Blockchain Papers

Xincheng Duan, Biwei Yan, Anming Dong, Li Zhang · 5 authors

No abstract is available for this record.

Jie Jin, Jiajun Zhou, Chengxiang Jin, Shanqing Yu · 6 authors

Blockchain technology supports the generation and record of transactions, and maintains the fairness and openness of the cryptocurrency system. However, many fraudsters utilize smart contracts to create fraudulent Ponzi schemes for profiting on Ethereum, which seriously affects financial security. Most existing Ponzi scheme detection techniques suffer from two major restricted problems: the lack of motivation for temporal early warning and failure to fuse multi-source information finally cause the lagging and unsatisfactory performance of Ethereum Ponzi scheme detection. In this paper, we propose a dual-channel early warning framework for Ethereum Ponzi schemes, named Ponzi-Warning, which performs feature extraction and fusion on both code and transaction levels. Moreover, we represent a temporal evolution augmentation strategy for generating transaction graph sequences, which can effectively increase the data scale and introduce temporal information. Comprehensive experiments on our Ponzi scheme datasets demonstrate the effectiveness and timeliness of our framework for detecting the Ponzi contract accounts.

Panpan Li, Yunyi Xie, Xinyao Xu, Jiajun Zhou · 5 authors

Blockchain has widespread applications in the financial field but has also attracted increasing cybercrimes. Recently, phishing fraud has emerged as a major threat to blockchain security, calling for the development of effective regulatory strategies. Nowadays network science has been widely used in modeling Ethereum transaction data, further introducing the network representation learning technology to analyze the transaction patterns. In this paper, we consider phishing detection as a graph classification task and propose an end-to-end Phishing Detection Graph Neural Network framework (PDGNN). Specifically, we first construct a lightweight Ethereum transaction network and extract transaction subgraphs of collected phishing accounts. Then we propose an end-to-end detection model based on Chebyshev-GCN to precisely distinguish between normal and phishing accounts. Extensive experiments on five Ethereum datasets demonstrate that our PDGNN significantly outperforms general phishing detection methods and scales well in large transaction networks.

Tahmid Hasan Pranto, Abdulla All Noman, Mustafizur Rahaman, AKM Bahalul Haque · 6 authors

E-commerce platforms have made our life easier and bought plenty of advantages too. However, due to fraud and scams, trust is a concern while buying products online. In this study, we proposed a blockchain-based architecture for the e-commerce sector where data mining technology is used to detect fraudulent users by generating precise and effective rules, and smart contracts are used for enforcement and functionality management within the blockchain network. Our data mining approach yielded a competitive accuracy, precision, recall, and f1-measure of over 99% compared to the state-of-the-art. High performing rules are further tested for ten simulated cycles under completely unseen data to test their rigidity in a real-time scenario. Details analysis of delineation (if any) in rule antecedents has also been analyzed for these cycles. Tested and selected rules are stored in smart contracts deployed within blockchain network for security and immutability. For ensuring strict order criteria maintenance, better return policy, authentic review and scam avoidance, two smart contracts have been written which implement seller reputation mechanism and authentic review maintenance while safeguarding the seller from intentional defaming too. Altogether, the goal of this study is to establish a balance between all the parties within an e-commerce platform so that everyone's right is protected, money is safe and resources are not exploited.

Guoming Zhang, Xuyun Zhang, Muhammad Bilal, Wanchun Dou · 6 authors

No abstract is available for this record.

César Sabater, Jan Ramon

In privacy-preserving machine learning, it is less obvious to verify correct behavior of participants because they are not supposed to reveal their inputs in cleartext to other participants. It is hence important to make federated machine learning robust against data poisoning and related attacks. While input data can be related to a distributed ledger (blockchain), a less studied input is formed by the random sampling parties perform. In this paper, we describe strategies based on zero knowledge proofs to allow parties to prove they perform sampling (and other computations) correctly. We sketch a number of alternative ways to implement our idea and provide some preliminary experimental results.

Yang Zhang, Tengyu Wang, Ka‐Veng Yuen

No abstract is available for this record.

