The success and popularity of Bitcoin mainly focuses the underlying blockchain technology which is totally immutable distributed ledger, highly secured by its P2P network consensus named Proof of Work (PoW). One of the worst threats to a Proof-of-Work based cryptocurrency is 51% attack. If one or more dishonest network peer gains more than 50% of resource such as processing power, then they will become the majority decision maker in the network. It is already proved that mixing of two or more existing protocol that is called hybrid protocol can make the network enough resistive to this attack. The recent implementations of hybrid protocols have other limitations and problems that they are facing and striving to resolve. But their main weakness is in distribution of block mining reward to the investors. From the perspective of an investor, an investor invests his hard-earned money in a cryptocurrency for making proper profit from his investment. The main source of this profit is the block reward which is generated and given to the miner on successful mining of a block. So, to ensure this profit is given to proper user on proper time interval, the consistency of block generation time interval is a vital factor. The voting system, ticket system etc. are not time controlled and over all block reward generation interval will not show a uniform distribution of profit. Another big issue is diversifying the peers by creating special committee and groups of validators the concept of P2P network is violated. In this paper we will describe a step by step process to implement a Hybrid PoW-PoS based consensus protocol. In our proposed system, the PoW mining process is only used to regulate the block generation time. The actual block generation is done by the same user with PoS consensus mechanism. There is no voting or validating committee. The entire network will validate each block. This is the major difference with other discussed system. The system will not only be able to tackle the 51% attack, it provides a uniform distribution of mining reward to the stake holders and investors by maintaining a precise block generation interval with difficulty adjustment in PoW mining and probability calculation for stake holders according to their matured staking balance. We will not only show how to make the system non-vulnerable to this attack but also describe in detail about how to validate the transactions and blocks in different stage of creating the block chain.
Proof of Stake (PoS) is a burgeoning Sybil resistance mechanism that aims to have a digital asset ("token") serve as security collateral in crypto networks. However, PoS has so far eluded a comprehensive threat model that encompasses both Byzantine attacks from distributed systems and financial attacks that arise from the dual usage of the token as a means of payment and a Sybil resistance mechanism. In particular, the existence of derivatives markets makes malicious coordination among validators easier to execute than in Proof of Work systems. We demonstrate that it is also possible for on-chain lending smart contracts to cannibalize network security in PoS systems. When the yield provided by these contracts is more attractive than the inflation rate provided from staking, stakers will tend to remove their staked tokens and lend them out, thus reducing network security. In this paper, we provide a simple stochastic model that describes how rational validators with varying risk preferences react to changes in staking and lending returns. For a particular configuration of this model, we provide a formal proof of a phase transition between equilibria in which tokens are predominantly staked and those in which they are predominantly lent. We further validate this emergent adversarial behavior (e.g. reduced staked token supply) with agent-based simulations that sample transitions under more realistic conditions. Our results illustrate that rational, non-adversarial actors can dramatically reduce PoS network security if block rewards are not calibrated appropriately above the expected yields of on-chain lending.
Previous work presented a theoretical model based on the implicit Bitcoin specification for how an entity might issue a protocol native cryptocurrency that mimics features of fiat currencies. Protocol native means that it is built into the blockchain platform itself and is not simply a token running on another platform. Novel to this work were mechanisms by which the issuing entity could manage the cryptocurrency but where their power was limited and transparency was enforced by the cryptocurrency being implemented using a publicly mined blockchain. In this work we demonstrate the feasibility of this theoretical model by implementing such a managed cryptocurrency architecture through forking the Bitcoin code base. We discovered that the theoretical model contains several vulnerabilities and security issues that needed to be mitigated. It also contains architectural features that presented significant implementation challenges; some aspects of the proposed changes to the Bitcoin specification were not practical or even workable. In this work we describe how we mitigated the security vulnerabilities and overcame the architectural hurdles to build a working prototype.
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cs.CR
Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
Over the last decade there has been a continuing decline in social trust on the part of individuals with regards to the handling and fair use of personal data, digital assets and other related rights in general. At the same time, there has been a change in the employment patterns for many people through the emergence of the gig economy. These gig workers include artists, songwriters and musicians in the music industry. We discuss the notion of the data cooperative with fiduciary responsibilities to its members, which is similar in purpose to credit unions in the financial sector. A data cooperative for artists and musicians allows the community to share IT resources, such as data storage, analytics processing, blockchains and distributed ledgers. A cooperative can also employ smart contracts to remedy the various challenges currently faced by the music industry with regards to the license tracking management.
