Hirschman’s Exit/Voice conception has stimulated an extensive literature across many disciplines. Exit/Voice was designed to shine explanatory light on the responses of stakeholders in firms and states in moments of decline. We apply it here to the Bitcoin blockchain, where the Exit/Voice apparatus illuminates strange and unencountered qualities of the reactive choices open to the blockchain’s varied stakeholders.
Chao Qu, Ming Tao, Jie Zhang, Xiaoyu Hong · 5 authors
With the fast development of mobile Internet, Internet of Things (IoT) has been found in many important applications recently. However, it still faces many challenges in security and privacy. Blockchain (BC) technology, which underpins the cryptocurrency Bitcoin, has played an important role in the development of decentralized and data intensive applications running on millions of devices. In this paper, to establish the relationship between IoT and BC for device credibility verification, we propose a framework with layers, intersect, and self-organization Blockchain Structures (BCS). In this new framework, each BCS is organized by Blockchain technology. We describe the credibility verification method and show how it provide the verification. The efficiency and security analysis are also given in this paper, including its response time, storage efficiency, and verification. The conducted experiments have been shown to demonstrate the validity of the proposed method in satisfying the credible requirement achieved by Blockchain technology and certain advantages in storage space and response time.
This paper explores the predictive qualities of Bitcoin Miners Revenue on Bitcoin Returns. Using data on Bitcoin in the cryptocurrency market from July 1, 2010 to February 20, 2018, we reflect intervariable correlations not previously examined. We analyze those relationships with a conditional regression analysis adjusting for calendar effects. We separate the sample, and use the last 17 trading days (month) to test a strategy based on the probability of Bitcoin Returns moving higher. After a slight modification to the logistic regression analysis, we find a profitable trading strategy exists based solely on Bitcoin Miners Revenue and the probability of Bitcoin Returns moving higher.
Thanks to the new global order established after the Second World War and the communication networks that have become widespread. Due to this, the electronic payment systems that have started to be used since the second half of the 20th century in the world and the credit cards called plastic money have started to be widely used in our country since the 80 '. From the beginning of 2000's, it is observed that cash-based transactions are lagging e-money-based transactions. Since the beginning of the 90's the Internet and social media emerged with new media technologies and after 2004, it has become a dominant idea that these environments provide freedom and even create disorder. In the last 5-6 years we have seen the trade of crypto currencies like Bitcoin. Bitcoin is a method of payment that people use for their purchases based on mutual trust, without an authority issuing it. It works independently of the state authority and the banking system. From this point of view, it is seen as the reflection of freedom originally envisaged for the internet environment. In this context, the question of how bitcoin systems are perceived, and the level of entrepreneurship are issues that needs to be investigated. In this study, a survey was conducted to measure the level of entrepreneurship of bitcoin miners, buyers and sellers. Twitter users were selected for the sample. The research is designed to examine the impact of entrepreneurship motivated by investors' interest in entering the arena that is said to be quite new and risky, and which sub-factors may dominate, which deals with bitcoin and similar crypto currencies. The findings show that users who are interested in mining, buying-selling and trading have very high level of entrepreneurial points.
This paper discusses the mining-trading of cryptocurrency in Islamic law as a digital asset that has recently been traded in cyberspace. The value of cryptocurrency is soaring and fluctuation and it is influenced by the demand of buying and selling. Indodax.com is the official digital asset site in Indonesia that trades more than 13 digital currencies. As we know, digital currencies are not electronic money, even though the characteristic is similar. Starting from this, I analyze whether cryptocurrency is worthy of being value as money that has a certain value. Until now, the Indonesian government through Bank Indonesia has published regulation Number 16/8/PBI/ 2014, which explicitly prohibits using bitcoin and altcoin on financial transactions. Otherwise, MUI (Indonesian Ulema Council) has not issued a fatwa yet related to cryptocurrency. From here, I focuse on this study to the law of cryptocurrency in Islamic law. Bitcoin has advantages and disadvantages. Among its advantages are the user can use exchange or transaction without third service (bank), and it can be traded in merchandise shops. But, the disadvantages of bitcoin are mach more, such as fluctuating value every times, it is not listed as a commodity, it is not watched by Financial Services Authority (OJK), it presents the element of gharar (uncertainty) and maysir (gambling or bet), which makes it possible to be used for money laundering and drugs. On the other hand, until now, the Indonesian people have not considered that bitcoin as a treasure like gold or silver
Bitcoin and Ethereum are novel mechanisms for decentralizing the concept of money and computation. Extending decentralization to the human identity concept, we can think of using blockchain for creating a list of verified human identities with a one-person-one-ID property. UniqueID is a Decentralized Autonomous Organization(DAO) for maintaining human identities such that every physical human entity can have no more that one account. One part of this identity is simply the user's claim on one of his unique, permanent, and measurable characteristics -biometrics. Blockchain has proved its integrity as a platform for storing and performing computations on such claims. The biggest challenge here is to ensure that the user has submitted his own valid biometric data. Human verifiers can check if there is any inconsistency in other users' data, by peer-to-peer checks. For preventing bad behavior and centralization in the verification process, UniqueID benefits from novel governance mechanisms to choose verifiers and punish unjust ones. Also, there are incentives for honest verifiers and users by newly generated tokens. We show how the users' privacy can be preserved by using state-of-the-art cryptographic techniques, and so they can use their identity without any concerns for votings, financial and banking purposes, social media accounts, reputation systems etc.