Youssef Elmougy, Oliver Manzi

Blockchain technology is continually gaining momentum, with applications expanding in sectors beyond digital assets and financial services. With the existence of a public distributed ledger, the validity of transactions and accounts on the blockchain can be easily reviewed. Nevertheless, there are malicious persons that attempt to fraud cryptocurrency holders, undermining the reliability of the blockchain. This study focuses on identifying fraudulent transactions and accounts by detecting anomalies in the Bitcoin and the Ethereum transaction networks, the two largest cryptocurrencies. By leveraging GPU-accelerated machine learning models, including Support Vector Machines, Random Forest, and Logistic Regression, we draw the metadata of over 30 million transactions on the Bitcoin network and confirmed transactions from over 500 thousand accounts on the Ethereum network. We offer insight into feature importance through sensitivity analysis, as well as train accurate models that allow for method adoption in automated fraud detection systems. The trained models achieve an accuracy and recall of 96.9% and 0.987 on the Bitcoin dataset, and 80.2% and 0.835 on the Ethereum dataset. The study of anomaly detection in the cryptocurrency blockchain done in this paper can be generalized to other blockchain networks, including health service blockchains, public sector blockchains, and financial intelligence blockchains.

Arianna Trozze, Bennett Kleinberg, T. Davies

Abstract Decentralized Finance (DeFi) is a system of financial products and services built and delivered through smart contracts on various blockchains. In recent years, DeFi has gained popularity and market capitalization. However, it has also been connected to crime, particularly various types of securities violations. The lack of Know Your Customer requirements in DeFi poses challenges for governments trying to mitigate potential offenses. This study aims to determine whether this problem is suited to a machine learning approach, namely, whether we can identify DeFi projects potentially engaging in securities violations based on their tokens’ smart contract code. We adapted prior works on detecting specific types of securities violations across Ethereum by building classifiers based on features extracted from DeFi projects’ tokens’ smart contract code (specifically, opcode-based features). Our final model was a random forest model that achieved an 80% F-1 score against a baseline of 50%. Notably, we further explored the code-based features that are the most important to our model’s performance in more detail by analyzing tokens’ Solidity code and conducting cosine similarity analyses. We found that one element of the code that our opcode-based features can capture is the implementation of the SafeMath library, although this does not account for the entirety of our features. Another contribution of our study is a new dataset, comprising (a) a verified ground truth dataset for tokens involved in securities violations and (b) a set of legitimate tokens from a reputable DeFi aggregator. This paper further discusses the potential use of a model like ours by prosecutors in enforcement efforts and connects it to a wider legal context.

Aditya Singh, Anubhav Gupta, Hardik Wadhwa, Siddhartha Asthana · 5 authors

The tremendous rise of cryptocurrency in the payment domain has unlocked huge opportunities but also raised numerous challenges in parallel involving cybercriminal activities like money laundering, terrorist financing, illegal and risky services, etc, owing to its anonymous and decentralized setup. The demand for building a more transparent cryptocurrency network, resilient to such activities, has risen extensively as more financial institutions look to incorporate it into their network. While a plethora of traditional machine learning and graph based deep learning techniques have been developed to detect illicit activities in a cryptocurrency transaction network, the challenge of generalization and robust model performance on future timesteps still exists. In this paper, we show that the model learned on transactional feature set provided in dataset (Elliptic Dataset) carry a temporal bias, i.e. they are highly dependent on the timesteps they occur. Deploying temporally biased models limits their performance on future timesteps. To address this, we propose a temporal debiasing technique using GNN based architecture that ensures generalization by adversarially learning between fraud1classification and temporal classification. The adversarial loss constructed optimizes the embeddings to ensure they 1.) perform well on fraud classification task 2.) does not contain temporal bias. The proposed architecture capture the underlying fraud patterns that remain consistent over time. We evaluate the performance of our proposed architecture on the Elliptic dataset and compare the performance with existing machine learning and graph-based architectures.1Fraud and illicit are used interchangeably in this paper

Haixiao Zheng, Bin Wen, Yuhan Li

Bitcoin has become the choice of many illegal transactions due to its anonymity. To fight crime and maintain the order of the financial market, it is necessary to identify illegal transaction activities in the Bitcoin network. On the basis of referring to the relationship between data, information, and knowledge in the DIKW architecture, this article proposes a new method called MP-GAT to convert discrete data in the Bitcoin network into usable information and knowledge to help identify illegal transactions. MP-GAT uses a combination of multi-layer perceptron and graph attention networks to build a model for identifying illegal transactions. Specifically, the concept of artificial intelligence is used to simulate the human reasoning system and learn from the data. Use the MP-GAT model to convert Bitcoin data into information and knowledge. The method of artificial intelligence is used to complete the transformation of data, information, and knowledge in the DIKW system to achieve the purpose of detecting and identifying illegal transactions in the Bitcoin network.

