Long Finance's Distributed Futures research programme is pleased to announce the publication of the report, “Smart Ledgers & Collective Defined Contribution Pensions”
Veterans of the UK pensions scene often describe a former world in which pensions were organised on a best efforts basis. They tend to lament its passing and view the current situation, in which pensions promises are either hard and immutable, as is the case with UK defined benefit (DB) schemes, or non-existent, as is the case with defined contribution (DC) schemes, unfavourably. However, in recent years, there has been an aspiration to allow greater flexibility and innovation in pension provision, than is allowed by these two extremes.
The report focuses on collective defined contribution (CDC) pensions, a new integrated system of accumulation and decumulation, which brings with it some new technological challenges. There is a need for an integrated administration and management system. Some aspects of a CDC scheme are rooted in practices arising in the DB world and some in DC, but there are also some which are entirely new, such as risk-sharing among members.
The use of smart ledger technology is a natural solution to many of the challenges a CDC structure poses for pensions governance and administration. First, smart ledgers, ensure the accuracy and immutability of previous records including the assumptions and decisions of trustees. Consequently, there is transparency as to the decision process, which is not something that currently exists in pensions. Second, the multi-period accruals of assets, contributions, and the entitlements of scheme members, as well as the payment of pensions are all linked in chains over time. This technology therefore affords transparency for members; they may view both the capital value and the pension income equivalent of this in near real-time, as well as its historic evolution.
As Michael Parsons, Chairman of Cardano Foundation, wrote in his Foreword “There couldn’t be a more pertinent publication for Distributed Futures than one on pensions. Why? Because pensions require long-term, complex administration against a set of rules with good governance. Think immutable ledgers, smart code, and well-thought-out long-term governance, i.e. smart ledgers.“
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
We present a distributed ledger application for the world of citizen philanthropy and social entrepreneurship, with stakeholder incentives designed to increase social good through accountability, transparency, and flexibility. In this system, called Directed Cash, individual donors specify conditions (the “Directed” part) attached to their donation or investment (“Cash”), that are then efficiently paired with interested recipients or aggregators of recipients (charities, social entrepreneurs) using distributed consensus so that the intent and pairing are open while maintaining donor anonymity. Furthermore, Directed Cash flows both ways to promote accountability and transparency: after receipt, a validation flows backwards to return to the donor so that the donor receives a report of how their donation was spent. While some elements of the system borrow from existing cryptocurrency and blockchain technologies, we propose alternative incentives for distributed consensus that are better aligned with the application and promote social good through the stakeholders. This paper describes the goals and concepts, and a system design to achieve these goals, a primary feature of which is a simple SQL-like language to enable specifying conditions, pairing, aggregation and publicly-verifiable reporting.
Blockchain technology is the underlying infrastructure and support technology to build trust of Bitcoin. It is not only an emerging technology that relies on pure mathematical method to create trust relationship in a distributed environment but also an innovative combination of hash algorithm, asymmetric cryptography, time stamp, consensus mechanism and many other technologies, with characteristics of decentralization, trustlessness, collective maintenance, reliable database, openness, security and untamperability, anonymity, verifiability and traceability, programmable and so on. This paper mainly introduces the technical characteristics and models of block chain, summarizes the development status and branch classification of Blockchain and outlines the future application of Blockchain technology.
Damiano Di Francesco Maesa, Matteo Franceschi, Barbara Guidi, Laura Ricci
Bitcoin has emerged as a disruptive technology able to revolutionize the way financial transactions are performed. The static analysis of the Bitcoin's blockchain conducted jointly with a real time analysis of the Bitcoin's Peer-to-Peer network can reveal interesting properties of the Bitcoin's ecosystem. In this paper we propose BitKer, a Bitcoin kernel client able to interact with the Peer-to-Peer network to retrieve information useful to support higher level analyses. BitKer offers an API to applications requiring an interaction with the underlying network, for instance to implement deanonymization strategies. In this work, we present a first set of experimental results obtained by three different logs, the last one of them obtained just after the August 2017 Bitcoin Cash hard fork. Results show that BitKer is effective in retrieving useful information and can be easily used as a basis for more complex analysis tools.
