Tooba Faisal, Nicolas T. Courtois, Antoaneta Serguieva
The use of blockchains is growing every day, and their utility has greatly expanded from sending and receiving crypto-coins to smart-contracts and decentralized autonomous organizations. Modern blockchains underpin a variety of applications: from designing a global identity to improving satellite connectivity. In our research we look at the ability of blockchains to store metadata in an increasing volume of transactions and with evolving focus of utilization. We further show that basic approaches to improving blockchain privacy also rely on embedding metadata. This paper identifies and classifies real-life blockchain transactions embedding metadata of a number of major protocols running essentially over the bitcoin blockchain. The empirical analysis here presents the evolution of metadata utilization in the recent years, and the discussion suggests steps towards preventing criminal use. Metadata are relevant to any blockchain, and our analysis considers primarily bitcoin as a case study. The paper concludes that simultaneously with both expanding legitimate utilization of embedded metadata and expanding blockchain functionality, the applied research on improving anonymity and security must also attempt to protect against blockchain abuse.
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Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
Jun 18, 2018·Andrew Burnie, 2018. Exploring the Interconnectedness of Cryptocurrencies using Correlation Networks. In Cryptocurrency Research Conference 2018 (Anglia Ruskin University, 2018). Anglia Ruskin University, Cambridge, UK
Correlation networks were used to detect characteristics which, although fixed over time, have an important influence on the evolution of prices over time. Potentially important features were identified using the websites and whitepapers of cryptocurrencies with the largest userbases. These were assessed using two datasets to enhance robustness: one with fourteen cryptocurrencies beginning from 9 November 2017, and a subset with nine cryptocurrencies starting 9 September 2016, both ending 6 March 2018. Separately analysing the subset of cryptocurrencies raised the number of data points from 115 to 537, and improved robustness to changes in relationships over time. Excluding USD Tether, the results showed a positive association between different cryptocurrencies that was statistically significant. Robust, strong positive associations were observed for six cryptocurrencies where one was a fork of the other; Bitcoin / Bitcoin Cash was an exception. There was evidence for the existence of a group of cryptocurrencies particularly associated with Cardano, and a separate group correlated with Ethereum. The data was not consistent with a token's functionality or creation mechanism being the dominant determinants of the evolution of prices over time but did suggest that factors other than speculation contributed to the price.
This study investigates the relationship between blockchain technology and the financial market. The US and China are used as case studies for the 2008–2016 period using fully modified least square and Toda-Yamamoto causality technique. The estimates show that blockchain technology has positive and significant relationship with the financial market in the US and China. In other words, the higher the levels of blockchain innovation in these countries, the more developed the financial markets. This suggests that the presence of blockchain innovation in financial markets spurs financial development. Blockchain innovation is therefore a positive significant factor for well-developed financial markets. The findings also indicate that macroeconomic factors such as lagged financial development, GDP per capita, the growth rate of GDP, FDI and trade openness have significant and positive relationship with financial development in the two countries. Among the institutional variables, government effectiveness has significant and positive effects only in the US.
We study how attempts to regulate cryptocurrencies, or at least to mitigate the harm they do, are misdirected. We started by looking at how one might blacklist stolen bitcoin, and find that two established legal principles – the nemo dat rule and the Clayton's case precedent -- make tracing crime proceeds much simpler than researchers previously thought; they support a first-in first-out rule for taint tracking, which turns out to be much more efficient. However once we published initial results and were approached by theft victims, we discovered a more serious problem. Many bitcoin exchanges do not now give their customers actual bitcoin, but rather do off-chain transactions with other exchange customers or transact on customers' behalf with outsiders. Except where customers withdraw cryptocurrency into self-hosted wallets, the ownership of these assets is unclear. The number of off-blockchain transactions has increased enormously in the last eighteen months; we can't find good figures but the volume is sufficient to raise serious concerns and the practice falls under e-money regulations that are not being enforced. In short, the security, economics and regulatory problems of cryptocurrencies in 2018 turn out to be rather different from those described in the academic literature. The real problem is that we are seeing the emergence of a shadow banking system. Cryptocurrencies do not solve the underlying problems that made bank regulation necessary, and we sadly predict that many of the familiar second-order problems will also reappear. We discuss the implications for regulating cryptocurrencies and smart contracts more generally, and suggest eight things that regulators and central banks might usefully do.