Kritagya Upadhyay, Ram Dantu, Yanyan He, Syed Badruddoja · 5 authors

A Service Level Agreement (SLA) is a special kind of legal contract that binds a vendor to its customers where the vendor commits to provide certain services in exchange for certain payment from the customers. On the other hand, a Smart Contract is a contract that is a computer program that also binds multiple parties into given agreements but is a set of a precise rules and is self-enforceable and self-executable. Since almost all legal contracts are ambiguous by nature and are complex to read and understand, we perform a novel study on how we can replace the traditional vague legal contract with the smart contact and the effect of the ambiguity on the smart contract by performing a thorough analysis on SLAs by measuring their ambiguities in various aspects. We take several samples of real SLAs from six different popular broadband vendors. We use four random SLAs to train the machine learning model to classify and then detect ambiguous words in two unseen SLAs which were the SLAs of Ziply Fiber and Century Link. As different people form different interpretations while reading the ambiguous legal contracts, we generate various human interpretations from the machine detected ambiguous words and convert all those generated interpretations into Smart Contracts to perform testing in Ethereum-based Blockchain to identify the most ambiguous as well as accurate interpretation of the SLA. From our analysis and observation, we were able to find out the most ambiguous interpretation of SLAs and we concluded that the SLA of Ziply Fiber was more ambiguous in general compared to the SLA of Century Link. Moreover, our proposed approach to detect ambiguous terms and to translate an ambiguous legal contract to a smart legal contract using a formal language to measure the degree of ambiguity can be extrapolated and replicated to legal contracts from other types of industries as well.

Runnan Tan, Qingfeng Tan, Peng Zhang, Zhao Li

Currently, the blockchain technology has been widely applied to various industries, and has attracted wide attention. However, because of its unique anonymity, digital currency has become a haven for all kinds of cyber crimes. It has been reported that Ethereum frauds provide huge profits, and pose a serious threat to the financial security of the Ethereum network. To create a desired financial environment, an effective method is urgently needed to automatically detect and identify Ethereum frauds in the governance of the Ethereum system. In view of this, this paper proposes a method for detecting Ethereum frauds by mining Ethereum-based transaction records. Specifically, web crawlers are used to capture labeled fraudulent addresses, and then a transaction network is reconstructed based on the public transaction book. Then, an amount-based network embedding algorithm is proposed to extract node features for identifying fraudulent transactions. At last, the graph convolutional network model is used to classify addresses into legal addresses and fraudulent addresses. The experimental results show that the system for detecting fraudulent transactions can achieve the accuracy of 95%, which reflects the excellent performance of the system for detecting Ethereum fraudulent transactions.

Jernej Vičič, Aleksandar Tošić

The manuscript presents a study of the possibility of use of Benford’s law conformity test, a well proven tool in the accounting fraud discovery, on a new domain: the discovery of anomalies (possibly fraudulent behaviour) in the the cryptocurrency transactions. Blockchain-based currencies or cryptocurrencies have become a global phenomenon known to most people as a disruptive technology, and a new investment vehicle. However, due to their decentralized nature, regulating these markets has presented regulators with difficulties in finding a balance between nurturing innovation, and protecting consumers. The growing concerns about illicit activity have forced regulators to seek new ways of detecting, analyzing, and ultimately policing public blockchain transactions. Extensive research on machine learning, and transaction graph analysis algorithms has been done to track suspicious behaviour. However, having a macro view of a public ledger is equally important before pursuing a more fine-grained analysis. Benford’s law, the law of first digit, has been extensively used as a tool to discover accountant frauds (many other use cases exist). The basic motivation that drove our research presented in this paper was to test the applicability of the well established method to a new domain, in this case the identification of anomalous behavior using Benford’s law conformity test to the cryptocurrency domain. The research focused on transaction values in all major cryptocurrencies. A suitable time-period was identified that was long enough to present sufficiently large number of observations for Benford’s law conformity tests and was also situated long enough in the past so that the anomalies were identified and well documented. The results show that most of the cryptocurrencies that did not conform to Benford’s law had well documented anomalous incidents, the first digits of aggregated transaction values of all well known cryptocurrency projects were conforming to Benford’s law. Thus the proposed method is applicable to the new domain.