Bing Mo, Kuiren Su, Songjie Wei, Cai Liu · 5 authors
Blockchain technology is a generic term for data organization structures, cryptography algorithms, distributed consensus mechanisms, and peer-to-peer communications that are used to implement distributed ledgers. Its core value lies in the establishment of mutual trust between non-coordinated participants. However, the current blockchain applications are inclined towards software and network, missing strong connection with the real world. The Internet of Things technology connects various smart devices and sensors to Internet to facilitate recognition and management of information. This paper presents a blockchain-based Internet of Things solution, where RFID chips with built-in asymmetric encryption algorithm and scanners uploading information directly to blockchain. Compared to traditional Internet of Things designs, the proposed solution combines the advantages of both decentralized blockchain, and the Waltonchain implementation demonstrates such advantages with both data security and application flexibility.
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
Recently, despite the growing popularity of smart contracts, one serious concern is arising among both industry and academia, that is, whether they work autonomously without human intervention really as intended and, when we are not sure, how we can ensure that contracts meet particular requirements. To resolve this, we propose a new formal approach to smart contract development: Instead of defining contracts just as programs in conventional languages, they should be defined using formal logic so that we can verify whether they meet particular requirements and enforce them if necessary. The primary challenge is that expressive formal logic often turns out to be undecidable and consequently executable programs cannot be generated. As a solution, each contract definition is divided into two layers, namely specification layer in a decidable logic called Linear Dynamic Logic for verification and enforcement of requirements and rule layer for defining implementation details, while the consistency between the two layers is systematically guaranteed. Based on this, it also becomes possible to automatically generate executable contract programs from their formal specification, which leads to improving the trustworthiness of contracts. Evaluation on Hyperledger Fabric shows the feasibility and high effectiveness of our approach.
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
The immense promise of reinventing business processes has led to the development of alternative blockchain technologies, such as consortium blockchain, that can deal with some of the issues of public blockchains such as used in the Bitcoin cryptocurrency. However, a consortium blockchain, where its tokens have no market value, suffers from a lack of a method for payment for services, since the authority is concentrated with the entities that secure payment. Here, we describe Niji, a new cross-chain payment protocol that allows parties to perform Bitcoin payment securely on a consortium chain, without any trusted third-party or mediator. Niji introduces templatization of a transaction to validate Bitcoin payments efficiently on different consortium blockchains. The process from payment to service provision runs autonomously without any interaction between parties. An experiment measuring the computational cost and latency demonstrates the feasibility and efficacy of our implementation.
Blockchain Technology Applications and Security
IoT and Edge/Fog Computing
Advanced Steganography and Watermarking Techniques
Shujie Cui, Muhammad Rizwan Asghar, Giovanni Russello
In blockchain-based systems, malicious behaviour can be detected using auditable information in transactions managed by distributed ledgers. Besides cryptocurrency, blockchain technology has recently been used for other applications, such as file storage. However, most of existing blockchain- based file storage systems can not revoke a user efficiently when multiple users have access to the same file that is encrypted. Actually, they need to update file encryption keys and distribute new keys to remaining users, which significantly increases computation and bandwidth overheads. In this work, we propose a blockchain and proxy re-encryption based design for encrypted file sharing that brings a distributed access control and data management. By combining blockchain with proxy re-encryption, our approach not only ensures confidentiality and integrity of files, but also provides a scalable key management mechanism for file sharing among multiple users. Moreover, by storing encrypted files and related keys in a distributed way, our method can resist collusion attacks between revoked users and distributed proxies.
This work presents ChainFS, a middleware system that secures cloud storage services using a minimally trusted Blockchain. ChainFS hardens the cloud-storage security against forking attacks. The ChainFS middleware exposes a file-system interface to end users. Internally, ChainFS stores data files in the cloud and exports minimal and necessary functionalities to the Blockchain for key distribution and file operation logging. We implement the ChainFS system on Ethereum and S3FS and closely integrate it with FUSE clients and Amazon S3 cloud storage. We measure the system performance and demonstrate low overhead.
