This thesis introduces a debit card based payment system that aims to provide fast in-store payments using Bitcoin. The system introduces physical constraints to Bitcoin payments to enable stores to accept payments before they are in a block.The proposed system was tested in a proof of concept model to estimate the time itwould take to pay with the system on the real Bitcoin network. A security analysis was performed to validate system security and to point out potential problems. The security analysis was done by interviewing five experts from different organizations to receive different views on the system. The analysis of the system indicated that it could potentially be fast enough to be used in stores, however security problems exist and need to be considered.
Digital mindsets and technology transformation is an inevitable need that organizations, businesses and individuals cannot ignore anymore. Businesses worldwide are gearing up for digital transformation in their existing processes, competencies, models and transactions. Digitization of financial systems and transactions are fallout of this revolution. Bitcoin can also be called a child of this technological revolution. At the onset, bitcoins can be seen as the first pan-global medium of which have been used by people internationally and independently, i.e. without any reliance on government regulations. Of the various forms of digital currencies available today, the current bullish (rather more than bullish) rally of Bitcoin in the year 2016-17, caught my attention and motivated to examine the future of this transaction system, and analyze the two often speculated status of bitcoin - as the currency of the future or an asset worthy of investment, or a mere bubble that will eventually burst. As the most popular form of cryptocurrency (according to research produced by Cambridge University in 2017, there are 2.9 to 5.8 million unique users using a cryptocurrency wallet, most of them using bitcoin) that is used for transactions and can be recorded in a ledger, various conflicting opinion exists regarding its perceived value as the digital currency of the future. In the paper I evaluate how the value of bitcoin is created and examine its potential as a currency of future or a commodity or asset.
W artykule przedstawiono wspóĆczesne zagadnienia w dziedzinie walut cyfrowych. Przeanalizowano czynniki ekonomiczne, które doprowadzily do powstania walut cyfrowych wskazujÄ c, ĆŒe jest to naturalny krok w rozwoju Ćrodków pĆatniczych. Dokonano przeglÄ du gĆów­nych typów walut cyfrowych i omówiono wplyw ich konstrukcji na popularnoĆÄ poszczególnych walut. Opisano zwiÄĆșle konkurencjÄ na rynku kryptowalut.
Part I of this Article describes how the healthcare industry has arrived in this place of vulnerability, including (1) the history of the movement toward EHRs through HIPAA, (2) HIPAAâs meaningful use regulations and the background of current ransomware attacks, and (3) the distinctions between these attacks and other security breaches that have plagued large insurers and health systems within the last five years. Next, Part II will examine current industry culture when it comes to cybersecurity and review current legal and business approaches to address this growing threat. Then, Part III will argue that, while the current lawsâincluding HIPAA and HITECHâare a good start, they do not go far enough to curb the current ransomware attacks and thus, should be amended. It will further argue that such amendments cannot be the only solution. Rather, the healthcare industry has to spur its own movement toward better and tighter security over its healthcare technology. Lastly, this Article will conclude with some suggestions and recommendations for how industry and government regulators can work together to assure that hospitals and health systems are not faced with the dilemma of having to choose between patient safety and the payment of a bitcoin ransom.
Bitcoin has emerged as the leading cryptographic currency since its inception in 2009 and at the time of writing holds a market capitalization of $28.4 billion. This ever-increasing figure has attracted adopters seeking to advance their investments, often leaving purely technical aspects on the sidelines. As is the case with any innovative technology, misconceptions are plentiful and information is not always conclusive. The research effort presented in this paper consists of a quantitative study seeking to address the subject of user anonymity in the Bitcoin network by employing an online survey on one of the most prominent Bitcoin forums. This includes 50 eligible participants, whose motivation is derived through the application of temporal motivation theory. The survey seeks to form an understanding of user attitudes towards the aspect of anonymity by following a methodological approach for exploring common tendencies among the representatives and will serve as the underlying data set from which conclusions can be drawn. Furthermore, this paper will present a literary study of the actual state of anonymity in this peer-to-peer technology by reviewing current findings highlighted in the area, thus presenting a comprehensive view of anonymity in the Bitcoin network, which will contrast the user study.
Since the creation of Bitcoin in 2009, hundreds of cryptocurrencies have emerged, thus becoming a common fixture of financial news bulletins. With a market capitalization of the five highest-valued cryptocurrencies exceeding $140 billion at the time of writing, these alternative currencies have caught the attention of both financial institutions and central banks with their innovative technological foundations and their potential to disrupt current financial institutional structures. We provide a non-technical overview of the concept and current market structure of cryptocurrencies for researchers in economics, finance, mathematics and computer science.
