To date, cryptocurrency prices are volatile and many cryptocurrency developers have adopted ad hoc approaches to stabilize their cryptocurrency price. When these currencies are not 100% backed by other valued assets, part of their price volatility may arise from self-fulfilling expectations of a speculative attack (as in Obstfeld (1996)). We show that an exchange rate policy, which is less than 100% backed and dynamically adjusts in response to traders’ conversion demand eliminates speculative attacks while, under some conditions, preserving much of the desired exchange rate stability. This dynamic exchange rate policy admits a great deal of discretion to and requires commitment by the party implementing the policy. We demonstrate how to implement this policy using the Ethereum network—a smart contract blockchain environment—and how this implementation yields commitment to the policy.
The revolution with technologies happens very often, here is one such technology called “Blockchain” which will be a game-changer in many functional sectors of the society. Initially, this technology was developed to support cryptocurrencies (such as Bitcoin, Ethereum, and Litecoin etc).Now a days it is gaining the attention of the researchers in almost the entire field. The consensus protocol in the cryptography and peer to peer architecture is one of the essential parts of the blockchain technology. The best consensus protocol in a blockchain system provides the fault tolerance. These censuses in blockchain are broadly classified in to two types. The absolute-finality consensus protocol and probabilistic-finality consensus protocols. In this paper, the different types of censuses protocols are discussed along with their working, strength and weakness. It also gives the overview on the different types of blockchain technology with their advantages and disadvantages. At the last we also presented a comparison of these consensus protocols by considering different qualitative parameters.
Periklis Kostamis, Andreas Sendros, Pavlos S. Efraimidis
The cost of using a blockchain infrastructure as well as the time required to search and retrieve information from it must be considered when designing a decentralized application. In this work, we examine a comprehensive set of data management approaches for Ethereum applications and assess the associated cost in gas as well as the retrieval performance. More precisely, we analyze the storage and retrieval of various-sized data, utilizing smart contract storage. In addition, we study hybrid approaches by using IPFS and Swarm as storage platforms along with Ethereum as a timestamping proof mechanism. Such schemes are especially effective when large chunks of data have to be managed. Moreover, we present methods for low-cost data handling in Ethereum, namely the event-logs, the transaction payload, and the almost surprising exploitation of unused function arguments. Finally, we evaluate these methods on a comprehensive set of experiments.
Smart contract is the building block of blockchain systems that enables automated peer-to-peer transactions and decentralized services. With the increasing popularity of smart contracts, blockchain systems, in particular Ethereum, have been the "paradise" of versatile fraud activities in which Ponzi, Honeypot and Phishing are the prominent ones. Formal verification and symbolic analysis have been employed to combat these destructive scams by analyzing the codes and function calls, yet the vulnerability of each \emph{individual} scam should be predefined discreetly. In this work, we present SCSGuard, a novel deep learning scam detection framework that harnesses the automatically extractable bytecodes of smart contracts as their new features. We design a GRU network with attention mechanism to learn from the \emph{N-gram bytecode} patterns, and determines whether a smart contract is fraudulent or not. Our framework is advantageous over the baseline algorithms in three aspects. Firstly, SCSGuard provides a unified solution to different scam genres, thus relieving the need of code analysis skills. Secondly, the inference of SCSGuard is faster than the code analysis by several order of magnitudes. Thirdly, experimental results manifest that SCSGuard achieves high accuracy (0.92$\sim$0.94), precision (0.94$\sim$0.96\%) and recall (0.97$\sim$0.98) for both Ponzi and Honeypot scams under similar settings, and is potentially useful to detect new Phishing smart contracts.