We introduce Unity Interleave, a new consensus algorithm for public blockchain settings. It is an eventual consistency protocol merging the Proof-of-Work (PoW) and Proof-of-Stake (PoS) into a coherent stochastic process. It builds upon research previously done for the Unity protocol, improving security while maintaining fairness and scalability.
Suyash Gupta, Jelle Hellings, Sajjad Rahnama, Mohammad Sadoghi
Since the introduction of Bitcoin---the first wide-spread application driven by blockchains---the interest of the public and private sector in blockchains has skyrocketed. At the core of this interest are the ways in which blockchains can be used to improve data management, e.g., by enabling federated data management via decentralization, resilience against failure and malicious actors via replication and consensus, and strong data provenance via a secured immutable ledger.
Atomic Crosschain Transaction technology allows composable programming across private Ethereum blockchains. It allows for inter-contract and inter-blockchain function calls that are both synchronous and atomic: if one part fails, the whole call graph of function calls is rolled back. Traditional Ethereum contract functions can limit which accounts can call them by specialised application program logic. This is important as it allows application developers to specify which callers can execute functions that update contract state. In this paper we introduce the strategy required to restrict which contracts on one blockchain can call a function in a contract that is deployed on another blockchain. We show that validating the Originating Blockchain Id (the blockchain the crosschain function call started on), From Blockchain Id, and From Account provides contracts with certainty that a function call came from a specific contract on a specific blockchain.
Blockchain systems (more precisely Distributed Ledger Technologies (DLTs)) represent a different digital ecosystem compared with traditional computer systems. One major difference are the performance and scalability factors which will be discussed and analytically investigated in this paper. In doing so, we provide guidance for defining a research agenda focusing on the investigation of the crucial role of scalability for blockchain systems. System performance -- measured in terms of (1) consensus response time (blockchain network latency or time to convergence/agreement); (2) number of transactions per second or throughput, and (3) computing (and power) resources consumed -- can be understood by considering the design dimensions of a blockchain system, namely: (i) the type of blockchain system needed from a requirements perspective which in turn determines; (ii) the complexity of the consensus protocol used; (iii) the topography of the traffic flow on the network; (iv) the performance and complexity of the domain-specific language that implements smart contracts; and (v) by the anticipated growth in size and complexity of the distributed ledger itself.
The problem of peer selection, which randomly selects a peer from a set, is commonplace in Proof-of-Stake (PoS) protocols. In PoS, peers are chosen randomly with probability proportional to the amount of stake that they possess. This paper presents an approach that relates PoS peer selection to Roulette-wheel selection, which is frequently used in genetic and evolutionary algorithms or complex network modelling. In particular, we introduce the use of stochastic acceptance algorithm [6] for fast peer selection. The roulette-wheel selection algorithm [6] achieves O(1) complexity based on stochastic acceptance, whereas searching based algorithms may take O(N ) or O(logN ) complexity in a network of N peers.
The aim of this work is to analyze the major existing cryptocurrency consensus algorithms considering a number ofattributes that may play a significant role in the long-term sustainability of a cryptocurrency ecosystem and to comparativelyevaluate
Blockchain interoperability, which allows state transitions across different blockchain networks, is critical functionality to facilitate major blockchain adoption. Existing interoperability protocols mostly focus on atomic token exchanges between blockchains. However, as blockchains have been upgraded from passive distributed ledgers into programmable state machines (thanks to smart contracts), the scope of blockchain interoperability goes beyond just token exchanges. In this paper, we present HyperService, the first platform that delivers interoperability and programmability across heterogeneous blockchains. HyperService is powered by two innovative designs: (i) a developer-facing programming framework that allows developers to build cross-chain applications in a unified programming model; and (ii) a secure blockchain-facing cryptography protocol that provably realizes those applications on blockchains. We implement a prototype of HyperService in approximately 35,000 lines of code to demonstrate its practicality. Our experiments show that (i) HyperService imposes reasonable latency, in order of seconds, on the end-to-end execution of cross-chain applications; (ii) the HyperService platform is scalable to continuously incorporate new large-scale production blockchains.