Bitcoin is a cryptocurrency for managing and transferring money in a distributed manner. The Bitcoin network creates a complex system of economic incentives that governs its inner working, impacting the network's security guarantees and its evolution. Recent development of Bitcoin as a speculative asset and the herein skyrocketing Bitcoin price greatly incentivize participation in the network. We posit that the expansion in Bitcoin miner population and speculative transactions may not be socially desirable. The increased competition in Bitcoin mining not only exacerbates energy consumption and environmental cost, but also makes the risky mining business much riskier. In addition to the risk of unstable reward flows, the fluctuation in Bitcoin price makes the profitability of mining more uncertain. This research studies an alternative socially optimal model for the Bitcoin market (and other cryptocurrencies in general). Through equilibrium analysis, we emphasize the need to limit speculation in Bitcoin transactions, improve efficiency, diversify currency portfolio, and minimize negative externalities of the Bitcoin mining business.
This study analyses the effect of adding bitcoin into the portfolio by exploiting the Long Only investment strategy. The Portfolio consists of five assets: bitcoin, crude oil price index, stock exchange of Thailand (SET) price index, the exchange rate between Thai and USD and Thai government bond compound with treasurer bill. The model used for modelling the return of all asset is Multivariate t-copula based on GARCH and also measure the risk of the portfolio using the Value-at-risk (VaR) under the condition of minimizing the variance of return. We find that when adding more bitcoin into the portfolio, the return and risk of asset increased. If we only invest in bitcoin, we will face the risk at 16.90% and gain 6.27%. When comparing the effectiveness of portfolio by using Return-risk ratio, it found that portfolio with bitcoin shows the higher return rate than portfolios without bitcoin. Therefore, it can conclude that bitcoin could indeed increase the effectiveness of portfolio.
Rohith P. George, Brad L. Peterson, Oliver Yaros, David L. Beam · 6 authors
Purpose To introduce blockchain in simple terms for business lawyers to be able to spot the right issues and ask the right questions. Design/methodology/approach This article provides an overview of blockchain, identifies two example use cases, and highlights some of the most pressing legal issues, including issues to address in on-chain programming, off-chain agreements and other issues when determining whether to implement a blockchain solution. Findings This article concludes that there has been a significant growth in investment and interest in blockchain. Numerous companies across different sectors have developed blockchain proof-of-concepts, with some heading towards production deployments. At this point, commercial blockchain is largely in the pilot or proof-of-concept stage across a wide range of use cases, with payments and supply chain being two of the most promising use cases. This article also identifies possible legal issues associated with blockchain. Practical implications Despite the growing interest in blockchain, it is still a novel topic to many business lawyers. It is very important that lawyers are able to identify the right issues and ask the right questions. Originality/value Practical guidance from experienced lawyers in the Technology Transactions and Financial Services Regulatory & Enforcement practices.
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
Muskan Vinayak, Har Amrit Pal Singh Panesar, Saulo dos Santos, Ruppa K. Thulasiram · 6 authors
The recent advancement in Blockchain technology and cryp-tocurrencies like Bitcoin and Ethereum has captured interest of many researchers in academia and industry. Since its advent, the Blockchain was inherently supposed to be used in combination with cryptocurrencies but currently this technology is being used in other areas as well. One particular area based on the distributed ledger technology that has grabbed the attention of many technologist and financial marketers is “Smart Contracts”. Based on a cryptocurrency framework known as Ethereum, these smart contracts can be used for different applications such as Option Pricing, Currency Exchange, Revenue Management System, Crowd-funding and Peer-to-Peer networking. In our current effort, we have designed a smart contract and demonstrate that this smart contract could be used to take various possible positions in an European style option. We have analyzed the contract for potential security vulnerabilities when implemented in Blockchain. These option based smart contracts could be used for collateral contract services among finance industries.
Mohammad Rabiul Islam, Rizal Mohd Nor, Imad Fakhri Taha Alshaikhli, Kabir Sardar Mohammad
Typically, electronic currency like digital or cryptocurrency both are influencing the world economy under the ledger technology, where as traditional fiat currency plays vital role in socio economy followed by conventional printing method. This review paper is basically focused on most influential facts behind the economical elements like the applicable operation via successful blockchain algorithm, architecture and mining operation based on contents from journal publications, online publications, news reports, seminars and workshops. Several aspects of crypto and fiat currencies are rolling on emerging economy, from this point, this paper tries to figure out how consensus algorithm and growing numbers of crypto and fiat currencies are performed with its existing pros and cons towards further developing process.
