We examine the significance of twenty-one potential drivers of bitcoin returns for the period 2010–2017 (2533 daily observations). Within a LASSO framework, we examine the effects of factors such as stock market returns, exchange rates, gold and oil returns, FED’s and ECB’s rates and internet trends on bitcoin returns for alternate time periods. Search intensity and gold returns emerge as the most important variables for bitcoin returns.
Elie Bouri, Mahamitra Das, Rangan Gupta, David Roubaud
This paper contributes to the embryonic literature on the relations between Bitcoin and conventional investments by studying return and volatility spillovers between this largest cryptocurrency and four asset classes (equities, stocks, commodities, currencies, and bonds) in bear and bull market conditions. We conducted empirical analyses based on a smooth transition VAR GARCH-in-mean model covering daily data from July 19, 2010 to October 31, 2017. We found significant evidence that Bitcoin returns are related quite closely to those of most of the other assets studies, particularly commodities, and therefore, the Bitcoin market is not isolated completely. The significance and sign of the spillovers exhibited some differences in the two market conditions and in the direction of the spillovers, with greater evidence that Bitcoin receives more volatility than it transmits. Our findings have implications for investors and fund managers who are considering Bitcoin as part of their investment strategies and for policymakers concerned about the vulnerability that Bitcoin represents to the stability of the global financial system.
The brave new world of blockchain potentially transforms the financial structures we have come to know and feel ambivalent about. What does a decentralized, secure system mean for our society?
We design a distributed platform with blockchain as a system service for supporting transaction execution in insurance processes. The insurance industry is heavily dependent on multiple processes between transacting parties for initiating, maintaining and closing diverse kind of policies. Transaction processing time, payment settlement time and security protection of the process execution are major concerns. Blockchain technology, originally conceived as an immutable distributed ledger for detecting double spending of cryptocurrencies, is now increasingly used in different FinTech systems to address productivity and security requirements. The application of blockchain in FinTech processing requires a deep understanding of the underlying business processes. It supports automated interactions between the blockchain and existing transaction systems through the notion of smart contracts. In this paper, we focus on the design of an efficient approach for processing insurance related transactions based on a blockchain-enabled platform. An experimental prototype is developed on Hyperledger fabric, an open source permissioned blockchain design framework. We discuss the main design requirements, corresponding design propositions, and encode various insurance processes as smart contracts. Extensive experiments were conducted to analyze performance of our framework and security of the proposed design.
With the recent surge in crypto-activity, a natural question arises as to what exactly a “cryptocurrency” is and how to value and assess these digital assets. In this paper, we provide an overview of the history and technology underlying cryptocurrencies. We also present information on the volume, size, and volatility of this emerging asset class, which we compare to major fiat currencies and commodities. Finally, we provide a framework for valuing crypto-assets, discuss the still-evolving regulatory environment for this asset class, and discuss the mechanics of investing in cryptocurrencies.
A. Nunez Mencias, Donna N. Dillenberger, P. Novotny, Fanni Tóth · 11 authors
Blockchain is a technology that has been available for several years and has already had several generations. Multiple implementations exist. In this paper, we describe how one of them, the Hyperledger Fabric, is used today to demonstrate the wide usage of the technology for multiple markets beyond finance and cryptocurrency. The use cases highlight the relevance of security—due to the type of data and the distributed foundation of blockchain—and of system performance to enable the use cases in production. Security and performance are the base for the architecture of blockchain on the IBM LinuxONE systems. The Secure Service Container prevents tampering, and the cryptocard usage hardens the solution—and the performance optimization in the compiler, cryptoinstructions, and large caches provides the performance. These optimizations have been further extended with the IBM z14 beyond previous IBM Z generations. In this paper, we describe how a cluster topology is used to implement a high-availability service that scales dynamically from small networks to large ones using the hot plug capabilities of the IBM LinuxONE systems.