Bitcoin transaction fee is an important kind of transaction costs that can be observed. In this paper, we address that the long-term effects of the demand are greater than that of the supply through empirical analyses of the influence degree of computational power, the number of transactions and the price of bitcoin. Based on the theory of supply and demand, there is a trend upward for bitcoin transaction fee in the future.
Bitcoin is the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen. The objective of this study is to evaluate the normality of data distribution for exchange rate of Bitcoin. The method implemented in this study is Shapiro-Wilk normality test including graphical approach namely box plot .Results show the data distribution of exchange rate for Bitcoin follows non-normal distribution. Therefore, the normality transformation is important to make sure the distribution of data follows normal distribution. The normal distribution is very crucial as one of the requirement for validity of statistical test.Normality tests are used to determine if a data set is well-modeled by a normal distribution and to compute how likely it is for a random variable underlying the data set to be normally distributed.This study implemented two-stages of outliers detection and deletion process.The final results shows the distribution of Bitcoin exchange rate with first difference is follow normal distribution with probability of 0.722.Result concluded the distribution of data after second stages of outlies deletion treatment shows high normal distribution characteristics. This finding concludes that Bitcoin data is highly volatile with existence of many outliers. The transformation process is highly important to make sure the Bitcoin data follows normal distribution that underlying critical assumption for statistical tests.
Tina Ehrke-Rabel, Iris Eisenberger, Elisabeth HHdl, Lily Zechner
German Abstract: Distribuierte Systeme, wie die Bitcoin-Blockchain, stellen das Recht vor neue Herausforderungen. Das disruptive Potential liegt unter anderem im Fehlen einer zentralen, verantwortlichen Kontrollinstanz, an die das Recht traditionell anknĂŒpft, und im Verschwimmen der Rollen von âProduzentInnenâ und âKonsumentInnenâ innerhalb des Systems. Die Erzeugung von KryptowĂ€hrungen, wie Bitcoin, mittels âProof of Workâ und die gleichzeitige Validierung von Transaktionen zwischen NetzwerknutzerInnen (sog âMiningâ) ist ein Beispiel dafĂŒr, dass die rechtlich etablierten Kategorien heute fĂŒr eine effiziente Rechtsdurchsetzung unzureichend sind. âMiningâ kann rechtlich zwar als GlĂŒcksspiel iSd österreichischen GSpG eingeordnet werden. Konsequenz dieser Einordnung sind allerdings Probleme beim Vollzug des anwendbaren Ordnungs-, Abgaben- und Strafrechts. Regulierung von âPeer-to-Peerâ-Systemen erfordert neue LösungsansĂ€tze, um staatliche Steuerungsfunktionen zu erhalten. English Abstract: Distributed ledgers, such as the Bitcoin blockchain, create new challenges for authorities and legislators alike. The technology is considered disruptive due to the lack of a responsible legal entity and because the lines are blurred between the âproducersâ and âconsumersâ operating within it. The creation of cryptocurrencies, like Bitcoin, through âproof of workâ and the simultaneous validation of transactions between users of the network (so called âminingâ) perfectly illustrate how established legal categories are insufficient to achieve effective law enforcement at present. This paper shows that according to Austrian law, âminingâ qualifies as a gamble. In that case, the applicable provisions of Austrian regulatory, tax and criminal law are, however, hardly enforceable. It follows that the regulation of âpeer to peerâ-systems requires an innovative approach, in order for the state to remain a key player in managing society.
Bitcoin volatility is known to be high, as is shown by comparing Bitcoin volatility to several currencies and to assets like stock, gold etc. This work attempts to extend this work by comparing Bitcoin volatility to volatility of currencies of least developed countries and other cryptocurrencies. Exchange rate and return data drawn from Bloomberg and covering March 2014 to March 2017 was analysed. It was found that Bitcoin volatility is still considerably higher than volatilities of currencies of least developed countries. Only five currencies were more volatile for more than 10% of the time span analysed.
