Federico Matteo Benčić, Pavle Skočir, Ivana Podnar Žarko
Supply chain management enhanced by the Internet of Things (IoT) solutions integrate special tags (e.g., RFID, NFC, and QR-codes) with products to create Smart Tags, in addition to storing supplemental information about a product, which is also used to track products during their lifecycle. However, a product consumer has to implicitly trust the Smart Tag creator and other stakeholders within the supply chain that they are providing authentic data within a product's tag. The DL-Tags solution steps into this environment to offer a decentralized, privacy-preserving, and verifiable management of Smart Tags during a product's lifecycle. The solution is based on distributed ledger technology (DLT) and uses the Ethereum blockchain to mediate interactions between the stakeholders during a product's exchange process. By reaching a consensus on the product's description and state logged on the blockchain, all involved stakeholders and product consumers can verify the product's authenticity without revealing their identity. The paper describes the DL-Tags solution and includes a cost analysis of all implemented transactions on the Ethereum blockchain. The proposed solution provides evidence of the product's origin and its journey across the supply chain while preventing tag duplication and manipulation. It is among the first documented practical solutions using DLT and IoT for supply chain management, which is designed to be distributed ledger agnostic.
Mohsin Ur Rahman, Fabrizio Baiardi, Barbara Guidi, Laura Ricci
Decentralized Online Social Networks (DOSNs) have been proposed as an alternative solution to the current centralized Online Social Networks (OSNs). Online Social Networks are based on centralized architecture (e.g., Facebook, Twitter, or Google+), while DOSNs do not have a service provider that acts as central authority and users have more control over their information. Several DOSNs have been proposed during the last years. However, the decentralization of the OSN requires efficient solutions for protecting the privacy of users, and to evaluate the trust between users. Blockchain represents a disruptive technology which has been applied to several fields, among these also to Social Networks. In this paper, we propose a manageable, user-driven and auditable access control framework for DOSNs using blockchain technology. In the proposed approach, the blockchain is used as a support for the definition of privacy policies. The resource owner uses the public key of the subject to define flexible role-based access control policies, while the private key associated with the subject's Ethereum account is used to decrypt the private data once access permission is validated on the blockchain. We evaluate our solution by exploiting the Rinkeby Ethereum testnet to deploy the smart contract, and to evaluate its performance. Experimental results show the feasibility of the proposed scheme in achieving auditable and user-driven access control via smart contract deployed on the Blockchain.
This paper studies the forecasting ability of cryptocurrency time series. This study is about the four most capitalized cryptocurrencies: Bitcoin, Ethereum, Litecoin and Ripple. Different Bayesian models are compared, including models with constant and time-varying volatility, such as stochastic volatility and GARCH. Moreover, some crypto-predictors are included in the analysis, such as S\&P 500 and Nikkei 225. In this paper the results show that stochastic volatility is significantly outperforming the benchmark of VAR in both point and density forecasting. Using a different type of distribution, for the errors of the stochastic volatility the student-t distribution came out to be outperforming the standard normal approach.
Anthony Ngunyi, Simon Mundia, Cyprian Ondieki Omari
Cryptocurrencies have become increasingly popular in recent years attracting the attention of the media, academia, investors, speculators, regulators, and governments worldwide. This paper focuses on modelling the volatility dynamics of eight most popular cryptocurrencies in terms of their market capitalization for the period starting from 7th August 2015 to 1st August 2018. In particular, we consider the following cryptocurrencies; Bitcoin, Ethereum, Litecoin, Ripple, Moreno, Dash, Stellar and NEM. The GARCH-type models assuming different distributions for the innovations term are fitted to cryptocurrencies data and their adequacy is evaluated using diagnostic tests. The selected optimal GARCH-type models are then used to simulate out-of-sample volatility forecasts which are in turn utilized to estimate the one-day-ahead VaR forecasts. The empirical results demonstrate that the optimal in-sample GARCH-type specifications vary from the selected out-of-sample VaR forecasts models for all cryptocurrencies. Whilst the empirical results do not guarantee a straightforward preference among GARCH-type models, the asymmetric GARCH models with long memory property and heavy-tailed innovations distributions overall perform better for all cryptocurrencies.
