Jun Li, Yumeng Shao, Ming Ding, Chuan Ma · 7 authors
Federated learning (FL), as a distributed machine learning approach, has drawn a great amount of attention in recent years. FL shows an inherent advantage in privacy preservation, since users' raw data are processed locally. However, it relies on a centralized server to perform model aggregation. Therefore, FL is vulnerable to server malfunctions and external attacks. In this paper, we propose a novel framework by integrating blockchain into FL, namely, blockchain assisted decentralized federated learning (BLADE-FL), to enhance the security of FL. The proposed BLADE-FL has a good performance in terms of privacy preservation, tamper resistance, and effective cooperation of learning. However, it gives rise to a new problem of training deficiency, caused by lazy clients who plagiarize others' trained models and add artificial noises to conceal their cheating behaviors. To be specific, we first develop a convergence bound of the loss function with the presence of lazy clients and prove that it is convex with respect to the total number of generated blocks $K$. Then, we solve the convex problem by optimizing $K$ to minimize the loss function. Furthermore, we discover the relationship between the optimal $K$, the number of lazy clients, and the power of artificial noises used by lazy clients. We conduct extensive experiments to evaluate the performance of the proposed framework using the MNIST and Fashion-MNIST datasets. Our analytical results are shown to be consistent with the experimental results. In addition, the derived optimal $K$ achieves the minimum value of loss function, and in turn the optimal accuracy performance.
Graph convolutional networks (GCNs) have been employed as a kind of significant tool on many graph-based applications recently. Inspired by convolutional neural networks (CNNs), GCNs generate the embeddings of nodes by aggregating the information of their neighbors layer by layer. However, the high computational and memory cost of GCNs due to the recursive neighborhood expansion across GCN layers makes it infeasible for training on large graphs. To tackle this issue, several sampling methods during the process of information aggregation have been proposed to train GCNs in a mini-batch Stochastic Gradient Descent (SGD) manner. Nevertheless, these sampling strategies sometimes bring concerns about insufficient information collection, which may hinder the learning performance in terms of accuracy and convergence. To tackle the dilemma between accuracy and efficiency, we propose to use aggregators with different granularities to gather neighborhood information in different layers. Then, a degree-based sampling strategy, which avoids the exponential complexity, is constructed for sampling a fixed number of nodes. Combining the above two mechanisms, the proposed model, named Mix-grained GCN (MG-GCN) achieves state-of-the-art performance in terms of accuracy, training speed, convergence speed, and memory cost through a comprehensive set of experiments on four commonly used benchmark datasets and a new Ethereum dataset.
This paper presents an autonomous driving that achieves physical layer security. Proposed vehicle communication is implemented based on Proof-of-Nonce (PoN) blockchain algorithm. PoN blockchain algorithm is a consensus algorithm that can be implemented in light weight. We propose a more secure vehicle communication scheme while achieving physical layer security by defecting PoN algorithm and secrecy capacity. By generating a block only when secrecy capacity is greater than or equal to the reference value, traffic information can be provided only to vehicles with physical layer security. This vehicle communication scheme can secure sufficient safety even from hackers based on quantum computing.
This paper presents a smart contract-based solution for autonomous administration of construction progress payments. It bridges the gap between payments (cash flow) and the progress assessments at job sites (product flow) enabled by reality capture technologies and building information modeling (BIM). The approach eliminates the reliance on the centralized and heavily intermediated mechanisms of existing payment applications. The construction progress is stored in a distributed manner using content addressable file sharing; it is broadcasted to a smart contract which automates the on-chain payment settlements and the transfer of lien rights. The method was successfully used for processing payments to 7 subcontractors in two commercial construction projects where progress monitoring was performed using a camera-equipped unmanned aerial vehicle (UAV) and an unmanned ground vehicle (UGV) equipped with a laser scanner. The results show promise for the method's potential for increasing the frequency, granularity, and transparency of payments. The paper is concluded with a discussion of implications for project management, introducing a new model of project as a singleton state machine.
This paper presents a deep learning framework based on Long Short-term Memory Network(LSTM) that predicts price movement of cryptocurrencies from trade-by-trade data. The main focus of this study is on predicting short-term price changes in a fixed time horizon from a looking back period. By carefully designing features and detailed searching for best hyper-parameters, the model is trained to achieve high performance on nearly a year of trade-by-trade data. The optimal model delivers stable high performance(over 60% accuracy) on out-of-sample test periods. In a realistic trading simulation setting, the prediction made by the model could be easily monetized. Moreover, this study shows that the LSTM model could extract universal features from trade-by-trade data, as the learned parameters well maintain their high performance on other cryptocurrency instruments that were not included in training data. This study exceeds existing researches in term of the scale and precision of data used, as well as the high prediction accuracy achieved.