Tooba Faisal, Nicolas T. Courtois, Antoaneta Serguieva
The use of blockchains is growing every day, and their utility has greatly expanded from sending and receiving crypto-coins to smart-contracts and decentralized autonomous organizations. Modern blockchains underpin a variety of applications: from designing a global identity to improving satellite connectivity. In our research we look at the ability of blockchains to store metadata in an increasing volume of transactions and with evolving focus of utilization. We further show that basic approaches to improving blockchain privacy also rely on embedding metadata. This paper identifies and classifies real-life blockchain transactions embedding metadata of a number of major protocols running essentially over the bitcoin blockchain. The empirical analysis here presents the evolution of metadata utilization in the recent years, and the discussion suggests steps towards preventing criminal use. Metadata are relevant to any blockchain, and our analysis considers primarily bitcoin as a case study. The paper concludes that simultaneously with both expanding legitimate utilization of embedded metadata and expanding blockchain functionality, the applied research on improving anonymity and security must also attempt to protect against blockchain abuse.
Open access
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cs.CR
Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
Jun 18, 2018·Andrew Burnie, 2018. Exploring the Interconnectedness of Cryptocurrencies using Correlation Networks. In Cryptocurrency Research Conference 2018 (Anglia Ruskin University, 2018). Anglia Ruskin University, Cambridge, UK
Correlation networks were used to detect characteristics which, although fixed over time, have an important influence on the evolution of prices over time. Potentially important features were identified using the websites and whitepapers of cryptocurrencies with the largest userbases. These were assessed using two datasets to enhance robustness: one with fourteen cryptocurrencies beginning from 9 November 2017, and a subset with nine cryptocurrencies starting 9 September 2016, both ending 6 March 2018. Separately analysing the subset of cryptocurrencies raised the number of data points from 115 to 537, and improved robustness to changes in relationships over time. Excluding USD Tether, the results showed a positive association between different cryptocurrencies that was statistically significant. Robust, strong positive associations were observed for six cryptocurrencies where one was a fork of the other; Bitcoin / Bitcoin Cash was an exception. There was evidence for the existence of a group of cryptocurrencies particularly associated with Cardano, and a separate group correlated with Ethereum. The data was not consistent with a token's functionality or creation mechanism being the dominant determinants of the evolution of prices over time but did suggest that factors other than speculation contributed to the price.
We study how attempts to regulate cryptocurrencies, or at least to mitigate the harm they do, are misdirected. We started by looking at how one might blacklist stolen bitcoin, and find that two established legal principles – the nemo dat rule and the Clayton's case precedent -- make tracing crime proceeds much simpler than researchers previously thought; they support a first-in first-out rule for taint tracking, which turns out to be much more efficient. However once we published initial results and were approached by theft victims, we discovered a more serious problem. Many bitcoin exchanges do not now give their customers actual bitcoin, but rather do off-chain transactions with other exchange customers or transact on customers' behalf with outsiders. Except where customers withdraw cryptocurrency into self-hosted wallets, the ownership of these assets is unclear. The number of off-blockchain transactions has increased enormously in the last eighteen months; we can't find good figures but the volume is sufficient to raise serious concerns and the practice falls under e-money regulations that are not being enforced. In short, the security, economics and regulatory problems of cryptocurrencies in 2018 turn out to be rather different from those described in the academic literature. The real problem is that we are seeing the emergence of a shadow banking system. Cryptocurrencies do not solve the underlying problems that made bank regulation necessary, and we sadly predict that many of the familiar second-order problems will also reappear. We discuss the implications for regulating cryptocurrencies and smart contracts more generally, and suggest eight things that regulators and central banks might usefully do.
