The era of transformation powered by digitization, improvements in information and communication technology, machine learning, robotics and artificial intelligence is upon us. Today, we are able to solve complex problems with the aid of technology. That notwithstanding, animal populations globally are under threat, with the extinction of species taking place at a far accelerated pace than can be reversed, thus making wildlife conservation a critical issue of our time. Along with wildlife extinction currently underway, there remains a chronic financial shortage for wildlife conservation and the funding shortfall is expanding annually. This research contends that blockchain, the technology underpinning cryptocurrencies such as Bitcoin can be utilized as a catalyst by the development of cryptowildlife nonfungible tokens (NFTs), which are provably scarce, unique and programmable digital wildlife collectible assets. These could be used to finance wildlife conservation as a supplementary source of revenue.
Cryptocurrencies like Bitcoin not only provide a decentralized currency, but also provide a programmatic way to process transactions. Ethereum, the second largest cryptocurrency next to Bitcoin, is the first to provide a Turing-complete language to specify transaction processing, thereby enabling so-called smart contracts. This provides an opportune setting for attackers, as security vulnerabilities are tightly intertwined with financial gain. In this paper, we consider the problem of automatic vulnerability identification and exploit generation for smart contracts. We develop a generic definition of vulnerable contracts and use this to build TEE THER, a tool that allows creating an exploit for a contract given only its binary bytecode. We perform a large-scale analysis of all 38,757 unique Ethereum contracts, 815 out of which our tool finds working exploits for—completely automated.
Bitcoin açık kaynaklı bir kod olarak yayınlanan ve blok zinciri (blockchain) teknolojisine dayanan ilk kriptopara birimidir. Kriptopara birimlerinin avantajı, merkezi olmayan yapılar olması ve bu sayede merkez bankalarına ihtiyaç duymayıp işlem maliyetlerinin az olmasıdır. Bu çalışmanın amacı, son zamanlarda popülerliği artan ve en köklü kriptopara birimi olan Bitcoin getirilerinin kaotik yapıya sahip olup olmadığını tespit etmektir. Başlangıç koşullarına aşırı duyarlı olan seriler kaotik dinamiklere sahiptir. Eğer seriler kaotik özelliklere sahipse, geleneksel yöntemlerle incelenmeleri yanıltıcı sonuçlar verebilmektedir. Bu amaçla, 19.12.2011-29.01.2018 dönemine ait Bitcoin getiri serisi kullanılarak ilk olarak BDS (Brock, Dechert ve Scheinkman) testi ile doğrusal olmayan bağımlılık test edilmiş, ardından serideki uzun dönemli bellek yapısını belirlemek için dönüştürülmüş genişlik (rescaled range-R/S) yöntemi uygulanarak Hurst üsteli elde edilmiştir. Ardından, yanlış en yakın komşular yöntemi ile uygun gömme boyutu belirlenmiştir. Serideki kaotik davranışı tespit etmek için korelasyon boyutu hesaplanmış ve Lyapunov üsteli değeri pozitif bulunmuştur. Sonuç olarak, serinin doğrusal olmayan dinamikler içerdiği, uzun belleğe sahip olduğu ve serinin kaotik özellikler taşıdığı bulgusu elde edilmiştir.
Cryptocurrency exchanges, i.e. online platforms where customers exchange their cryptocurrencies for other cryptocurrencies or fiat currencies, are routinely targeted by hackers, which often result in a massive drain of cryptocurrencies. The heists can be large enough to bring down the exchanges to their knees. The customers of an exchange who have entrusted it with cryptocurrencies would have a contractual right to claim their return. If the exchange is wound up, however, personal claims (such as a contractual claim) brought in bankruptcy proceedings would not yield to them a full recovery. It is, therefore, practically important to examine whether the cryptocurrencies entrusted to an exchange are shielded from the bankruptcy of the exchange provider, so that the customers can obtain a full recovery. Under most, if not all, legal systems, the answer to this question would be unclear because cryptocurrencies are a novel asset and because the legal relationships between an exchange provider and its customers have not been sufficiently scrutinised. This article will seek to improve legal clarity by presenting an analytical framework, identifying issues, and pointing to possible solutions.
It will begin by examining the law of Japan, possibly the only country in the world where the matter has been litigated. Following a hacking attack, Mt Gox, the world’s biggest operator of a Bitcoin exchange at that time, became insolvent. After the opening of bankruptcy proceedings, one of its former customers filed a suit against the bankruptcy trustee in Japan, seeking a full recovery of the Bitcoins he had entrusted to the exchange. Rather than relying on a personal claim, the plaintiff asserted ownership over what he saw as “his Bitcoins”. His claim was, however, dismissed by the Tokyo District Court for reasons to be examined in this article. More recently, other customers filed a suit in Japan by trying another legal avenue to obtain a full recovery. They are arguing that their Bitcoins had been held by the exchange on trust for them.
