Blockchain Papers

Timothy Peterson

No abstract is available for this record.

Roman Beck, Christian Becker, Juho Lindman, Matti Rossi

This report documents the program and the outcomes of Dagstuhl Seminar 17132 "Opportunities and Risks of Blockchain Technologies". Blockchain-based applications such as Bitcoin or Ethereum are emerging technologies, but a dramatic increase in industrial and academic interest in the technology is evident. Start-­ups and large financial players are working intensely on blockchain-based applications, making this one of the most promising drivers of financial innovation. However, the design and implementation of blockchain-based systems requires deep technical know-how in various areas, as well as consideration of economic and societal issues. These opportunities and challenges provided the starting point for the Dagstuhl Seminar where we analyzed and synthesized the current body of knowledge on the emerging landscape of blockchain technologies. We linked cryptographic economic systems to already established research streams around trust-related issues in payment systems and digital currencies, and digital asset management.

Meltem KESKİN KÖYLÜ

Institutions and real people need to be able to manage the change that comes with financial technology. Finance and technology are two dynamic elements of life. Being able to execute financial operations independent of place enables direct communication between people. The basis for this kind of a financial technology can be formed by the distributed financial database (blockchain), which includes a financial technology architecture and its management strategy. The blockchain also forms the basis for the digital currency bitcoin, and brings focus to the commercial life itself, as it makes economic mediators such as banks, corporations and states obsolete. Blockchain enables transaction verification from different multiple sources and transparently keeps account records. Thus, it decentralizes the trade and enables no mediator interaction between sellers and buyers, a system that is bound to be common in markets. Existence of no authoritative corporation or mediator, no cost money transfer and the verification from multiple sources are all assets that enable trust and fast operation in the blockchain technology, as it becomes more and more popular. With this study, the digital account function called blockchain is discussed to be used in financial markets and national/international trade. To this end, how the blockchain works, data integrity that it provides, its availability and reliability, as well as its applicability to the trade are discussed.

Jim Lindberg

Blockchain technology emerged in 2009 together with the introduction of Bitcoin, the first virtual currency which enabled nodes in a network, that do not necessarily trust each other, to exchange digital value without the use of trusted intermediaries. Since then, the idea of disintermediation and decentralization has gained traction in a large number of applications outside the world of finance and virtual currencies. This thesis is written in collaboration with Scania, an automotive industry manufacturer, with the purpose of gaining a better understanding of blockchain technology and how it can be used in the transportation industry. This thesis proposes five potential blockchain use cases that aim to either enhance Scania’s existing services or to create new services. Out of these five use cases, one is deemed inappropriate in regards to the use of blockchain technology while the other four have potentials benefits. The common denominator among these use cases is that they are decentralized in nature meaning that the use of intermediaries is mitigated. It is recognized that all use cases could be implemented using traditional, centralized databases and that the use of blockchain boils down to a technology choice with its own trade-offs relative to other potential choices. This thesis concludes that blockchain technology offers a new kind of database architecture, the main benefit of which is that it lets several non-trusting entities agree on a common set of facts, without having a trusted intermediary establishing these facts.

Dr Craig S Wright

No abstract is available for this record.

Mary E. Maginnis

No abstract is available for this record.

Ignacio Rabasa Martínez

espanolEl presente trabajo busca analizar los posibles problemas que plantea el uso y aceptacion de criptodivisas como bitcoin en las distintas modalidades de crowdfunding practicadas en la actualidad. Para ello se explican las formas de crowdfunding mas utilizadas en funcion de la relacion contractual promotor- inversor y la normativa juridica a la que estan sometidas. EnglishThe present work seeks to analyze the possible legal difficulties that may arise from the use and acceptance of cryptocurrencies as bitcoin in crowfunding context. To do this, the different forms of crowdfunding are summarized in terms of the contractual promoter-investorrelationship and the legal regulations to which they are subject

Nashirah Abu Bakar, Sofian Rosbi

Crptocurrency is a digital or virtual currency that uses cryptography for security, transfer process and storage in ledger.This paper is to validate the correlation between exchange rate changes and trading volume changes.Data selected for this study is hourly data starting from 4 November 2017 until 7 November 2017.Methodology implemented in this study started with normality diagnostics and followed by correlation diagnostic.In this study, Pearson correlation calculation is implemented to evaluate the association between two variables namely exchange rate and trading volume.Pearson's correlation coefficient (r) is a measure of the strength of the association between the two variables.Result shows the coefficient of association is 0.123.Therefore, this study proved that the association between exchange rate changes and trading volume changes is very weak association.This value occurred because there is high volatility in hourly data and existence of outliers.The significant of this finding will help investors to recognize the relationship between trading volume and exchange rate.Therefore, it will help investors to make better decision in developing investment portfolio.