Ultra-dense edge computing (UDEC) has great potential, especially in the 5G era, but it still faces challenges in its current solutions, such as the lack of: i) efficient utilization of multiple 5G resources (e.g., computation, communication, storage and service resources); ii) low overhead offloading decision making and resource allocation strategies; and iii) privacy and security protection schemes. Thus, we first propose an intelligent ultra-dense edge computing (I-UDEC) framework, which integrates blockchain and Artificial Intelligence (AI) into 5G ultra-dense edge computing networks. First, we show the architecture of the framework. Then, in order to achieve real-time and low overhead computation offloading decisions and resource allocation strategies, we design a novel two-timescale deep reinforcement learning (\textit{2Ts-DRL}) approach, consisting of a fast-timescale and a slow-timescale learning process, respectively. The primary objective is to minimize the total offloading delay and network resource usage by jointly optimizing computation offloading, resource allocation and service caching placement. We also leverage federated learning (FL) to train the \textit{2Ts-DRL} model in a distributed manner, aiming to protect the edge devices' data privacy. Simulation results corroborate the effectiveness of both the \textit{2Ts-DRL} and FL in the I-UDEC framework and prove that our proposed algorithm can reduce task execution time up to 31.87%.
Cuneyt G. Akcora, Sudhanva Purusotham, Yulia R. Gel, Mitchell Krawiec-Thayer · 5 authors
The number of blockchain users has tremendously grown in recent years. As an unintended consequence, e-crime transactions on blockchains has been on the rise. Consequently, public blockchains have become a hotbed of research for developing AI tools to detect and trace users and transactions that are related to e-crime. We argue that following a few select strategies can make money laundering on blockchain virtually undetectable with most of the existing tools and algorithms. As a result, the effective combating of e-crime activities involving cryptocurrencies requires the development of novel analytic methodology in AI.
Problems affecting the transport of people or goods are plentiful in industry and commerce and they also appear to be at the origin of much more complex problems. In recent years, the logistics and transport sector keeps growing supported by technological progress, i.e. companies to be competitive are resorting to innovative technologies aimed at efficiency and effectiveness. This is why companies are increasingly using technologies such as Artificial Intelligence (AI), Blockchain and Internet of Things (IoT). Artificial intelligence, in particular, is often used to solve optimization problems in order to provide users with the most efficient ways to exploit available resources. In this work we present an overview of our current research activities concerning the development of new algorithms, based on CLP techniques, for route planning problems exploiting the geometric information intrinsically present in many of them or in some of their variants. The research so far has focused in particular on the Euclidean Traveling Salesperson Problem (Euclidean TSP) with the aim to exploit the results obtained also to other problems of the same category, such as the Euclidean Vehicle Routing Problem (Euclidean VRP), in the future.
With the advent of the Internet of things (IoT) era, more and more devices are connected to the IoT. Under the traditional cloud-thing centralized management mode, the transmission of massive data is facing many difficulties, and the reliability of data is difficult to be guaranteed. As emerging technologies, blockchain technology and edge computing (EC) technology have attracted the attention of academia in improving the reliability, privacy and invariability of IoT technology. In this paper, we combine the characteristics of the EC and blockchain to ensure the reliability of data transmission in the IoT. First of all, we propose a data transmission mechanism based on blockchain, which uses the distributed architecture of blockchain to ensure that the data is not tampered with; secondly, we introduce the three-tier structure in the architecture in turn; finally, we introduce the four working steps of the mechanism, which are similar to the working mechanism of blockchain. In the end, the simulation results show that the proposed scheme can ensure the reliability of data transmission in the Internet of things to a great extent.
Financial technology (FinTech) has been playing an increasingly critical role in driving modern economies, society, technology, and many other areas. Smart FinTech is the new-generation FinTech, largely inspired and empowered by data science and new-generation AI and (DSAI) techniques. Smart FinTech synthesizes broad DSAI and transforms finance and economies to drive intelligent, automated, whole-of-business and personalized economic and financial businesses, services and systems. The research on data science and AI in FinTech involves many latest progress made in smart FinTech for BankingTech, TradeTech, LendTech, InsurTech, WealthTech, PayTech, RiskTech, cryptocurrencies, and blockchain, and the DSAI techniques including complex system methods, quantitative methods, intelligent interactions, recognition and responses, data analytics, deep learning, federated learning, privacy-preserving processing, augmentation, optimization, and system intelligence enhancement. Here, we present a highly dense research overview of smart financial businesses and their challenges, the smart FinTech ecosystem, the DSAI techniques to enable smart FinTech, and some research directions of smart FinTech futures to the DSAI communities.