Correlation networks were used to detect characteristics which, although\nfixed over time, have an important influence on the evolution of prices over\ntime. Potentially important features were identified using the websites and\nwhitepapers of cryptocurrencies with the largest userbases. These were assessed\nusing two datasets to enhance robustness: one with fourteen cryptocurrencies\nbeginning from 9 November 2017, and a subset with nine cryptocurrencies\nstarting 9 September 2016, both ending 6 March 2018. Separately analysing the\nsubset of cryptocurrencies raised the number of data points from 115 to 537,\nand improved robustness to changes in relationships over time. Excluding USD\nTether, the results showed a positive association between different\ncryptocurrencies that was statistically significant. Robust, strong positive\nassociations were observed for six cryptocurrencies where one was a fork of the\nother; Bitcoin / Bitcoin Cash was an exception. There was evidence for the\nexistence of a group of cryptocurrencies particularly associated with Cardano,\nand a separate group correlated with Ethereum. The data was not consistent with\na token's functionality or creation mechanism being the dominant determinants\nof the evolution of prices over time but did suggest that factors other than\nspeculation contributed to the price.\n
Chuka Oham, Raja Jurdak, Salil S. Kanhere, Ali Dorri · 5 authors
In this paper, we propose a partitioned BlockChain based Framework for Auto-insurance Claims and Adjudication (B-FICA) for CAVs that tracks both sensor data and entity interactions with two-sided verification. B-FICA uses permissioned BC with two partitions to share information on a need to know basis. It also uses multi-signed transactions for proof of execution of instructions, for reliability and auditability and also uses a dynamic lightweight consensus and validation protocol to prevent evidence alteration. Qualitative evaluation shows that B-FICA is resilient to several security attacks from potential liable entities. Finally, simulations show that compared to the state of the art, B-FI CA reduces processing time and its delay overhead is negligible for practical scenarios and at marginal security cost.
Jianli Pan, Jianyu Wang, A. MARIA HESTER, Ismail AlQerm · 6 authors
The emerging Internet of Things (IoT) is facing significant scalability and security challenges. On the one hand, IoT devices are "weak" and need external assistance. Edge computing provides a promising direction addressing the deficiency of centralized cloud computing in scaling massive number of devices. On the other hand, IoT devices are also relatively "vulnerable" facing malicious hackers due to resource constraints. The emerging blockchain and smart contracts technologies bring a series of new security features for IoT and edge computing. In this paper, to address the challenges, we design and prototype an edge-IoT framework named "EdgeChain" based on blockchain and smart contracts. The core idea is to integrate a permissioned blockchain and the internal currency or "coin" system to link the edge cloud resource pool with each IoT device' account and resource usage, and hence behavior of the IoT devices. EdgeChain uses a credit-based resource management system to control how much resource IoT devices can obtain from edge servers, based on pre-defined rules on priority, application types and past behaviors. Smart contracts are used to enforce the rules and policies to regulate the IoT device behavior in a non-deniable and automated manner. All the IoT activities and transactions are recorded into blockchain for secure data logging and auditing. We implement an EdgeChain prototype and conduct extensive experiments to evaluate the ideas. The results show that while gaining the security benefits of blockchain and smart contracts, the cost of integrating them into EdgeChain is within a reasonable and acceptable range.
We propose definitions and implementations of "S-money" - virtual tokens designed for high value fast transactions on networks with relativistic or other trusted signalling constraints, defined by inputs that in general are made at many network points, some or all of which may be space-like separated. We argue that one significant way of characterising types of money in space-time is via the "summoning" tasks they can solve: that is, how flexibly the money can be propagated to a desired space-time point in response to relevant information received at various space-time points. We show that S-money is more flexible than standard quantum or classical money in the sense that it can solve deterministic summoning tasks that they cannot. It requires the issuer and user to have networks of agents with classical data storage and communication, but no long term quantum state storage, and is feasible with current technology. User privacy can be incorporated by secure bit commitment and zero knowledge proof protocols. The level of privacy feasible in given scenarios depends on efficiency and composable security questions that remain to be systematically addressed.
The Ethereum blockchain offers two core technical features: an ability to create a tamper-proof distributed ledger of computer code and an ability to design economic incentives to align actors inte...
As an open, distributed ledger, the block chain technology provides crypto-currency markets with a new form of digital organizing. However, can such a decentralized system withstand the reverberati...
