The potential of blockchain technology has received attention in the area of FinTech - the combination of finance and technology. Blockchain technology was first introduced as the technology behind the Bitcoin decentralized virtual currency, but there is the expectation that its characteristics of accurate and irreversible data transfer in a decentralized P2P network could make other applications possible. Although a precise definition of blockchain technology has not yet been given, it is important to consider how to classify different blockchain systems in order to better understand their potential and limitations. The goal of this paper is to add to the discussion on blockchain technology by proposing a classification based on two dimensions external to the system: (1) existence of an authority (without an authority and under an authority) and (2) incentive to participate in the blockchain (market-based and non-market-based). The combination of these elements results in four types of blockchains. We define these dimensions and describe the characteristics of the blockchain systems belonging to each classification.
Digital infrastructures play an increasingly central role in shaping existing organisations and creating new ones. Research on digital infrastructure has rested on the assumption that infrastructures are developed to support pre-existing organised activities. However, with new digital infrastructures supporting open source projects and blockchain communities such as Bitcoin, development of the technological infrastructure also gives rise to a new way of self-organising. Specifically, forking of the underlying source code and subsequent community adoption is increasingly observed to trigger new patterns of self-organising. In order to explore and develop this concept, this paper investigates a case of such distributed digital community: the emergence of the Bitcoin community around a specific instantiation of the Blockchain infrastructure. Our study examines how the community emerges, and how changes in the source code lead to different patterns of self-organising. The paper develops a conceptual framework of self-organising in distributed communities emerging around digital infrastructures.
Conrad Burchert, Christian Decker, Roger Wattenhofer
The Bitcoin network has scalability problems. To increase its transaction rate and speed, micropayment channel networks have been proposed; however, these require to lock funds into specific channels. Moreover, the available space in the blockchain does not allow scaling to a worldwide payment system. We propose a new layer that sits in between the blockchain and the payment channels. The new layer addresses the scalability problem by enabling trustless off-blockchain channel funding. It consists of shared accounts of groups of nodes that flexibly create one-to-one channels for the payment network. The new system allows rapid changes of the allocation of funds to channels and reduces the cost of opening new channels. Instead of one blockchain transaction per channel, each user only needs one transaction to enter a group of nodes-within the group the user can create arbitrarily many channels. For a group of 20 users with 100 intra-group channels, the cost of the blockchain transactions is reduced by 90% compared to 100 regular micropayment channels opened on the blockchain. This can be increased further to 96% if Bitcoin introduces Schnorr signatures with signature aggregation.
The Bitcoin protocol allows to save arbitrary data on the blockchain through a special instruction of the scripting language, called OP_RETURN. A growing number of protocols exploit this feature to extend the range of applications of the Bitcoin blockchain beyond transfer of currency. A point of debate in the Bitcoin community is whether loading data through OP_RETURN can negatively affect the performance of the Bitcoin network with respect to its primary goal. This paper is an empirical study of the usage of OP_RETURN over the years. We identify several protocols based on OP_RETURN, which we classify by their application domain. We measure the evolution in time of the usage of each protocol, the distribution of OP_RETURN transactions by application domain, and their space consumption.
The Internet of Things has a number of well-publicised security flaws, resulting in numerous recent attacks.In this paper we lay out a framework for looking at how distributed ledgers and Blockchain technology can be used to enhance the security, privacy and manageability of IoT devices and networks.A significant concern is the inability to process blockchains on small devices.We propose an architecture for IoT security and privacy based on blockchains that addresses this and other issues.We look at related work and propose areas of further research.
Luis Ibáñez, Elena Simperl, Fabien Gandon, Henry Story
The web was originally conceived as decentralized and universal, but during its popularization, its big value was built on centralized servers and nonuniversal access. A key element to redecentralize the web is to be able to generate trustable, secure, and accountable updates among autonomous participants without a central server. The authors believe that the marriage between distributed ledgers and linked data can provide this functionality and unlock the web's true potential. As a first step toward it, the authors propose a minimal vocabulary to describe and link distributed ledgers.
The know-your-customer (KYC) due diligence process is outdated and generates costs of up to USD 500 million per year per bank. We propose a new system, based on distributed ledger technology (DLT) that reduces the costs of the core KYC verification process for financial institutions and improves the customer experience. In the proposed system, the core KYC verification process is only conducted once for each customer, regardless of the number of financial institutions with which the customer intends to work. Thanks to DLT, the result of the core KYC verification can be securely shared by customers with all the financial institutions that they intend to work with. This system allows for efficiency gains, cost reduction, improved customer experience, and increased transparency throughout the process of onboarding a customer.
The financial technology (FinTech) sector sees high potential value in cryptocurrency blockchain protocols, or distributed-ledger technology (DLT). However, the requirements and guarantees of blockchains for cryptocurrencies do not match those of FinTech-from transaction throughput to security primitives and privacy. The author explores how blockchain research beyond Bitcoin is closing these gaps and some of the challenges that remain.