Brandon M. Peck

A recent Eleventh Judicial Circuit Court of Florida decision has raised concerns over how both federal and state courts consider the unregulated cryptocurrency, Bitcoin. In State of Florida v. Michell Abner Espinoza, Judge Teresa Pooler held that Bitcoin did not fall under the statutory definitions of “payment instrument” or “monetary instrument” because virtual currency is not directly specified nor could it be included within one of the defined categories listed in Fla. Stat. § 560.103(29) or 896.101(2). Furthermore, Judge Pooler, alluding to the doctrine of lenity, refused to hold Espinoza responsible under a statute that is “so vaguely written that even legal professionals have difficulty finding a singular meaning.” Judge Pooler thus disagreed with earlier decisions by several federal judges. The federal courts have uniformly held that Bitcoin is “money” or “funds” for the purpose of money laundering. Additionally, the federal courts, analyzing the applicable federal money laundering statutes, have refused to apply the doctrine of lenity because there were no ambiguities such that “an ordinary person would [not] know that engaging in the challenged conduct could give rise to the type of criminal liability charged.” State and federal courts can interpret similar state and federal statutes in differing ways based on each statute’s respective canon of construction and legislative intent. However, because the Florida Money Laundering Act (Fla. Stat. § 896.101) is modeled on the federal Money Laundering Control Act (18 U.S.C. § 1956), it is reasonable to assume that the courts would reach the same conclusion. Part I of this comment describes Bitcoin, discussing the cryptocurrency’s origins as well as how it works. Part II analyzes both the state and federal anti–money laundering statutes in light of Florida v. Espinoza and the opinions of the federal courts. Part III discusses the state and federal business services statutes in light of Florida v. Espinoza and federal court decisions, including U.S. v. Ulbricht, which held Bitcoin to be within the plain meaning of “money” and “funds” under the applicable federal money laundering statute. Finally, Part IV of this paper addresses the public policy implications of how Bitcoin is interpreted under criminal statutes pertaining to money laundering. A brief synopsis will provide information on how other countries and states have considered Bitcoin and the steps that the U.S. Congress has begun to take to address Bitcoin in criminal prosecutions.

Chao Yuan, Mixue Xu, Xueming Si

With the rise of Bitcoin, blockchain which is the core technology of Bitcoin has received increasing attention. Privacy preserving and performance on blockchain are two research points in academia and business, but there are still some unresolved issues in both respects. An aggregate signature scheme is a digital signature that supports making signatures on many different messages generated by many different users. Using aggregate signature, the size of the signature could be shortened by compressing multiple signatures into a single signature. In this paper, a new signature scheme for transactions on blockchain based on the aggregate signature was proposed. It was worth noting that elliptic curve discrete logarithm problem and bilinear maps played major roles in our signature scheme. And the security properties of our signature scheme were proved. In our signature scheme, the amount will be hidden especially in the transactions which contain multiple inputs and outputs. Additionally, the size of the signature on transaction is constant regardless of the number of inputs and outputs that the transaction contains, which can improve the performance of signature. Finally, we gave an application scenario for our signature scheme which aims to achieve the transactions of big data on blockchain.

Chao Yuan

With the rise of Bitcoin, cryptographic currencies have attracted more and more attention. Subsequently, other cryptographic currencies were gradually created, such as Zcash, Moreno, Dash and so on. In cryptographic currency, privacy preserving and expansion are two key technical points. In terms of privacy preserving, more effective solutions were proposed in Zcach, Moreno, Dash and other cryptographic currencies systems, in which ring signature, zero knowledge proof and other cryptographic techniques played important roles. But these schemes mainly considered protecting the addresses of both sides of the transaction. In terms of expansion, lightning network and other projects also give solutions. But most of these projects will bring other problems. In this paper, a signature scheme based on the aggregate signature and the elliptic curve algorithm is proposed to hide the transaction value of a single sender and receiver in the transactions which contain multiple inputs and outputs. This signature scheme achieves the purpose of privacy preserving from the transaction value. Further, the correctness proof and security analysis are given in this paper. In addition to that, another signature scheme that combines aggregation signature with bilinear ring signature is proposed. This aggregate ring signature scheme gives another attempt to solve the problem of expansion in the cryptographic currency system only using cryptographic technologies. At the same time, the sender's addresses can be hidden. Similarly, we also confirmed the correctness of this signature scheme.