This book discusses the necessity and perhaps urgency for the regulation of algorithms on which new technologies rely; technologies that have the potential to re-shape human societies. From commerce and farming to medical care and education, it is difficult to find any aspect of our lives that will not be affected by these emerging technologies. At the same time, artificial intelligence, deep learning, machine learning, cognitive computing, blockchain, virtual reality and augmented reality, belong to the fields most likely to affect law and, in particular, administrative law. The book examines universally applicable patterns in administrative decisions and judicial rulings. First, similarities and divergence in behavior among the different cases are identified by analyzing parameters ranging from geographical location and administrative decisions to judicial reasoning and legal basis. As it turns out, in several of the cases presented, sources of general law, such as competition or labor law, are invoked as a legal basis, due to the lack of current specialized legislation. This book also investigates the role and significance of national and indeed supranational regulatory bodies for advanced algorithms and considers ENISA, an EU agency that focuses on network and information security, as an interesting candidate for a European regulator of advanced algorithms. Lastly, it discusses the involvement of representative institutions in algorithmic regulation.
Petrônio Cândido de Lima e Silva, Carlos Alberto Severiano, Marcos Antônio Alves, Rodrigo Silva · 6 authors
In this paper we introduce a Non-Stationary Fuzzy Time Series (NSFTS) method with time varying parameters adapted from the distribution of the data. In this approach, we employ Non-Stationary Fuzzy Sets, in which perturbation functions are used to adapt the membership function parameters in the knowledge base in response to statistical changes in the time series. The proposed method is capable of dynamically adapting its fuzzy sets to reflect the changes in the stochastic process based on the residual errors, without the need to retraining the model. This method can handle non-stationary and heteroskedastic data as well as scenarios with concept-drift. The proposed approach allows the model to be trained only once and remain useful long after while keeping reasonable accuracy. The flexibility of the method by means of computational experiments was tested with eight synthetic non-stationary time series data with several kinds of concept drifts, four real market indices (Dow Jones, NASDAQ, SP500 and TAIEX), three real FOREX pairs (EUR-USD, EUR-GBP, GBP-USD), and two real cryptocoins exchange rates (Bitcoin-USD and Ethereum-USD). As competitor models the Time Variant fuzzy time series and the Incremental Ensemble were used, these are two of the major approaches for handling non-stationary data sets. Non-parametric tests are employed to check the significance of the results. The proposed method shows resilience to concept drift, by adapting parameters of the model, while preserving the symbolic structure of the knowledge base.
Metaheuristic search strategies have proven their effectiveness against man-made solutions in various contexts. They are generally effective in local search area exploitation, and their overall performance is largely impacted by the balance between exploration and exploitation. Recent developments in parallel local search explore methods to take advantage of the efficient local exploitation of searches and reach impressive results. This however restricts the scaling potential to nodes within a private, trusted computer cluster. In this research we propose a novel blockchain protocol that allows parallel local search to scale to untrusted and anonymous computational nodes. The protocol introduces publicly verifiable performance evaluation of the local optima reported by each node, creating a competitive environment between the local searches. That is strengthened with economical stimuli for producing good solutions, that provide coordination between the nodes, as every node tries to explore different sections of the search space to beat their competition.
Increasingly growing Cryptocurrency markets have become a hive for scammers to run pump and dump schemes which is considered as an anomalous activity in exchange markets. Anomaly detection in time series is challenging since existing methods are not sufficient to detect the anomalies in all contexts. In this paper, we propose a novel hybrid pump and dump detection method based on distance and density metrics. First, we propose a novel automatic thresh-old setting method for distance-based anomaly detection. Second, we propose a novel metric called density score for density-based anomaly detection. Finally, we exploit the combination of density and distance metrics successfully as a hybrid approach. Our experiments show that, the proposed hybrid approach is reliable to detect the majority of alleged P & D activities in top ranked exchange pairs by outperforming both density-based and distance-based methods.
