With increasing popularity, the scalability of blockchain-based crypto-currencies becomes an urgent concern. Bitcoin, among other crypto-currencies, have known limitations in transaction throughput and speedbut no agreed upon solution. Many of the proposals increasing throughput also increase the load on the Bitcoin network. Lightning is a proposal enabling payments to be conducted without affecting the Bitcoin network. Lightning is a protocol using payment channels to enable instant and cheap payments using the blockchain for security. With Lightning, payments can be sent through a network of nodes connected by payment channels. In this thesis, the current state of Lightning is explored and an evaluation for use on Bitcoin exchanges is performed. The usability, privacy and security of Lightning are the topics evaluated. In order to evaluate the usability, an exchange interface application was built allowing deposits and withdrawals using Lightning. The protocol specification and relevant literature are examined in order to evaluate the security and privacy of Lightning. The exchange interface showed that Lightning can be integrated into an exchange and provide a fast and cheap way to deposit and withdraw money for clients. In this paper some integration designs are proposed and ways to improve the client user experience are discussed. The Lightning node implementations need to mature a bit before real usage and there are some security issues that also need to be considered. With monitoring and network analysis the privacy can be compromised.
The subject matter of the article is the substantiation of the problems and perspectives of the introduction of Distributed Ledger Technologies (DLT) / Blockchain in the public and private sectors as a modern digital economy instrument. The goal of the work is to substantiate the scientific and methodical principles of implementing the technologies of distributed DLT / Blockchain registers. The following tasks were solved in the article: the notion of Distributed Ledger Technologies (DLT) and Blockchain is defined; types of Distributed DLT Registries are presented in the form of a classification with a distinction of features and possibilities of application of each type; the general scheme of work is described and the specific features of the Blockchain technology are systematized; the features and directions of the use of intelligent contracts (smart contracts) based on the technology of blockchain are singled out; the international experience of government initiatives and pilot projects of the blockade technology application has been analyzed; the analysis of the domestic experience of practical application of Blockchain technologies in the public and private sectors and the perspective areas for the future application of technologies of the distributed DLT registries are identified; according to the international analytical agencies research results, the obstacles of the Blockchain technologies implementation in the public and private sectors are systematized. The following methods are used : abstract-logical analysis, theoretical generalization, system and statistical analysis. The following results were obtained. The concept of technologies of distributed DLT / Blockchain registries is disclosed. The availability of the system is based on open, private and federal DLTs. The specific features of DLT / Blockchain distributed registry technologies include centralization, involvement of a large number of participants to achieve consensus, use of cryptography and digital signatures, almost impossible to change chronological records, the convenience of tracking and verifying information, and the ability to program. The international experience of using Blockchain technology in countries such as the Great Britain, Georgia, Estonia, the USA, the United Arab Emirates, Italy has been researched. Examples of practical implementation of DLT / Blockchain registry technology in Ukraine are considered. The main obstacles to implementing distributed DLT / Blockchain registries in the public sector are regulatory restrictions and technology immaturity. The obstacles to the introduction of block technologies in the private sector are identified. Conclusions: It is proved that the distributed DLT registry technology has a significant potential for development for the future digital economy. Nevertheless, there are a number of barriers to their full use in the public and private sector, which requires further study by experts.
Year 2017 is hailed as the year of the blockchain, a technology which has disrupted a wide array of sectors, particularly the financial and legal sectors. Blockchain is a technology derived from Bitcoin, the first cryptocurrency created by Satoshi Nakamoto in 2008. Since then, the Bitcoin concept has been innovated to create blockchain technology. Blockchain consists of de-centralized, tamper-proof digital ledgers of transactions, which are chronologically and securely recorded over complex networks. Proponents of this technology are looking into the adoption of blockchain in their operations, since it is safer and reduces operating costs. This paper provides an overview of the prospects of utilizing blockchain technology to solve issues existing in the construction industry, specifically in Malaysia. The scope of this study is confined to several aspects, which includes the fundamentals of blockchain technology, and the use of Building Information Modeling (BIM) for pre-construction and construction phases, within the purview of the project management field. Among the applications of this technology includes identity validation and notarization for construction personnel/industry players, project governance and smart contracts (BIM and Blockchain integration). As a result of this study, it was found that the application of blockchain technology in project management is still in its early adoption phase, with exciting developments in the near future. Despite being in its early stages of adoption, it can be seen that the blockchain technology adoption across the globe, particularly in the area of project management has a promising outlook. However, further research needs to be carried out to ascertain the feasibility of blockchain technology implementation in the local construction industry.