Bitcoin is a system created to service micro-payments in e-commerce, as well as the digital unit of value functioning in the system's environment. When analysed, the behaviour of market participants indicates that the introduction of investment applications of the cryptocurrency, in parallel with its original payment application, had a tremendous impact on the larger-scale functioning of the system. This was aided by the functioning of many trading platforms allowing for exchange into traditional currencies and a high volatility of quotations. Without doubt, bitcoin may be branded a ground-breaking financial innovation or a work of genius. However, the growing, and even global use of bitcoin has brought some of the system's imperfections to light. As the system developed, bitcoin users started to have a better view of the threats to the correct functioning of the system arising from its construction. The paper aims to indicate the main barriers limiting the functioning of the bitcoin system, and its use in payments in particular. The work has adopted the following research hypothesis: In the early stages of bitcoin functioning, users had little awareness of the technological flaws of the system. The study analyses the literature on the subject and the results of a survey carried out among Polish bitcoin users. The analysis confirms of the research hypothesis, as it shows that in the system's first several years, users identified the following threats to the system's functioning: the speculative nature of bitcoin, the lack of adequate awareness in society which would allow for a widespread use of the innovation, potential too strict regulation of the cryptocurrencies market or its banning. The authors also present threats to the functioning of the system which in their opinion are of greatest importance at the moment. These relate to the existence of intermediaries, the lack of systemic incentives addressed to bitcoin merchants, growing costs and payment processing time. The authors intend to indicate those aspects of bitcoin's functioning in order to make the use of cryptocurrencies more conscious and contribute to limiting financial risk of system users.
Virtual and digital crypto-currencies, specifically Bitcoin, were developed by an anonymous pseudonym âSatoshi Nakamotoâ in 2009 and have become a developing form of payment system used by businesses and consumers. Unlike traditional payment systems, Bitcoin is a peer-to-peer network with unique characteristics. Bitcoin is a private, anonymous and decentralised network that is intended to work independently from a government or banking authority. Bitcoin is therefore a network dependent upon mathematical algorithms between two users and managed through a process called âminingâ, which is then stored within a userâs private âwalletâ. This innovative technology offers numerous opportunities as a payment system; however, the legal challenges and risks it creates can be detrimental to consumers and businesses that use Bitcoin as an alternative payment system. The legal challenges of Bitcoin cause uncertainty for governments, businesses and consumers on the treatment of Bitcoin as an acceptable means of payment in Australia. Therefore, the purpose of this thesis is to determine whether Bitcoin is a form of âmoneyâ and as such ought to be accepted as legal tender by the Australian Government under specific legislative instruments. Furthermore, this thesis will examine how Bitcoin is used to facilitate money laundering activities. Moreover, this thesis considers the treatment of tax within Bitcoin transactions and how unregulated Bitcoin transactions can be used to avoid tax. In addressing these legal issues and concerns, consideration is given to the possible regulation of virtual and digital currencies like Bitcoin in Australia. This thesis considers Australian banking, money laundering and taxation legislation and examines whether these regulatory frameworks are suitable to include Bitcoin as a payment system in order to limit money laundering and tax evasion activities within Bitcoin payment systems. Additionally, this thesis examines regulatory approaches to virtual and digital currencies in foreign jurisdictions, namely the United States, Canada and the European Union in order to gain some insight into how other countries are regulating Bitcoin as a payment system. This thesis arrives at a number of conclusions relevant to the possible regulation of Bitcoin in Australia. Firstly, it identifies Bitcoin as money and a form of payment system, but not legal tender and therefore not an accepted legal currency in Australia, which considers self-regulation of Bitcoin as a payment system a possibility. Secondly, it recognises that existing money laundering legislation can be amended to include Bitcoin as a payment system through which money laundering can take place and where Bitcoin exchange platforms are required to implement a âknow-your-customerâ policy or âknow-your-userâ policy. Thirdly, this thesis identifies that Bitcoin is recognised as a commodity for tax purposes and that suitable guidelines can be introduced on how to deal with tax activities and tax evasion within Bitcoin payments. Lastly, it is also recommended that international organisations such the Financial Action Task Force and International Monetary Fund could provide clarity on the treatment of virtual and digital currencies, specifically Bitcoin, as a payment system and legal currency, given that Bitcoin in global and borderless. Therefore, this research contributes towards how the Bitcoin network operates, its legal challenges and regulation in order to further research in this area of law.
Blockchain technology has the potential to disrupt how cryptography is done. In this work, we propose to view blockchains as an âenablerâ, much like indistinguishability obfuscation [5, 23, 46] or one-way functions, for building a variety of cryptographic systems. Our contributions in this work are as follows:
1.
A Framework for Proof-of-Stake based Blockchains: We provide an abstract framework for formally analyzing and defining useful security properties for Proof-of-Stake (POS) based blockchain protocols. Interestingly, for some of our applications, POS based protocols are more suitable. We believe our framework and assumptions would be useful in building applications on top of POS based blockchain protocols even in the future.
