Distributed Ledgers (DLs) like Blockchain have become a popular technique to build collective trust in digital records. The rationale is that any agent wishing to append a block to a DL needs to provide proof of holding some property/asset or having performed some costly activity. Thus, “poisoning” a DL with spurious content requires much more effort than poisoning a conventional shared data structure. Based on this idea, DLs are now being deployed as community stores of trusted transaction records, reputation values and even of trustworthy training data for Machine Learning (ML) models. Certainly, when injecting spurious or hostile content in a DL, a rational attacker has to consider whether the damage δ caused by a spurious block B is worth the effort ε needed to append B to the DL; but practical experience has shown that being certain to disrupt a DL-supported application may be a powerful motivator for digital vandalism even when it is costly. In this paper, we put out an alternative idea: Reciprocally Useful Work (RUW), a novel DL update mechanism where any agent wishing to add a block B to the ledger must first perform an activity that will improve the utility for the DL-supported application of some other agent's block B'. We discuss in detail how to apply RUW to DLs storing training data for Machine Learning (ML) models, in order to show that reciprocity can play the role of a direct compensation of the potential disruption, which is measurable in term of the performance of the ML model trained on the DL content.
Since Bitcoin and the blockchain were proposed in 2008, distributed ledger technologies and cryptocurrencies have spanned several areas of research. One of the biggest challenges of the field is how to scale the distributed system to support a higher transaction throughput, keeping a safe, distributed, and permissionless network. This work builds on top of the current blockchain and directed acyclic graph distributed ledger technologies literature and proposes a simple, fast and predictable algorithm to reach network consensus. It builds a model to formalize consensus on a DAG DLT and performs experiments to validate the feasibility of the proposed algorithm.
Key points The integration of crypto assets into the traditional journal model offers potential for both user incentives and financial security, especially for new or small journals. The case study reveals low uptake by users, which may be attributed to a resistance to new technology and underestimation of the incentives required. Implementation of cryptocurrencies is likely to be more successful if it is implemented by many journals and in an open environment for publishers.
This paper describes the Distributed Ledger Network Analyzer (DiLeNA), a new software tool for the analysis of the transactions network recorded in Distributed Ledger Technologies (DLTs). The set of transactions in a DLT forms a complex network. Studying its characteristics and peculiarities is of paramount importance, in order to understand how users interact in the distributed ledger system. The tool design and implementation is introduced and some results are provided. In particular, the Bitcoin and Ethereum blockchains, i.e. the most famous and used DLTs at the time of writing, have been analyzed and compared.
In order to avoid the demerits of Direct Democracy (DD) and Representative Democracy (RD), recently a democratic reform called Liquid Democracy (LD) was introduced which is a combination of DD and RD that gives the people full decisional control either by voting directly or by entrusting their voting power to a representative for some political ideologies or bills. Our work attempts to study the democratic models based on accuracy and competence parameters. Further a liquid democracy voting protocol is proposed and implemented on a block chain based distributed ledger which is capable of fighting attacks of integrity and non-repudiation while ensuring authenticity of the votes. This system would be transparent thus ensuring people about the legitimacy of their delegation of votes and direct votes. This is a big step up from the current existing system of EVM’s that do not guarantee this level of security.
It is widely accepted that Ethereum mining is highly centralized. Nonetheless, centralization has been mostly characterized by exclusively looking at the influence that independent miners or mining pools can have over the network. Moreover, models of mining behavior assume that miners are either unrelated or only relate via mining pools under highly structured and transparent agreements. If these assumptions and the predictions they entail were to be completely accurate, there would not be any evidence of on-chain transactions between miners, other than the ones expected from mining pool payouts. By looking at on-chain transactions between miners in the Ethereum Network we find that aside from the payouts from mining pools to small miners, there are also transactions that define relationships between mining pools, independent miners and between independent miners and mining pools. Furthermore, by characterizing the topology of the network of miner transactions, we find the emergence of highly connected clusters that control significant amounts of hashing power and exhibit relationships in the opposite direction of what theoretical models predict. This more nuanced characterization of mining centralization can help identify network vulnerabilities and inform protocol redesigns.