Correlation networks were used to detect characteristics which, although\nfixed over time, have an important influence on the evolution of prices over\ntime. Potentially important features were identified using the websites and\nwhitepapers of cryptocurrencies with the largest userbases. These were assessed\nusing two datasets to enhance robustness: one with fourteen cryptocurrencies\nbeginning from 9 November 2017, and a subset with nine cryptocurrencies\nstarting 9 September 2016, both ending 6 March 2018. Separately analysing the\nsubset of cryptocurrencies raised the number of data points from 115 to 537,\nand improved robustness to changes in relationships over time. Excluding USD\nTether, the results showed a positive association between different\ncryptocurrencies that was statistically significant. Robust, strong positive\nassociations were observed for six cryptocurrencies where one was a fork of the\nother; Bitcoin / Bitcoin Cash was an exception. There was evidence for the\nexistence of a group of cryptocurrencies particularly associated with Cardano,\nand a separate group correlated with Ethereum. The data was not consistent with\na token's functionality or creation mechanism being the dominant determinants\nof the evolution of prices over time but did suggest that factors other than\nspeculation contributed to the price.\n
We study the relationship between Bitcoin and traditional payment systems and the financial sector. The payment systems we will do the study with are Visa, MasterCard, Western Union, American Express and PayPal. We study whether Bitcoin returns, Bitcoin transaction volume, unique Bitcoin addresses and Bitcoin google searches have any relationship with the returns of the traditional payment companies. In addition we also study whether the same variables have any explanatory relationship with the financial sector. We find that the relationship between Bitcoin and payment systems is very weak, which indicates that investors that typically invest in these companies doesn’t see Bitcoin as a serious competitor. However, number of unique Bitcoin addresses has a negative relationship with the abnormal returns of most of the payment companies.
A blockchain is a datastructure that is an append-only chain of blocks. Each\nblock contains a set of transaction and has a cryptographic link back to\nits predecessor. The cryptographic link serves to protect the integrity of\nthe blockchain. A key property of blockchain systems is that it allows mu-\ntually distrusting entities to reach consensus over a unique order in which\ntransactions are appended. The most common usage of blockchains is in\ncryptocurrencies such as Bitcoin.\nIn this thesis we use blockchain technology to design a scalable architec-\nture for a storage system that can provide strong data integrity and ensure the\npermanent availability of the data. We study recent literature in blockchain\nand cryptography to identify the desired characteristics of such a system. In\ncomparison to similar systems, we are able to gain increased performance by\ndesigning ours around a permissioned blockchain, allowing only a predefined\nset of nodes to write to the ledger. A prototype of the system is built on top\nof existing open-source software. An experimental evaluation using different\nquorum sizes of the prototype is also presented.
Blockchain is the technology behind the Bitcoin, it was introduced in the year 2009 by an anonymous person named Satoshi Nakamoto. This technology showed a new way in which financial transaction are possible without any centralized entity involved along with the participating entity. Blockchain technology can be useful in managing supply chain effectively using distributed ledger technology. Distributed ledger spans the identical copy of it"s ledger which is spanned across all the node in the blockchain network.
Bu çalışmada her geçen gün ilgiyle izlenmeye devam edilen sanal para birimi Bitcoin’de çoklu balonların varlığı Phillips, Shi ve Yu (2015) tarafından geliştirilen GSADF birim kök testi ve kritik değerlerin tespitinde her türlü değişen varyans problemini hesaba katarak işlem yapan Harvey, Leybourne, Sollis ve Taylor (2016) tarafından geliştirilen metot takip edilerek araştırılmıştır. Veri seti 16.07.2010 ve 31.12.2017 tarihleri arasında günlük bazdaki 24 saatlik ortalama Bitcoin fiyatlarından oluşmaktadır. Yapılan analizler sonucunda söz konusu veri aralığının büyük bir kısmında Bitcoin fiyatlarında çoklu balonların varlığı görülmüştür
Recently we could see several institutions coming together to create consortium based blockchain networks such as Hyperledger. Although for applications of blockchain such as Bitcoin, Litcoin, etc. the majority-attack might not be a great threat but for consortium based blockchain networks where we could see several institutions such as public, private, government, etc. are collaborating, the majority-attack might just prove to be a prevalent threat if collusion among these institutions takes place. This paper proposes a methodology where we can use intelligent software agents to monitor the activity of stakeholders in the blockchain networks to detect anomaly such as collusion, using supervised machine learning algorithm and algorithmic game theory and stop the majority-attack from taking place.