After presenting an analysis under Japanese law, this article will explore its relevance to other legal systems. Since Japanese law belongs to the family of civil law systems, the analysis concerning the ownership of cryptocurrencies would have direct relevance to other civil law systems in the context of rei vindicatio (vindication of property). It would also inform the debate whether cryptocurrencies are “property” in terms of the tort of conversion in common law systems. The analysis concerning whether an exchange holds cryptocurrencies on trust for its customers would be useful to all the common law systems of which the law of trusts forms an integral part as well as any civil law systems which, like Japanese law, have introduced the concept of trusts.
Nowadays people rely on many things in order to do daily activity. As time goes by, global economy has changed and has had significant growth. The form of money has also changed, from only being available in the physical form, such as coins and banknotes, now we have the digital form of money, otherwise known as virtual currency. This paper discusses about the legal status of Bitcoin as virtual currency in Indonesia according to Law Number 7 of 2011 regarding Currency Law. The author examines the problem by using normative legal research methods with descriptive approach. The data was collected from secondary and primary data and is used as supportive research data. The collected data is analysed using qualitative method. The result of this research is the legal status of Bitcoin as virtual currency in Indonesia according to Law Number 7 of 2011 regarding Currency Law has not been regulated yet. Therefore, the government of Indonesia needs to make a specific regulation to regulate Bitcoin in Indonesia.
Kripto paralar günümüzde sıklıkla karşımıza çıkan para teriminden biridir. Ülkelerarasında ticaret sınırının kalkması ile birlikte ulusal paralara alternatif para birimi olan kripto para, mal ve hizmet ticaretinde kullanılabildiği gibi, aksi durumlarda da kullanımı yıllar geçtikçe artmaktadır. Kripto kelime anlamıyla cyripto ve currency kelimelerinin bir araya getirilmesi ile oluşmuş, ana teması şifre olan kelimedir. Şifreleme yöntemi ile alışveriş ve alım-satımlar gerçekleştirilmektedir. Bu şifreleme sisteminin güvenilirliği konusunda her ne kadar tartışma olsa da, kullanım alanı gün geçtikçe yaygınlaşma göstermektedir. Çalışmada kripto paranın en yaygın kullanım şekli olan bitcoin incelenmiş, ortaya çıkışı ve sistemi hakkında bilgi verilmiştir. Türkiye ve diğer ülkelerdeki kullanımı her ne kadar sınırlayıcı olsa da muhatap bir kurum olmadığı sürece kullanım alanının genişleyeceği aşikârdır.
We propose Parsec, a web-scale State channel for the Internet of Value to exterminate the consensus bottleneck in Blockchain by leveraging a network of state channels which enable to robustly transfer value off-chain. It acts as an infrastructure layer developed on top of Ethereum Blockchain, as a network protocol which allows coherent routing and interlocking channel transfers for trade-off between parties. A web-scale solution for state channels is implemented to enable a layer of value transfer to the internet. Existing network protocol on State Channels include Raiden for Ethereum and Lightning Network for Bitcoin. However, we intend to leverage existing web-scale technologies used by large Internet companies such as Uber, LinkedIn or Netflix. We use Apache Kafka to scale the global payment operation to trillions of operations per day enabling near-instant, low-fee, scalable, and privacy-sustainable payments. Our architecture follows Event Sourcing pattern which solves current issues of payment solutions such as scaling, transfer, interoperability, low-fees, micropayments and to name a few. To the best of knowledge, our proposed model achieve better performance than state-of-the-art lightning network on the Ethereum based (fork) cryptocoins.
Banking malware is malicious software that aims to steal money from victims via manipulated bank transfers in online banking. This paper describes how the profits of banking malware are generated and subsequently laundered, with a particular focus on the use of bitcoins and other digital payment methods. Computers are infected with banking malware via phishing emails, in which people are persuaded in various ways to click on links or open attachments, or via exploit kits, programs that try to find weak spots in the security of computer systems. After infection, bank transfers of the online banking accounts of victims are manipulated via fake website screens (web injects). Behind the screens the amounts and beneficiaries of transactions are modified, emptying the victims’ bank accounts. In the next step, the banking malware profits are laundered. In this paper we describe two models that are used in particular (next to more traditional money laundering methods). The first model involves the use of money mules and a quick cash-out. The second model focuses on direct spending via (a) direct purchases of products via online shopping, (b) direct purchases of bitcoins via Bitcoin exchanges or (c) direct purchases of luxury goods. Bitcoins can be further laundered via so-called mixing services. All in all, these methods allow criminals to launder profits in relative anonymity and prevent seizure of the illegal profits.