Alim Al Ayub Ahmed, Harish Paruchuri, Siddhartha Vadlamudi, Apoorva Ganapathy
Digital finance is assuming a significant part in the arrangement of financial services all over the world. Fast growth with digitalization, data analysis, and computing capacities allows for a whole new scope of financial services and transactions. This financial development empowered by digital financial technology (Fintech) has pulled in a ton of attention, as it could offer some potential for economic growth and development. As a part of the Fintech environment, cryptography has started to grow quickly and digital assets are acquiring in favorability among financial bankers and investors. Human behavior as they engage with financial activities is personally associated with the noticed market elements. However, with many existing theories and studies on the fundamental motivations of the conduct of people in financial frameworks, there is still restricted experimental derivation of the behavioral conduct of the financial agents from a definite market analysis. Cryptocurrency technology has given a map to this analysis with its voluminous data and its transparency of financial transactions. It has empowered us to perform inference on the personal conduct standards of users in the market, which we analyze in the bitcoin and ethereum cryptocurrency markets. In our study, we initially decide different properties of the cryptography users by complex network analysis. Financial cryptography is a difficult subject that necessitates abilities from a variety of seemingly unrelated fields. There is a serious risk that attempts to establish Financial Cryptography frameworks would simplify or omit key disciplines because they are caught between central banking and cryptography. This paper discusses research that attempts to limit the scope of Financial Cryptography. This model should assist the project, administrative, and requirements personnel by classifying each discipline into a seven-layer model of basic nature, where the link between each adjoining layer is evident. While this model is shown as effective, all models have cutoff points. This one does not present a design system or a protocol agenda. Furthermore, given the model's initial adaptation and the field, it should be viewed as a suggestion of complexity rather than a definitive approach.
Chao Liu, Xiaoshuai Zhang, Kok Koeng Chai, Jonathan Loo · 5 authors
Abstract Electric power grid infrastructure has revolutionized our world and changed the way of living. So has blockchain technology. The hierarchical electric power grid has been shifting from a centralized structure to a decentralized structure to achieve higher flexibility and stability, and blockchain technology has been widely adopted in the energy sector to deal with grid management, billing, metering, and so on, because of its nature of decentralization. Here, the aim is to provide a multi‐dimensional review on the technological advances of the blockchain in smart grids. Its corresponding applications based on these advances, including company projects and use cases, are summarized. Furthermore, the security threat issues in smart grids, Ethereum Virtual Machine (i.e. the operating environment of consensus mechanisms), and smart contracts are analysed, with a brief conclusion to manifest the prior tasks in building secure blockchain‐based infrastructures in smart grids. As such, the challenges and features of different protocols and their applicability in each use case are identified to provide an insightful guide for future research studies.
Nowadays, smart applications are increasing day by day to improve the standard of living in smart cities. A modern-day smart city is characterized by the presence of numerous smart Information and Communication Technology (ICT)-enabled services such as automated healthcare, automatic building monitoring, home automation, smart parking, traffic management, data security, among others. Such cities employ multitudes of Internet of Things (IoT) devices to collect and share data between trusted users by means of a centralized intermediary for monitoring and control of the myriad automatic activities. However, a centralized intermediary is plagued by issues such as single point of failure, risk of data loss, man-in-the-middle attack, and so forth. Blockchain-based smart contracts for automated control in smart cities provide a decentralized and secure alternative. In this paper, an Ethereum based system design for decentralized applications in smart cities has been proposed that enables systems to share data without an intermediary between trusted and non-trusted stakeholders using Ethereum based self-executing contracts. Such contracts allow automated multi-step workflows for smart applications. Two use cases, have been considered namely smart healthcare and smart building monitoring, as proof of stake of the proposed Ethereum based contract. The performance of the proposed scheme for these use cases has been presented with Keccack 256 transaction hash, the total number of transactions, gas consumed by each contract. Such an attempt is a worthwhile addition to state of the art as evident from the results presented herein. The modeling simulation and analysis of hashing power shows that for hashing power greater than 55% the probability of double spending attack reaches to 42% maximum. So it is concluded that the probability of double spending increases with the increase of transaction values.