Henrik Suikkanen

Blockchain technology has been raising enthusiasm over a variety of disciplines, from information technology and finance, to law and economics. Blockchain is a decentralized ledger, which facilitates trust and makes peer-to-peer transactions possible without a central third-party authority. Since 2008, cryptocurrency bitcoin has provided an example of how to implement a marketplace without a central authority by using blockchain technology . The fact that a broad range of economic and government activities rely on a centralized recording of the basic data of the economy makes this technology potentially significant. The utopian views of blockchain have argued that it will disrupt a wide range of markets by eliminating the need for intermediation. The objective of this thesis is to review the relevant literature related to the topic and provide a guide to what blockchain means in the field of economics. The published research is mapped through a three stage literature review, and based on this, it is organized in three main categories: monetary-, innovation- and governance-centred research. Even though the literature surrounding the topic is still in its infancy, the potential of blockchain technologies is recognized by the literature. From the monetary viewpoint blockchain gives unprecedented flexibility in designing the attributes of currencies in terms of supply, value and exchange. From the innovation viewpoint, blockchain can create both increased efficiency of existing markets but also profits through entirely new markets. From the governance viewpoint blockchain facilitates trust and can be instrumental in democratizing economy more towards peer-to-peer production and consumption. Rather than a single technology, blockchain should be understood as a part of a greater digital transformation. In this case, blockchain can play a role in unlocking the potential of digital commons as well as the sharing and platform economy through a decentralized, universal record-keeping system.

Camilla Law, Marja Vahlqvist

Bitcoin has gained more recognition than ever before, and the interest in cryptocurrencies seems to grow exponentially. Without any central government regulating Bitcoin, a global user group has adopted this new technology, which is designed to be used as a currency for trading without banks. Empirical studies focus on revealing the true characteristic of cryptocurrencies. Are they a currency, an asset or something else? This paper explores the potential of Bitcoin as a financial asset when used for hedging and portfolio diversification. A regression analysis will be performed to analyse if Bitcoin can be used as a hedge against OMXS30. This analysis yields insignificant values, which leads to a complication in the conclusion. The result imply that Bitcoin is an inadequate hedge, but may possess diversification properties. Studying Bitcoin in relation to OMXS30, Dow Jones, Nikkei 225, Gold and Oil results in correlation values close to zero. By using the mean-variance optimization method, two portfolios are created, one including and one excluding Bitcoin. We show that by including Bitcoin in the portfolio the risk can be decreased on a given return rate. Considering the low and insignificant correlation values with other assets and the better riskreturn ratio when Bitcoin is included in a portfolio, we conclude that Bitcoin can be a suitable diversification tool.

Meixing Dai, Moïse Sidiropoulos

Le bitcoin attire de plus en plus l'attention des spéculateurs, des consommateurs et des sites marchands, et augmente rapidement en capitalisation. Les autorités de régulation sont plus que jamais préoccupées par la façon dont il doit être traité du point de vue économique. Est-il une monnaie, une chaîne de Ponzi ou un actif financier très spéculatif ? Selon les réponses données à cette question, les réactions des autorités seront très différentes.

Christian Cachin

A blockchain is a public ledger for recording transactions, maintained by many nodes without central authority through a distributed cryptographic protocol. All nodes validate the information to be appended to the blockchain, and a consensus protocol ensures that the nodes agree on a unique order in which entries are appended. Distributed protocols tolerating faults and adversarial attacks, coupled with cryptographic tools are needed for this. The recent interest in blockchains has revived research on consensus protocols, ranging from the proof-of-work method in Bitcoin's "mining" protocol to classical Byzantine agreement. Going far beyond its use in cryptocurrencies, blockchain is today viewed as a promising technology to simplify trusted exchanges of data and goods among companies. In this context, the Hyperledger Project has been established in early 2016 as an industry-wide collaborative effort to develop an open-source blockchain. This talk will present an overview of blockchain concepts, cryptographic building blocks and consensus mechanisms. It will also introduce Hyperledger Fabric, an implementation of blockchain technology intended for enterprise applications. Being one of the key partners in the Hyperledger Project, IBM is actively involved in the development of this blockchain platform.