This study attempts to create a cryptocurrency classification metod and tool for reliability assessment from the point of view of investors and traders. The definition of the reliability of cryptocurrency and classification criteria is formulated. The following emphasizes how, using the support vector method, based on the available open data, it is possible to determine the reliability of Ethereum-based cryptocurrencies. As a result of testing, 15 reliable cryptocurrencies were identified and software was developed that allows you to collect and classify cryptocurrencies.
Ravi Chandra Koirala, Keshav Dahal, Santiago Matalonga
The concept of openness and decentralization is one which people have desired since years. Everyone wants transactional data to be transparent. When sensitive data are on the hand of third-parties, it may be susceptible to frauds and misuse. The advent of blockchain, a decentralized technology in cryptocurrency, has revealed an appropriate solution to address such issues. Blockchain maintains the integrity of a transaction. It not only secures from tempering and fraud but also ensures transactions are verifiable without involvement of an intermediate. Therefore, blockchain is applied to different decentralized domains that require trusted computing. Supply chain is one of these domains, that can benefit from trustworthy decentralized transactions initiated by multiple stakeholders. This paper presents a general model for a blockchain enabled supply chain. We have implemented this model using three smart contracts on an Ethereum platform. We have provided evidence of our verification and validation efforts. Our results convey the feasibility of the approach, which can streamline the administrative processes, and automatize the transactions making the system more efficient and transparent.
The adoption of blockchain based distributed ledgers is growing fast due to their ability to provide reliability, integrity, and auditability without trusted entities. One of the key capabilities of these emerging platforms is the ability to create self-enforcing smart contracts. However, the development of smart contracts has proven to be error-prone in practice, and as a result, contracts deployed on public platforms are often riddled with security vulnerabilities. This issue is exacerbated by the design of these platforms, which forbids updating contract code and rolling back malicious transactions. In light of this, it is crucial to ensure that a smart contract is secure before deploying it and trusting it with significant amounts of cryptocurrency. To this end, we introduce the VeriSolid framework for the formal verification of contracts that are specified using a transition-system based model with rigorous operational semantics. Our model-based approach allows developers to reason about and verify contract behavior at a high level of abstraction. VeriSolid allows the generation of Solidity code from the verified models, which enables the correct-by-design development of smart contracts.
This paper presents an efficient solution for the booking and payments functionality of a car sharing system that allows individuals to share their personal, underused cars in a completely decentralized manner, annulling the need of an intermediary. Our solution, named SC2Share, leverages smart contracts and uses them to carry out secure and private car booking and payments. Our experiments on SC2Share on the Ethereum testnet guarantee high security and privacy to its users and confirm that our system is cost-efficient and ready for practical use.
With the rapid development of electronic information technology, online transaction will gradually surpass traditional market transaction, among which online payment and asset delivery become the focus of attention. But in fact, due to the incomplete third-party payment mechanism and the intrusion risk of various charging Trojan, it is easy to cause a trust crisis. The existing centralized framework often leads to information asymmetry between the two parties. Therefore, how to realize the fairness of payment and the auditability of assets in the distributed system is a challenging problem. The emerging blockchain technology provides a new method with its openness, transparency and verifiability. Existing researches do not provide a complete shopping model for consumers, most of which focuses on payments or only on asset delivery. In this paper, we propose an auditable fair payment and physical asset delivery protocol based on smart contracts. Three types of smart contracts are designed to achieve reliable and fair payment among merchants, consumers and logistics companies. The traceability and auditability of blockchain provide an effective method to audit assets and data sharing in the whole transportation. In view of the phenomenon of goods being switched, the way of ”pre-verification” is added. In order to prevent the illegal elements to fake pickup code, induce consumers to conduct illegal operations, cause property loss, in our system the pickup codes are generated by consumers to reduce the risk of fraud. In addition, our plan designs a complete return process for the first time, providing better service experience and higher efficiency for consumers. Finally, all the contracts involved in the scheme are implemented and deployed on the ethereum test network. The results of security analysis and evaluation showed that our scheme was improved in cost, with high security and availability.
