Since its creation in 2009, the electronic currency Bitcoin has generated volumes of online debate in the business press. While there have been plenty of economic arguments situating it as a financial bubble about to collapse including from Nobel Prize winning economists, its price value has proven to be more durable than many have predicted. To explain this durability, Karpikâs conception of market singularities is used to understand the Bitcoin phenomenon by outlining the beliefs that maintain Bitcoinâs status as a volatile financial asset. Market singularities are markets for particular kinds of goods and services that are of uncertain and incommensurable value. Singularities markets have communities of followers and a distinctive belief system that ascribes value to a particular product, service, or asset. Developing Karpikâs conception, the paper explores the libertarian political belief system that surrounds Bitcoinâs status as a financial asset. I also outline some political tensions within the electronic currency community concerning governance and centralisation.
Despite its increasing popularity, no official guidance on the financial reporting of Bitcoin transactions has been provided by standard setters, although tax accounting guidance began to appear in 2014. Designed as a decentralised currency, Bitcoin is not intended to become a reporting currency and will instead complement fiat money. We argue that in the case of Bitcoin the accounting principle of faithful representation requires interpretation of the economic substance for financial reporting that varies with reporting entity: trading firms recognise Bitcoin like a foreign currency and measure the revenue, or expense, at the equivalent amount of the reporting currency and digital currency exchanges recognise Bitcoin as goods in line with tax accounting treatment. An Economica paper by Radford (1945), which describes the use of cigarettes as commodity money in a prisoner of war camp alludes to this economic basis. This paper applies accounting principles to a practical issue and contributes to the process by which standard setters may issue an interpretation.
There has been increasing interest in adopting BlockChain (BC), that underpins the crypto-currency Bitcoin, in Internet of Things (IoT) for security and privacy. However, BCs are computationally expensive and involve high bandwidth overhead and delays, which are not suitable for most IoT devices. This paper proposes a lightweight BC-based architecture for IoT that virtually eliminates the overheads of classic BC, while maintaining most of its security and privacy benefits. IoT devices benefit from a private immutable ledger, that acts similar to BC but is managed centrally, to optimize energy consumption. High resource devices create an overlay network to implement a publicly accessible distributed BC that ensures end-to-end security and privacy. The proposed architecture uses distributed trust to reduce the block validation processing time. We explore our approach in a smart home setting as a representative case study for broader IoT applications. Qualitative evaluation of the architecture under common threat models highlights its effectiveness in providing security and privacy for IoT applications. Simulations demonstrate that our method decreases packet and processing overhead significantly compared to the BC implementation used in Bitcoin.
Giuseppe Pappalardo, Tiziana Di Matteo, Guido Caldarelli, Tomaso Aste
We investigate Bitcoin network observing transactions broadcasted into the network during a week from 04/05/2016 and then monitoring their inclusion into the blockchain during the following seven months.We unveil that 42% of the transactions are still not included in the Blockchain after 1 h from their appearance and 20% of the transactions are still not included in the Blockchain after 30 days, therefore revealing a great inefficiency in the Bitcoin system. However, we observe that most of these âforgottenâ transactions have low values and in terms of transferred value the system is less inefficient with 93% of the transactions value being included into the Blockchain within 3 h and 98.8% within a day. The fact that a sizeable fraction of transactions is not processed timely casts serious doubts on the usability of the Bitcoin Blockchain for reliable time-stamping purposes. It also calls for a debate about the right systems of incentives which a peer-to-peer unintermediated system should introduce to promote efficient transaction recording
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Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
Digital currency platforms such as Bitcoin, Ethereum, and Ripple are slowly but surely revolutionizing trade and commerce alongside their potential to impact people's economic lifestyles immensely. Digital currencies present a unique medium for humanitarian, mission, and more notoriosly arms and terrorism transactions around the globe. Various factors like security, legislature, and infrastructure affect the viability of adopting digital currencies in developing countries such as Zimbabwe. The research study assesses whether this technology's shortcomings outweigh the conventional means of exchange: hard cash, gold, and checks. Therefore, aiding stakeholders in making informed decisions concerning interfacing technology with economics in the developing world.