The work presented in this thesis describes the design and development of smart contract system for blockchain based applications. The main objective is to investigate the current state of blockchain technology and its implementations and to reveal how main principles of this disruptive technology can reshape "business as normal" activities. This work examines the Blockchain technology as a whole and addresses its potential for the development of distributed applications. Blockchain based smart contract system for different applications that demonstrate a streamlined access management system using Ethereum blockchain has been designed and implemented. Ethereum reinforces the second gen of blockchain technology by providing an open and global computing/environment platform allowing for the exchange of cryptocurrency (Ether) and the creation of self-verified smart contract applications. Smart contracts provide a framework for the ownership of digital assets and a range of distributed applications in the blockchain region. Ethereum and smart contracts are open, decentralized and unalterable, as such, they are susceptible to vulnerabilities that arise from developers ' simple coding errors. We have designed and implemented smart contract system for blockchain based applications across healthcare management to Facilitate Medical Ecosystems and Energy systems to increase energy efficiency by designing smart contract system for energy-saving certificates. We also identified key themes, developments and emerging areas of healthcare and energy research. In this thesis, blockchain technology has been applied in areas such as healthcare and Energy sector. Healthcare applications are the main contribution of this thesis and the work on the Energy systems reflects as an additional contribution of this thesis. Hopefully the work presented in this thesis will give enough motivation towards developing distributed applications (ĐApps) using blockchain based smart contract system.
Blockchain is a novel distributed ledger technology. Through its features and smart contract capabilities, a wide range of application areas opened up for blockchain-based innovation [5]. In order to analyse how concrete blockchain systems as well as blockchain applications are used, data must be extracted from these systems. Due to various complexities inherent in blockchain, the question how to interpret such data is non-trivial. Such interpretation should often be shared among parties, e.g., if they collaborate via a blockchain. To this end, we devised an approach codify the interpretation of blockchain data, to extract data from blockchains accordingly, and to output it in suitable formats [1, 2]. This work will be the main topic of the keynote. In addition, application developers and users of blockchain applications may want to estimate the cost of using or operating a blockchain application. In the keynote, I will also discuss our cost estimation method [3, 4]. This method was designed for the Ethereum blockchain platform, where cost also relates to transaction complexity, and therefore also to system throughput.
Vehicular crowd sensing is a promising approach to address the problem of traffic data collection by leveraging the power of vehicles. In various applications of vehicular crowd sensing, there exist two burning issues. First, privacy can be easily compromised when a vehicle is performing a crowd sensing task. Second, vehicles have no incentive to submit high-quality data due to the lack of fairness, which means that everyone gets the same paid, regardless of the quality of the submitted data. To address these issues, we propose a smart privacy-preserving incentive mechanism (SPPIM) for vehicular crowd sensing. Specifically, we first propose a new SPPIM model for the scenario of vehicular crowd sensing via smart contract on the blockchain. Then, we design a privacy-preserving incentive mechanism based on budget-limited reverse auction. Anonymous authentication based on zero-knowledge proof is utilized to ensure the privacy preservation of vehicles. To ensure fairness, the reward payments of winning vehicles are determined by not only the bids of vehicles but also their reputation and the data quality. Then, any rewarded vehicle can get the fair payment; on the contrary, malicious vehicles or task initiators will be punished. Finally, SPPIM is implemented by using smart contracts written via Solidity on a local Ethereum blockchain network. Both security analysis and experimental results show that the proposed SPPIM achieves privacy preservation and fair incentives at acceptable execution costs.
Purpose Blockchain technology offers a lot of potential benefits in supply chain management. However, there is a need of a reference model which addresses the gaps in existing frameworks. This paper aims to propose a blockchain technology-based reference model which can be applied to global logistics operations. Design/methodology/approach The researchers have integrated the fit-for-purpose theoretical framework and prototyping methodology to design the reference model, a blockchain-based logistics, tracking and traceability system (BLTTS). The researchers demonstrated the application of the reference model through a health-care supply chain case study. The proposed BLTTS can be implemented across global logistics operations for business performance improvement. Findings The research provides a framework and recommendations for global companies to consider when adopting the blockchain technology for implementation. The researchers found that the Ethereum blockchain technology improves security of the data shared within the block through the secure hashing algorithm 1. The hash algorithm ensures anonymity of the involved parties. The model integrates blockchain with supply chain thus creating transparent process, efficiency and real-time communication. Research limitations/implications The reference model will offer a better solution to global logistics operations challenges. It provides recommendations to key stakeholders involved in logistics operations segment of the logistics industry while adopting blockchain technology. Apart from the methodological limitation of the study, the system compatibility and the layer configuration aspects might be posing potential challenges while upscaling the implementation. Originality/value The proposed reference model overcomes the drawbacks of existing models as it integrates Ethereum technology. In addition, the researchers have applied the model to demonstrate its functioning in real-time environment, which could guide for future research.
