Blockchain Papers

Beat Weber

No abstract is available for this record.

Christoph Sorge, Artus Krohn-Grimberghe

No abstract is available for this record.

Jürgen Muthig

No abstract is available for this record.

Tyler Moore

No abstract is available for this record.

Craig Warmke

Many want to know what bitcoin is and how it works. But bitcoin is as complex as it is controversial, and relatively few have the technical background to understand it. In this paper, I offer an accessible on-ramp for understanding bitcoin in the form of a model. My model reveals both what bitcoin is and how it works. More specifically, it reveals that bitcoin is a fictional substance in a massively coauthored story on a network that automates and distributes jobs normally entrusted to centralized publishing institutions. My model therefore falsifies a popular view according to which each bitcoin is a chunk of code.

Tobias Bamert, Christian Decker, Lennart Elsen, Roger Wattenhofer · 5 authors

Cashless payments are nowadays ubiquitous and decentralized digital currencies like Bitcoin are increasingly used as means of payment. However, due to the delay of the transaction confirmation in Bitcoin, it is not used for payments that rely on quick transaction confirmation. We present a concept that addresses this drawback of Bitcoin and allows it to be used for fast transactions. We evaluate the performance of the concept using double-spending attacks and show that, employing our concept, the success of such attacks diminishes to less than 0.09%. Moreover, we present a real world application: We modified a snack vending machine to accept Bitcoin payments and make use of fast transaction confirmations.

Malte Möser, Rainer Böhme, Dominic Breuker

We provide a first systematic account of opportunities and limitations of anti-money laundering (AML) in Bitcoin, a decentralized cryptographic currency proliferating on the Internet. Our starting point is the observation that Bitcoin attracts criminal activity as many say it is an anonymous transaction system. While this claim does not stand up to scrutiny, several services offering increased transaction anonymization have emerged in the Bitcoin ecosystem - such as Bitcoin Fog, BitLaundry, and the Send Shared functionality of Blockchain.info. Some of these services routinely handle the equivalent of 6-digit dollar amounts. In a series of experiments, we use reverse-engineering methods to understand the mode of operation and try to trace anonymized transactions back to our probe accounts. While Bitcoin Fog and Blockchain.info successfully anonymize our test transactions, we can link the input and output transactions of BitLaundry. Against the backdrop of these findings, it appears unlikely that a Know-Your-Customer principle can be enforced in the Bitcoin system. Hence, we sketch alternative AML strategies accounting for imperfect knowledge of true identities but exploiting public information in the transaction graph, and discuss the implications for Bitcoin as a decentralized currency.

Christian Decker, Roger Wattenhofer

Bitcoin is a digital currency that unlike traditional currencies does not rely on a centralized authority. Instead Bitcoin relies on a network of volunteers that collectively implement a replicated ledger and verify transactions. In this paper we analyze how Bitcoin uses a multi-hop broadcast to propagate transactions and blocks through the network to update the ledger replicas. We then use the gathered information to verify the conjecture that the propagation delay in the network is the primary cause for blockchain forks. Blockchain forks should be avoided as they are symptomatic for inconsistencies among the replicas in the network. We then show what can be achieved by pushing the current protocol to its limit with unilateral changes to the client's behavior.

Artus Krohn-Grimberghe, Christoph Sorge

Digital payment schemes show an ever increasing importance. Out of the countless different schemes available this article focuses on the popular Bitcoin system. The authors provide a description of Bitcoin's unique technological basis and its accompanying ecosystem of users, miners, trading platforms and vendors. Furthermore, this article discusses Bitcoin's currency-like features and the first regulatory actions take in the European Union and in the United States of America.

Beat Weber

The virtual currency and payment project Bitcoin intends to challenge the current monetary and payment system that finds itself in a legitimacy crisis in the aftermath of the financial market turmoil of 2008. In examining the governance of the Bitcoin system, I try to assess its potential to create input and output legitimacy as a payment system and as a monetary system in comparison with current practice.