Advancements in distributed ledger technologies are rapidly driving the rise of decentralized crowdsourcing systems on top of open smart contract platforms like Ethereum. While decentralized blockchain-based crowdsourcing provides numerous benefits compared to centralized solutions, current implementations of decentralized crowdsourcing suffer from fundamental scalability limitations by requiring all participants to pay a small transaction fee every time they interact with the blockchain. This increases the cost of using decentralized crowdsourcing solutions, resulting in a total payment that could be even higher than the price charged by centralized crowdsourcing platforms. This paper proposes a novel suite of protocols called NF-Crowd that resolves the scalability issue by reducing the lower bound of the total cost of a decentralized crowdsourcing project to O(1). NF-Crowd is a highly reliable solution for scaling decentralized crowdsourcing. We prove that as long as participants of a project powered by NF-Crowd are rational, the O(1) lower bound of cost could be reached regardless of the scale of the crowd. We also demonstrate that as long as at least one participant of a project powered by NF-Crowd is honest, the project cannot be aborted and the results are guaranteed to be correct. We design NF-Crowd protocols for a representative type of project named crowdsourcing contest with open community review (CC-OCR). We implement the protocols over the Ethereum official test network. Our results demonstrate that NF-Crowd protocols can reduce the cost of running a CC-OCR project to less than $2 regardless of the scale of the crowd, providing a significant cost benefit in adopting decentralized crowdsourcing solutions.
Token models introduced by Distributed Ledger Systems (DLS) such as Bitcoin or Ethereum enabled a fundamental shift in the economic structures of our society. This led not only to a large number of different token models but also to a multitude of development strategies for them. However, only a few of existing tokens proved a significant success on the market. The reason for that is a missing unified understanding of parameters required for success and the lack of standardization in token economics in general. This paper derives a unified token economics taxonomy considering regulatory authorities, practitioners, and academics. The taxonomy encompasses five dimensions which are essential for classifying token economics. Finally, this work derives eight universal success parameters of a token model and in a broader sense of DLS. The clear taxonomy and parameters will enable a more efficient and expedient approach for token development.
Ethereum is arguably the second most popular cryptocurrency-based network after Bitcoin, both make use of the distributed ledger technology known as blockchain. The blockchain-based networks are considered to be secure, but the level of provided security is proportional to the number of connected nodes, the number of influential nodes and the supported amount of hash power. Thus, the knowledge of the network properties and nodes behavior is useful to protect the network from the possible attacks such as double spending attacks, DDoS attacks, 51% attacks, and Sybil attacks. In this paper, we propose nodes discovery mechanism, which performs a P2P links discovery on Ethereum main-network. For that, we developed the Search-node, a modified version of Ethereum Client that search for all participating nodes in the network, store the nodes identification in the Bucket, and then process the peer discovery method. We analyze the collected data to discover the relationship between nodes, heavily-connected nodes, nodes geo-distribution and provide network snapshots, as well as some data related to security issues and possible attacks over the influential nodes. Our results show that approximately 300,000 nodes are connected over Ethereum network, and among these roughly 139 nodes show a high-degree.
This article proposes a self-organizing collaborative computing network with an approach to enhance the expectation of a collaborating node for joining the self-organizing network. The proposed approach relies on Ethereum cryptocurrency and Smart Contract to enhance the expectation of collaborating nodes by monetizing the services provided to the self-organizing network. Furthermore, an escrow based smart contract is formalized in the proposed framework to sustains the monetary trust issue between collaborating nodes. The proposed scheme can enforce an autonomic incentive management mechanism to any type of self-organizing networks such as self-organizing clouds, ad-hoc networks, self-organizing federated cloud networks, self-organizing federated learning networks, and self-organizing D2D networks to name a few. Considering the distributed nature of these self-organizing networks and the Ethereum blockchain network, a distributed agent-based methodology is materialized in the proposed framework. Following this, a proof of concept implementation for the general case of a self-organizing cloud is presented. Lastly, the article provides some insights into possible future directions using the proposed framework.