Jose Eduardo A. Sousa, Vinícius Cunha Oliveira, Júlia Almeida Valadares, Alex Borges Vieira · 7 authors
Ethereum is one of the most popular cryptocurrency currently and it has been facing security threats and attacks. As a consequence, Ethereum users may experience long periods to validate transactions. Despite the maintenance on the Ethereum mechanisms, there are still indications that it remains susceptible to a sort of attacks. In this work, we analyze the Ethereum network behavior during an under-priced DoS attack, where malicious users try to perform denial-of-service attacks that exploit flaws in the fee mechanism of this cryptocurrency. We propose the application of machine learning techniques and ensemble methods to detect this attack, using the available transaction attributes. The proposals present notable performance as the Decision Tree models, with AUC-ROC, F-score and recall larger than 0.94, 0.82, and 0.98, respectively.
Vinícius Cunha Oliveira, Júlia Almeida Valadares, Jose Eduardo A. Sousa, Alex Borges Vieira · 7 authors
Ethereum has emerged as one of the most important cryptocurrencies in terms of the number of transactions. Given the recent growth of Ethereum, the cryptocurrency community and researchers are interested in understanding the Ethereum transactions behavior. In this work, we investigate a key aspect of Ethereum: the prediction of a transaction confirmation or failure based on its features. This is a challenging issue due to the small, but still relevant, fraction of failures in millions of recorded transactions and the complexity of the distributed mechanism to execute transactions in Ethereum. To conduct this investigation, we train machine learning models for this prediction, taking into consideration carefully balanced sets of confirmed and failed transactions. The results show high-performance models for classification of transactions with the best values of F1-score and area under the ROC curve approximately equal to 0.67 and 0.87, respectively. Also, we identified the gas used as the most relevant feature for the prediction.
The Non-Fungible Token (NFT) market is mushrooming in recent years. The concept of NFT originally comes from a token standard of Ethereum, aiming to distinguish each token with distinguishable signs. This type of token can be bound with virtual/digital properties as their unique identifications. With NFTs, all marked properties can be freely traded with customized values according to their ages, rarity, liquidity, etc. It has greatly stimulated the prosperity of the decentralized application (DApp) market. At the time of writing (May 2021), the total money used on completed NFT sales has reached $34,530,649.86$ USD. The thousandfold return on its increasing market draws huge attention worldwide. However, the development of the NFT ecosystem is still in its early stage, and the technologies of NFTs are pre-mature. Newcomers may get lost in their frenetic evolution due to the lack of systematic summaries. In this technical report, we explore the NFT ecosystems in several aspects. We start with an overview of state-of-the-art NFT solutions, then provide their technical components, protocols, standards, and desired proprieties. Afterward, we give a security evolution, with discussions on the perspectives of their design models, opportunities, and challenges. To the best of our knowledge, this is the first systematic study on the current NFT ecosystems.
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Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
The function of money plays an essential and indisputable role in the development of trade. Typically, banknotes and coins have always been introduced by central authorities. Emerging after the 2008 crisis, however, Bitcoin, considered to be the original cryptocurrency, contributed to money in an unprecedented dimension as it is the first decentralized peer-to-peer payment network. Cryptocurrencies are in constant interaction and the casualty relationship, among other variables, with Brent Oil. This study attempts to investigate the relationship between Bitcoin, Ethereum and Brent Oil price movements using 210 daily data from 10.12.2019 to 01.10.2020, featuring the period of the start and the spread of the COVID-19 pandemic. In this study, the casualty relationship among Brent Oil, Bitcoin and Ethereum was examined with the Granger Causality test. As a result of the study, a bidirectional casualty relationship is determined between Brent Oil and Ethereum. However, a one-way causality relationship is found between Brent Oil and Bitcoin. On the other hand, there is no causality relationship between Ethereum and Bitcoin.