Intrigued by Bitcoin’s exceptional value development and media attention the last years, we assess if there have been any speculative bubbles in the Bitcoin market and if it exists any bubble today. Our empirical analysis can be divided into three steps. First, it is conducted an econometric test on the existence and date stamping of bubbles in Bitcoin prices based on a new recursive test proposed by Phillips et al (2015) – the SADF and GSADF test. However, this statistical test derives a bubble conclusion from an explosive price behavior. This deviates from common definitions of bubbles within financial theories that a bubble exists if the value of an asset exceeds its fundamental value. Over the period 2010 – April 2018, we detected several of short-lived bubbles and a number of huge bubbles. Our empirical results indicate that there are found six huge bubbles during 2011-2018 lasting from 24 days – 123 days. Our statistical evidence suggests that there does not exist any bubbles in the Bitcoin market today. Second, we find that these bubbles may not incorporate information about rational expectation but rather of irrational exuberances, a finding consistent with the theory presented in the Google Trends, The RSI and the bubble model of “The Stages in a Bubble”. Third, we find that there are some reoccurring trends that are affecting the Bitcoin market investigating the date-stamping results. These are the incidents of the Mt. Gox and China’s relation to Bitcoin as a legal currency.
By comparing cryptocurrencies with other existing payment methods, including banknotes and bank cards, it is clear that the use of Bitcoin and its competitors (Ethereum, \dots) is almost insignificant in world trade. We may also note that these cryptocurrencies have become tools of speculation, which is the antithesis of their primary purpose. Based essentially on the security of electronic signatures, the Ecash introduced here will put the users back to the center of the game and exclude miners and their enormous waste of power energy. Thus, the purpose of this paper is to show that even a piece of paper can be recycled into a secure Ecash, while remaining environmentally friendly. Hence, we create here a cryptocurrency that would use a slight modification of the current banknotes to set up anonymous electronic transactions. By trading with banknotes, we mechanically transfer ownership of the paper money from one owner to another, hence, in this scheme, we introduce the notion of ownership transfer. It implies that at each transaction the elements allowing to authenticate the Ecash does not change, while the ownership certificate will change since the Ecash is transfer towards someone else.
We analyze the economic incentives generated by the proof-of-stake mechanism discussed in the Ethereum Casper upgrade proposal. Compared with proof-of-work, proof-of-stake has a different cost structure for attackers. In Budish (2018), three equations characterize the limits of Bitcoin, which has a proof-of-work mechanism. We investigate their counterparts and evaluate the risk of double-spending attack and sabotage attack. We argue that PoS is safer than PoW agaisnt double-spending attack because of the tractability of attackers, which implies a large "stock" cost for the attacker. Compared to a PoW system whose mining equipments are repurposable, PoS is also safer against a sabotage attack.
The cryptocurrencies are digital currencies that were initially designated to replace the old ones. However, they act as investment assets and many treat them like stocks. The market for cryptocurrencies counts more than 1600 types and the Bitcoin is the first and foremost of all of them. In one year the price of Bitcoin grew staggering 2000 percent. Other currencies have not seen this type of rising. This study investigates the period of over 4 years of data for 5 cryptocurrencies, the three years before and the last year of hyper-growth of the Bitcoin. We used GARCH model to see if two periods of data may offer some incites for patterns. The findings of this paper show that the Bitcoin in the period of high volatility is more diverged from its counterparts. According to results in the period of high volatility, the factors that influence the price formation of cryptocurrencies may not be the same for all of them. Using the price of the Bitcoin of one day earlier and the price of altcoins today we find spillover effect. Spillover effect is less prominent in the second period of high volatility. It may indicate of relatively independent nature of altcoins during the periods of high volatility.
The blockchain is the enigmatic technology that gave birth to Bitcoin and the cryptocurrency movement. By fate or by good fortune, carbon markets and cryptocurrencies face common problems: a need to find consensus on data, and a need to trade value between distrustful strangers. Could the blockchain ledger enable a consensus on carbon budgets, and deliver value for carbon mitigation services? Could blockchain technologies help to resolve the climate crisis? To answer these questions we need to examine the opportunities for decentralized ledgers in carbon and energy markets. Here we show that the blockchain offers a unique opportunity to improve accountability in carb¬on markets and to develop renewable energy micro-grids, but for the blockchain to reach its full potential—to be the game changer—it should be combined with macro-economic policies and macro-prudential regulatory frameworks that can finance a multi-trillion dollar transition.