The main objective of this investigation was to analyze the legal nature of the Decentralized Federal State as a political-territorial organization in Venezuela. The federal State is formed under the principles of federalism, that is, of political decentralization. Its territory is divided into autonomous units that, on certain matters, are governed by their own Constitution, laws and authorities, while others are subject to the central legal order of the State and the government of the federation. It corresponds to the federal Constitution to distribute the competences between the central and decentralized bodies. The methodology was based on a non-experimental design, in the documentary research modality. The techniques of documentary observation, analytical summary and critical examination, bibliographies of national and foreign authors were used; the Constitution of the Bolivarian Republic of Venezuela (1999) and the Organic Law of People's Power (2010). The techniques of data collection will be the bibliographic archival and the documentary observation, whose instrument will be the documentary record.
The aim of this study is to review the literature growth and author productivity of Blockchain technology research from 2008 to March 2017. 801 articles were retrieved from Scopus database and analyzed with bibliometrics approach using different perspective views. The author productivity was derived using the Lotka’s law and K-S test was performed to verify the reliability. The result indicates that the number of literatures on Blockchain is still increasing. Three stages of Blockchain research change were discovered. In 2008 to 2013, the topics were related to the Bitcoin and cryptocurrencies; in 2014 to 2015, the number of Bitcoin literatures grew rapidly; after 2016, a lot of researchers are paying attention to the techniques of Blockchain and smart contract. Moreover, the distribution of author productivity meets the study of Lotka. This study presents state-of-the-art and abstract the trend of Blockchain research regarding several perspectives of bibliometrics analysis.
PETER MWIATHI SILAS, Nelson Wawire, Perez Ayieko Onono-Okelo
The Kenya government has instituted fiscal decentralization over the years to promote social economic development, reduce poverty and income inequality and ensure balanced regional development. Despite these efforts, poverty levels have remained high in Kenya. The literature on the relationship between fiscal decentralization and poverty has been rather inconclusive about the effects of fiscal decentralization on poverty. The main objective of this paper was to analyse the effects of fiscal decentralization on poverty in Kenya. Using cross-county panel data from 2002 – 2014 and published data from government agencies, UNDP reports and World Bank reports, the paper estimated various empirical models to analyse the effects intergovernmental transfers, sub-national own-source revenue and county expenditure on poverty in Kenya. The study established that the effect of fiscal decentralization on poverty depends on the nature of decentralization and the extent of fiscal decentralization as well as the county specifics. The paper therefore, recommends the need for for county governments to have adequate own-source revenue to finance their expenditure as opposed to relying on intergovernmental transfers from national government.
Cryptocurrencies are a type of digital currencies that are relying on cryptographic proofs for confirmation of transactions. Cryptocurrencies usually achieve a unique combination of three features: ensuring limited anonymity, independence from central authority and double spending attack protection. No other group of currencies, including fiat currencies, has this combination of features. We will define cryptocurrency ownership and account anonymity. We will define cryptocurrency ownership and account anonymity. We will introduce a classification of the types of approaches to regulation of cryptocurrencies by various individual countries. We will present the risks that the use of cryptocurrencies involves and the possibilities of prevention of those risks. We will present the possible use of cryptocurrencies for the benefit of the state. The conclusion addresses the implications of adoption of a cryptocurrency as a national currency.
Digital banking as an essential service can be hard to access in remote, rural regions where the network connectivity is unavailable or intermittent. The payment operators like Visa and Mastercard often face difficulties reaching these remote, rural areas. Although micro-banking has been made possible by short message service or unstructured supplementary service data messages in some places, their security flaws and session-based nature prevent them from wider adoption. Global-level cryptocurrencies enable low-cost, secure, and pervasive money transferring among distributed peers, but are still limited in their ability to reach people in remote communities. We propose a blockchain-based digital payment scheme that can deliver reliable services on top of unreliable networks in remote regions. We focus on a scenario where a community-run base station provides reliable local network connectivity while intermittently connects to the broader Internet. We take advantage of the distributed verification guarantees of the Blockchain technology for financial transaction verification and leverage smart contracts for secure service management. In the proposed system, payment operators deploy multiple proxy nodes that are intermittently connected to the remote communities where the local blockchain networks, such as Ethereum are composed of miners, vendors, and regular users. Through probabilistic modeling, we devise design parameters for the blockchain network to realize robust operation over the top of the unreliable network. Furthermore, we show that the transaction processing time will not be significantly impacted due to the network unreliability through extensive emulations on a private Ethereum network. Finally, we demonstrate the practical feasibility of the proposed system by developing Near Field Communication (NFC)-enabled payment gateways on Raspberry-Pis, a mobile wallet application and mining nodes on off-the-shelf computers.