We propose a new Proof-of-Stake consensus protocol based on a Sequential Proof-of-Work constructed with a verifiable random function (VRF) and a verifiable delay function (VDF) that has the following properties: a) all addresses with positive stake can participate; b) is fair because the coin stake is proportional to the distribution of rewards; c) is resistant to several classic blockchain attacks such as Sybil attacks, Nothing-at-stake attacks and Winner-takes-all attacks. We call it Vixify Consensus. We introduce a variant of sequential Proof-of-Work puzzles with applications on Distributed Randomness Beacons.
We propose a new Proof-of-Stake consensus protocol constructed with a verifiable random function (VRF) and a verifiable delay function (VDF) that has the following properties: a) all addresses with positive stake can participate; b) is fair because the coin stake is proportional to the distribution of rewards; c) is resistant to several classic blockchain attacks such as Sybil attacks, "Nothing-at-stake" attacks and "Winner-takes-all" attacks. We call it Vixify Consensus.
KYC (know your customer) and AML (anti-money laundering) practices have been designed and implemented in traditional financial transactions for some years now. However, it has been complicated to find a balance between business efficiency, innovations, financial inclusion, and compliance, both in the specification of what should be done and in the implementation of a risk-based approach that satisfies the required specification during real business operation. This chapter presents a survey of traditional practices to KYC/AML, highlighting a subset of existing challenges in these practices, taking into consideration the innovation of cryptocurrencies transactions and related innovations, such as digital identity, and the financial inclusion of unbanked people without identity papers. The authors finish this chapter by discussing existing solutions to these challenges both by adopting new KYC/AML practices and by using innovative technological solutions.
Compact blocks, and compact block protocol are a recent addition to the Bitcoin (BTC) data propagation protocol that aims to reduce bandwidth requirements and, possibly, reduce latency as well. In this work we evaluate operation of BTC network under a mix of regular, and compact block traffic, assuming that nodes randomly leave, and re-join the network, and perform block and, optionally, transaction pool (mempool) synchronization upon returning. Our analysis begins by evaluating block, and transaction deficits accumulated during the node absence and block synchronization. Then, we analyze mempool behavior, and show that mempool synchronization is necessary since it decreases probability of transaction deficit, and the need for transaction retrieval actions. Finally, we analyze the impact of synchronization activities, and transaction deficit on data distribution times in the BTC network with high, and low bandwidth distribution modes for a mix of compact, and regular blocks. Results demonstrate resilience to node absence, and subsequent synchronization, as well as substantial performance improvements for small protocol changes. Furthermore we show that the low bandwidth mode is more resilient to potential security attacks.
This paper describes a simulation study on security attacks over Distributed\nLedger Technologies (DLTs). We specifically focus on attacks at the underlying\npeer-to-peer layer of these systems, that is in charge of disseminating\nmessages containing data and transaction to be spread among all participants.\nIn particular, we consider the Sybil attack, according to which a malicious\nnode creates many Sybils that drop messages coming from a specific attacked\nnode, or even all messages from honest nodes. Our study shows that the\nselection of the specific dissemination protocol, as well as the amount of\nconnections each peer has, have an influence on the resistance to this attack.\n
This paper describes the Distributed Ledger Network Analyzer (DiLeNA), a new software tool for the analysis of the transactions network recorded in Distributed Ledger Technologies (DLTs). The set of transactions in a DLT forms a complex network. Studying its characteristics and peculiarities is of paramount importance, in order to understand how users interact in the distributed ledger system. The tool design and implementation is introduced and some results are provided. In particular, the Bitcoin and Ethereum blockchains, i.e. the most famous and used DLTs at the time of writing, have been analyzed and compared.