The concept of a blockchain was invented by Satoshi Nakamoto to maintain a distributed ledger. In addition to its security, important performance measures of a blockchain protocol are its transaction throughput and confirmation latency. In a decentralized setting, these measures are limited by two underlying physical network attributes: communication capacity and speed-of-light propagation delay. In this work we introduce Prism, a new proof-of-work blockchain protocol, which can achieve 1) security against up to 50% adversarial hashing power; 2) optimal throughput up to the capacity C of the network; 3) confirmation latency for honest transactions proportional to the propagation delay D, with confirmation error probability exponentially small in the bandwidth-delay product CD; 4) eventual total ordering of all transactions. Our approach to the design of this protocol is based on deconstructing Nakamoto's blockchain into its basic functionalities and systematically scaling up these functionalities to approach their physical limits.
The recent surge in blockchain applications and database systems has renewed the interest in traditional Byzantine Fault Tolerant consensus protocols (BFT). Several such BFT protocols follow a primary-backup design, in which a primary} replica coordinates the consensus protocol. In primary-backup designs, the normal-case operations are rather simple. At the same time, primary-backup designs place an unreasonable burden on primaries and allows malicious primaries to affect the system throughput substantially, however. To resolve this situation, we propose the MultiBFT paradigm, a protocol-agnostic approach towards improving the performance of primary-backup consensus protocols. At the core of MultiBFT is an approach to continuously order the client-transactions by running several instances of the underlying BFT protocol in parallel. We bring forth our paradigm to two well-established BFT protocols and demonstrate that the rendered parallelized protocols are not only safe and live but also significantly outperform, up to $2\times$, their original non-parallelized forms. Further, we show that our MultiBFT paradigm reaches a throughput of up to $320$K transactions per second.
Bitcoin-NG, a scalable blockchain protocol, divides each block into a key block and many micro blocks to effectively improve the transaction processing capacity. Bitcoin-NG has a special incentive mechanism (i.e. splitting transaction fees to the current and the next leader) to maintain its security. However, this design of the incentive mechanism ignores the joint effect of transaction fees, mint coins and mining duration lengths on the expected mining reward. In this paper, we identify the advanced mining attack that deliberately ignores micro blocks to enlarge the mining duration length to increase the likelihood of winning the mining race. We first show that an advanced mining attacker can maximize its expected reward by optimizing its mining duration length. We then formulate a game-theoretical model in which multiple mining players perform advanced mining to compete with each other. We analyze the Nash equilibrium for the mining game. Our analytical and simulation results indicate that all mining players in the mining game converge to having advanced mining at the equilibrium and have no incentives for deviating from the equilibrium; the transaction processing capability of the Bitcoin-NG network at the equilibrium is decreased by advanced mining. Therefore, we conclude that the Bitcoin-NG blockchain protocol is vulnerable to advanced mining attack. We discuss how to reduce the negative impact of advanced mining for Bitcoin-NG.
With the introduction of the term blockchain in 2008, it's interest has been increasing in the community since the idea was coined. The reason for this interest is because it provides anonymity, security and integrity without any central third party organisation in control of data and transaction. It has attracted huge interest in research areas due to its advances in various platforms, limitations and challenges. There are various Distributed Ledger Technologies that demonstrates their special features which overcome limitations of other platforms. However, implementations of various distributed ledger technologies differ substantially based on their data structures, consensus protocol and fault tolerant among others. Due to these variations, they have a quite different cost, performance, latency and security. In this paper, working and in-depth comparison of major distributed ledger technologies including their special features, strengths and weaknesses is presented and discussed by identifying various criteria.
Georgia Avarikioti, Antoine Desjardins, Eleftherios Kokoris-Kogias, Roger Wattenhofer
Sharding distributed ledgers is a promising on-chain solution for scaling blockchains but lacks formal grounds, nurturing skepticism on whether such complex systems can scale blockchains securely. We fill this gap by introducing the first formal framework as well as a roadmap to robust sharding. In particular, we first define the properties sharded distributed ledgers should fulfill. We build upon and extend the Bitcoin backbone protocol by defining consistency and scalability. Consistency encompasses the need for atomic execution of cross-shard transactions to preserve safety, whereas scalability encapsulates the speedup a sharded system can gain in comparison to a non-sharded system. Using our model, we explore the limitations of sharding. We show that a sharded ledger with $n$ participants cannot scale under a fully adaptive adversary, but it can scale up to $m$ shards where $n=c'm\log m$, under an epoch-adaptive adversary; the constant $c'$ encompasses the trade-off between security and scalability. This is possible only if the sharded ledgers create succinct proofs of the valid state updates at every epoch. We leverage our results to identify the sufficient components for robust sharding, which we incorporate in a protocol abstraction termed Divide & Scale. To demonstrate the power of our framework, we analyze the most prominent sharded blockchains (Elastico, Monoxide, OmniLedger, RapidChain) and pinpoint where they fail to meet the desired properties.