Kuresellesen dunyada 1960’li yillarda teknik ve teknolojik alanda yasanan gelismeler insanoglunun tarihsel gelisimde onemli bir rol oynayan parayi da etkilemistir. Siber/dijital dunyada sanal bir para biriminin ortaya cikmasi kuresel ticarette yeni bir devrim niteligindedir. Bitcoin, sanal para birimlerinin oncusu olarak kabul edilmektedir. Bu makalede elektronik para (sanal para, dijital para, kripto para vb.) gibi bircok adlandirmaya sahip olan para birimlerinden bahsedilecek, ilklerden olan Bitcoin analiz edilecek olup, uluslararasi iliskilerde hayat sahasi bulan devletler uzerindeki yansimalari karsilastirmali olarak ele alinacaktir. Bu calismadaBitcoin hakkinda literatur taramasi yapilmis olup, guncel kaynaklardan elde edilen nicel veriler ile makale desteklenmeye calisilmistir. Ayrica belli basli devletler bu makale de secilerek, Bitcoin hakkindaki duzenlemeleri karsilastirmali olarak ortaya konulmaya calisilmistir.
This paper examines the profitability and significance of a universe of 3312 intra-day technical trading rules on the 5-minute BTC/USD spot exchange rate between January 2013 and July 2017. We find numerous significantly profitable trading strategies, even after adjusting for data-snooping effects and transaction costs. However, profitability is highly unstable and declines over time. Combining signals of multiple trading rules by means of a neural network classification algorithm results in strategies which outperform the individual trading rules and benchmarks based on risk-adjusted profitability and break-even transaction costs. It is concluded that technical analysis in the cryptocurrency market is significantly profitable and that the cryptocurrency market is not fully efficient.
Rule number 3 Karanganyar Regency in 2015 set changes in income and expenditure budget for fiscal year 2015. Karanganyar Regency is one of the areas that implement decentralization policy and requires a lot of funds to finance regional development. The biggest potential possessed Karanganyar Regency in the financing of regional expenditures derived from local taxes and is expected to provide the largest contribution in local revenues. This study aims to determine the effectiveness of tax collection hotels and restaurants and its contribution to the local revenues Karanganyar Regency . Methods of data analysis in this research are descriptive analysis. The variables in this study are the ratio of the effectiveness and contribution analysis. Data analysis technique in this study is a quantitative analysis. Based on the analysis, the effectiveness rate of tax collection of hotel and restaurant of Karanganyar Regency and its contribution to the local revenue of the region in 2011-2016 states showed the same result with some previous research .
Els conceptes de cadenes de blocs (blockchains) i contractes intel·ligents (smart contracts) ofereixen una alternativa sostenible en educació superior. Des d’aquest objectiu, es presenta una revisió d’ambdós conceptes i la seva relació amb els termes bitcoin, ledger, edublock i educoin. En un segon moment, s’atén a les xarxes en educació superior basades en tecnologia de cadenes de blocs, el seu vincle amb els contractes intel·ligents i les possibilitats a dia d’avui.