Riccardo Longo, Alessandro Sebastian Podda, Roberto Saia
Currently, an increasing number of third-party applications exploit the Bitcoin blockchain to store tamper-proof records of their executions, immutably. For this purpose, they leverage the few extra bytes available for encoding custom metadata in Bitcoin transactions. A sequence of records of the same application can thus be abstracted as a stand-alone subchain inside the Bitcoin blockchain. However, several existing approaches do not make any assumptions about the consistency of their subchains, either (i) neglecting the possibility that this sequence of messages can be altered, mainly due to unhandled concurrency, network malfunctions, application bugs, or malicious users, or (ii) giving weak guarantees about their security. To tackle this issue, in this paper, we propose an improved version of a consensus protocol formalized in our previous work, built on top of the Bitcoin protocol, to incentivize third-party nodes to consistently extend their subchains. Besides, we perform an extensive analysis of this protocol, both defining its properties and presenting some real-world attack scenarios, to show how its specific design choices and parameter configurations can be crucial to prevent malicious practices.
Ariba Aslam Zahoor, Muhammad Mubashir Khan, Junaid Arshad
Distributed ledger technologies represent decentralized databases, without the requirement for a central authority to authenticate and validate transactions. Blockchain technology is one of these technologies that provides a record of digital transactions that have been executed and validated by consensus of a majority of participants in the system. It uses software that processes on the order of the newly created and connected blocks via cryptographic means to ensure security and integrity. It has a verified record of each transaction that has been executed till date, which cannot be removed from the system, thereby ensuring the integrity of information. Although Bitcoin is the most popular application of blockchain, it has been used in diverse application domains such as healthcare, logistics, and security. While blockchain enables fairness and prevention from denial-of-service attacks, it lacks in transaction processing time as compared with credit cards and other online services. Hashgraph, another distributed ledger technology, has emerged recently, which focuses on addressing this limitation, promising extraordinary improvement in transaction processing times. Although hashgraph was initially deployed in private settings, public deployment has been recently launched, enabling its adoption for wider application domains. Within this context, this chapter is focused on presenting a comparative study of these distributed ledger technologies, identifying strengths and weaknesses to highlight potential application domains.
Jun Li, Alex Grintsvayg, Jeremy D. Kauffman, Charles B. Fleming
Despite the critical need of publishing and consuming content online, a centralized content platform such as Amazon or YouTube may not always have their policy and practice aligned with the interest of their users and could be rent-seeking, censorious, and frequently exploitative, whereas a peer-to-peer solution such as BitTorrent may suffer from issues of content discovery, legitimacy, monetization, verifiable publisher identity, and poor user experience. In this paper, to improve significantly over both options, we propose a new approach called LBRY that enables a decentralized online content marketplace. In particular, it uses a blockchain to build a decentralized content platform controlled by the community, and allows its users to publish, host, find, access, download, and pay for content with ease. LBRY introduces a new naming scheme that gives users the full control of the names of their content, and uses a blockchain to not only support a digital currency (LBC) and transparent decentralized ledger, but also allow every user to access a synchronized name space and a global index of content metadata, thus supporting a new paradigm of digital content distribution. We detail how LBRY works in this paper, including how it designs its data structures for content, content metadata, and a novel content naming space; how it uses the blockchain to manage and synchronize the name space and implement an index for content metadata in order to support content sharing and purchase; and how it handles several issues in running LBRY.
As online sources are becoming more prevalent in journalism and scientific literature, the ephemeral nature of the World Wide Web is becoming an increasingly serious issue for their verifiability, replicability, and reproducibility. The architecture of Webchain, a new system enabling source and reference verifiability on the Web, is combining distributed ledger technologies with secure timestamping to ensure the history of creation, ownership, and referential integrity of online resources. We present the architecture and system extensions, conduct a security analysis, and evaluate the Webchain system based on a comprehensive prototype implementation. The results confirm the feasibility and robustness of our approach.