Double spending and blockchain forks are two main issues that the Bitcoin crypto-system is confronted with. The former refers to an adversary's ability to use the very same coin more than once while the latter reflects the occurrence of transient inconsistencies in the history of the blockchain distributed data structure. We present a new approach to tackle these issues: it consists in adding some local synchronization constraints on Bitcoin's validation operations, and in making these constraints independent from the native blockchain protocol. Synchronization constraints are handled by nodes which are randomly and dynamically chosen in the Bitcoin system. We show that with such an approach, content of the blockchain is consistent with all validated transactions and blocks which guarantees the absence of both double-spending attacks and blockchain forks.
Philippe Genestier, Sajida Zouarhi, Pascal Limeux, David Excoffier ¡ 7 authors
In our digital world, access to personal data has become an item of concern, with challenging security and privacy aspects. Occurrences of hacking intentions and privacy violations make digital trust a major challenge. This is true in the eHealth area where management of patient health data must comply with many regulations, while remaining accessible to duly authorised health practitioners. Most will have heard about Blockchain because of its most known application - Bitcoin - in the payment area. However, Blockchainâs characteristics make it possible to fulfill the requirements of consent management, as illustrated in an implementation within a health domain use case.
In this document, we introduce some thinkings relative to the concept of blockchain, how it works and what are the issues for the banking system. Thus, first we recall what cryptography is, then we introduce the concept of blockchain as a protocol for transmitting information in a secure way, distinguishing two possible approaches: the decentralized public approach and the centralized private approach. The notion of cryptocurrency is introduced and two examples of applications of the public blockchains that are the bitcoin and the etherium are provided.
Igor Zikratov, Alexander Kuzmin, Vladislav Akimenko, Viktor Niculichev ¡ 5 authors
Blockchain is a relatively new technology that has shown a lot of possibilities. It emerged in 2009 as a public ledger of all Bitcoin transactions. Blockchain technology is finding applications in wide range of areas: digital assets and stocks, smart contracts, record keeping, ID systems, cloud storage, ride sharing, etc. We investigate the blockchains' activity in terms of how to store, retrieve and share files in decentralized network.
The blockchain has fueled one of the most enthusiastic bursts of activity in applied cryptography in years, but outstanding problems in security and privacy research must be solved for blockchain technologies to go beyond the hype and reach their full potential. At the first IEEE Privacy and Security on the Blockchain Workshop (IEEE S&B), we presented peer-reviewed papers bringing together academia and industry to analyze problems ranging from deploying newer cryptographic primitives on Bitcoin to enabling usecases like privacy-preserving file storage. We overview not only the larger problems the workshop has set out to tackle, but also outstanding unsolved issues that will require further cooperation between academia and the blockchain community.
Blockchain or distributed ledger technology is the key innovation inside Bitcoin, the virtual currency, or distributed database commodity. Regulators in different states and nations have viewed and now regulate Bitcoin variously. For example, Bitcoin is property (IRS), a virtual currency (New York State Department of Financial Services and its BitLicense), and an unregulated technology (California, Texas). This regulatory divergence has not prevented the emergence of an $18 billion Bitcoin global market. It has however led some of its early enthusiasts to prison for crossing the line from trusted blockchain anonymity to money laundering. Distributed ledger applications are presently in experimental and early commercial use in applications and for industry sectors now extending far beyond Bitcoin, and far beyond fintech (financial technology.)