XIAO Feng, ZHANG Peng-cheng, LUO Xia-pu

As the largest blockchain platform supporting smart contracts,millions of smart contracts have been deployed on Ethereum.Since the deployed smart contracts cannot be modified even if the contracts contain bugs,it is critical for developers to eliminate bugs prior to the deployment.Many smart contract analysis tools have been proposed.These tools either use bytecode-based symbolic execution to detect bugs,or convert the source code to an intermediate representation and then detect bugs.The tools based on symbolic execution usually cannot cover many types of bugs in source code.Converting the source code to an intermediate representation negatively impacts the detection speed.Moreover,these tools are bug detectors,which cannot automatically fix bugs based on analysis results.To address these limitations,we propose an approach named SolidityCheck,which employs regular expressions,program instrumentation and statement replacement in source code to quickly detect bugs and fix certain types of bugs.We conduct extensive experiments to evaluate SolidityCheck.The experimental results show that,compared with existing approaches,SolidityCheck demonstrates excellent performances on multiple indicators.

Feng Xiaohua, Marc Conrad, Eze C Elias, Khalid Hussein

AI (Artificial intelligence) application on Big Data had been developed fast. AI cyber security defense for the facing threats were required. Blockchain technology was invented in 2008 with BTC (Bit coin. This technology could be benefited alongside the custom of Blockchain, AI, Big Data and so on. There were a rapid progress in the advancement of Blockchain. This subject had recently become a discussion topic in the ICT (Information and Communications Technology) world. In this paper, AI security is discussed from the initial stage. Suggestion: In this paper, we discussed the impact of AI security from the initial stage and its impact and benefits to IT engineers, ICT students and CS (Computer Sciences) academic researchers, using a case study of medical records with personal recognizable identification privacy information that needs strict access control security. We considered its need for trustworthy cyber security, anti-fake, anti-alteration and transaction accounting transparency reputation to be applied to the NHS (National Health Service). Lastly, the paper provided some necessarily analysis. Blockchain technology had trustworthy cyber security, anti-fake, anti-alteration and transaction accounting transparency reputation to be considered to be applied to NHS (National Health Service). This short paper provided some analysis necessarily.

Akshay M. Fajge, Subhasish Goswami, Arpit Srivastava, Raju Halder

The gas mechanism on the Ethereum blockchain attempts to set charges for every smart contract operation in order to prevent infinite control of computational resources by the executing transactions. To satisfy this requirement, users need to specify in their transactions how much gas fees (in terms of gas limit and gas price) they would like to pay for. In essence, these gas fees are paid to the miners in return for their computational services. Naturally, miners tend to maximize their profits by considering the transactions with higher gas fees, and as a result, the transactions with lower gas fees remain in the waiting pool for a long time. This paper proposes a machine learning-based approach to predict whether a transaction with offered gas fees is likely to be included in the blockchain within the expected time or not. Such prior prediction of transactions' waiting time definitely assists users to reset their gas fees accordingly. The proposed model is evaluated on nearly one million real transactions from Ethereum mainnet, and the experimental results demonstrate a better performance than the existing one in the literature, with an achievement of 90.18% accuracy and 0.897 F1-score when the model is trained with Random Forest on the dataset balanced with SMOTETomek.

Yizhou Chen, Heng Dai, Xiao Yu, Wenhua Hu · 6 authors

With the development of blockchain technologies, many Ponzi schemes disguise themselves under the veil of smart contracts. The Ponzi scheme contracts cause serious financial losses, which has a bad effect on the blockchain. Existing Ponzi scheme contract detection studies have mainly focused on extracting hand-crafted features and training a machine learning classifier to detect Ponzi scheme contracts. However, the hand-crafted features cannot capture the structural and semantic feature of the source code. Therefore, in this study, we propose a Ponzi scheme contract detection method called MTCformer (Multi-channel Text Convolutional Neural Networks and Transofrmer). In order to reserve the structural information of the source code, the MTCformer first converts the Abstract Syntax Tree (AST) of the smart contract code to the specially formatted code token sequence via the Structure-Based Traversal (SBT) method. Then, the MTCformer uses multi-channel TextCNN (Text Convolutional Neural Networks) to learn local structural and semantic features from the code token sequence. Next, the MTCformer employs the Transformer to capture the long-range dependencies of code tokens. Finally, a fully connected neural network with a cost-sensitive loss function in the MTCformer is used for classification. The experimental results show that the MTCformer is superior to the state-of-the-art methods and its variants in Ponzi scheme contract detection.