Kripto para birimleri teknolojinin gelişmesiyle birlikte son yıllarda önem kazanmış ve daha çok kullanılır hale gelmiştir. Merkezi bir otoriteye bağlı olmayan ve kriptografik sistemler ile güvenliği sağlanan bu para birimlerinden en bilineni Bitcoin’dir. Bu çalışmada, başlıca kripto para birimleri ve işleyiş süreçleri incelenmiştir. Buna ek olarak Bitcoin’in döviz, hisse senedi emtia piyasaları ve faiz ile olan ilişkisi ele alınmıştır. Çalışmada kullanılan veri setinin frekansı aylık olup Mart-2012 ile Mayıs-2018 dönemini kapsamaktadır. Zaman serisi yöntemlerinden Johansen Eşbütünleşme ve Granger Nedensellik analizleri uygulanmıştır. Çalışmanın sonuçlarına göre, Bitcoin fiyatlarının artan bir trende ve yüksek bir volatiliteye sahip olduğu görülmektedir. Faiz değişkeni ile Bitcoin fiyatları arasında diğer analizler ve Granger nedensellik testi sonuçlarına göre istatistiksel olarak anlamlı bir ilişki vardır.
Now this day we see many new innovations in Monetary System. Now at one side Digital Currency comes with a new concept called Plastic Money with great and easy ways to pay and get money to anyone. And the other side we still struggling with Fiat Currencies problems which effecting economy of any country very badly. Conventional currency has been based on gold or silver. Around the world, people are using software programs that follow a mathematical formula to produce Bitcoins but bitcoin is equally facing risks, non acceptability of central banking system in developing Nations. This paper studies the present scenario of Bitcoin, its evolution and its impact on developing Nations like India
For various reasons, financial institutions often make use of high-level trading strategies when buying and selling assets. Many individuals, irrespective or their level of prior trading knowledge, have recently entered the field of trading due to the increasing popularity of cryptocurrencies, which offer a low entry barrier for trading. Regardless of the intention or trading strategy of these traders, the invariable outcome is their attempt to buy or sell assets. However, in such a competitive field, experienced market participants seek to exploit any advantage over those who are less experienced, for financial gain. Therefore, this work aims to make a contribution to the important issue of how to optimize the process of buying and selling assets on exchanges, and to do so in a form that is accessible to other traders. This research concerns the optimization of limit order placement within a given time horizon of 100 seconds and how to transpose this process into an end-to-end learning pipeline in the context of reinforcement learning.<br/>Features were constructed from raw market event data that related to movements of the Bitcoin/USD trading pair on the Bittrex cryptocurrency exchange. These features were then used by deep reinforcement learning agents in order to learn a limit order placement policy. To facilitate the implementation of this process, a reinforcement learning environment that emulates a local broker was developed as part of this work. Furthermore, we defined an evaluation procedure which can determine the capabilities and limitations of the policies learned by the reinforcement learning agents and ultimately provides means to quantify the optimization achieved with our approach. Our analysis of the results of this work includes the identification of patterns in cryptocurrency trading that were formed by market participants who posted orders, and a conceptual framework to construct data features containing these patterns. We developed a fully-functioning reinforcement learning environment that emulates a local broker and, by means of this process, we identified which components are essential.<br/>With the use of this environment, we were able to train and test multiple reinforcement learning agents whose aims were to optimize the placement of buy and sell limit orders. During the evaluation, we were able to improve the parameter settings of the constructed reinforcement learning environment and therefore improve the policy learned by the agents. Ultimately, we achieved a significant improvement in limit order placement with the application of a state-of-the-art deep Q-network agent and were able to simulate purchases and sales of 1.0 BTC at a price that was up to $33.89 better than the market price. We have made use of the OpenAI Gym library and contributed our work to the community to enable further investigations to be carried out. The work done in this thesis can be used as a framework to (1) build a component that acts as an intermediary between trader and exchange and (2) to enable exchanges to provide a new order type to be used by traders.
The historic rise of blockchain-based cryptocurrencies to over $327 billion in market capitalization has sparked significant research efforts studying their reliability, performance, and security. Bitcoin, the highest valued cryptocurrency, has received the most thorough scrutiny, with many studies analyzing its peer properties and network health. In contrast, the network layer for Ethereum, the second-largest cryptocurrency, has gone mostly ignored, even though it employs different algorithms for transaction propagation. \n\nIn this thesis, we perform timing analysis on transactions propagated through Ethereum networks to identify the origin nodes. We build a tool called TxSniper to verify our approach on Ethereum's main network. We find that we can identify the origin with a 70% probability; this method is not always effective due to presence of nodes running clients that use different implementations of transaction propagation.