This paper evaluates blockchain technology and the role of regulators and policymakers in shaping the evolution and commercialization of this disruptive innovation particularly for the Internet of Things. As blockchain is increasingly used to establish a secure trust relationship and permanent record in a wide array of networked markets, will the diverse regulatory treatments of âessentially the same â innovation create new policy barriers to its wide application? Are there information policy measures, which can help industry and users, avoid the inevitable pitfalls of a novel technology? If so, is there a new alignment of distribution of authority among regulators, which these innovations will spark? Presently for example, the Securities and Exchange Commission, IRS, and This original research will be among the first to deconstruct blockchain for a wide array of industrial sectors and Internet of Things markets. Most prior work has focused on blockchain applications for financial markets, and specifically the cybercurrency Bitcoin, and in particular its cryptographically driven consensus process to establish and maintain trust. While it is important to understand how blockchain technology utilization can increase technical efficiency and reduce transaction costs with an immutable, auditable record of all transactions, that only explains why this technology innovation has sparked such interest. Most important is the ability of blockchain to combine trust and privacy with transparency in new way.
The research methods for evaluation of blockchaining the Internet of Things include socio-technical field tests and multi-method pilot studies currently being planned. Preliminary results and insights from industry and policymaker interviews and will be shared in this paper. Suggestions for further blockchain Internet of Things policy research will conclude the paper.
Bitcoin telah menarik investor di seluruh dunia karena menyajikan pilihan yang menarik untuk sistem moneter saat ini. Ini adalah mata uang virtual yang dapat berpotensi menggantikan mata uang moneter yang ada karena menawarkan konsep baru pembayaran dikenal sebagai reksa persetujuan tanpa bergantung pada kepercayaan untuk setiap bank atau desentralisasi. Bitcoin sebagai mata uang telah diberlakukan di beberapa negara, meskipun tanggapan telah kecurigaan dan memperingatkan.Makalah ini akan memeriksa bitcoin isu-isu terkait menggunakan pendekatan normatif-yuridis dan kritis dalam konteks hukum yang berlaku di Indonesia, Undang-Undang Nomor 11 Tahun 2008 tentang Informasi dan Transaksi Elektronik. Sejauh ini, undang-undang serupa telah diberlakukan oleh California, Uni Eropa dan Singapura untuk menangani masalah-masalah mata uang virtual. Tujuan dari makalah ini adalah untuk menggambarkan bitcoin, mengapa mata uang dan bagaimana kerangka perlindungan hukum untuk Bitcoin investor di Indonesia.Berdasarkan luas-tersebar adopsi bitcoin dan sisi gelap dari kasus bitcoin membentuk sikap pemerintah tentang bitcoin di Amerika Serikat, makalah ini mengeksplorasi bagaimana memberikan peraturan yang tepat untuk melindungi bitcoin investor di Indonesia.
Bitcoin is a popular alternative to fiat money, widely used for its perceived anonymity properties. However, recent attacks on Bitcoin's peer-to-peer (P2P) network demonstrated that its gossip-based flooding protocols, which are used to ensure global network consistency, may enable user deanonymization---the linkage of a user's IP address with her pseudonym in the Bitcoin network. In 2015, the Bitcoin community responded to these attacks by changing the network's flooding mechanism to a different protocol, known as diffusion. However, no systematic justification was provided for the change, and it is unclear if diffusion actually improves the system's anonymity. In this paper, we model the Bitcoin networking stack and analyze its anonymity properties, both pre- and post-2015. In doing so, we consider new adversarial models and spreading mechanisms that have not been previously studied in the source-finding literature. We theoretically prove that Bitcoin's networking protocols (both pre- and post-2015) offer poor anonymity properties on networks with a regular-tree topology. We validate this claim in simulation on a 2015 snapshot of the real Bitcoin P2P network topology.
The synchronization process inherent to the Bitcoin network gives rise to an infinite-server model with the unusual feature that customers interact. Among the closed-form characteristics that we derive for this model is the busy period distribution which, counterintuitively, does not depend on the arrival rate. We explain this by exploiting the equivalence between two specific service disciplines, which is also used to derive the model's stationary distribution. Next to these closed-form results, the second major contribution concerns an asymptotic result: a fluid limit in the presence of service delays. Since fluid limits arise under scalings of the law-of-large-numbers type, they are usually deterministic, but in the setting of the model discussed in this paper the fluid limit is random (more specifically, of growth-collapse type).