Georgia Avarikioti, Eleftherios Kokoris-Kogias, Roger Wattenhofer
Sharding distributed ledgers is the most promising on-chain solution for scaling blockchain technology. In this work, we define and analyze the properties a sharded distributed ledger should fulfill. More specifically, we show that a sharded blockchain cannot be scalable under a fully adaptive adversary, but it can scale up to $O(n/\log n)$ under an epoch-adaptive adversary. This is possible only if the distributed ledger creates succinct proofs of the valid state updates at the end of each epoch. Our model builds upon and extends the Bitcoin backbone protocol by defining consistency and scalability. Consistency encompasses the need for atomic execution of cross-shard transactions to preserve safety, whereas scalability encapsulates the speedup a sharded system can gain in comparison to a non-sharded system. We introduce a protocol abstraction and highlight the sufficient components for secure and efficient sharding in our model. In order to show the power of our framework, we analyze the most prominent shared blockchains (Elastico, Monoxide, OmniLedger, RapidChain) and pinpoint where they fail to meet the desired properties.
Yackolley Amoussou-Guenou, Antonella Del Pozzo, Maria Potop-Butucaru, Sara Tucci-Piergiovanni
Committee-based blockchains are among the most popular alternatives of proof-of-work based blockchains, such as Bitcoin. They provide strong consistency (no fork) under classical assumptions, and avoid using energy-consuming mechanisms to add new blocks in the blockchain. For each block, these blockchains use a committee that executes Byzantine-fault tolerant distributed consensus to decide the next block they will add in the blockchain. Unlike Bitcoin, where there is only one creator per block with high probability, in committee-based blockchain any block is cooperatively created. In order to incentivize committee members to participate to the creation of new blocks rewarding schemes have to be designed. In this paper, we study the fairness of rewarding in committee-based blockchains and we provide necessary and sufficient conditions on the system communication under which it is possible to have a fair reward mechanism.
Blockchain is maintained as a global log between a network of nodes and uses cryptographic distributed protocols to synchronize the updates. As adopted by Bitcoin and Ethereum these update operations to the ledger are serialized, and executed in batches. To safeguard the system against the generation of conflicting sets of updates and maintain the consistency of the ledger, the frequency of the updates is controlled, which severely affects the performance of the system. This paper presents Converging Directed Acyclic Graph (CDAG), as a substitute for the chain and DAG structures used in other blockchain protocols. CDAG allows multiple parallel updates to the ledger and converges them at the next step providing finality to the blocks. It partitions the updates into non-intersecting buckets of transactions to prevent the generation of conflicting blocks and divide the time into slots to provide enough time for them to propagate in the network. Multiple simultaneous updates improve the throughput of CDAG, and the converging step helps to finalize them faster, even in the presence of conflicts. Moreover, CDAG provides a total order among the blocks of the ledger to support smart contracts, unlike some of the other blockDAG protocols. We evaluate the performance of CDAG on Google Cloud Platform using Google Kubernetes Engine, simulating a real-time network. Experimental results show that CDAG achieves a throughput of more than 2000 transactions per second and confirms them well in under 2 minutes. Also, the protocol scales well in comparison to other permissioned protocols, and the capacity of the network only limits the performance.
Blockchain platforms like Bitcoin and Ethereum have introduced a distributed and decentralized cryptocurrency system with no third-party intermediation required. These peer to peer network systems allows Internet users to directly transact with each other. However due to the heavy emphasis on decentralization, scalability has taken a back seat. It has also become a key issue in the wider adoption of these technologies. The change to the underlying data organizing structure to Direct Acyclic Graphs (DAG) of the distributed ledger, has significantly increased transaction scalability. In this paper, we analyse some of the Distributed Ledger Technologies that use DAGs and have shown marked improved in transaction performance without weakening security.