Open access
Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
A total of 1.1 million bitcoins were stolen in the 2013–2017 period. Noting that the average price for a Bitcoin in 2018 was $7572 the corresponding monetary equivalent of losses is $8.9 billion highlighting the societal impact of this criminal activity. Investigating the response of the uncertainty of Bitcoin returns when hacking incidents occur, the results of this study point toward two different responses. After experiencing a contemporaneous effect at day t=0, the volatility increases significantly again at day t+5. Hacking incidents that occur in the Bitcoin market also affect the uncertainty in the Ethereum market with a time delay of five days. Notably, neither Bitcoin nor Ethereum appear to exhibit asymmetric responses to negative innovations.
Efficient transfers to many recipients present a host of issues on Ethereum. First, accounts are identified by long and incompressible constants. Second, these constants have to be stored and communicated for each payment. Third, the standard interface for token transfers does not support lists of recipients, adding repeated communication to the overhead. Since Ethereum charges resource usage, even small optimizations translate to cost savings. Airdrops, a popular marketing tool used to boost coin uptake, present a relevant example for the value of optimizing bulk transfers. Therefore, we review technical solutions for airdrops of Ethereum-based tokens, discuss features and prerequisites, and compare the operational costs by simulating 35 scenarios. We find that cost savings of factor two are possible, but require specific provisions in the smart contract implementing the token system. Pull-based approaches, which use on-chain interaction with the recipients, promise moderate savings for the distributor while imposing a disproportional cost on each recipient. Total costs are broadly linear in the number of recipients independent of the technical approach. We publish the code of the simulation framework for reproducibility, to support future airdrop decisions, and to benchmark innovative bulk payment solutions.
Abstract We study Bitcoin (BTC) trading at the Chicago Mercantile Exchange (CME) and four settlement spot exchanges that transact $146 million per day in the BTC/USD pair. Spot market median trade sizes are under $1,300 but exceed $18,000 on the CME. Bid‐ask spreads average 0.0298%. Trade sizes of over $1 million move markets by less than 1%. 2.5% of trades and 15.5% of cancellations on Coinbase take place within 50 ms. Bid‐ask spreads exceed 0.8% for only 226 s. Most executions trade‐through better quotes, with estimated losses of $36 million. The CME leads price discovery. BTC leads Ethereum price adjustment.
Now more and more data are being outsourced to cloud services. In order to ensure data security and privacy, data are usually stored on the cloud server in the form of ciphertext. When a user requests access to the encrypted data, an access key distributed by a third party is needed. However, if the third party is dishonest, the security of the system will be threatened. Faced with this problem, in this paper, we propose a new secure cloud storage framework with access control by using the Ethereum blockchain technology. Our new scheme is a combination of Ethereum blockchain and ciphertext-policy attribute-based encryption (CP-ABE). The proposed cloud storage framework is decentralized, that is, there is no trusted third party in the system. Our scheme has three main features. First, as the Ethereum blockchain technology is used, the data owner can store ciphertext of data through smart contracts in a blockchain network. Second, the data owner can set valid access periods for data usage so that the ciphertext can only be decrypted during valid access periods. Finally, as the creation and invocation of each smart contract can be stored in the blockchain, thus, the function of the trace is achieved. The analysis of the security and experiment shows that our scheme is feasible.