Lin Liu, Wei‐Tek Tsai, Md Zakirul Alam Bhuiyan, Hao Peng · 5 authors

No abstract is available for this record.

Patrick Rakotomarolahy

This paper proposes prediction of the bitcoin return direction with logistic, discriminant analysis and machine learning classification techniques. It extends the prediction of the bitcoin return direction using exogenous macroeconomic and financial variables which have been investigated as drivers of bitcoin return. We also use google trends as proxy for investors interest on bitcoin. We consider those variables as predictors for bitcoin return direction. We conduct an in-sample and out-of-sample empirical analysis and achieve a misclassification error around 4% for in-sample evaluation and around 41% in out-of-sample empirical analysis. Ensemble learning trees based outperforms the other methods in both in-sample and out-of-sample analyses.

Júlia Almeida Valadares, Vinícius Cunha Oliveira, José Eduardo de Azevedo Sousa, Heder S. Bernardino · 7 authors

Ethereum é uma das maiores plataformas de cripto ativos atualmente, e vem se tornando um ambiente de negócios digitais entre usuários. O Ethereum foi concebido para permitir transações descentralizadas entre usuários anônimos. Contudo, o desenvolvimento de métodos para identificar perfis de comportamentos de usuários, mantendo suas identidades anônimas, têm o potencial para alavancar negócios nessa plataforma. Nesse trabalho, investigamos o uso de aprendizado de máquina para classificar um perfil de usuário como profissional ou comum a partir de atributos de suas transações. Essa classificação é desafiadora devido à pequena fração de usuários publicamente rotulados no Ethereum e ainda a fração consideravelmente menor de usuários profissionais. Para conduzir essa investigação, treinamos modelos considerando conjuntos cuidadosamente balanceados de transações com usuários rotulados. Nossos resultados mostram modelos de alto desempenho para a classificação de perfis, alcançando desempenho superior a 90% para acurácia, precisão, revocação e demais medidas relacionadas. Adicionalmente, identificamos as características mais relevantes em transações para essa classificação.

Lei Wang, Hao Cheng, Zibin Zheng, Aijun Yang · 5 authors

No abstract is available for this record.

Rahmeh Ibrahim, Aseel Mohammad Elian, Mohammed M. Ababneh

Blockchain is a platform technology for the cryptocurrency's applications like Bitcoin and Ethereum. The purpose of the blockchain is to eliminate the need for third trusted parties such as banks. In recent years and because of the properties of this technology like immutability and transparency, the technology was extended beyond cryptocurrencies and was exploited by various sectors like education, healthcare, finance, energy, government, and IoT providing more privacy, faster transactions and more security. In this research, we investigated Illicit accounts on Ethereum blockchain and proposed a Fraud detection model using three different machine learning algorithms: decision tree (j48), Random Forest and K-nearest neighbors (KNN). These algorithms were applied on a data set obtained from Kaggle.com containing 42 features. We have used the correlation coefficient to select the most effective features and built a new data set using 6 features only. Our research results show a significant improvement in time measurements using the three algorithms and an improvement in the F measure using the Random Forest algorithm.

Yanmei Zhang, Wenqiang Yu, Ziyu Li, Salman Raza · 5 authors

As more investors adopt to enter the field of blockchain investment, the Ponzi scheme, a traditional investment scam, has emerged as a hidden fraud in smart contracts. Although some proposed solutions have paid attention to detecting Ponzi schemes in the blockchain, two problems remain: features for detecting Ponzi schemes are incomplete, and algorithms for detecting Ponzi schemes are not sufficiently efficient. Therefore, we innovatively extract the bytecode feature and combine it with user transaction and opcode frequencies to get more comprehensive features. With these features, we propose a smart contract Ponzi scheme identification method based on the improved LightGBM algorithm. Experiments conducted on the real data set of Ethereum prove that our proposed method has improved accuracy dramatically in terms of the$F$-score index and the AUC index compared with the state-of-the-art methods. In addition, model training speed is improved significantly. Therefore, our method more accurately identifies Ponzi schemes in smart contracts, thus reducing investment risk.