A health-care system gathers comprehensive physiological information and medical records, making its data more important than ever. For example, for years now, the National Health Insurance Administration (https://www.nhi.gov.tw/English/) of Taiwan has requested every doctor, whether in a medical center or private clinic, to upload the diagnosis result, treatment, and prescription. These anamneses have also been stored in the National Health Insurance Research Database (http://nhird.nhri.org.tw/en/index.html) since 1 March 1995, and 99.9% of the Taiwanese population have been enrolled since 2014. With this comprehensive database, analytics tools can be run to uncover useful information to further understand the etiological factors for rare disorders. This database is successful primarily because Taiwan is a small but densely populated island, making it relatively easy for the government to collect most, if not all, the anamneses.
Bitcoin, the first cryptocurrency, has the ability to transmit and verify digital assets on the Internet without specific management entities. There are currently more than 1,500 cryptocurrencies with a market capitalization of more than US$480 billion. Bitcoin and other cryptocurrencies were built on blockchain technologies to prevent forgery and falsification while distributing transaction data among participants. Although blockchain has been used mostly for developing cryptocurrencies, it is a new functional technology for both financial and consumer electronics (CE) sectors.
This thesis focuses on the integration of smart contracts into the Bazo Blockchain with the goal of creating a platform for decentralized applications. Smart contracts are programs that are stored on a blockchain and can be triggered by transactions. Smart contracts offer opportunities in automation and bring along advantages provided by blockchains such as immutability, public visibility of transactions and decentralization. As blockchains are trust-less protocols, it is guar- anteed that smart contracts are executed as intended. The integration of smart contracts was solved by implementing a virtual machine that executes the instructions sent by a transaction. This stack based virtual machine uses byte arrays as base type, which enables the virtual machine to deal with numbers of arbitrary length. Working with elements of arbitrary size requires taking the length of the elements into account, when calculating the gas cost, in addition to the base cost of the instruction type. Furthermore, the virtual machine was embedded within the mining application, which required to alter the blockchain protocol and the mining application. As a result, smart contracts can be deployed and transactions that call functions of smart contracts can be executed. Calling a smart contract function leads to the execution of the contract in the virtual machine and persisting the result in the blockchain. The Bazo Blockchain contin- ues to be a research project, this means it’s not ready for production use due to complex setup and handling. Follow-up theses could simplify the development of smart contracts for the Bazo Blockchain by creating a high-level programming language that can be compiled to Bazo virtual machine instructions.
We study the relationship between Bitcoin and traditional payment systems and the financial sector. The payment systems we will do the study with are Visa, MasterCard, Western Union, American Express and PayPal. We study whether Bitcoin returns, Bitcoin transaction volume, unique Bitcoin addresses and Bitcoin google searches have any relationship with the returns of the traditional payment companies. In addition we also study whether the same variables have any explanatory relationship with the financial sector. We find that the relationship between Bitcoin and payment systems is very weak, which indicates that investors that typically invest in these companies doesn’t see Bitcoin as a serious competitor. However, number of unique Bitcoin addresses has a negative relationship with the abnormal returns of most of the payment companies.
Over the past decade the financial services industry has been disrupted by a range of new technologies. This has included the launch of new, private, digital currencies such as Bitcoin. In this environment, central banks are considering how they can take advantage of these new technologies to help deliver their core functions. This article contributes to this discussion by evaluating the pros and cons of a public digital currency issued by a central bank across four functional areas: currency distribution, payments, monetary stability and financial stability. We distinguish between two kinds of digital currency – ‘conventional’ digital currencies, which rely on existing payments technology to operate, and crypto-currencies which rely on distributed ledged technology (similar to Bitcoin). We find the pros and cons of a central bank issuing a digital currency are mixed across each of the central bank functions, revealing the complexity in evaluating such a currency. In particular, we find the implications for monetary policy and financial stability could be significant, both positively and negatively.
Pradip Kumar Sharma, Shailendra Rathore, Jong Hyuk Park
The winds of change are blowing toward the multibillion dollar global consumer electronics (CE) industry, which includes companies that are engaged in the manufacturing of smart devices to enable smartconnected vehicles, transportation, health-care systems, home automation, and smart industry in the smart-city network. The rapid increase in the number and diversity of smart devices connected to the Internet has given rise to concerns about scalability, efficiency, flexibility, and availability in the existing smart-city network. The imminent energy crisis, radiofrequency spectrum, and constraints on the lifetime of smart devices have also emerged as critical challenges. To address these challenges, this article presents DistArch-SCNet, the efficient, scalable, blockchain-based distributed smart-city network architecture enabled by the light-fidelity (Li-Fi) communication technique.