The paper develops a logical understanding of processes for signature of legal contracts, motivated by applications to legal recognition of smart contracts on blockchain platforms. A number of axioms and rules of inference are developed that can be used to justify a ``meeting of the minds'' precondition for contract formation from the fact that certain content has been signed. In addition to an ``offer and acceptance'' process, the paper considers ``signature in counterparts'', a legal process that permits a contract between two or more parties to be brought into force by having the parties independently (possibly, remotely) sign different copies of the contract, rather than placing their signatures on a common copy at a physical meeting. It is argued that a satisfactory account of signature in counterparts benefits from a logic with syntactic self-reference. The axioms used are supported by a formal semantics, and a number of further properties of the logic are investigated. In particular, it is shown that the logic implies that when a contract has been signed, the parties do not just agree, but are in mutual agreement (a common-knowledge-like notion) about the terms of the contract.
We report on the use of sentiment analysis on news and social media to analyze and predict the price of Bitcoin. Bitcoin is the leading cryptocurrency and has the highest market capitalization among digital currencies. Predicting Bitcoin values may help understand and predict potential market movement and future growth of the technology. Unlike (mostly) repeating phenomena like weather, cryptocurrency values do not follow a repeating pattern and mere past value of Bitcoin does not reveal any secret of future Bitcoin value. Humans follow general sentiments and technical analysis to invest in the market. Hence considering people's sentiment can give a good degree of prediction. We focus on using social sentiment as a feature to predict future Bitcoin value, and in particular, consider Google News and Reddit posts. We find that social sentiment gives a good estimate of how future Bitcoin values may move. We achieve the lowest test RMSE of 434.87 using an LSTM that takes as inputs the historical price of various cryptocurrencies, the sentiment of news articles and the sentiment of Reddit posts.
Machine learning has recently enabled large advances in artificial intelligence, but these results can be highly centralized. The large datasets required are generally proprietary; predictions are often sold on a per-query basis; and published models can quickly become out of date without effort to acquire more data and maintain them. Published proposals to provide models and data for free for certain tasks include Microsoft Research's Decentralized and Collaborative AI on Blockchain. The framework allows participants to collaboratively build a dataset and use smart contracts to share a continuously updated model on a public blockchain. The initial proposal gave an overview of the framework omitting many details of the models used and the incentive mechanisms in real world scenarios. In this work, we evaluate the use of several models and configurations in order to propose best practices when using the Self-Assessment incentive mechanism so that models can remain accurate and well-intended participants that submit correct data have the chance to profit. We have analyzed simulations for each of three models: Perceptron, Naïve Bayes, and a Nearest Centroid Classifier, with three different datasets: predicting a sport with user activity from Endomondo, sentiment analysis on movie reviews from IMDB, and determining if a news article is fake. We compare several factors for each dataset when models are hosted in smart contracts on a public blockchain: their accuracy over time, balances of a good and bad user, and transaction costs (or gas) for deploying, updating, collecting refunds, and collecting rewards. A free and open source implementation for the Ethereum blockchain and simulations written in Python is provided at https://github.com/microsoft/0xDeCA10B. This version has updated gas costs using newer optimizations written after the original publication.
Currently, there are no convincing proxies for the fundamentals of cryptocurrency assets. We propose a new market-to-fundamental ratio, the price-to-utility (PU) ratio, utilizing unique blockchain accounting methods. We then proxy various existing fundamental-to-market ratios by Bitcoin historical data and find they have little predictive power for short-term bitcoin returns. However, PU ratio effectively predicts long-term bitcoin returns than alternative methods. Furthermore, we verify the explainability of PU ratio using machine learning. Finally, we present an automated trading strategy advised by the PU ratio that outperforms the conventional buy-and-hold and market-timing strategies. Our research contributes to explainable AI in finance from three facets: First, our market-to-fundamental ratio is based on classic monetary theory and the unique UTXO model of Bitcoin accounting rather than ad hoc; Second, the empirical evidence testifies the buy-low and sell-high implications of the ratio; Finally, we distribute the trading algorithms as open-source software via Python Package Index for future research, which is exceptional in finance research.
