We review the so called selfish mining strategy in the Bitcoin network and compare its profitability to honest mining.We build a rigorous profitability model for repetition games. The time analysis of the attack has been ignored in the previous literature based on a Markov model,but is critical. Using martingale's techniques and Doob Stopping Time Theorem we compute the expected duration of attack cycles. We discover a remarkable property of the bitcoin network: no strategy is more profitable than the honest strategy before a difficulty adjustment. So selfish mining can only become profitable afterwards, thus it is an attack on the difficulty adjustment algorithm. We propose an improvement of Bitcoin protocol making it immune to selfish mining attacks. We also study miner's attraction to selfish mining pools. We calculate the expected duration time before profit for the selfish miner, a computation that is out of reach by the previous Markov models.
Blockchain-based consensus protocols present the opportunity to develop new protocols, due to their novel requirements of open participation and explicit incentivization of participants. To address the first requirement, it is necessary to consider the leader election inherent in consensus protocols, which can be difficult to scale to a large and untrusted set of participants. To address the second, it is important to consider ways to provide incentivization without relying on the resource-intensive proofs-of-work used in Bitcoin. In this paper, we propose a secure leader election protocol, Caucus; we next fit this protocol into a broader blockchain-based consensus protocol, Fantomette, that provides game-theoretic guarantees in addition to traditional blockchain security properties. Fantomette is the first proof-of-stake protocol to give formal game-theoretic proofs of security in the presence of non-rational players.
Mustafa Al-Bassam, Alberto Sonnino, Michał Król, Ioannis Psaras
We present Airtnt, a novel scheme that enables users with CPUs that support Trusted Execution Environments (TEEs) and remote attestation to rent out computing time on secure enclaves to untrusted users. Airtnt makes use of the attestation capabilities of TEEs and smart contracts on distributed ledgers to guarantee the fair exchange of the payment and the result of an execution. Airtnt makes use of off-chain payment channels to allow requesters to pay executing nodes for intermediate "snapshots" of the state of an execution. Effectively, this step-by-step "compute-payment" cycle realises untrusted pay-as-you-go micropayments for computation. Neither the requester nor the executing node can walk away and incur monetary loss to the other party. This also allows requesters to continue executions on other executing nodes if the original executing node becomes unavailable or goes offline.
Freya Sheer Hardwick, Raja Naeem Akram, Konstantinos Markantonakis
At a time when society is in constant transition to keep up with technological advancement, we are seeing traditional paradigms being increasingly challenged. The fundamentals of governance are one such paradigm. As society's values have shifted, so have expectations of government shifted from the traditional model to something commonly referred to as `open governance'. Though a disputed term, we take open governance to mean a concept, which encourages and facilitates openness, accountability, and responsiveness to citizens. For the success of open governance initiatives, there are some technologies, such as the internet, that are crucial. These technologies enable access to both the data and to engagement activities between citizens and government. There are also other technologies, like blockchain and smart contacts, which could be utilised to assist open governance. A sound starting point would be moving from a system where information is tediously released by a government, on an `as they please' basis, to an infrastructure where critical actions are captured with strong integrity, non-repudiation and evidential guarantees. With an added dimension that facilitates these actions record be accessible to public scrutiny in near real-time. One candidate technology for capturing such actions is blockchain. Initially, blockchains were mainly used to facilitate cryptocurrencies as a record of transactions. The notable example being bitcoin. However, in recent years, blockchains utility is being recognised through smart contracts - potentially a vital building block to realising open and transparent government activities. In this paper, we employ the concept of smart contracts to government tendering activities. The proposed scheme is based on smart contracts, enabling a fair, transparent and independently verifiable (auditable) government tendering scheme. The scheme is then implemented on the Ethereum platform to evaluate the performance and financial cost implications, along with an evaluation of the potential security and auditability challenges.
We propose building a new PKC in a ring structure, the classification of rings being an open problem. The difficulty of the scheme is based on retrieving the eigenvalues of endomorphism on a finite type module over a non-commutative ring. It is resistant to a chosen cipher text attack. Working in the fraction ring of a non-commutative ring makes our scheme a zero-knowledge proof of knowledge, result indistinguishable, in the Naor-Yung model. Finally, a dramatic improvement in security is obtained through the drawing with uniform probability of the working ring at high frequency.
In this paper we discuss a design philosophy for interoperable blockchain systems, using the design philosophy of the Internet architecture as the basis to identify key design principles. Several interoperability challenges are discussed in the context of cross-domain transactions. We illustrate how these principles are informing the interoperability architecture of the MIT Tradecoin system.
With widespread smart contract implementation on the horizon, there is much conversation about how to regulate this new technology. Noting the failure of contract law to address the inequities of standardised contracts in the digital environment can help prevent them from being codified further into smart contracts.