Once again the manufacturers of dreams and cotton candy are at work, finding fertile Despite its clearly virtual origin, bitcoin has become a trap of mythological finance capable of deluding all as easily achievable, but absolutely uncertain,wealth that will end in drama, as the financial and speculative bubbles taught us, and as evidenced by history and the facts, but obscured by the infinite greed of the King Midas syndrome . As always, the unfathomable capacity of human psychology to be drawn into the drama by a subtle, and in this case, invisible thread remains an enigmaground in which to throw the magic hook wisely trafficked as possibility and truth; the term cryptocurrency itself contributes to giving it an esoteric qualification, reminiscent of the dream of the philosopher's stone.
Elli Androulaki, Artem Barger, Vita Bortnikov, Christian Cachin · 21 authors
Fabric is a modular and extensible open-source system for deploying and operating permissioned blockchains and one of the Hyperledger projects hosted by the Linux Foundation (www.hyperledger.org). Fabric is the first truly extensible blockchain system for running distributed applications. It supports modular consensus protocols, which allows the system to be tailored to particular use cases and trust models. Fabric is also the first blockchain system that runs distributed applications written in standard, general-purpose programming languages, without systemic dependency on a native cryptocurrency. This stands in sharp contrast to existing blockchain platforms that require "smart-contracts" to be written in domain-specific languages or rely on a cryptocurrency. Fabric realizes the permissioned model using a portable notion of membership, which may be integrated with industry-standard identity management. To support such flexibility, Fabric introduces an entirely novel blockchain design and revamps the way blockchains cope with non-determinism, resource exhaustion, and performance attacks. This paper describes Fabric, its architecture, the rationale behind various design decisions, its most prominent implementation aspects, as well as its distributed application programming model. We further evaluate Fabric by implementing and benchmarking a Bitcoin-inspired digital currency. We show that Fabric achieves end-to-end throughput of more than 3500 transactions per second in certain popular deployment configurations, with sub-second latency, scaling well to over 100 peers.
Permission-less blockchains can realise trustless trust, albeit at the cost of limiting the complexity of computation tasks. To explain the implications for scalability, we have implemented a trust model for smart contracts, described as agents in an open multi-agent system. Agent intentions are not necessarily known and autonomous agents have to be able to make decisions under risk. The ramifications of these general conditions for scalability are analysed for Ethereum and then generalised to other current and future platforms.
An atomic cross-chain swap is a distributed coordination task where multiple parties exchange assets across multiple blockchains, for example, trading bitcoin for ether. An atomic swap protocol guarantees (1) if all parties conform to the protocol, then all swaps take place, (2) if some coalition deviates from the protocol, then no conforming party ends up worse off, and (3) no coalition has an incentive to deviate from the protocol. A cross-chain swap is modeled as a directed graph ${\cal D}$, whose vertexes are parties and whose arcs are proposed asset transfers. For any pair $({\cal D},L)$, where ${\cal D} = (V,A)$ is a strongly-connected directed graph and $L \subset V$ a feedback vertex set for ${\cal D}$, we give an atomic cross-chain swap protocol for ${\cal D}$, using a form of hashed timelock contracts, where the vertexes in $L$ generate the hashlocked secrets. We show that no such protocol is possible if ${\cal D}$ is not strongly connected, or if ${\cal D}$ is strongly connected but $L$ is not a feedback vertex set. The protocol has time complexity $O(diam({\cal D}))$ and space complexity (bits stored on all blockchains) $O(|A|^2)$.
With development of Big Data technology these years, Internet financial companies in China started trying using big data technology to do credit investigation instead of traditional methods. But there is some limitation and problem in terms of data acquisition channel, information asymmetry and data privacy protection, etc. Block chain, characterized in unalterability and decentralization comes into people's sight. This paper will introduce block chain technology, explore the use of block chain technology in Internet financial credit investigation, and put forward an internet financial credit data sharing model based on block chain, which mainly composed by the Fin-tech Federate Servers group (FFS), the user data storage structure and a distributed database system (DDBS). By combining DPoS and re-encryption technology, the model has the characteristics of non-tampering, authorized access and convenient accountability. Through this model, the user data is recorded by the trusted agent, encrypted by asymmetric encryption technology, and anchored to the chain of the block periodically.