Konstantin D. Pandl, Scott Thiebes, Manuel Schmidt-Kraepelin, Ali Sunyaev
Developments in artificial intelligence (AI) and distributed ledger technology (DLT) currently lead to lively debates in academia and practice. AI processes data to perform tasks that were previously thought possible only for humans. DLT has the potential to create consensus over data among a group of participants in untrustworthy environments. In recent research, both technologies are used in similar and even the same systems. This can lead to a convergence of AI and DLT, which in the past, has paved the way for major innovations of other information technologies. Previous work highlights several potential benefits of a convergence of AI and DLT but only provides a limited theoretical framework to describe upcoming real-world integration cases of both technologies. In this research, we review and synthesize extant research on integrating AI with DLT and vice versa to rigorously develop a future research agenda on the convergence of both technologies. In terms of integrating AI with DLT, we identified research opportunities in the areas of secure DLT, automated referee and governance, and privacy-preserving personalization. With regard to integrating DLT with AI, we identified future research opportunities in the areas of decentralized computing for AI, secure data sharing and marketplaces, explainable AI, and coordinating devices. In doing so, this research provides a four-fold contribution. First, it is not constrained to blockchain but instead investigates the broader phenomenon of DLT. Second, it considers the reciprocal nature of a convergence of AI and DLT. Third, it bridges the gap between theory and practice by helping researchers active in AI or DLT to overcome current limitations in their field, and practitioners to develop systems along with the convergence of both technologies. Fourth, it demonstrates the feasibility of applying the convergence concept to research on AI and DLT.
This position paper presents a synthesis viewpoint of blockchains from two orthogonal perspectives: fault-tolerant distributed systems and game theory. Specifically, we formulate a new game-theoretical problem in the context of blockchains and sketch a closed-form Nash equilibrium to the problem.
Blockchain is gaining extensive attention due to its provision of secure and decentralized resource sharing manner. However, the incumbent blockchain systems also suffer from a number of challenges in operational maintenance, quality assurance of smart contracts and malicious behaviour detection of blockchain data. The recent advances in artificial intelligence bring the opportunities in overcoming the above challenges. The integration of blockchain with artificial intelligence can be beneficial to enhance current blockchain systems. This article presents an introduction of the convergence of blockchain and artificial intelligence (namely blockchain intelligence). This article also gives a case study to further demonstrate the feasibility of blockchain intelligence and point out the future directions.
The AIBC is an Artificial Intelligence and blockchain technology based large-scale decentralized ecosystem that allows system-wide low-cost sharing of computing and storage resources. The AIBC consists of four layers: a fundamental layer, a resource layer, an application layer, and an ecosystem layer. The AIBC implements a two-consensus scheme to enforce upper-layer economic policies and achieve fundamental layer performance and robustness: the DPoEV incentive consensus on the application and resource layers, and the DABFT distributed consensus on the fundamental layer. The DABFT uses deep learning techniques to predict and select the most suitable BFT algorithm in order to achieve the best balance of performance, robustness, and security. The DPoEV uses the knowledge map algorithm to accurately assess the economic value of digital assets.
The autonomous trading agent is one of the most actively studied areas of artificial intelligence to solve the capital market portfolio management problem. The two primary goals of the portfolio management problem are maximizing profit and restrainting risk. However, most approaches to this problem solely take account of maximizing returns. Therefore, this paper proposes a deep reinforcement learning based trading agent that can manage the portfolio considering not only profit maximization but also risk restraint. We also propose a new target policy to allow the trading agent to learn to prefer low-risk actions. The new target policy can be reflected in the update by adjusting the greediness for the optimal action through the hyper parameter. The proposed trading agent verifies the performance through the data of the cryptocurrency market. The Cryptocurrency market is the best test-ground for testing our trading agents because of the huge amount of data accumulated every minute and the market volatility is extremely large. As a experimental result, during the test period, our agents achieved a return of 1800% and provided the least risky investment strategy among the existing methods. And, another experiment shows that the agent can maintain robust generalized performance even if market volatility is large or training period is short.
In the era of the Internet of information, we have gone through layering, cross-layer, and cross-system design paradigms. Recently, the ``curse of modeling" and ``curse of dimensionality" of the cross-system design paradigm have resulted in the popularity of using artificial intelligence (AI) to optimize the Internet of information. However, many significant research challenges remain to be addressed for the AI approach, including the lack of high-quality training data due to privacy and resources constraints in this data-driven approach. To address these challenges, we need to take a look at humans' cooperation in a larger time scale. To facilitate cooperation in modern history, we have built three major technologies: ``grid of transportation", ``grid of energy", and ``the Internet of information". In this paper, we argue that the next cooperation paradigm could be the ``Internet of intelligence (Intelligence-Net)", where intelligence can be easily obtained like energy and information, enabled by the recent advances in blockchain technology. We present some recent advances in these areas, and discuss some open issues and challenges that need to be addressed in the future.