The basic principle of a digital currency system such as the Bitcoin, allows secured monetary transaction through an insecure public network without going through a financial institution. Despite the inherent weakness of the public network, this self-governing financial system remains operational through its strong security design. This project will examine the Bitcoin design and incorporate its security component into the NtuCoin system, which caters to the environment of an educational institute. The components examined are namely, Wallets, Transactions, Block-chain, Mining, Network. The wallet is the foundation of NtuCoin system, which stores the mandatory digital keys that locks or unlocks funds in the block-chain. Digital keys stored within a client wallet, specifically public and private key pairs, were generated using the Elliptic Curve Cryptography algorithm. The secp256k1 curve was chosen for its special property of non-randomness, which allows more efficient computation as compared to curves with random structure [1]. According to Satoshi (2009), transactions within the NtuCoin system can be visualized as a chain of digital signatures. These Signatures were implemented to ensure the integrity of legitimate transactions. In NtuCoin, signatures were obtained through multiple cryptography algorithms such as SHA256, RIPEMD-160, and ECDSA. Every newly generated transaction within the network will be checked against a list of criteria for their integrity, and invalid transactions that violates the criteria will be discarded by all nodes. The mining component periodically aggregates transactions into a block (container), and then timestamp it as a form of proof that these transactions exist within the network at a particular time. Satoshi (2009) suggested a proof-of-work system similar to Adam Back’s Hashcash, which states that a denial of service counter measure can be achieved through increasing the difficulty for block creation and then chaining these blocks in a timing sequential fashion. Therefore, the block-chain is well known as the main security feature in a digital currency network. Any malicious intent on changing a particular block record in the chain would require a complete computation of the entire blocks, which is computationally infeasible. It is evident from the research that NtuCoin satisfies the fundamental requirements of most security models that ensure the Confidentiality, Integrity and Availability. Confidentiality of the data within a node’s client is attained by encrypting the wallets with a user defined secret key. In addition, the Integrity of transactions flowing within the network is ensured through the usage of intensives digital signature algorithms. Furthermore, high availability is enabled through the highly distributed nature of a peer to peer environment.
Bitcoin is the first and most successful digital currency in the world. It polarizes the news almost daily, with either glowing reviews of the many benefits of an alternative and international currency, or doomsday predictions of anarchy, deflation, and another tulip bubble.\nThis article focuses on the truly innovative aspect of Bitcoin - and that which has gone mostly unnoticed since its inception - the technological platform used to transfer Bitcoin from one party to another. This technology is called the Blockchain. The Blockchain eschews a bank or other intermediary and allows parties to transfer funds directly to one another, using a peer-to-peer system. This disruptive technology has done for money transfers what email did for sending mail - by removing the need for a trusted third party just as email removed the need for using the post office to send mail.\nIf this technology can be used for peer-to-peer money transfers, why not extend the technology to accomplish other forms of transfers? Imagine selling a house or buying a car peer-to-peer. What about using the Blockchain technology to buy and sell stocks? Stocks exchanged completely peer-to-peer could resolve many of the issues facing the stock market today, including high frequency trading and short sales. This article develops a peer-to-peer stock market system, the legal implications of such a system, and how this system will fit in with current legislation and regulation.