Peter Pennefather, West Suhanic, Fatima Lakha, Deborah I. Fels
An inclusive systemic design is specified for publishing data derived from personal private health records, owned and curated by patients. The design is specified with an example of a digital scrapbook of private personal records of care for medically significant pain. This scrapbook is designed to aggregate private records of patient pain experiences and of the care and accommodations they access. The design also specifies how to store, access and analyze those private records through distributed ledgers and how qualitative and quantitative data derived from that private data can be published as a common pool resource with polycentric governance.
A blockchain is a datastructure that is an append-only chain of blocks. Each\nblock contains a set of transaction and has a cryptographic link back to\nits predecessor. The cryptographic link serves to protect the integrity of\nthe blockchain. A key property of blockchain systems is that it allows mu-\ntually distrusting entities to reach consensus over a unique order in which\ntransactions are appended. The most common usage of blockchains is in\ncryptocurrencies such as Bitcoin.\nIn this thesis we use blockchain technology to design a scalable architec-\nture for a storage system that can provide strong data integrity and ensure the\npermanent availability of the data. We study recent literature in blockchain\nand cryptography to identify the desired characteristics of such a system. In\ncomparison to similar systems, we are able to gain increased performance by\ndesigning ours around a permissioned blockchain, allowing only a predefined\nset of nodes to write to the ledger. A prototype of the system is built on top\nof existing open-source software. An experimental evaluation using different\nquorum sizes of the prototype is also presented.
Blockchain is the technology behind the Bitcoin, it was introduced in the year 2009 by an anonymous person named Satoshi Nakamoto. This technology showed a new way in which financial transaction are possible without any centralized entity involved along with the participating entity. Blockchain technology can be useful in managing supply chain effectively using distributed ledger technology. Distributed ledger spans the identical copy of it"s ledger which is spanned across all the node in the blockchain network.
Bu çalışmada her geçen gün ilgiyle izlenmeye devam edilen sanal para birimi Bitcoin’de çoklu balonların varlığı Phillips, Shi ve Yu (2015) tarafından geliştirilen GSADF birim kök testi ve kritik değerlerin tespitinde her türlü değişen varyans problemini hesaba katarak işlem yapan Harvey, Leybourne, Sollis ve Taylor (2016) tarafından geliştirilen metot takip edilerek araştırılmıştır. Veri seti 16.07.2010 ve 31.12.2017 tarihleri arasında günlük bazdaki 24 saatlik ortalama Bitcoin fiyatlarından oluşmaktadır. Yapılan analizler sonucunda söz konusu veri aralığının büyük bir kısmında Bitcoin fiyatlarında çoklu balonların varlığı görülmüştür
Cryptocurrency is a relatively recent economic and technological phenomenon, competing with established traditional third party financial systems through a trust-based peer-to-peer decentralized network. This unique financial and technological transactional structure opens new market opportunities and challenges, defining the cryptocurrency compared to the established financial market. To illuminate and analyse the inner workings of the cryptocurrency market, this thesis highlights the market drivers for the current top five cryptocurrencies in terms of market capitalization, by focusing on the current market situation and market history. This is supplemented by examining the history of traditional money and how cryptocurrencies can be compared with it. In addition, the technological and financial structure of the main cryptocurrencies and how the main components of the market work will be examined. Financial analysis such as price, volatility, market correlation, market history matching, liquidity of the cryptocurrency market and strategic market analysis were conducted as part of this study. By using this information, it is possible to establish a foundation for further market comprehension of the five major cryptocurrencies and the future challenges. Based on the analysis in this thesis, several findings were made regarding the nature of the cryptocurrency market. Generally, it is apparent that established market models are applicable to the cryptocurrency market. However, the cryptocurrency market experiences symptoms of its own free decentralized market model, technology, and limited public adoption.\nArguably, a common public opinion is that the cryptocurrency market is difficult to comprehend, and market development can often seem arbitrary and mysterious to outsiders. The market is complicated by periods of with seemingly arbitrary exceptionally high volatility. This along with historical growth levels that are unparalleled in many other industries are common in the cryptocurrency market. Other common unbalancing factors are the exposure to market manipulations, geopolitical uncertainties and agendas, and market responses to news and singular events. There are additionally several limitations and challenges with regards to the industry’s technological foundations. This has the potential to impact the valuation and longevity of the different cryptocurrencies. By analysing these aspects, an insightful and comprehensive comparative market analysis of the cryptocurrency industry is formed.