One of the most important components in a public blockchain like Bitcoin and Ethereum is the authenticated data structure that keeps track of all block data, transactions, and the world state (account balance, smart contract states, etc.) Thanks to authenticated data structures, lightweight nodes only need to store authentication information and can delegate queries to those nodes with a full replica of data and the authenticated data structure. The lightweight nodes can trust the query results after verifying against the authentication information. It is also critical to have enough nodes in the network that are equipped with the authenticated data structure to ensure scalability and availability, which is especially important for public blockchains. Therefore, every public blockchain highly encourages users to download the authenticated data structure as the first step.\n\nFetching all elements from the entire authenticated data structure is a novel query type that has not gathered attention in the past. We describe this new emerging query type in the three-party authenticated data structure (ADS). We improve the design and implementation of the authenticated data structure so that the new query type is well-supported. We specifically apply the improvements to the Ethereum blockchain network. With our proposed ADS system in Ethereum, we improve Ethereum state synchronization performance by 216 times.
In this paper, we revisit the fundamental question of Bitcoins security against selfish-mine attack introduced by I. Eyal and E. G. Sirer in We study the state machine of Bitcoin's network under the influence of one pool miner adopting the selfish mine strategy while the rest of the community following the standard protocol. We prove that the process following by the states of Bitcoin's system is a irreducible, positive-recurrent, aperiodic, and discrete Markov chain. We give an invariant (stationary) distribution for this Markov chain and deduce easily the rate of convergence towards the stationary equilibrium situation.
Francesco Bortolussi, Zeger Hoogeboom, Frank W. Takes
Cryptocurrencies such as Bitcoin and Ethereum have recently gained a lot of popularity, not only as a digital form of currency but also as an investment vehicle. Online marketplaces and exchanges allow users across the world to convert between dozens of different cryptocurrencies and regular currencies such as euros or dollars. Due to the novelty of this concept, the volatility of these markets and the differences in maturity and usage of particular marketplaces, currency pairs may appear at multiple marketplaces but at different trading prices. This paper proposes a novel algorithmic approach to take advantage of these mispricings and capitalize upon the pricing differences that exist between exchanges and currency pairs. To do so, we model each combination of a currency and a market as one node in a graph. A directed link between two nodes indicates that a conversion between these two currency/market pairs is possible. The weight of the link relates to the exchange rate of executing this particular currency exchange. To leverage the mispricings, we seek for cycles in the graph such that upon multiplying the weights of the links in the cycle, a value greater than 1 is found and thus a profit can be made. Our goal is to do this efficiently, without exhaustively enumerating all possible cycles in the graph. Therefore, we convert our data and address the problem in terms of finding minimum weight triangles in graphs with integer weights, for which efficient algorithms can be utilized. We experiment with parameter settings (heuristics) related to the conversion of exchange rate data into integer weight values. We show that our approach improves upon a reasonable baseline algorithm in terms of computation time. Furthermore, using a real-world dataset, we demonstrate how the obtained minimal weight cycles indeed unveil a number of currency exchange cycles that result in a net profit.
The recent emergence of cryptocurrencies such as Bitcoin and Ethereum has posed possible alternatives to global payments as well as financial assets around the globe, making investors and financial regulators aware of the importance of modeling them correctly. The Lvy's stable distribution is one of the attractive distributions that well describes the fat tails and scaling phenomena in economic systems. In this paper, we show that the behaviors of price fluctuations in emerging cryptocurrency markets can be characterized by a non-Gaussian Lvy's stable distribution with ' 1:4 under certain conditions on time intervals ranging roughly from 30 min to 4 h. Our arguments are developed under quantitative valuation defined as a distance function using the Parseval's relation in addition to the theoretical background of the General Central Limit Theorem (GCLT). We also discuss the model-fitting for returns by employing the method based on likelihood ratios. Even though the cubic power-law model is a better fitting model than the Lvy's stable model in the tail part of returns, the Lvy's stable model outperforms the fit for the entire and wider range of returns. Our approach can be extended for further analysis of statistical properties and contribute to developing proper applications for financial modeling.