Krishnendu Chatterjee, Amir Kafshdar Goharshady, Rasmus Ibsen-Jensen, Yaron Velner
Crypto-currencies are digital assets designed to work as a medium of exchange, e.g., Bitcoin, but they are susceptible to attacks (dishonest behavior of participants). A framework for the analysis of attacks in crypto-currencies requires (a) modeling of game-theoretic aspects to analyze incentives for deviation from honest behavior; (b) concurrent interactions between participants; and (c) analysis of long-term monetary gains. Traditional game-theoretic approaches for the analysis of security protocols consider either qualitative temporal properties such as safety and termination, or the very special class of one-shot (stateless) games. However, to analyze general attacks on protocols for crypto-currencies, both stateful analysis and quantitative objectives are necessary. In this work our main contributions are as follows: (a) we show how a class of concurrent mean-payoff games, namely ergodic games, can model various attacks that arise naturally in crypto-currencies; (b) we present the first practical implementation of algorithms for ergodic games that scales to model realistic problems for crypto-currencies; and (c) we present experimental results showing that our framework can handle games with thousands of states and millions of transitions.
In year 2017, Bitcoin attracted most investors because high return of investment. The system for Bitcoin transaction is known as blockchain. The blockchain is blocks of transaction history that shared publicly using secured cryptography. Each block contains the previous transaction information, timestamp and new transaction data in secured cryptographic hash programming language. This paper evaluates the Bitcoin framework whether the security of the system is satisfied with a definition of reliable computer system. In the same time, this paper discovers the reliability of the programming process that involved in blockchain system. The finding of this paper will help investors to understand the blockchain system properly in developing better understanding of cryptocurrency framework. The better understanding of the blockchain will help investors making proper decision in their investment portfolio to gain better profit and preventing loss.
The purpose of this article is to determine how the use of a bitcoin as an instrument of payment can affect the system of international financial payments and the banking system. The method of critical analysis of scientific and methodological literature is used and the materials of research executed by leading experts in the fields of international finance and IT in 2009-2017 are summarized. A bitcoin can become a serious competitor to banks, payment systems such as SWIFT in the implementation of major cross-border payments. It is even compared with gold because there is no risk for the counterparty in operations with it. We suggest that a bitcoin is an outstanding digital technology which can fundamentally change the world banking system, payment settlements and the global economy. The article proposes a classification of advantages, disadvantages and prospects of using a bitcoin as a means of payment between large financial institutions and banks. The perspective of increased competition between leading international payment systems in conducting large cross-border payments is substantiated. The prospects of further studies are determined. How do central banks need to reform the system of international financial payments in view of the inevitable introduction of cryptocurrency? How to implement new financial instruments based on blockchain technology and a bitcoin? What changes in legislation should be made to get the names of buyers and sellers of bitcoins, which will help to reduce financing of illegal activities?
Son dönemlerde dünyada olduğu gibi ülkemizde de popülaritesi giderek artan ve başta Bitcoin, Ethereum gibi kripto paraları içinde barındıran kripto para piyasası gerek uluslararası gerekse ulusal yazının ilgisini çekmektedir. Küresel değişimin ağırlıklı olarak finansal bağlamının son halkalarından biri olan bu piyasaya adaptasyon ve gelişim için hem işletmelerin hem de ulusların vizyon sahibi olarak gerekli adımları atmaları gerekmektedir. Bu durum karşısında bir toplumda; bilgi, farkındalık ve kullanım oranlarının ölçülmesi gereken en temel yapı taşları vatandaş ve işletmeler olacaktır. Bu bağlamda yapılmış olan araştırmanın iki temel aşaması bulunmaktadır. İlk aşamada ulaşılmak istenen amaç; Türk toplumunun kripto para piyasası hakkındaki farkındalık ve tutumunu ölçmek iken; ikinci aşamadaki amaç ise Türkiye’deki kripto para kullanan işletmelerin motivasyonlarını incelemektir. Bu temel amaçlar doğrultusunda ilgi sırasıyla 154 kişi ile anket ve 10 işletme ile çevrimiçi mülakat yapılmıştır. Elde edilen bulgular neticesinde tartışma ve sonuç kısmında birey-işletme-toplum üçlü skalasında çeşitli çıkarımlarda ve önerilerde bulunulmuştur