Blockchain is a distributed, transparent, immutable ledger. Consensus protocol forms the core of blockchain. They decide how a blockchain works. With the advent of new possibilities in blockchain technology, researchers are keen to find a well-optimized Byzantine fault tolerant consensus protocol. Creating a global consensus protocol or tailoring a cross-platform plug and play software application for implementation of various consensus protocols are ideas of huge interest. Stellar Consensus Protocol (SCP) is considered to be a global consensus protocol and promises to be Byzantine Fault Tolerant (BFT) by bringing with it the concept of quorum slices and federated byzantine fault tolerance. This consensus's working and its comparison with other protocols that were earlier proposed are analyzed here. Also, hyperledger an open-source project by Linux Foundation which includes implementing the concept of practical byzantine fault tolerance and also a platform where various other consensus protocols and blockchain applications can be deployed in a plug and play manner is also being discussed here. This paper focuses on analyzing these consensus protocols already proposed and their feasibility and efficiency in meeting the characteristics they propose to provide.
Orphan risk for large blocks limits Bitcoin’s transactional capacity while the lack of secure instant transactions restricts its usability. Progress on either front would help spur adoption. This paper considers a technique for using fractional-difficulty blocks (weak blocks) to build subchains bridging adjacent pairs of real blocks. Subchains reduce orphan risk by propagating blocks layer-by-layer over the entire block interval, rather than all at once when the proof-of-work is solved. Each new layer of transactions helps to secure the transactions included in lower layers, even though none of the transactions have been con-firmed in a real block. Miners are incentivized to cooperate building subchains in order to process more transactions per second (thereby claiming more fee revenue) without incur-ring additional orphan risk. The use of subchains also diverts fee revenue towards network hash power rather than dripping it out of the system to pay for orphaned blocks. By nesting subchains, weak block verification times approaching the theoretical limits imposed by speed-of-light constraints would become possible with future technology improvements. As subchains are built on top of the existing Bitcoin protocol, their implementation does not require any changes to Bitcoin’s consensus rules.
Johnny Dilley, Andrew Poelstra, Jonathan Wilkins, Marta Piekarska · 6 authors
Bitcoin, the first peer-to-peer electronic cash system, opened the door to permissionless, private, and trustless transactions. Attempts to repurpose Bitcoin's underlying blockchain technology have run up against fundamental limitations to privacy, faithful execution, and transaction finality. We introduce \emph{Strong Federations}: publicly verifiable, Byzantine-robust transaction networks that facilitate movement of any asset between disparate markets, without requiring third-party trust. \emph{Strong Federations} enable commercial privacy, with support for transactions where asset types and amounts are opaque, while remaining publicly verifiable. As in Bitcoin, execution fidelity is cryptographically enforced; however, \emph{Strong Federations} significantly lower capital requirements for market participants by reducing transaction latency and improving interoperability. To show how this innovative solution can be applied today, we describe \emph{\liquid}: the first implementation of \emph{Strong Federations} deployed in a Financial Market.
Current IoT systems tend to be cloud-centric which in turn introduces network latency and constrained interaction with sensors and actuators. This paper presents the idea of using restful micro-services called Virtual Resources. A Virtual Resource is a software-defined IoT management construct that enables multi-tenancy support and load distribution onto edge hosts. The paper presents a performance analysis of our Golang implementation of Virtual Resources in various settings.
Dec 1, 2016·2016 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
Mayra Samaniego, Uurtsaikh Jamsrandorj, Ralph Deters
A blockchain is a distributed and decentralized ledger that contains connected blocks of transactions. Unlike other ledger approaches, blockchain guarantees tamper proof storage of approved transactions. Due to its distributed and decentralized organization, blockchain is beeing used within IoT e.g. to manage device configuration, store sensor data and enable micro-payments. This paper presents the idea of using blockchain as a service for IoT and evaluates the performance of a cloud and edge hosted blockchain implementation.
Moving IoT components from the cloud onto edge hosts helps in reducing overall network traffic and thus minimizes latency. However, provisioning IoT services on the IoT edge devices presents new challenges regarding system design and maintenance. One possible approach is the use of software-defined IoT components in the form of virtual IoT resources. This, in turn, allows exposing the thing/device layer and the core IoT service layer as collections of micro services that can be distributed to a broad range of hosts.
User appropriation can be immensely helpful to bootstrap emerging technologies; but how do new and lesser known technologies attract these earliest adopters? This paper investigates user appropriation of emerging computing technologies, by focusing on Bitcoin, a digital monetary system supported by a peer-to-peer network of computing devices. We conducted in-depth interviews with sixteen Bitcoin community participants in Hong Kong, Singapore, and Baltimore. We describe user appropriation in this case of Bitcoin as a sociocultural journey-from encounter, research and learning, to socialization. We contribute the concept of cultural affinities, including conceptual, contextual and social dimensions, as important mediators leading to early-stage user appropriation.