Martin Janota

This thesis examines motives of demand for digital currency Bitcoin. We estimate transaction and speculative motives of Bitcoin users and their impact on the emerging digital currency. We analyze Bitcoin data and argue that external Bitcoin trading is mostly influenced by speculative motive. Speculative trade volume on average appreciates Bitcoin exchange rate. However internal Bitcoin transactions are driven mostly by transaction motive and are largely independent on Bitcoin trading. Speculative and non-speculative motived users thus coexist in separate circuits, interacting mostly indirectly through exchange rate and acceptability of Bitcoin. In the last part we argue that quantity theory of money is well applicable on transaction-based data, which Bitcoin provides, and use it to estimate money velocity and output index. We show that growth of Bitcoin accounts brings significant network effect and along with number of transactions largely explains growth of output index. Author: Martin Janota Thesis name: Digital currencies: Analysis of Bitcoin demand

Leszek Rychlewski

No abstract is available for this record.

Amanda Talsma, Jan Sloots, Janneke van de Ouweland

Dit onderzoek is verricht voor het Lectoraat Duurzaam Financieel Management aan de Hanzehogeschool. Er wordt onderzocht welke gevolgen het gebruik van de Bitcoin heeft voor de maatschappij.

Morgen E. Peck

Bitcoin, the cryptocurrency powered by a decentralized peer-to-peer network of computers, has been hot this season. With the exchange rate bobbing around US $100, those involved in creating new bitcoins' and upholding the network that makes them valuable' have become locked in an arms race of sorts, seeking new, powerful machines that will enrich them but that could also destabilize the nascent virtual money.

J.A. Bergstra, Karl de Leeuw

A collection of questions about Bitcoin and its hypothetical relatives Bitguilder and Bitpenny is formulated. These questions concern technical issues about protocols, security issues, issues about the formalizations of informational monies in various contexts, and issues about forms of use and misuse. Some questions are formulated in the more general setting of informational monies and near-monies. We also formulate questions about legal, psychological, and ethical aspects of informational money. Finally we formulate a number of questions concerning the economical merits of and outlooks for Bitcoin.

Springer Gabler Wiesbaden

No abstract is available for this record.

Leszek Rychlewski

No abstract is available for this record.

Nicolas Christin

We perform a comprehensive measurement analysis of Silk Road, an anonymous, international online marketplace that operates as a Tor hidden service and uses Bitcoin as its exchange currency. We gather and analyze data over eight months between the end of 2011 and 2012, including daily crawls of the marketplace for nearly six months in 2012. We obtain a detailed picture of the type of goods sold on Silk Road, and of the revenues made both by sellers and Silk Road operators. Through examining over 24,400 separate items sold on the site, we show that Silk Road is overwhelmingly used as a market for controlled substances and narcotics, and that most items sold are available for less than three weeks. The majority of sellers disappears within roughly three months of their arrival, but a core of 112 sellers has been present throughout our measurement interval. We evaluate the total revenue made by all sellers, from public listings, to slightly over USD 1.2 million per month; this corresponds to about USD 92,000 per month in commissions for the Silk Road operators. We further show that the marketplace has been operating steadily, with daily sales and number of sellers overall increasing over our measurement interval. We discuss economic and policy implications of our analysis and results, including ethical considerations for future research in this area.

Micha Ober, Stefan Katzenbeisser, Kay Hamacher

The Bitcoin network of decentralized payment transactions has attracted a lot of attention from both Internet users and researchers in recent years. Bitcoin utilizes a peer-to-peer network to issue anonymous payment transactions between different users. In the currently used Bitcoin clients, the full transaction history is available at each node of the network to prevent double spending without the need for a central authority, forming a valuable source for empirical research on network structure, network dynamics, and the implied anonymity challenges, as well as guidance on the future evolution of complex payment systems. We found dynamical effects of which some increase anonymity while others decrease it. Most importantly, several parameters of the Bitcoin transaction graph seem to have become stationary over the last 12–18 months. We discuss the implications.

J. Harry Cotton

This article examines the use of Bitcoin in money remittance markets as a specific illustration of wider emerging regulatory issues relating to the use of cryptocurrencies. While there are many conceivable benefits of using Bitcoin for remittances, there are also many risks for users of these remittance services. This article adopts a user perspective to look at what the major concerns are and what existing protections may be available to persons using cryptocurrencies under New Zealand law through the example of using Bitcoin for remittance purposes. The article then summarises approaches taken by other jurisdictions before suggesting a specific regulatory approach to cryptocurrencies that New Zealand should consider adopting.