Bitcoin es un sistema de pago electronico que desde su aparicion en 2009 se ha posicionado como uno de los sistemas de pago de mayor uso, dando pie a que diversas empresas alrededor del mundo promuevan y adopten su uso. Por ello resulta de gran valor para el publico interesado en las nuevas tecnologias el poseer una vision general acerca de su funcionamiento y las implicaciones que su uso tienen en la actualidad. Este trabajo aporta un panorama del sistema de pago Bitcoin describiendo su funcionamiento, arquitectura, modo de operacion y algunas de las consideraciones financieras asociadas a su uso; se espera que este trabajo pueda ser utilizado como una introduccion para aquel interesado en el estudio del tema.
Bitcoin, the most innovate digital currency as of now, created since 2008, even through experienced its ups and downs, still keeps drawing attentions to all parts of society. It relies on peer-to-peer network, achieved decentralization, anonymous and transparent. As the most representative digital currency, people curious to study how Bitcoinâ price changes in the past. In this paper, we use monthly data from 2011 to 2016 to build a VEC model to exam how economic factors such as Custom price index, US dollar index, Dow jones industry average, Federal Funds Rate and gold price influence Bitcoin price. From empirical analysis we find that all these variables do have a long-term influence. US dollar index is the biggest influence on Bitcoin price while gold price influence the least. From our result, we conclude that for now Bitcoin can be treated as a speculative asset, however, it is far from being a proper credit currency.
Abstract Stratum, the de-facto mining communication protocol used by blockchain based cryptocurrency systems, enables miners to reliably and efficiently fetch jobs from mining pool servers. In this paper we exploit Stratumâs lack of encryption to develop passive and active attacks on Bitcoinâs mining protocol, with important implications on the privacy, security and even safety of mining equipment owners. We introduce StraTap and ISP Log attacks, that infer miner earnings if given access to miner communications, or even their logs. We develop BiteCoin, an active attack that hijacks shares submitted by miners, and their associated payouts. We build BiteCoin on WireGhost, a tool we developed to hijack and surreptitiously maintain Stratum connections. Our attacks reveal that securing Stratum through pervasive encryption is not only undesirable (due to large overheads), but also ineffective: an adversary can predict miner earnings even when given access to only packet timestamps. Instead, we devise Bedrock, a minimalistic Stratum extension that protects the privacy and security of mining participants. We introduce and leverage the mining cookie concept, a secret that each miner shares with the pool and includes in its puzzle computations, and that prevents attackers from reconstructing or hijacking the puzzles. We have implemented our attacks and collected 138MB of Stratum protocol traffic from mining equipment in the US and Venezuela. We show that Bedrock is resilient to active attacks even when an adversary breaks the crypto constructs it uses. Bedrock imposes a daily overhead of 12.03s on a single pool server that handles mining traffic from 16,000 miners.
The Bitcoin digital currency appeared in 2009. Since this time, researchers and practitioners have looked under the hood of the open source Bitcoin currency, and discovered that Bitcoins Blockchain software architecture is useful for non-monetary purposes too. By coalescing the research and practice on Blockchains, this work begins to unpack Blockchains as a general phenomenon, therein, arguing that all Blockchain phenomena can be conceived as being comprised of transaction platforms and digital ledgers, and illustrating where public key encryption plays a differential role in facilitating these features of Blockchains.