The rise of programmable open distributed consensus platforms based on the blockchain technology has aroused a lot of interest in replicated stateful computations, aka smart contracts. As blockchains are used predominantly in financial applications, smart contracts frequently manage millions of dollars worth of virtual coins. Since smart contracts cannot be updated once deployed, the ability to reason about their correctness becomes a critical task. Yet, the de facto implementation standard, pioneered by the Ethereum platform, dictates smart contracts to be deployed in a low-level language, which renders independent audit and formal verification of deployed code infeasible in practice. We report an ongoing experiment held with an industrial blockchain vendor on designing, evaluating, and deploying Scilla, a new programming language for safe smart contracts. Scilla is positioned as an intermediate-level language, suitable to serve as a compilation target and also as an independent programming framework. Taking System F as a foundational calculus, Scilla offers strong safety guarantees by means of type soundness. It provides a clean separation between pure computational, state-manipulating, and communication aspects of smart contracts, avoiding many known pitfalls due to execution in a byzantine environment. We describe the motivation, design principles, and semantics of Scilla, and we report on Scilla use cases provided by the developer community. Finally, we present a framework for lightweight verification of Scilla programs, and showcase it with two domain-specific analyses on a suite of real-world use cases.
The proof-of-stake (PoS) protocols aim to reduce the unnecessary computing power waste seen in Bitcoin. Various practical and provably secure designs have been proposed, like Ouroboros Praos (Eurocrypt 2018) and Snow White (FC 2019). However, the essential security property of unpredictability in these protocols remains insufficiently explored. This paper delves into this property in the cryptographic setting to achieve the "best possible" unpredictability for PoS. We first present an impossibility result for all PoS protocols under the single-extension design framework, where each honest player extends one chain per round. The state-of-the-art permissionless PoS protocols (e.g., Praos, Snow White, and more), are all under this single-extension framework. Our impossibility result states that, if a single-extension PoS protocol achieves the best possible unpredictability, then this protocol cannot be proven secure unless more than 73% of stake is honest. To overcome this impossibility, we introduce a new design framework called multi-extension PoS, allowing each honest player to extend multiple chains using a greedy strategy in a round. This strategy allows us to construct a class of PoS protocols that achieve the best possible unpredictability. It is noteworthy that these protocols can be proven secure, assuming a much smaller fraction (e.g., 57%) of stake to be honest.
Pingcheng Ruan, Tien Tuan Anh Dinh, Dumitrel Loghin, Meihui Zhang · 7 authors
Blockchain has come a long way: a system that was initially proposed specifically for cryptocurrencies is now being adapted and adopted as a general-purpose transactional system. As blockchain evolves into another data management system, the natural question is how it compares against distributed database systems. Existing works on this comparison focus on high-level properties, such as security and throughput. They stop short of showing how the underlying design choices contribute to the overall differences. Our work fills this important gap and provides a principled framework for analyzing the emerging trend of blockchain-database fusion. We perform a twin study of blockchains and distributed database systems as two types of transactional systems. We propose a taxonomy that illustrates the dichotomy across four dimensions, namely replication, concurrency, storage, and sharding. Within each dimension, we discuss how the design choices are driven by two goals: security for blockchains, and performance for distributed databases. To expose the impact of different design choices on the overall performance, we conduct an in-depth performance analysis of two blockchains, namely Quorum and Hyperledger Fabric, and two distributed databases, namely TiDB, and etcd. Lastly, we propose a framework for back-of-the-envelope performance forecast of blockchain-database hybrids.
Tien Tuan Anh Dinh, Anwitaman Datta, Beng Chin Ooi
Research in blockchain systems has mainly focused on improving security and bridging the performance gaps between blockchains and databases. Despite many promising results, we observe a worrying trend that the blockchain landscape is fragmented in which many systems exist in silos. Apart from a handful of general-purpose blockchains, such as Ethereum or Hyperledger Fabric, there are hundreds of others designed for specific applications and typically do not talk to each other. In this paper, we describe our vision of interoperable blockchains. We argue that supporting interaction among different blockchains requires overcoming challenges that go beyond data standardization. The underlying problem is to allow smart contracts running in different blockchains to communicate. We discuss three open problems: access control, general cross-chain transactions, and cross-chain communication. We describe partial solutions to some of these problems in the literature. Finally, we propose a novel design to overcome these challenges.