2.
Blockchains as an Alternative to Trusted Setup Assumptions in Cryptography: A trusted setup, such as a common reference string (CRS) has been used to realize numerous systems in cryptography. The paragon example of a primitive requiring trusted setup is a non-interactive zero-knowledge (NIZK) system. We show that already existing blockchains systems including Bitcoin, Ethereum etc. can be used as a foundation (instead of a CRS) to realize NIZK systems. The novel aspect of our work is that it allows for utilizing an already existing (and widely trusted) setup rather than proposing a new one. Our construction does not require any additional functionality from the miners over the already existing ones, nor do we need to modify the underlying blockchain protocol. If an adversary can violate the security of our NIZK, it could potentially also take over billions of dollars worth of coins in the Bitcoin, Ethereum or any such cryptocurrency!
We believe that such a âtrusted setupâ represents significant progress over using CRS published by a central trusted party. Indeed, NIZKs could further serve as a foundation for a variety of other cryptographic applications such as round efficient secure computation [33, 36].
3.
One-time programs and pay-per use programs: Goldwasser et al. [29] introduced the notion of one time program and presented a construction using tamper-proof hardware. As noted by Goldwasser et al. [29], clearly a one-time program cannot be solely software based, as software can always be copied and run again. While there have been a number of follow up works [4, 6, 30], there are indeed no known constructions of one-time programs which do not rely on self destructing tamper-proof hardware (even if one uses trusted setup or random oracles). Somewhat surprisingly, we show that it is possible to base one-time programs on POS based blockchain systems without relying on trusted hardware. Our ideas do not seem to translate over to Proof-of-Work (POW) based blockchains.
We also introduce the notion of pay-per-use programs which is simply a contract between two parties â service provider and customer. A service provider supplies a program such that if the customer transfers a specific amount of coins to the provider, it can evaluate the program on any input of its choice once, even if the provider is offline. This is naturally useful in a subscription based model where your payment is based on your usage.
Blockchain is a decentralized transaction and data management technology developed first for Bitcoin cryptocurrency. The interest in Blockchain technology has been increasing since the idea was coined in 2008. The reason for the interest in Blockchain is its central attributes that provide security, anonymity and data integrity without any third party organization in control of the transactions, and therefore it creates interesting research areas, especially from the perspective of technical challenges and limitations. This paper highlights the architecture, benefits and applications of Blockchain Technology.
The concept of a Turing machine has been well defined. It would be sufficient to show that Bitcoin uses a dual stack architecture that acts as a dual counter machine. Such systems have already been demonstrated as being Turing complete. We demonstrate that Bitcoin script is a minimal family of which λ and R are members. Further using the compositional product rule and the iteration rule we demonstrate that Bitcoin scripting is Turing complete with the limitations imposed on any realworld computer. This limitation is that there cannot be an infinite tape. Iterations can be simulated using an âunrolledâ loop function with allocation to the âAltâ stack. As the product rule states that if A, B are machines, then A.B is also a machine. The iteration rule shows that if A is a machine then (A) is also a machine. Further the minimum power of A under which the observed square of the final configuration is blank. The consequence of these rules is that for every partial recursive function of in variables we can show that it can be evaluated by machine of the proposed family.
espanolLa aparicion de contratos en formato electronico y autoejecutables es el resultado logico del progresivo proceso de automatizacion en la distribucion y en el internet de las cosas. Nuestro regimen legal integra sin dificultad este formato de contratacion, pero conseguir un proceso totalmente automatizado implica recurrir a mecanismos de pago en red que no siempre se adaptan al tipo contractual. El uso del dinero electronico y las monedas virtuales como el bitcoin cubren esta funcion pero la escasa o nula regulacion de las monedas virtuales y su doble caracter de unidad de valor y unidad de cuenta dificultan la funcionalidad y seguridad juridica del uso de las tecnologias Blockchain en formatos estandarizados y automatizados de contratacion. EnglishThe appearance of smart contract in electronic and self-executable format, is the logical result of the progressive process of automation in the distribution and on called âInternet of thingsâ. Law integrates this contracting format without difficulty, but achieving a fully automated process involves using online payment mechanisms that are not always adapted to the contractual type. The use of electronic money and virtual currencies, such as bitcoin, cover this function, but the scarce or null regulation of virtual currencies and their double character, as a unit of value and a unit of account, make the functionality and legal security of the use of Blockchain technologies difficult in standardized and automated contracting formats