Kay Noyen, Dirk Volland, Dominic Wörner, Elgar Fleisch
Sensing-as-a-Service (S2aaS) is an emerging Internet of Things (IOT) business\nmodel pattern. To be technically feasible and to effectively allow for broad\nadoption, S2aaS implementations have to overcome manifold systemic hurdles,\nspecifically regarding payment and sensor identification. In an effort to\novercome these hurdles, we propose Bitcoin as protocol for S2aaS networks. To\nlay the groundwork and start the conversation about disruptive changes that\nBitcoin technology could bring to S2aaS concepts and IOT in general, we\nidentify and discuss the core characteristics that could drive those changes.\nWe present a conceptual example and describe the basic process of exchanging\ndata for cash using Bitcoin.\n
On February 2014, $650.000.000 worth of Bitcoins disappeared. Currently it is unclear whether hackers or MtGox, the largest Bitcoin exchange, are to be blamed. In either case, the anonymous and unregulated nature of the Bitcoin system makes it practically impossible for innocent victims to get their money back. We have investigated the technical possibilities, solutions and implications of introducing a regulatory framework based on redlisting Bitcoin accounts. Despite numerous proposals, the Bitcoin community has voiced a strong opinion against any form of regulation. However, most of the discussions were based on speculations rather than facts. We strive to contribute a scientific foundation to these discussions and illuminate the path to crypto-justice.
A hard-fork reconfiguration of the peer to peer Bitcoin network is described that substitutes tamper-evident logs and proof-of-stake consensus for proof-of-work consensus. The block creation rewards and transaction fees are reallocated to establish and staff a secure financial data network capable of handling the world's transactions with subsecond response time. The new system pays dividends to stake-offering bitcoin holders. In contrast to Satoshi Nakamoto's mesh network consisting of competing peers, this system uses an enterprise class network that is efficient, robust, and scalable, consisting of cooperating peers. The network backbone nodes host trustless nomadic agents. Thousands of distributed full nodes are paid to replicate a singleton blockchain built upon every 10 minutes by a nomadic mint agent whose actions are verified by its peers. This arrangement enables immediate acknowledgment to an issuing node that its transaction has been accepted. Less effort means that subsidized transaction costs will be lower. Network reconfiguration enables the processing of numerous microtransactions. Stake-weighted distributed consensus is achieved when necessary with less than one-half arbitrarily faulty nodes. Important invariants of the Satoshi Social Contract between core developers and users are maintained: The reward schedule, the blockchain format, the fixed number of bitcoins, and the decentralized, trustless protocol are untouched. The system remains a global distributed database, with additions to the database by consent of the majority, based on a set of transparent rules they follow.
Bitcoins have emerged as a possible competitor to usual currencies, but other\ncrypto-currencies have likewise appeared as competitors to the Bitcoin\ncurrency. The expanding market of crypto-currencies now involves capital\nequivalent to $10^{10}$ US Dollars, providing academia with an unusual\nopportunity to study the emergence of value. Here we show that the Bitcoin\ncurrency in itself is not special, but may rather be understood as the\ncontemporary dominating crypto-currency that may well be replaced by other\ncurrencies. We suggest that perception of value in a social system is generated\nby a voter-like dynamics, where fashions form and disperse even in the case\nwhere information is only exchanged on a pairwise basis between agents.\n
The question "what is Bitcoin" allows for many answers depending on the objectives aimed at when providing such answers. The question addressed in this paper is to determine a top-level classification, or type, for Bitcoin. We will classify Bitcoin as a system of type money-like informational commodity (MLIC).
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.
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.
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.
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 being 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.
Formalist positions towards money are considered from a perspective of formal methods in computing. The Formaleuro (FEUR) as a dimension for monetary quantities is proposed as well as the Formalbitcoin (FBTC) which represents an item ready for circulation in a model of informational money. An attempt is made to understand the concept of money from scratch. In order to provide a definition of money the need is felt to make use of a tailored theory of definition. To that end a theory of imaginative definitions is presented and its implications for definitions of money are sketched. It is argued that a theory of money may be dependent on the role of its holder. A survey of some roles is given, with the so-called subordinate administrative role (SAR) in a central position. The concepts of virtual memory and virtual machine are taken as the point of departure for a definition of the notion of virtual money. It is argued that from the perspective of a component (division) of a large organization (ORG) its local financial system (LFS) provides a virtual money vm(LFS, ORG) which may well fail to meet the most common general and acknowledged moneyness criteria. Inverse moneyness preference is coined as phrase to assert the tendency of top-management of ORG to make its virtual money deviate from these criteria.