Машкаров Юрій Григорович, Коваленко Микола Миколайович, Коваленко Микола Йосипович, Петченко Владислава Юріївна
The analysis of financing Balakliia district of Kharkiv region in the conditions of decentralization is carried out for the period of 2015–2018. Based on the actual data and econometric tools, a mathematical model for planning and forecasting the district budget is developed. The ways to further improve the econometric model of the local budget formation under decentralization are offered.
Defending against distributed denial of service (DDoS) attacks in the Internet is a fundamental problem. One practical approach to addressing DDoS attacks is to redirect all destination (e.g., via DNS or BGP) to a third-party, DDoS protection-as-a-service provider (e.g., Cloudflare and Akamai), which is well provisioned and equipped with proprietary filtering mechanisms to remove attack traffic before passing the remaining traffic to the destination. Although such an approach is appealing, as it requires no modification to the existing Internet infrastructure and can scale to handle very large attacks, recent industrial interviews with more than 100 interviewees from over 10 industry segments reveal that this approach alone is not sufficient, especially for large organizations (e.g., Web hosting companies and government) that cannot afford to allow third-parity security-service providers to terminate their network connections. Instead, these organizations have to rely on their ISPs to filter attack traffic. In this paper, we discuss the challenges faced by the ISPs in order to disrupt the Internet security-service market and sketch our solutions, powered by smart contracts.
This article presents the analyze of the cryptocurrency market, the practice of state regulation of the cryptocurrency. During the market research of the cryptocurrency and the experience of its regulation, author identified certain similarities. First, each state strives to create a favorable climate for the development of new technologies (blockchain), seeing a great potential for using technology in the public and private sectors. Secondly, there is a rapid growth of the cryptocurrency market, and the state, not adapting the existing national legislation to the existing challenges of the digital economy, faces a lack of revenue to the budget, since the cryptocurrency is outside the legal jurisdiction. Third, today there are over a thousand different cryptocurrencies, accordingly, unified standards for their regulation should be developed.
Cryptocurrency is a relatively new form of investment. Its concept was first introduced in 2009, and has grown ever since. To this day, there are thousands of cryptocurrencies. Just as other currencies, cryptocurrency can be related to a crime. Ever since its introduction nearly a decade ago, there have been crimes where cryptocurrency are related. According to ACIC’s crime types, cryptocurrency are related to two crime categories: cybercrime, and illicit drugs. There are also other cases where the type of crimes is not listed as a part of ACIC’s. In response to the crimes that have occurred throughout the years, several governments have moved to establish laws regarding cryptocurrency. Some governments chose to ban cryptocurrency completely, whereas others opted for regulation.
Since the current cryptocurrencies has failed to reach the level of normality of standard fiat currencies and banking systems there exist a need for a new cryptocurrency if this shall ever be the case. This project will be a part of creating and designing such a cryptocurrency that hope to compete with the fiat currencies of our time. This with the following research question: In the examined network, would increasing the reward received by the participants who successfully validate a transaction result in faster validation time and thereby faster transactions? This question is examined with basis in game theory and simplified simulations to be able to draw conclusions about how the network behaves. Conclusions such as when the participants increases the system speed decreases or that when the money in the system increases there exist an incentive for the participants to work faster. Possible Nash equilibriums are also examined to guide the participants when deciding strategies. Since the purpose of this project is to create a cryptocurrency that can compete with fiat currencies a short comparison between cryptocurrencies and fiat currencies are discussed.