Siti Rohaya Mat Rahim, Zam Zuriyati Mohamad, Juliana Abu Bakar, Farhana Hanim Mohsin · 5 authors
This study examines the two important aspect of latest technology issues in Islamic finance that related to artificial intelligence (AI) and smart contract. AI refers to the ability of machines to understand, think, and learn in a similar way to human beings, indicating the possibility of using computers to simulate human intelligence. Smart contract is a computer code running on top of a block-chain containing a set of rules under which the parties to that smart contract agree to interact with each other. The main objectives of this article are to evaluate the operations of AI and smart contract, to make comparison between the operations of AI and smart contract. This article concludes that AI and smart contract will have a huge impact in future for Islamic Finance industry.
Purpose The purpose of this paper is to examine the value-at-risk and related measures for the Bitcoin and to compare the findings with Standard and Poor’s SP500 Index, and the gold spot price time series. Design/methodology/approach A GJR-GARCH model has been implemented, in which the residuals follow the standardized Pearson type-IV distribution. A large variety of value-at-risk measures and backtesting criteria are implemented. Findings Bitcoin is a highly volatile currency violating the value-at-risk measures more than the other assets. With respect to the Basel Committee on Banking Supervision Accords, a Bitcoin investor is subjected to higher capital requirements and capital allocation ratio. Practical implications The risk of an investor holding Bitcoins is measured and quantified via the regulatory framework practices. Originality/value This paper is the first comprehensive approach to the risk properties of Bitcoin.
Purpose This paper aims to gather together the minimum units of users’ identity in the Bitcoin network (i.e. the individual Bitcoin addresses) and group them into representations of business entities, what we call “super clusters”. While these clusters can remain largely anonymous, the authors are able to ascribe many of them to particular business categories by analyzing some of their specific transaction patterns (TPs), as observed during the period from 2009 to 2015. The authors are then able to extract and create a map of the network of payment relationships among them, and analyze transaction behavior found in each business category. They conclude by identifying three marked regimes that have evolved as the Bitcoin economy has grown and matured: from an early prototype stage; to a second growth stage populated in large part with “sin” enterprise (i.e. gambling, black markets); to a third stage marked by a sharp progression away from “sin” and toward legitimate enterprises. Design/methodology/approach Data mining. Findings Four primary business categories are identified in the Bitcoin economy: miners, gambling services, black markets and exchanges. Common patterns of transaction behavior between the business categories and their users are a “one-day” holding period for bitcoin transactions is somewhat typical. That is, a one-day effect where traders, gamblers, black market participants and miners tend to cash out on a daily basis. There seems to be a strong preference to do business within the bitcoin economy in round lot amounts, whether it is more typical of traders exchanging for fiat money, gamblers placing bets or black market goods being bought and sold. Distinct patterns of transaction behavior among the business categories and their users are flows between traders and exchanges average just around 20 BTC, and traders buy or sell on average every 11 days. Meanwhile, gamblers wager just 0.5 BTC on average, but re-bet often within the same day. Three marked regimes have evolved, as the Bitcoin economy has grown and matured: from an early prototype stage, to a second growth stage populated in large part with “sin” enterprises (i.e. gambling, black markets), to a third stage marked by a sharp progression away from “sin” and toward legitimate enterprises. This evolution of the Bitcoin economy suggests a trend toward legitimate commerce. Originality/value The authors propose a new theoretical framework that allows investigating and exploring the network of payment relationships in the Bitcoin economy. This study starts by gathering together the minimum units of Bitcoin identities (the individual addresses), and it goes forward in grouping them into approximations of business entities, what is called “super clusters”, by using tested techniques from the literature. A super cluster can be thought of as an approximation of a business entity in that it describes a number of individual addresses that are owned or controlled collectively by the same beneficial owner for some special economic purposes. The majority of these important clusters are initially unknown and uncategorized. The novelty of this study is given by the pure user group and the TP analyses, by means of which the authors are able to ascribe the super clusters into specific business categories and outline a map of the network of payment relationships among them.