Yong Wang, Aiqing Zhang, Peiyun Zhang, Huaqun Wang
The sharing of electronic health records (EHRs) has great positive significance for research of disease and doctors' diagnosis. In recent years, cloud-based electronic medical record sharing scheme has brought a lot of conveniences, but the centralization of cloud exposes threats inevitably to data security and privacy preservation. Blockchain technology can be seen as a promising solution to address these problems on account of its unique propertis of decentration, anonymity, unforgeability and verifiability. In this paper, we propose a blockchain based secure and privacy-preserving EHR sharing protocol. Data requester can search desired keyword from data provider to find relevant EHRs on the EHR consortium blockchain and get the re-encryption ciphertext from cloud server after getting the data owner's authorization. The scheme mainly uses searchable encryption and conditional proxy re-encryption to realize data security, privacy preservation, and access control. Furthermore, proof of authorization is designed as the consensus mechanism for consortium blockchain to guarantee system's availability. Security analysis demonstrates that the proposed protocol can achieve security goals. Besides, we emulate the cryptographic primitives and implement the proposed scheme on Ethereum platform. Performance evaluation shows that the proposed scheme has high computational efficiency.
Ayushi Sharma, Shashwat Tiwari, Nitin Arora, S. C. Sharma
Blockchain is an emerging technology that can radically improve transactions security at banking, supply chain, and other transaction networks. It's estimated that Blockchain will generate $3.1 trillion in new business value by 2030. Essentially, it provides the basis for a dynamic distributed ledger that can be applied to save time when recording transactions between parties, remove costs associated with intermediaries, and reduce risks of fraud and tampering. This book explores the fundamentals and applications of Blockchain technology. Readers will learn about the decentralized peer-to-peer network, distributed ledger, and the trust model that defines Blockchain technology. They will also be introduced to the basic components of Blockchain (transaction, block, block header, and the chain), its operations (hashing, verification, validation, and consensus model), underlying algorithms, and essentials of trust (hard fork and soft fork). Private and public Blockchain networks similar to Bitcoin and Ethereum will be introduced, as will concepts of Smart Contracts, Proof of Work and Proof of Stack, and cryptocurrency including Facebook's Libra will be elucidated. Also, the book will address the relationship between Blockchain technology, Internet of Things (IoT), Artificial Intelligence (AI), Cybersecurity, Digital Transformation and Quantum Computing. Readers will understand the inner workings and applications of this disruptive technology and its potential impact on all aspects of the business world and society. A look at the future trends of Blockchain Technology will be presented in the book.
И.И. Баринов, Vadim Arasev, Andreas Fackler, Vladimir Komendantskiy · 7 authors
In this paper we introduce POSDAO, a Proof of Stake (POS) algorithm implemented as a decentralized autonomous organization (DAO). It is designed to provide a decentralized, fair, and energy efficient consensus for public chains. The algorithm works as a set of smart contracts written in Solidity. POSDAO is implemented with a general purpose BFT consensus protocol such as Authority Round (AuRa) with a proposer node and probabilistic finality, or Honey Badger BFT (HBBFT), leaderless and with instant finality. Validators are incentivized to behave in the best interests of a network through a configurable reward structure. The algorithm provides a Sybil control mechanism for managing a set of validators, distributing rewards, and reporting and penalizing malicious validators. The authors provide a reference POSDAO implementation, xDai POSDAO, which uses xDai as a stable transactional coin and a representative ERC677 token (STAKE) as a staking token. The reference implementation functions on an Ethereum 1.0 sidechain and utilizes the AuRa consensus protocol. Assets are bridged between the Ethereum mainnet and the xDai POSDAO network using several instances of the POA TokenBridge.
Blockchain and smart contracts (i.e., computer code that can be run on blockchain) are increasingly popular for healthcare applications. However, only very few implementations exist because of the complexity of the technologies. Although there are tutorials and reviews to introduce blockchain and smart contracts, a pragmatic comparison of such platforms is needed. In this study, we addressed practical considerations while building a healthcare blockchain and smart contract system, by (1) comparing technical features of platforms, (2) selecting three platforms, (3) constructing blockchain networks, (4) testing the blockchains, and (5) summarizing the experience and time used for implementation by students. We evaluated Ethereum, Hyperledger Fabric, and MultiChain, and confirmed that the selection of a proper platform depends on the requirements of the application. The findings of our study can accelerate the process and reduce the risk of adopting blockchain technology in biomedical and healthcare domain.