The financial sector has grown ever more interested in crypto-currencies and the innovative Distributed Ledger Technology (DLT) that underpins them. For central banks, in their role as providers of currency and critical payments infrastructure, a key area of interest is whether DLTs could be used to enhance existing payment processes. This article gives a high-level explanation of how different DLTs can change payments processes. The answer depends on what form the distributed ledger takes. We identify four binary elements that determine the different properties of distributed ledgers and use case studies to evaluate how these elements can improve on, or fall short of, existing payments infrastructure. We find that Blockchain – the most well-known DLT that underpins Bitcoin – brings benefits in terms of the speed of cross-border settlement and improves security by removing the single point of failure, but has drawbacks in terms of slowing the speed and increasing the cost of smaller domestic transactions, and being energy intensive. Some central banks have experimented with other forms of DLTs that try to capture some of the benefits of Blockchain while minimising the costs, but so far these DLTs have tended to mimic existing payment processes and have not demonstrated many additional benefits.
Blockchain-based cryptocurrencies secure a decentralized consensus protocol by incentives. The protocol participants, called miners, generate (mine) a series of blocks, each containing monetary transactions created by system users. As incentive for participation, miners receive newly minted currency and transaction fees paid by transaction creators. Blockchain bandwidth limits lead users to pay increasing fees in order to prioritize their transactions. However, most prior work focused on models where fees are negligible. In a notable exception, Carlsten et al. postulated in CCS'16 that if incentives come only from fees then a mining gap would form~--- miners would avoid mining when the available fees are insufficient. In this work, we analyze cryptocurrency security in realistic settings, taking into account all elements of expenses and rewards. To study when gaps form, we analyze the system as a game we call \emph{the gap game}. We analyze the game with a combination of symbolic and numeric analysis tools in a wide range of scenarios. Our analysis confirms Carlsten et al.'s postulate; indeed, we show that gaps form well before fees are the only incentive, and analyze the implications on security. Perhaps surprisingly, we show that different miners choose different gap sizes to optimize their utility, even when their operating costs are identical. Alarmingly, we see that the system incentivizes large miner coalitions, reducing system decentralization. We describe the required conditions to avoid the incentive misalignment, providing guidelines for future cryptocurrency design.
This paper describes the deployment and implementation of a blockchain to improve the security, knowledge, intelligence and collaboration during the inter-agent communication processes in restrict domains of the Internet Infrastructure. It is a work that proposes the application of a blockchain, platform independent, on a particular model of agents, but that can be used in similar proposals, once the results on the specific model were satisfactory.
Parinya Ekparinya, Vincent Gramoli, Guillaume Jourjon
Recently, several works conjectured the vulnerabilities of mainstream blockchains under several network attacks. All these attacks translate into showing that the assumptions of these blockchains can be violated in theory or under simulation at best. Unfortunately, previous results typically omit both the nature of the network under which the blockchain code runs and whether blockchains are private, consortium or public. In this paper, we study the public Ethereum blockchain as well as a consortium and private blockchains and quantify the feasibility of man-in-the-middle and double spending attacks against them. To this end, we list important properties of the Ethereum public blockchain topology, we deploy VMs with constrained CPU quantum to mimic the top-10 mining pools of Ethereum and we develop full-fledged attacks, that first partition the network through BGP hijacking or ARP spoofing before issuing a Balance Attack to steal coins. Our results demonstrate that attacking Ethereum is remarkably devastating in a consortium or private context as the adversary can multiply her digital assets by 200, 000x in 10 hours through BGP hijacking whereas it would be almost impossible in a public context.
Zhe Yang, Kan Yang, Lei Lei, Kan Zheng · 5 authors
Vehicular networks enable vehicles to generate and broadcast messages in order to improve traffic safety and efficiency. However, due to the nontrusted environments, it is difficult for vehicles to evaluate the credibilities of received messages. In this paper, we propose a decentralized trust management system in vehicular networks based on blockchain techniques. In this system, vehicles can validate the received messages from neighboring vehicles using Bayesian Inference Model. Based on the validation result, the vehicle will generate a rating for each message source vehicle. With the ratings uploaded from vehicles, roadside units (RSUs) calculate the trust value offsets of involved vehicles and pack these data into a “block.” Then, each RSU will try to add their “blocks” to the trust blockchain which is maintained by all the RSUs. By employing the joint proof-of-work (PoW) and proof-of-stake consensus mechanism, the more total value of offsets (stake) is in the block, the easier RSU can find the nonce for the hash function (PoW). In this way, all RSUs collaboratively maintain an updated, reliable, and consistent trust blockchain. Simulation results reveal that the proposed system is effective and feasible in collecting, calculating, and storing trust values in vehicular networks.