Emanuele Borgonovo, Stefano Caselli, Alessandra Cillo, Donato Masciandaro

No abstract is available for this record.

Zheng Nan, Taisei Kaizoji

No abstract is available for this record.

Navroop K. Sahdev

Blockchain, the technology behind Bitcoin, promises to be nothing less than Internet 2.0. The financial services industry, in particular, is preparing for the disruption blockchain/distributed ledger technology promises to cause. In the current business environment, the majority of startups and small businesses have to look for alternative sources of funding given that ‘going public’ is increasingly expensive. The crowdfunding space has seen tremendous growth as an alternative way to raise capital by businesses. However, these crowdfunded shares cannot be traded for 7-10 years on average on any given platform in the U.S. currently. To build a trading platform on the blockchain which is completely P2P, immutable, fully transparent and low cost presents some key design issues. In particular, the issue of liquidity - and price discovery - on the blockchain continues to be a puzzle. At the same time, the proposition of removing middlemen from equities trading is a very attractive one, streamlining the process of capital formation with higher market efficiency. The current paper addresses the following key questions: How can a DLT trading platform ensure adequate liquidity? What would be the process of price discovery? While some recent studies hail blockchain technology as a boom for market liquidity, it is not immediately clear what the impact of P2P trading would be on the prices of various stocks. There are no ‘solutions’ just yet. At the same time, the lack of regulation around trading on the blockchain creates an environment of uncertainty for all players. In particular, the implementation of such a platform can revolutionize capital formation and build robust markets in both developing and developed countries where crowdfunding has proven to be a successful model. While my research is targeted at solving a very specific pain point for both researchers and companies working on distributed ledger technology, ultimately, it would be a significant step forward towards onboarding underserved communities across the world who don’t have access to financial services.

Dominik Krause, Nga Pham

Bitcoin is a peer to peer (p2p) payment cash system and an unregulated digital currency that is primarily designed and developed in 2008 without tender legal status. Bitcoin is so-called cryptocurrency because it uses the cryptographic function in order to secure the creation and transfer of money. During recent years, Bitcoin has been emerging as the well-known electronic currency and gaining popularity worldwide as well as caught the media attention in the area of volume trading. Therefore, Bitcoin will be a potential financial asset for investors due to its extraordinary returns. The purpose of this research is to find out how Bitcoin returns correlate with stock markets and to assess the risk that the electronic currency bears, to conclude whether Bitcoin is a favourable instrument for investors that want to diversify their portfolios. Therefore, daily data from 2013 to 2017 is used to measure correlations with major global stock markets and analyse in a regression to what extend Bitcoin is integrated into financial systems. In addition, Bitcoin’s risk has been measured by estimating value at risk, as well as the volatility and a regression analysis with explanatory variables has been performed to identify the driving factors of the unusually high volatility. Finally, the researchers constructed models to forecast expected returns to identify whether Bitcoin is rather a short or long term instrument. The researchers came to the conclusion that Bitcoin is a favourable instrument to diversify a portfolio as it correlates negatively with most of the analysed stock market indices and the research result showed that Bitcoin is not yet integrated into financial systems. It has however been paid attention to the new types of risk and the questionable image the electronic currency has as it is often used to support criminal activities. The fact that no authority, clearing house or central bank's involvement is present, creates uncertainty for many investors.

Christoffer Koch, Gina Pieters

This article gives a very general introduction to the technology, promises and limitations of blockchain technology --- popularized by the digital currency Bitcoin and a key force behind the surge of cryptocurrencies. Blockchain acts as a distributed database or joint global register of all transactions --- a decentralized digital ledger --- and has the potential to become a disruptive force in the financial industry and elsewhere, bypassing traditional, centralized channels such as banks.

Tiziana Croce

The Blockchain can definitely be applied in the field of personal data protection, since there are many people and companies that must preserve and ensure information integrity. From this point of view, using a storage system with Blockchain technology would even be more effective than a traditional management model.

Gloria Yang Yu, Jinyuan Zhang

No abstract is available for this record.

Yasufumi Shimada

No abstract is available for this record.

Jiri Chod, Nikolaos Trichakis, Gerry Tsoukalas, Henry Aspegren · 5 authors

No abstract is available for this record.