Roman Matzutt, Oliver Hohlfeld, Martin Henze, Robin Rawiel · 6 authors
As transaction fees skyrocket today, blockchains become increasingly expensive, hurting their adoption in broader applications. This work tackles the saving of transaction fees for economic blockchain applications. The key insight is that other than the existing "default'' mode to execute application logic fully on-chain, i.e., in smart contracts, and in fine granularity, i.e., user request per transaction, there are alternative execution modes with advantages in cost-effectiveness. On Ethereum, we propose a holistic middleware platform supporting flexible and secure transaction executions, including off-chain states and batching of user requests. Furthermore, we propose control-plane schemes to adapt the execution mode to the current workload for optimal runtime cost. We present a case study on the institutional accounts (e.g., coinbase.com) intensively sending Ether on Ethereum blockchains. By collecting real-life transactions, we construct workload benchmarks and show that our work saves 18%\sim 47%18%-47% per invocation than the default baseline while introducing 1.81%\sim 16.59%1.81%-16.59% blocks delay.
Ariel Ekblaw, Chelsea Barabas, Jonathan Harvey-Buschel, Andrew Lippman
Since 2009, the Bitcoin open-source software project has established a commanding presence in the digital currency space as a self-organizing, distributed system. The project stems from a long history of efforts to harness decentralization and progressive cryptography for social good, as espoused by the ethos of the Cypherpunks mailing list on which Bitcoin was first released. However, certain design choices in Bitcoin's core protocol have led to consolidation of the peer-to-peer nodes, rather than greater diversification, thus threatening system integrity. In this position paper, we explore the socio-technical limits that challenge Bitcoin's ability to remain fully decentralized and "self-contained" as an algorithmically governed system. The need to integrate into existing human systems and infrastructures complicates the project's original vision. We propose hardware, software and electricity management modifications to the broader Bitcoin ecosystem, recognizing the need for socio-inspired design strategies to revive network integrity. We then use Bitcoin as an example to discuss the fundamental limitations of "pure decentralization" and algorithmic self-governance.
The lack of credibility of transactions has become major issue restricting the rapid development and popularization of E-commerce. Existing solutions adopt blockchain protocols to improve the credibility of transactions. Most of them still have significant scalability barrier, such as instant transaction and throughput. By analyzing how fundamental and circumstantial bottlenecks in Bitcoin-derived blockchain limit the ability of its current peer-to-peer overlay network, this paper presents Permissioned Blockchain Framework (PBF). PBF aims at achieving trusted trading and supporting instant transaction in E-commerce. To guarantee a higher credibility of transactions, this paper presents a global consensus algorithm - Permissioned Trusted Trading Network Consensus Algorithm. In order to fulfill the demand of instant transactions without sacrificing credibility, this paper presents a Peer Inner Blockchain Protocol. The comparison between PBF and Bitcoin-derived blockchain in E-commerce, suggests better performance on throughput, latency, capacity.
Aug 1, 2016·2016 IEEE Intl Conference on Computational Science and Engineering (CSE) and IEEE Intl Conference on Embedded and Ubiquitous Computing (EUC) and 15th Intl Symposium on Distributed Computing and Applications for Business Engineering (DCABES)
Bitcoin is a digital currency based on peer-to-peer network to propagate and verify transactions. Bitcoin differs from traditional currencies in that, it does not rely on a centralised authority. In this paper, we present a simulation model of Bitcoin peer-to-peer network which is an event based simulation. Large scale measurements of the real Bitcoin network are performed in order to enable a precise parameterisation of the presented simulation model. In addition, we perform validation results revealing that the presented simulation model behaves as close as the real Bitcoin network. Based on the developed simulation model, evaluation of our proposed Bitcoin Clustering Based Super Node (BCBSN) protocol as a mechanism to speed up information propagation in Bitcoin network is presented. Evaluation results show that the presented clustering protocol is able to reduce the transaction propagation delay with a reasonable proportion.
Dimitris Chatzopoulos, Sujit Gujar, Boi Faltings, Pan Hui
The popularity of digital currencies, especially cryptocurrencies, has been continuously growing since the appearance of Bitcoin. Bitcoin is a peer-to-peer (P2P) cryptocurrency protocol enabling transactions between individuals without the need of a trusted authority. Its network is formed from resources contributed by individuals known as miners. Users of Bitcoin currency create transactions that are stored in a specialised data structure called a block chain. Bitcoin's security lies in a proof-of-work scheme, which requires high computational resources at the miners. These miners have to be synchronised with any update in the network, which produces high data traffic rates. Despite advances in mobile technology, no cryptocurrencies have been proposed for mobile devices. This is largely due to the lower processing capabilities of mobile devices when compared with conventional computers and the poorer Internet connectivity to that of the wired networking. In this work, we propose LocalCoin, an alternative cryptocurrency that requires minimal computational resources, produces low data traffic and works with off-the-shelf mobile devices. LocalCoin replaces the computational hardness that is at the root of Bitcoin's security with the social hardness of ensuring that all witnesses to a transaction are colluders. It is based on opportunistic networking rather than relying on infrastructure and incorporates characteristics of mobile networks such as users' locations and their coverage radius in order to employ an alternative proof-of-work scheme. Localcoin features (i) a lightweight proof-of-work scheme and (ii) a distributed block chain.