In a previous paper, it was discussed whether Bitcoin and/or its blockchain could be considered a complex system and, if so, whether a chaotic one, a positive response raising concerns about the likelihood of Bitcoin/blockchain entering a chaotic regime, with catastrophic consequences for financial systems based on it. This paper intends to simplify and extend that analysis to other PoW, PoS, and hybrid protocol-based cryptocurrencies. As before, this study was carried out with the help of Information Theory of Complex Systems, in general, and Crutchfield's Statistical Complexity measure, in particular. This paper is a work-in-progress. We intend to uncover some other measures that capture the qualitative notion of complexity of systems that can be applied to these cryptocurrencies to compare with the results here obtained.
In recent years bitcoin has been attracted eminent attraction all around world in the area of cryptocurrency and its unique peer to peer transaction system. Analyzing and forecasting is most common task for data scientists that helps organizations to improve there business strategies. \n \nThis report is built around the fact that in bitcoin trading and analysis, the factors underlying are basically the traditional price predictions using the data mining technique.The project aim to gather data on bitcoin, analyse and forecast in order to see the fall or rise in bitcoin price.The bitcoin Dataset used is bitcoinmarketcap. This report intend to help the reader and understand what approach and methodology used to complete different milestones.This report summarizing all the aspect used throughout this project. \n \nThis is done using different techniques and algorithm to predict and forecast the rise or fall of bitcoin with the use of Crisp-DM methodology.The techniques used in the projects are Time Series ARIMA ,Time Series( Facebook prophet API), Linear Regression and and Multiple Regression.
Both “big data” and “analytics” have become popular keywords in many organizations. The power data analytics has on harnessing the increasing volumes, velocity and complexity of data in a world of constant change and disruptive technologies has been recognized. Many companies are making significant investments to better understand the impact of these capabilities on their businesses. One area with significant potential is the transformation of the audit. This project explores ways in which analytics can change and shape the work of accountants. \n \nAnomaly detection plays a pivotal role in data mining since most outlying points contain crucial information for further investigation. In the financial world which the Bitcoin network is a part of, anomaly detection can indicate fraud. Using data mining tools such as Regression, we simultaneously examine the relationship among variables whilst visually inspecting the data for possible outliers. By doing so, I have chosen the world’s leading cryptocurrency, Bitcoin. This project will conclude with an in-depth analysis on whether or not data analytics can shape how effectively, and secure accountants can audit transactions by implementing analytics tools into their daily protocols.
The purpose of this project is to perform an analysis on the comments by users on cryptocurrency discussion platforms and the prices of the mentioned cryptocurrencies. Although the blockchain has been around close to 10 years, cryptocurrencies are still a relatively young market. Bitcoin which has the first mover advantage has always been a dominating force within the sphere, but within the last year the market has seen a huge increase in interest. One year ago, the entire market capitalization of all cryptocurrencies was $13 billion and bitcoin held a dominance of 88% with a market cap of $11.5 billion. Compare that to today and all cryptocurrencies have a market cap of $310 billion with bitcoin only having a 54% dominance. The entire sphere has seen growth of more than 2284% in less than a year and bitcoin is beginning to lose a lot of its market share to newer more promising currencies. Unlike traditional stocks, cryptocurrencies have no tangible value attached and prices fluctuate with perceived value. Cryptocurrency trading relies on speculation more so than fundamental analysis and as a result most of the price speculation takes place online. Due to the abundance of data regarding speculation around prices on various cryptocurrency discussion platforms, I hope to find a correlation between the sentiment of the posts and the prices of the mentioned cryptocurrencies. This project will follow the KDD methodology.
In the present techno-political moment it is clear that ignoring or dismissing the hype surrounding blockchain is unwise, and certainly for regulatory authorities and governments who must keep a grip on the technology and those promoting it, in order to ensure democratic accountability and regulatory legitimacy within the blockchain ecosystem and beyond. Blockchain is telling (and showing) us something very important about the evolution of capital and neoliberal economic reason, and the likely impact in the near future on forms and patterns of work, social organization, and, crucially, on communities and individuals who lack influence over the technologies and data that increasingly shape and control their lives. In this short essay I introduce some of the problems in the regulation of blockchain and offer counter-narratives aimed at cutting through the hype fuelling the ascendency of this most contemporary of technologies.
Recently, blockchain systems have attracted intensive attentions from academia, industrial circles and governments, which make smart contract a hit since it is an important research topic for blockchain system. We propose a logic-based smart contract model Logic-SC for blockchain system based on semantics and syntax of Active-U-Datalog with some temporal extensions. Logic-SC model owns a triggering mechanism by temporal active rules, which can satisfy the expressiveness and flexibility of the smart contracts for blockchain system. The paper introduces the rules, structure of contracts and implementation of the model. Finally, an application is exampled to show the effectiveness of the model.
Blockchain Technology Applications and Security
Auction Theory and Applications
Advanced Steganography and Watermarking Techniques