Bitcoin, first introduced in 2008, and other virtual currencies (litecoin, ripple, ethereum, dash, etc. – known as “altcoins”) are a phenomenon of the 21st century. When speaking about bitcoins, views on cryptocurrency-related risks and benefits vary significantly. However, in this article, we will not focus on bitcoin here to illustrate how virtual currencies work. The aim of this article is to show how the borrowed Anglicism bitcoin is used in the Czech and the French languages. The purpose of the theoretical framework is to clarify concepts of neologism, Anglicism and internationalism and propose relationships among the concepts in a study. In the practical section, using the word bitcoin, we show how the loanword is used in both languages and how its integration into the language is similar. The main result of the analysis is a list of derived and compound words from the word bitcoin in Czech and French. The article deals with derived and compound words from the point of view of their quantitative evaluation using Aranea web corpora. In this article, we have shown the possibilities of their derivatives and adaptation to the given system of the language.
SELECTED ASPECTS OF BITCOIN AND ITS IMPLICATIONS FROM THE STANDPOINT OF THE LAW AND ECONOMICS Abstract Bitcoin is one of the best-known examples of a decentralized convertible cryptocurrency based on blockchain technology. The diploma thesis deals with the main aspects of bitcoin and bitcoin payment networks in complex economic analysis based on the use of standard economic apparatus. The economic analysis is backed by a thorough and relevant legal research. The main goal of the diploma thesis is complex economic and legal analysis of bitcoin. In economic analysis, the emphasis is put on the use of supply-demand analysis, which outlines the basic factors affecting supply and demand for bitcoins. Based on a clear delineation of these factors, the thesis is able to analyse specific aspects of bitcoin. Diploma thesis analyzes the impacts of decentralized setting, as well as risks associated with anonymity of users, crime in connection with bitcoin, time delays in transaction verification, technical and energetic demands on mining, high transaction costs and internet connection needs. Each of these aspects is compared to existing payment institutions or systems. The thesis also examines the legal regulation of bitcoin. Due to the absence of a complex legal regulation, the diploma thesis tries to apply the...
Blockchain technology is expected to be an enabler of Ëtrust-free economic transactionsâ¢, which implies a frictionless economy without uncertainty and risks. Looking at current use cases of blockchains such as the peer-to-peer payment system Bitcoin, it i
This paper examines how financial products are classified within the capital gains bracket and which tax differences follow from such classification. Based on practice and the methodology of the Income tax act, the paper describes how a divestment of the cryptocurrency Bitcoin should be classified and taxed. The result is thereafter analyzed from the perspective of the principle of uniformity and other objectives of the tax system, such as simplicity and predictability.
The cryptocurrency Bitcoin was introduced in 2008 as an alternative to the traditional Fiat currencies, with the purpose of decreasing transactional costs and increase payment security. Although the primary goal of Bitcoin is to function as money, cryptocurrencies are also the subject of speculation for investors. For many, the last years’ rapid value increase has led to large economic gains. For others, the equally rapid decreases have led to large losses. Hence, the question of how capital gains and losses from trading with Bitcoin should be taxed has been brought to light.
The regulation for the Swedish capital gains taxation were established together with the tax reform of 1990. Some of the overarching goals of the reform were to make the taxation system simpler and fairer, as well as making taxation uniform across the same levels of income. As a mean of reaching this goal, all capital gains were gathered under the income type “capital”, with a uniform tax rate of 30 percent. Since the realization principle enables the creation of so-called interest-free tax credits, the legislator diverted from the principle of uniformity by creating differences in the taxation of same assets; such as tax deductions for shares, bonds and “other assets”. The differentiation was founded on the basis of risk, and the difficulty with which the product is controlled in terms of trade. Least favorable is the taxation of “other assets” in chapter 52 of the Income tax act. Assets that may not be classified as shares or bonds are taxed in that category.
Ultimately, for a product to be classified as a share, value fluctuations have to be based on the economic performance of the issuing company. Since Bitcoin is not issued by a company, and the value is solely based on market supply and demand, Bitcoin should not be classified as a share for the sake of taxation. Neither can Bitcoin be classified as a foreign currency which is taxed according to the rules of bonds, since the cryptocurrency does not meet any of the main definitions of legal tender according to economic theory nor legislation. Hence, a divestment should be taxed according to the rules of “other assets” in chapter 52.