The emerging digital cryptocurrency Bitcoin has made waves in mainstream media across the globe, as have the numerous extreme events that have rocked it. One such event, the bankruptcy of a prominent Bitcoin exchange called Mt.Gox, particularly shocked the emerging sociotechnical field. However, it is not clear how the numerous entrepreneurial firms operating in this field survived this shock. \\ \\ Studies of resilience in the face of extreme events have typically examined mature firms, characterised by formal structures and some slack resources. In such studies, the resilience, adaptability and trans-formability of the firm come into view. A new firm in an emergent field, however, is equally driven to survive â but must do so with far more limited resources, without a formal structure and little in the way of organisational learning. In our study, we find that such entrepreneurial firms rely on their col-lective identity in forming resilient responses. Furthermore, one outcome of this shock was a call for regulations and oversight â despite earlier dogmatic rejections of such formal control. \\ \\ Keywords: Bitcoin, Entrepreneurship, Resilience, Extreme Event, Qualitative Study \\
Traditional sports ticket sales have followed a basic model of tickets in exchange for cash or credit. In an evolving and competitive market, sports marketing professionals must adapt and consider alternate forms of ticket sales. This case study follows Julie Lin, the director of ticket sales for a fictional National Hockey League expansion team, the Seattle Salmon. In an effort to align with the strategic vision of being considered a highly innovative sports franchise, Lin is considering accepting Bitcoin, a virtual currency, as a form of payment. Considered a “cryptocurrency,” Bitcoin is awarded through the solving of complex computer riddles, is devoid of a physical form, has no government or regulatory body backing it, and has value based largely on speculation. Bitcoin has found popularity and legitimacy among technology companies and companies considered to be innovative. At the present time, three professional sports accept Bitcoin for the purchase of tickets. This case will follow Lin and her exploration of Bitcoin within her franchise. Readers will consider positive and negative aspects of Bitcoin in a sports ticketing environment, and ultimately present an educated and data-driven recommendation regarding the details of this case.
Confirmation bias is a cognitive fallacy that can lead investors to make wrong decisions. It affects how one interprets, searches and recalls information. Yet there is lack of research on how confirmation bias influences information sharing behaviour. Do people share more readily news or information that is closer to their beliefs? I investigate the sharing (retweeting) behaviour of bitcoin media followers. I further assume that bitcoin investors belong to a subset of bitcoin media followers. I find evidence that retweeting behaviour of positive and negative sentiment news is related to bitcoin price changes on a weekly level. When price goes up bitcoin investors tend to share more positive news and when price goes down relatively more negative news are shared. I also investigate the long term sharing tendency and find that on average bitcoin investors tend to share equal amounts of positive and negative news. I argue that this sharing behaviour is a demonstration of confirmation bias influencing information sharing behaviour.
The underlying values inherent in the creation of bitcoins are those of decentralization and accessibility. The horizontal power structure is an integral part of bitcoins’ architecture – this paper seeks to find a feasible alternative to status quo in order to preserve these characteristics. First, we look at the harms of monopolies and how the concentration of bitcoins is exceptionally harmful to its continued existence. Second, we expose the inadequacies of the existing regulatory frameworks, and discuss how status quo militates against the foundational ideology of bitcoin as a non-institutional cryptocurrency. Third, we undertake a comparative study of the existing regulatory regimes to identify legal and regulatory issues surrounding bitcoins. Finally, we propose a solution to the concern of centralization by discussing the relationship between law, code and the market, and discussing existing coded solutions that may be further improved upon to prevent such monopoly
[NOTE: This paper was written in late 2014 and early 2015. It is relevant given the continued movement of Bitcoin toward the mainstream, exemplified by El Salvador's adoption of Bitcoin as legal tender in June 2021.] After a slow beginning in 2009, the digital currency Bitcoin has edged closer to the mainstream, and regulators are scrambling to determine what to do with it. So far, they have focused on harms that its use creates, such as easy money laundering and sales of illicit goods. But Bitcoin’s ability to grease the wheels of crime is not the only risk we should worry about. Rather, due to its status as decentralized, open-source software, Bitcoin poses a risk that money has not historically been subject to – the risk that the money will just stop working one day due to a technology or basic governance problem. Illuminating the importance of reliable money to our society, this paper unpacks the operational risks generated by Bitcoin’s very structure, such as the inherent vulnerabilities of software to bugs and attacks, the governance problems spawned by its decentralized structure and open-source nature, and the lack of monetary expertise of the coders who run the currency. Explicitly considering how each operational risk impacts Bitcoin’s status as money, I conclude that the aggregation of Bitcoin’s operational risks means that it is simply not durable enough to serve as money – even if it becomes widely accepted and achieves a stable value. With hundreds of millions of dollars in investments now pouring into Bitcoin and the larger virtual currency ecosystem, and with more and more prominent individuals jumping daily on the Bitcoin bandwagon, this paper urges regulators and policy-makers to specifically address Bitcoin’s critical operational risks as they design the soon-to-come regulations for virtual currencies.