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
Current blockchains often are designed with one use case in mind, such as currency transfer in Bitcoin or record storage in Namecoin. While application-specific blockchains are powerful tools for fulfilling their niche use cases, there are blockchains like Ethereum that have a set of use cases comprising a superset of the use cases of many blockchains. These generalized blockchains are powerful tools for extending decentralization to new use cases without designing entirely new blockchains. This paper considers tradeoffs in the design and implementation of blockchain systems that intend to deliver general functionality and examines various current and Merged-mining, fragmentation, the network effect, scalability, and generalized blockchain approaches are all considered and put into context. Bitcoin, Ethereum, Cardano, and Rootstock are considered in various aspects of the current limitations, and potential future solutions to problems noted. This paper weighs the chances of success of various generalized blockchain paradigms, including the network effect scalability and potential client-side use. We conclude that the network effect likely favors a Bitcoin/sidechain solution while scalability favors a direct Ethereum solution. The likelihood of success of mainstream adoption of any single decentralized application appears to favor an Ethereum solution.
Blockchain Technology Applications and Security
Physical Unclonable Functions (PUFs) and Hardware Security
Benjamin Johnson, Áron Lászka, Jens Großklags, Tyler Moore
Cryptocurrency exchanges are frequently targeted and compromised by cyber-attacks, which may lead to significant losses for the depositors and closure of the affected exchanges. These risks threaten the viability of the entire public blockchain ecosystem since exchanges serve as major gateways for participation in public blockchain technologies. In this paper, we develop an economic model to capture the short-term incentives of cryptocurrency exchanges with respect to making security investments and establishing transaction fees. Using the model, we derive conclusions regarding an exchange's optimal economic decisions, and illustrate key features of these conclusions using graphs based on real-world data. Our security investment model exhibits horizontal scaling properties with respect to reducing exposure to losses, and may be of special interest to exchanges operating in markets with high price volatility.
Many studies have been done to improve the performance of centrally controlled business processes and enhance the integration between different parties of these collaborations. However, the most serious issues of collaborative business processes remained unsolved in these studies - lack of trust and divided data on various confidential ledgers. Blockchain technology has enormous potential to become a new substantial integration method for untrusted collaborative businesses. Using the governing consensus mechanism, blockchain eliminates the necessity of the trusted third party. It provides a distributed shared ledger which facilitates the job of the process monitoring for the parties. The smart contract, as a crucial tool, is used to define the guaranteed autonomous programs. In addition, the privacy of the data can be ensured by using a permissioned blockchain that handles the access control because, in this way, only verifiable participants can have access to the state of the business process and its related information. In this study, the applicability of execution of a real-world untrusted business process on the permissioned blockchain is investigated. Moreover, we determine the advantages of using the permissioned access-controller blockchain as the infrastructure for the collaborative business processes, through implementing the process of Order Processing on the Hyperledger Fabric blockchain platform.
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
Omnia Mahmoud, Henning Kopp, Amr T. Abdel-Hamid, Frank Kargl
Insurances are a way of financial risk mitigation that pay the user in case of damage. However, once the event happens, the user does not get paid immediately due to the large degree of human interaction required. In this paper, we automate insurance payment by using smart contracts. As additional contribution, our design supports integration of IoT devices to register events that trigger insurance contracts and offers additional privacy-protection even on public blockchains. In order to allow users to retrieve their payment from the insurance contract anonymously we remove the linkability and traceability between events that triggers the contract and the insurance holder by applying ring signatures. Using a prototypical implementation based on Ethereum, we study the additional overhead and cost that our design incurs and can show that exploiting latest features of Ethereum, gas cost can be driven down substantially compared to earlier approaches. In sum, we propose, implement, and evaluate a design for smart insurance contracts integrating IoT sensors and including additional privacy protection using ring signatures.
Bit coin is a crypto-currency that is based on a block-chain technology. All transactions in bit coin recorded in the block-chain and the transactions are validated through mining. When mining, honest miners are rewarded in proportion to their computing power. However, it has been proven that selfish mining can get more mining rewards beyond computing power. Selfish mining intentionally makes block fork of the block-chain and wastes the computing power of honest miners. In this paper, we analyze selfish mining and existing countermeasures, and propose a new method to prevent selfish mining by adding the transaction creation time to the transaction data structure. The proposed method is the highest threshold compared to existing methods, which is 33% threshold required for successful selfish mining. The threshold is also the most optimized result with the probability of an honest miner mining in selfish mining pools to zero.
Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
In Bitcoin, it is well known that the confirmation of a transaction issued by a user takes a longer time than the mean block-generation time of 10 minutes. In order to understand the stochastic behavior of the transaction-confirmation process, we consider a queueing model with batch service and general input. In our queueing model, we assume that the transaction interarrival times are independent and identically distributed (i.i.d.), and follow a general distribution, and that the transactions waiting in the queue are served in a batch manner. We define the number of transactions in queue just before a transaction arrival as the system state, deriving the steady-state distribution and the mean transaction-confirmation time by matrix analytic method. In numerical examples, we compare analytical results with trace-driven simulation, discussing the applicability of our queueing model to the prediction of the transaction-confirmation time. It is found that exponential-type distributions such as exponential distribution and hyper-exponential one can accurately estimate the mean transaction-confirmation time for the current maximum block-size limit of 1 Mbyte.
Using blockchain as a decentralized backend infrastructure has been attracting many startups entrepreneurs' and developers' attention. Blockchain records transactions permanently and protects them from undesirable tampering. It provides a reliable tamper-proof database which can be considered as a trustable resource for tracking previous system's state. In this paper, we present our access control application based on Hyperledger Fabric Blockchain and Hyperledger Composer to control access to physical places. The system components and modular architecture are illustrated, and we have extracted metadata include historian transactions' details arising from our demo test. Finally, the performance metrics and resources consumption are provided using Hyperledger Caliper, a benchmark framework for measuring Hyperledger blockchains performance.
Γεώργιος Σπαθούλας, Anastasija Collen, Pankaj Pandey, Niels Alexander Nijdam · 10 authors
The European research project GHOST challenges the traditional cyber security solutions for the Internet of Things (IoT) sector by exploiting novel technologies, such as blockchain, to provide resilience and integrity of decision making on the communication exchange in a smart home context. When it comes to novel cyber security solutions for extremely heterogeneous environments like IoT and smart homes, the key focus is typically given to the understanding of network activities and elimination of suspicious traffic. The GHOST project adds an extra dimension to this approach by integrating blockchain technology at its core decision mechanism. On a daily basis, each GHOST installation is encountering malicious behaviour and suspicious IoT communications, where easy information sharing with other installations, as well as decentralised decision making, are mandatory features for the efficient protection of the end-user. GHOST's Smart Contracts (SC) are designed to tackle in an easy, yet productive way, the reporting on suspicious IP addresses which the IoT devices in a smart home are trying to communicate with. Two variations of blacklisting smart contracts are presented in this paper, covering a diverse spectrum of possible attack vectors while closely following the Privacy by Design (PbD) principles. A reputation scoring scheme for malicious IPs reporting is integrated in the SC, uncovering the implementation details on the penalisation of existing entries in case of malicious behaviour of reporting devices.
Technological advances pave the way for new legal concepts with increasingly high importance. Contracts are the most conducted legal transactions in daily life. Thus, technological advances have a great and fast effect in field of Contract Law. Concept of smart contract is one of the latest developments of Contract Law that is introduced by technological advances. Smart contract is not a type of contract, contrary to the impression based on term, but it is a new concept bringing important solutions to legal enforcement of contractual obligations. In our article, a definition of smart contract concept is given at first, then basic information about technical infrastructure of smart contracts shall be discussed briefly, while transactions carried out in process of smart contracts along with advantages and disadvantages brought by smart contracts are analyzed. Furthermore, legal advantages that will be brought by smart contracts and possible legal problems are also discussed.
We study the evolution of ideas related to creation of asset-backed currencies over the last 200 years and argue that recent developments related to distributed ledger technologies and blockchains give asset-backed currencies a new lease of life. We propose a practical mechanism combining novel technological breakthroughs with well-established hedging techniques for building an asset-backed transactional oriented cryptocurrency, which we call the digital trade coin (DTC). We show that in its mature state, the DTC can serve as a much-needed counterpoint to fiat reserve currencies of today.