Lastly, my interpretation is taxation of Bitcoin and other financial products does not meet the requirements of uniformity. The different treatment of financial products could, according to me, not be justified through reasons of tax credit, nor based on the difficulty of controlling the trade of Bitcoin. The valuation of Bitcoin cannot be deemed predictable, and the creation of tax credits should not be seen as more likely through investments in Bitcoin in comparison to other investments in currency products. Neither should control difficulties for the Swedish tax agency create the basis for an argument of limited right of deduction of capital losses.
Vincenzo Ferrari, João Pedro Quintais, Αλεξάνδρα Γιαννοπούλου, Balázs Bodó
The EU Blockchain Observatory and Forum (an initiative led by DG CONNECT) organized the “Workshop on GDPR, data policy and compliance” event in June 2018 to discuss data protection issues as well as privacy-enhancing features of blockchain technologies. The meeting gathered stakeholders and experts to examine the main challenges and opportunities of distributed ledger technologies (DLTs), so supporting the European Commission’s efforts to provide practical guidelines for the industry. Ms. Valeria Ferrari, of the Blockchain & Society Policy Research Lab participated in the workshop, and compiled this report.
This paper proposes optimization mechanisms for a multi – layered IoT network model, backed up by Blockchain Technology. This paper focuses on optimizing the computational load such that the model can meet the feasible conditions for deployment purpose. Though, dividing the IoT network into multiple layers reduces the computational load at each stage, the load split isn’t quite proportional to the amount of work done at each level. Flexibility to monitor computational load at each level and distribute the workload has been introduced at each level.
Bilinear maps (also called pairings) have been used for constructing various kinds of cryptographic primitives including (but not limited to) short signatures, identity-based encryption, attribute-based encryption, and non-interactive zero-knowledge proof systems. In known instantiations of cryptographic bilinear maps based on eliptic curves, source and target groups are different groups, which may restrict applications of bilinear maps. Cheon and Lee studied self-bilinear maps, which are bilinear maps whose source and target groups are identical. They showed huge potential of self-bilinear maps by showing that self-bilinear maps can be transformed into multilinear maps, which give further more cryptographic applications including (but not limited to) multiparty non-interactive key exchange, broadcast encryption, attribute-based encryption, homomorphic signatures, and obfuscation. However, they also showed a strong negative result on the existence of cryptographic self-bilinear maps. Namely, they showed that if there exists an efficiently computable self-bilinear map on a known order group, then the computational Diffie-Hellman (CDH) assumption does not hold on the group. This means that cryptographically useful self-bilinear maps do not exist on groups of known order. On the other hand, there is no negative result for self-bilinear maps on groups of unknown order. Indeed, Yamakawa et al. gave a partial positive result for self-bilinear maps on unknown order groups. Namely, they constructed self-bilinear maps with auxiliary information, which is a weaker variant of self-bilinear maps based on indistinguishability obfuscation. Though they showed that they are sufficient for some applications of self-bilinear maps, they are not as useful as "ideal" self-bilinear maps, which do not need auxiliary information. In this talk, we first review the construction of self-bilinear maps with auxiliary information given by Yamakawa et al. Then we consider the possibility of constructing ideal self-bilinear maps.
Bitcoin, but there are other serious players in the game such as Ethereum, NEO, and Ripple, to name just a few. 2 Cryptocurrencies extend beyond the pre-established limits, and thus do not fit easily into the existing paradigm. 3 In fact, their scope is so vast, it is almost impossible to predict their future impact. 4 It is a bit like attempting to estimate the possible size and magnitude of an unknown type of fully mature tree from its tiny infant seed.*So, perhaps we should not limit our imaginations too much with rapidly redundant frameworks and limiting definitions.*The objective of this article is to widen and expose the field of interpretations and understanding of cryptocurrencies while providing some stimulating, inspirational thoughts regarding the unprecedented opportunities and dilemmas cryptocurrencies face.*This mini-thesis has been written almost like a stream of thought, rather than a concisely researched document.*This is because it does not attempt to meet all the criteria of empirically proven research.*As such, some of its statements are unproven, unquantifiable, and unquoted.*Currently, complete examination is impossible because cryptocurrency, and the blockchain technology supporting it behind the scenes, is a rapidly evolving organic phenomenon-it is swirling, moving, and adapting. 5 At this stage, it is impossible to predict accurately what will global simulations.He is a regular contributor to the World Bank doing business reports from 2015 through 2018.