The Internet has sparkled a number of innovations that have fundamentally changed many aspects of our lives. Among them, it has dis-intermediated markets, transforming them from physical to digital. Up to date though, the most common of the elements present in any commercial transaction has largely escaped Internet's influence: money. Analysts have long predicted that this could not be forever and indeed it hasn't. Over the past years, we have witnessed the rapid rise of co-called cryptocurrencies, fuelled by the blockchain innovation. In this lecture, after briefly revisiting the nature of money (perhaps the less well understood of the most widely used technologies), I will address the emerging concept of smart money and its various potential uses. Starting from Bitcoin (the protocol), I will attempt to sketch out a road to money-over-IP, consisting of intermediate innovation stops at bitcoin (the currency), app-specific money, smart contracts, and M2M money. In the process, I will explain how these emerging innovations will fundamentally affect the nature of the Internet itself, as well as the future of commerce and our world.
This paper explores the legal character of the Bitcoin and other emerging "virtual currencies," and the legal and policy implications of Bitcoin trading. It observes that these "cryptocurrencies" exhibit different legal characteristics depending on the context in which they are examinedwhether transactional law, tax law, or criminal law, for example. The paper argues that the appropriate legal analogue for classifying Bitcoins should be investment and commercial notes, since this characterisation would lead to the application of an appropriate and effective body of transactional and regulatory law to Bitcoins.
A purely anti-node non-peer-to-peer version of electronic money would allow online payments to be sent directly from one person to another without going through a financial institution and node promoters such as digital and gold-miners. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem using an anti-node non-peer-to-peer network which is not only distributed but encrypted to the core of the gene. The network timestamps transactions by hashing them into an ongoing chain of hash-based genesis-concept combined with military grade chain-reinforced-encryption using AES, SHA, RSA and custom algos, forming a record that cannot be changed without redoing the genesis-concept. The longest chain not only serves as proof of the sequence of events witnessed, but proof that it came from the largest pool of CPU power. As long as a majority of CPU power is controlled by nodes that are not cooperating to attack the network, they'll generate the longest chain and outpace attackers. The network itself requires minimal structure. Messages are broadcasted on a best effort basis, and nodes can leave and re-join the network at will, accepting the longest proof-of-work chain as proof of what happened while they were gone. However, in the proposed model, the central authority server itself acts as the node and represents the network transport layer by itself which enables it to not to be dependent on individual nodes, and the crypto-formulation continuous at server level. By this process, the dependency on nodes are ruled out and the server (the executioner, in this case) gets all the bits combined in one platform from the beginning to the end using enhanced salting layer, providing the facility of de-centralized defacto standard e-payments within nano seconds or less i.e., account to account transfer using one central block processing schema.
W artykule zwrócono uwagę na wybrane zagrożenia związane z internetowym systemem płatności za pomocą kryptowaluty bitcoin. Poruszone zostały zagadnienia związane z anoniowością w sieci Bitcoin, pozyskiwaniem bitcoinów, prawdopodobieństwem podwójnego wydania środków (ang. double spending), ryzykiem inwestycji w kryptowalutę oraz ryzykiem AML.
This paper analyzes Bitcoin and associated mining pools. Participants may decide to join a mining pool as an income smoothing device. Such participants are risk averse whereas other Bitcoin participants are risk taking.
Jason M. Gordon, Jennifer E. Chapman, Benjamin W. Akins
Bitcoin is rapidly increasing in use throughout the world. Instrumental to the Bitcoin system, the process for introducing new bitcoin into the system is known as “mining.” Mining involves the use of powerful computer systems and complex, computational algorithms to verify or validate prior bitcoin transactions. The reward for successfully undertaking this process is the creation and award of new bitcoin to the miner. Bitcoin mining has become a tedious and difficult process. The race to verify transactions, and thereby earn bitcoin, necessitates more sophisticated processes for verification and greater computational power. Many bitcoin miners band together in groups called “pools” to create a powerful mining platform. Some miners invest time and effort to build or maintain a suitable computer system, while others passively provide money or other resources toward the creation of the mining system. Many such mining pools have grown to allow individuals to collectively contribute effort to the transaction verification process in exchange for an interest in the proceeds from the mining activity. The bitcoin mining pool has largely escaped regulation. This paper argues that the mining pool should be regulated under the existing federal securities regulation regime.