Bitcoin is an application that runs on blockchain technology. Blockchain is a foundational technology that is bringing in the second era of the Internet â the era where value can be transferred, rather than just information. Blockchain is developing along a four-stage path similar to that which TCP/IP took. Both are foundational technologies. TCP/IP brought the Internet, and eventually brought significant (transformational) technological changes in business like Amazon.com and Skype. These are changes that could not have been forecast at the beginning of the Internet age. Blockchain is an immutable distributed ledger. It replaces the inefficient use of multiple centralized ledgers. It will support smart contracts that automatically make payments, adjust accounts, and coordinate records among multiple organizations. A payroll application on blockchainâs distributed ledger will allow employees to be paid, and all related deductions and deposits to be made in real-time. It will allow multiple government agencies to immediately have audit-level access to all employee records, and all employer matching-payments. With a fiat crypto-currency a payroll application on the blockchain will allow immediate global payroll compliance at a fraction of the cost of current payroll compliance. Based on the trajectory of ITP/IPâs development it is reasonable to assume that a payroll application will be seen on a blockchain (most likely Quorum, a private/permissioned blockchain based on the Ethereum platform) by 2018-2021. The first one will be constructed either by a government (Finland or Estonia) or by a private company (in the USA). Costs will be so low that the industry will consolidate (picture the arrival of Amazon.com among the group of brick and mortar books stores that preceded it in the late 1990âs). A traditional payroll service provider today needs to prepare for this change by developing a pilot program internally that will educate its workforce to the advantages and operational intricacies of a service based in the blockchain.
The development of the virtual world has penetrated the world of national borders. Not only unlimited distances but applicable laws in cyberspace are increasingly not bound by the laws of the state. In buying and selling in cyberspace, especially the internet, money that is used is no longer monotone in currency issued by a particular country but has created a payment system that does not require legitimacy of a country. The most phenomenal emergence of Bitcoin is that its use as currency in a purchase transaction has been appointed exceeds a country's currency. Several countries in the world have determined stance against the imposition of BitCoin, some accept and some refuse. Indonesia has not determined a clear stance for the development of new Bitcoin in Indonesia limited to the internet world and not stray into the real world. Keyword : Relevance, Law no. 7 In 2011, the Virtual Currency, Phenomenon, BitCoin, Indonesia
Bitcoin is an application that runs on blockchain technology. Blockchain is a foundational technology that is bringing in the second era of the Internet â the era where value can be transferred, rather than just information.
Blockchain is developing along a four-stage path similar to that which TCP/IP took. Both are foundational technologies. TCP/IP brought the Internet, and eventually brought significant (transformational) technological changes in business like Amazon.com and Skype. These are changes that could not have been forecast at the beginning of the Internet age.
Blockchain is an immutable distributed ledger. It replaces the inefficient use of multiple centralized ledgers. It will support smart contracts that automatically make payments, adjust accounts, and coordinate records among multiple organizations.
A payroll application on blockchainâs distributed ledger will allow employees to be paid, and all related deductions and deposits to be made in real-time. It will allow multiple government agencies to immediately have audit-level access to all employee records, and all employer matching-payments. With a fiat crypto-currency a payroll application on the blockchain will allow immediate global payroll compliance at a fraction of the cost of current payroll compliance.
Based on the trajectory of ITP/IPâs development it is reasonable to assume that a payroll application will be seen on a blockchain (most likely Quorum, a private/permissioned blockchain based on the Ethereum platform) by 2018-2021. The first one will be constructed either by a government (Finland or Estonia) or by a private company (in the USA). Costs will be so low that the industry will consolidate (picture the arrival of Amazon.com among the group of brick and mortar books stores that preceded it in the late 1990âs).
A traditional payroll service provider today needs to prepare for this change by developing a pilot program internally that will educate its workforce to the advantages and operational intricacies of a service based in the blockchain.
Heretofore the concept of "blockchain" has not been precisely defined. Accordingly the potential useful applications of this technology have been largely inflated. This work sidesteps the question of what constitutes a blockchain as such and focuses on the architectural components of the Bitcoin cryptocurrency, insofar as possible, in isolation. We consider common problems inherent in the design of effective supply chain management systems. With each identified problem we propose a solution that utilizes one or more component aspects of Bitcoin. This culminates in five design principles for increased efficiency in supply chain management systems through the application of incentive mechanisms and data structures native to the Bitcoin cryptocurrency protocol.