The paper presents Tendermint, a new protocol for ordering events in a distributed network under adversarial conditions. More commonly known as Byzantine Fault Tolerant (BFT) consensus or atomic broadcast, the problem has attracted significant attention in recent years due to the widespread success of blockchain-based digital currencies, such as Bitcoin and Ethereum, which successfully solved the problem in a public setting without a central authority. Tendermint modernizes classic academic work on the subject and simplifies the design of the BFT algorithm by relying on a peer-to-peer gossip protocol among nodes.
The Distributed nature of Bitcoin introduces security issues that necessitate security-specific enhancements in Bitcoin protocol. Therefore, proposing a method of incorporating criteria check and verification process for miners to participate in the mining process and join the mining pool respective
Bitcoin (BTC) je digitalna, decentralizirana, anonimna platna mreža, a ujedno i kripto valuta koja je korištena u toj mreži. BTC se koristi za elektronsko plaćanje usluga. U pojedinim mjestima, također, je moguće platiti noćenje u lancu hotela, kupiti pizzu, kupiti VPB servis... Diplomski rad podijeljen je na dva glavna dijela. U prvom dijelu objašnjeno je sve što potrebno za razumjeti što je to Bitcoin. U drugom dijelu opisani su bitniji dijelovi koda Bitcoin algoritam
Subscribing to a techno-utopian discourse replacing institutions and experts with “trust in code,” digital alternative currency Bitcoin is pitched as a “math-based money” governed by incorruptible code rather than human regulators. In three cases, which occurred between 2013 and 2015, we examine this system at moments of breakdown. In contrast to the discourse, we find that power is concentrated to critical sites and individuals who manage the system through ad hoc negotiations, and who users must therefore implicitly trust—a contrast we call Bitcoin’s “promissory gap.” But even in the face of such contradictions between premise and reality, the discourse is maintained. We identify four authorizing strategies used in this work: conflating people with devices, assuming actors conform to notions of economic rationality, appealing to technical expertise, and explaining contradictions as temporary bugs. We contend that these strategies are mobilized widely to legitimize a variety of applications of algorithmic regulation and peer production projects.
Bitcoin is the first secure decentralized electronic currency system. However, it is known to be inefficient due to its proof-of-work (PoW) consensus algorithm and has the potential hazard of double spending. In this paper, we aim to reduce the probability of double spending by decreasing the probability of consecutive winning. We first formalize a PoW-based decentralized secure network model in order to present a quantitative analysis. Next, to resolve the risk of double spending, we propose the personalized difficulty adjustment (PDA) mechanism which modifies the difficulty of each participant such that those who win more blocks in the past few rounds have a smaller probability to win in the next round. To analyze the performance of the PDA mechanism, we observe that the system can be modeled by a high-order Markov chain. Finally, we show that PDA effectively decreases the probability of consecutive winning and results in a more trustworthy PoW-based system.
This letter questions the true nature (true versus spurious) of the Long Range Dependence (LRD) behavior observed in the returns and volatility series of four Cryptocurrencies (CC). Using a robust approach, this letter shows that the LRD behavior exhibited by the returns and volatility series of Bitcoin, Litecoin, and Ripple is a true behavior, and not a statistical artifact. As for Ethereum, the results show that the true LRD is only supported for the volatility series. Our results confirm the inefficiency of all the considered markets, with the exception of Ethereum.
A bitcoin node needs to download the full block contents of the entire blockchain, before actually being able to send and receive transactions on bitcoin broadcast network, except simple payment verification clients which require only block headers and bloom filters to sync with others peers available on the network. Transactions/Blocks pass through a complex process at sender and receiver than it apparently looks to be. During transmission transactions/blocks are broken down into smaller chunks of data so that they can be carried on the wire. These chunks are given appropriate headers, encapsulated and then passed through several layers to reach the destination. In this paper we captured Bitcoin packets using Wireshark and deeply investigated and analyzed them. We investigated how bitcoin transaction/block messages work and what values and parameters are considered during this whole process.
One remarkable feature of vehicular ad hoc networks is characterized by an opportunistic communications by means of store-carry-forward message relaying which requires the cooperation of vehicles on the networks. However, we cannot be sure that all vehicles willingly contribute their computing resources to the networks for message forwarding with no rewards for their efforts in real-world scenarios. In addition, unfortunately, there may exist some selfish and greedy node which may not help others but tend to take their own gain. To cope with this challenge, incentive mechanisms are generally considered as the promising solution. In this paper, we design a Bitcoin-based secure and reliable incentive scheme for cooperative vehicular delay tolerant networking services. Bitcoin is the well-known worldwide cryptocurrency and digital payment system whose implementation relies on cryptographic techniques, which makes it possible to develop a practical credit-based incentive scheme on the vehicular networks at a low cost. We also implement Bitcoin transaction scripts to handle our proposed incentive scheme.