Smart contract applications based on Ethereum blockchain have been widely used in many fields. They are developed by professional developers using specialized programming languages like solidity. It requires high requirements on knowledge of the specialized field and the proficiency in contract programming. Thus, it is hard for normal users to design a usable smart contract based on their own demands. Most current studies about smart contracts focus on the security of coding while lack of friendly tools for users to design the specialized templates of contracts coding. This paper provides a visual and user-defined smart contract designing systems. It makes the development of domain-specific smart contracts simpler and visualization for contract users. The system implements the domain-specific features extraction about the crawled data sets of smart contract programs by TF-IDF and K-means++ clustering algorithm. Then, it achieves the automatic generation of unified basic function codes by Char-RNN (improved by LSTM) based on the domain-specific features. The system adopts Google Blockly and links the generated codes with UI controls. Finally, it provides a set of specialized templates of basic functions for users to design smart contracts by the friendly interface. It reduces the difficulty and costs of contract programming. The paper offers a case study to design contracts by users. The designed contracts were validated on the existing system to implement the food trading and traders' credit evaluation. The experimental results show that the designed smart contracts achieve good integration with the existing system and they can be deployed and compiled successfully.
Vasily Derbentsev, Natalia Datsenko, Olga Stepanenko, Vitaly Bezkorovainyi
This paper describes the construction of the short-term forecasting model of cryptocurrencies’ prices using machine learning approach. The modified model of Binary Auto Regressive Tree (BART) is adapted from the standard models of regression trees and the data of the time series. BART combines the classic algorithm classification and regression trees (C&RT) and autoregressive models ARIMA. Using the BART model, we made a short-term forecast (from 5 to 30 days) for the 3 most capitalized cryptocurrencies: Bitcoin, Ethereum and Ripple. We found that the proposed approach was more accurate than the ARIMA-ARFIMA models in forecasting cryptocurrencies time series both in the periods of slow rising (falling) and in the periods of transition dynamics (change of trend).
Jan 1, 2019·Proceedings of the ... Annual Hawaii International Conference on System Sciences/Proceedings of the Annual Hawaii International Conference on System Sciences
Taneli Hukkinen, Juri Mattila, Kari Smolander, Timo Seppälä · 5 authors
In recent years, information systems have not been largely evaluated by their operating costs, but mainly by their strategic benefit and competitive advantage. As blockchain-based decentralized applications become more commonplace, representing a shift towards fully consumption-based distributed computing, a new mode of thinking is required of developers, with meticulous attention to computational resource efficiency. This study improves on a blockchain application designed for conducting microtransactions of electricity in a nanogrid environment. By applying the design science research methodology, we improve the efficiency of the application’s smart contract by 11 %, with further improvement opportunities identified. Despite the results, we find the efficiency remains inadequate for public Ethereum deployment. From the optimization process, we extrapolate a set of general guidelines for optimizing the efficiency of Ethereum smart contracts in any application.
Ngoc Tien Thanh Le, Quoc Nghiep, Nguyen Ngoc, Nghia Duong‐Trung · 7 authors
The adoption of decentralized cryptocurrency plat-forms is growing fast, thanks to the implementation of Blockchain technology and smart contracts. It encourages the novel frame-works in a wide range of applications including finance and payment methods such as cash on delivery. However, a large number of smart contracts developed for cash on delivery suffer from fraudulent transactions which enable malicious participants to break the signed contracts without sufficient penalties. A shipper will involve in the system and place a mortgage to ensure reliability. A buyer also pledges an amount of money when making the order. Our process not only ensures the interests of a seller but also prevents a fraud shipper. The penalties will be made in two scenarios: (i) the buyer refuses to receive the commodities without any reliable reasons; and (ii) the shipper attempts to make any modification on the delivered goods during transportation. To help developers create more secure and reliable cash on delivery system, we introduce double smart contracts, a framework rooted in Blockchain technology and Ethereum, to tackle those mentioned problems. We also contribute our solution as an open source software that developers can easily add to their implementation to enhance functionality.