Ian Miers, Christina Garman, Matthew Green, Aviel D. Rubin

Bitcoin is the first e-cash system to see widespread adoption. While Bitcoin offers the potential for new types of financial interaction, it has significant limitations regarding privacy. Specifically, because the Bitcoin transaction log is completely public, users' privacy is protected only through the use of pseudonyms. In this paper we propose Zerocoin, a cryptographic extension to Bitcoin that augments the protocol to allow for fully anonymous currency transactions. Our system uses standard cryptographic assumptions and does not introduce new trusted parties or otherwise change the security model of Bitcoin. We detail Zerocoin's cryptographic construction, its integration into Bitcoin, and examine its performance both in terms of computation and impact on the Bitcoin protocol.

J.A. Bergstra, Karl de Leeuw

The famous new money Bitcoin is classified as a technical informational money (TIM). Besides introducing the idea of a TIM, a more extreme notion of informational money will be developed: exclusively informational money (EXIM). The informational coins (INCOs) of an EXIM can be in control of an agent but are not owned by any agent. INCOs of an EXIM cannot be stolen, but they can be lost, or thrown away. The difference between an EXIM and a TIM shows up when considering a user perspective on security matters. Security for an EXIM user is discussed in substantial detail, with the remarkable conclusion that computer security (security models, access control, user names, passwords, firewalls etc.) is not always essential for an EXIM, while the application of cryptography based information security is unavoidable for the use of an EXIM. Bitcoin seems to meet the criteria of an EXIM, but the assertion that "Bitcoin is an EXIM", might also be considered problematic. As a thought experiment we will contemplate Bitguilder, a hypothetical copy of Bitcoin that qualifies as an EXIM. A business ethics assessment of Bitcoin is made which reveals a number of worries. By combining Bitguilder with a so-called technical informational near-money (TINM) a dual money system, having two units with a fluctuating rate, may be obtained. It seems that a dual money can remedy some, but not all, of the ethical worries that arise when contemplating Bitcoin after hypothetically having become a dominant form of money. The contributions that Bitcoin's designers can potentially make to the evolution of EXIMs and TIMs is analyzed in terms of the update of the portfolio of money related natural kinds that comes with Bitcoin.

J.A. Bergstra, Karl de Leeuw

The famous new money Bitcoin is classified as a technical informational money (TIM). Besides introducing the idea of a TIM, a more extreme notion of informational money will be developed: exclusively informational money (EXIM). The informational coins (INCOs) of an EXIM can be in control of an agent but are not owned by any agent. INCOs of an EXIM cannot be stolen, but they can be lost, or thrown away. The difference between an EXIM and a TIM shows up when considering a user perspective on security matters. Security for an EXIM user is discussed in substantial detail, with the remarkable conclusion that computer security (security models, access control, user names, passwords, firewalls etc.) is not always essential for an EXIM, while the application of cryptography based information security is unavoidable for the use of an EXIM. Bitcoin seems to meet the criteria of an EXIM, but the assertion that "Bitcoin is an EXIM", might also be considered problematic. As a thought experiment we will contemplate Bitguilder, a hypothetical copy of Bitcoin that qualifies as an EXIM. A business ethics assessment of Bitcoin is made which reveals a number of worries. By combining Bitguilder with a so-called technical informational near-money (TINM) a dual money system, having two units with a fluctuating rate, may be obtained. It seems that a dual money can remedy some, but not all, of the ethical worries that arise when contemplating Bitcoin after hypothetically having become a dominant form of money. The contributions that Bitcoin's designers can potentially make to the evolution of EXIMs and TIMs is analyzed in terms of the update of the portfolio of money related natural kinds that comes with Bitcoin.

Nicholas A. Plassaras

This Comment examines the potentially destabilizing effects of emerging digital currencies on the international foreign currency exchange market. Specifically, it examines "Bitcoin," a decentralized, partially anonymous, and largely unregulated digital currency that has become particularly popular in the last few years. This Comment argues that the International Monetary Fund, the institution responsible for coordinating the stability of foreign exchange rates, is ill-equipped to handle the widespread use of digital currencies in the foreign currency exchange market It highlights the inability of the Fund to intervene in the event of a speculative attack on a currency by Bitcoin users. This Comment concludes by suggesting two interpretations of the Fund's incorporating document, the Articles of Agreement, that would allow it to intervene in the event of such an attack.