate money laundering (which is concerned with source of funds) with terrorism financing (which is concerned with destination of funds) when regulating the financial system. Furthermore, FATF report on terrorism financing noted the importance of links between financial tools and wider counter-terrorist activity to combat terrorist financing.<br> Terrorism, being a socially dangerous and difficult to predict phenomenon, is changing its forms, methods, but the need for terrorist organizations to collect, move, and use money is always urgent. The legalization (laundering) of proceeds of crime, as well as the financing terrorism, poses a serious threat to national security of Ukraine and its financial system. The use of computer technologies to commit crimes increases their social security, generates new ways of committing them, and simplifies the very process of committing and masking their tracks. Cryptocurrencies are popular on the dark web because they provide a convenient method of obfuscating identities and transaction details. In addition, the absence of rules for exchanges and points of sale, the obligation to identify the e-wallet owner and a clear legal regulation of the use of cryptocurrencies in general, create favorable conditions for criminals. Investigation of such crimes creates considerable difficulties, given the lack of capabilities of law enforcement agencies from the current level of technological and software criminal activity. The author also found out the advantages of such a currency, which determine its use by criminals, and examined possible ways to counter and combat such crime.
After introducing key concepts and definitions in the field of digital identity, this paper will investigate the benefits and drawbacks of existing identity systems on the road towards achieving self-sovereign identity. It will explore, in particular, the use of blockchain technology and biometrics as a means to ensure the “unicity” and “singularity” of identities, and the associated challenges pertaining to the security and confidentiality of personal information. The paper will then propose a model of blockchain-based self-sovereign identity based on attestations, claims, credentials and permissions, which is globally portable across the life of an individual. Such a system is not dependent on any particular government or organization for administration or legitimacy, although it might include government issued identification and biometrics as one of many indicia of identity. Such a solution based on a recorded and signed digital history of actions is a system that best approximates the fluidity and granularity of identity, enabling individuals to express only specific facets of their identity, depending on the parties with whom they wish to interact. This paper focuses on two case studies to explain how such a credentials system could work in specific contexts: (1) Kiva’s identity protocol for building credit history in Sierra Leone, and (2) World Food Programme’s Building Blocks program for delivering cash aid to refugees in Jordan. Finally, the paper will explore what the future might look like when blockchain-based cryptocurrencies and self-sovereign identity intersect. With digital transactions functioning as identity claims within an ecosystem based on self-sovereign identity, new business models might emerge, such as identity insurance schemes, along with the emergence of value-stable cryptocurrencies (“stablecoins”) functioning as local currencies.
As the first decentralized peer-to-peer (P2P) cryptocurrency system allowing people to trade with pseudonymous addresses, Bitcoin has become increasingly popular in recent years. However, the P2P and pseudonymous nature of Bitcoin make transactions on this platform very difficult to track, thus triggering the emergence of various illegal activities in the Bitcoin ecosystem. Particularly,mixing servicesin Bitcoin, originally designed to enhance transaction anonymity, have been widely employed for money laundering to complicate the process of trailing illicit fund. In this article, we focus on the detection of the addresses belonging to mixing services, which is an important task for anti-money laundering in Bitcoin. Specifically, we provide a feature-based network analysis framework to identify statistical properties of mixing services from three levels, namely, network level, account level, and transaction level. To better characterize the transaction patterns of different types of addresses, we propose the concept of attributed temporal heterogeneous motifs (ATH motifs). Moreover, to deal with the issue of imperfect labeling, we tackle the mixing detection task as a positive and unlabeled learning (PU learning) problem and build a detection model by leveraging the considered features. Experiments on real Bitcoin datasets demonstrate the effectiveness of our detection model and the importance of hybrid motifs including ATH motifs in mixing detection.
The trifecta of globalization, urbanization and digitization have created new opportunities and challenges across our nation, cities, boroughs and urban centers. Cities are in a unique position at the center of commerce and technology becoming hubs for innovation and practical application of emerging technology. In this rapidly changing 24/7 digitized world, city governments worldwide are leveraging innovation and technology to become more effective, efficient, transparent and to be able to better plan for and anticipate the needs of its citizens, businesses and community organizations. This class will provide the framework for how cities and communities can become smarter and more accessible with technology and more connected.
Journal of Anthropology and Archaeology is a peer-reviewed international journal, which publishes original papers promoting theoretical, methodological and empirical developments in the discipline of socio-cultural anthropology.
This essay is based on a presentation made on January 24, 2020 at the invitation of the Texas Journal of International Law and the Strauss Center for National Security at the University of Texas. That presentation focused on the two questions mentioned in the title of this essay – Do Blockchain Technologies Make Us Safer? And Do Cryptocurrencies Necessarily Make Us Less Safe? The essay presents answers to the two questions: “yes” and “probably yes.” This essay begins with some level-setting on different types of blockchain technologies and of cryptocurrencies, and gives some background materials on global and national responses to certain cryptocurrencies, such as El Petro sponsored by Venezuela’s PDVSA and Facebook’s Libra.
Today, companies use blockchain technology and digital assets for a variety of purposes. This Comment analyzes the digital token. If the Securities and Exchange Commission (SEC) views a digital token as a security, then the issuer of the digital token must comply with the registration and extensive disclosure requirements of federal securities laws.\nTo determine whether a digital asset is a security, the SEC relies on the test that the Supreme Court established in SEC v. W.J. Howey Co. Rather than enforcing a statute or agency rule, the SEC enforces securities laws by applying the Howey test on a fact-intensive case-by-case basis. This Comment takes the position that policymaking by enforcement is harmful to the financial technology industry and perpetuates the lack of clarity surrounding regulation of digital assets.\nThis Comment proposes a solution in which both Congress and the SEC play an integral role: 1) Congress should amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to exclude “digital token” from the definition of “security”; and 2) the SEC should issue an agency rule that creates a grace period for digital tokens to become fully decentralized before the SEC may evaluate whether they are securities.
It can be argued that cryptocurrencies are based on blockchain technology and have a wide range of advantages for customers. It has become a way of sharing value, investing or even earning money. Unfortunately, cryptocurrency is currently used for money laundering and financing terrorism. Governments of many countries are faced with the range of issues that need to be resolved, such as determining the essence of cryptocurrency, tracking operations and activities of cryptocurrency exchanges, taxation and many others. Moreover, there is a variety of challenges for the market, cryptocurrencies volatility in particular, which is necessary to consider.