Zakaria Abou El Houda, Abdelhakim Hafid, Lyes Khoukhi
With the exponential growth in the number of insecure devices, the impact of Distributed Denial-of-Service (DDoS) attacks is growing rapidly. Existing DDoS mitigation schemes are facing obstacles due to low flexibility, lack of resources, and high cost. The new emerging technologies, such as blockchain, introduce new opportunities for low-cost, efficient and flexible DDoS attacks mitigation across multiple domains. In this paper, we propose a blockchain-based approach, called Cochain-SC, which combines two levels of mitigation, intra-domain and inter-domain DDoS mitigation. For intra-domain, we propose an effective DDoS mitigation method in the context of software defined networks (SDN); it consists of three schemes: (1) Intra Entropy-based scheme (I-ES) to measure, using sFlow, the randomness of data inside the domain; (2) Intra Bayes-based scheme (I-BS) to classify, based on entropy values, illegitimate flows; and (3) Intra-domain Mitigation (I-DM) scheme to effectively mitigate illegitimate flows inside the domain. For inter-domain, we propose a collaborative DDoS mitigation scheme based on blockchain; it uses the concept of smart contracts (i.e., Ethereum's smart contracts) to facilitate the collaboration among SDN-based domains (i.e., Autonomous System: AS) to mitigate DDoS attacks. For this aim, we design a novel and secure scheme that allows multiple SDN-based domains to securely collaborate and transfer attack information in a decentralized manner. Combining intra- and inter-domain DDoS mitigation, Cochain-SC allows an efficient mitigation along the path of an ongoing attack and an effective mitigation near the origin of the attack. This allows reducing the enormous cost of forwarding packets, across multiple domains, which consist mostly of useless amplified attack traffic. To the best of our knowledge, Cochain-SC is the first scheme that proposes to deal with both intra-domain and inter-domain DDoS attacks mitigation combining SDN, blockchain and smart contract. The implementation of Cochain-SC is deployed on Ethereum official test network Ropsten. Moreover, we conducted extensive experiments to evaluate our proposed approach; the experimental results show that Cochain-SC achieves flexibility, efficiency, security, cost effectiveness, and high accuracy in detecting illegitimate flows, making it a promising approach to mitigate DDoS attacks.
There are two traditional data trading modes, the hosting mode, and the aggregation mode, which depend on the trusted third parties to a large extent. The hosting mode is that the data are completely hosted in the data trading center, so the data trading center retains the data. On the surface, the aggregation mode is that the data trading center is not to retain the data of trading, but actually, it has the ability to retain the data. There is a fundamental difference between the ability to retain the data and the inability to retain the data. These two trading modes cause the data owners to be afraid to share data trading. In this paper, we propose a solution to the data trading mode based on the smart contract using blockchain and machine learning. Our solution takes advantage of the immutability, tamper-proof and traceability of blockchain, the programmability of smart contract, and the verification of data availability by the similarity learning to propose a challenge response mechanism between the data purchaser and the data owner, an off-chain download mechanism between the data purchaser and the data storage service provider, and an arbitration mechanism for the controversy resolution of the data trading. The challenge response mechanism is used to authenticate and authorize the data owner, the off-chain download mechanism is used to authenticate and authorize the data purchaser to download the purchased data, and the similarity learning is used to deal with the controversy over the data availability in the data trading. The design and implementation of data trading smart contract successfully achieved the goal of removing the trusted third party in the data trading, and thus, the problem that the data trading center has the ability to retain the data in the process of the data trading is solved, as well as the automatic payment by using the Ethereum encrypted currency among the trading participants is realized. This paper presents the whole process of smart contract from the design and implementation to the test completion and provides the security analysis and performance evaluation. The full code of smart contract and the ABI interface have been uploaded to the GitHub for the public release.