Blockchain technology has a great potential for improving efficiency, security and privacy of Electronic Health Records (EHR) sharing systems. However, existing solutions relying on a centralized database are susceptible to traditional security problems such as Denial of Service (DoS) attacks and a single point of failure similar to traditional database systems. In addition, past solutions exposed users to privacy linking attacks and did not tackle performance and scalability challenges. In this paper, we propose a permissioned Blockchain based healthcare data sharing system that integrates Blockchain technology, decentralized file system and threshold signature to address the aforementioned problems. The proposed system is based on Istanbul Byzantine Fault Tolerant (IBFT) consensus algorithm and Interplanetary File System (IPFS). We implemented the proposed system on an enterprise Ethereum Blockchain known as Hyperledger Besu. We evaluated and compared the performance of the proposed system based on various performance metrics such as transaction latency, throughput and failure rate. Experiments were conducted on a variable network size and number of transactions. The experimental results indicate that the proposed system performs better than existing Blockchain based systems. Moreover, the decentralized file system provides better security than existing traditional centralized database systems while providing the same level of performance.
Recently, with the vigorous development of Decentralized Finance (DeFi) on Ethereum blockchain, the economic value and user scale of Ethereum keep growing. However, the low transaction processing capability of Ethereum prevents its further development. One factor that limits the transaction processing capability is the bandwidth required to synchronize the blocks over the nodes in the Ethereum network. This work proposes a new block synchronization protocol, referred to as LightBlock, which is dedicated to reducing the bandwidth used by the Ethereum network to disseminate messages. The LightBlock protocol is of great significance to the improvement of TPS. Since Ethereum's block synchronization protocol is a kind of gossip protocol, the redundant message propagation is its inherent shortcoming. In the LightBlock protocol, we use transaction Hash to replace the transaction of the original block to form a LightBlock structure. The propagation of LightBlock structure requires a much smaller bandwidth resource than the propagation of the original block has. Moreover, in order to reduce the communication overhead of the new protocol, each node needs to predict the missing transactions of its neighbor nodes before propagating the LightBlock strcuture. Therefore, we set up three models to measure the similarity of the current Ethereum node transaction pool and other parameters. Through analysis, the size of LightBlock is reduced by an average of 83.55% compared to the size of the current block; after adding the function of predicting missing transactions, the probability of not increasing the number of additional communications increases from 0.2 to 0.398.
Ethereum Smart Contracts based on Blockchain Technology (BT)enables monetary transactions among peers on a blockchain network independent of a central authorizing agency. Ethereum smart contracts are programs that are deployed as decentralized applications, having the building blocks of the blockchain consensus protocol. This enables consumers to make agreements in a transparent and conflict-free environment. However, there exist some security vulnerabilities within these smart contracts that are a potential threat to the applications and their consumers and have shown in the past to cause huge financial losses. In this study, we review the existing literature and broadly classify the BT applications. As Ethereum smart contracts find their application mostly in e-commerce applications, we believe these are more commonly vulnerable to attacks. In these smart contracts, we mainly focus on identifying vulnerabilities that programmers and users of smart contracts must avoid. This paper aims at explaining eight vulnerabilities that are specific to the application level of BT by analyzing the past exploitation case scenarios of these security vulnerabilities. We also review some of the available tools and applications that detect these vulnerabilities in terms of their approach and effectiveness. We also investigated the availability of detection tools for identifying these security vulnerabilities and lack thereof to identify some of them
For applications of Byzantine fault tolerant (BFT) consensus protocols where the participants are economic agents, recent works highlighted the importance of accountability: the ability to identify participants who provably violate the protocol. At the same time, being able to reach consensus under dynamic levels of participation is desirable for censorship resistance. We identify an availability-accountability dilemma: in an environment with dynamic participation, no protocol can simultaneously be accountably-safe and live. We provide a resolution to this dilemma by constructing a provably secure optimally-resilient accountability gadget to checkpoint a longest chain protocol, such that the full ledger is live under dynamic participation and the checkpointed prefix ledger is accountable. Our accountability gadget construction is black-box and can use any BFT protocol which is accountable under static participation. Using HotStuff as the black box, we implemented our construction as a protocol for the Ethereum 2.0 beacon chain, and our Internet-scale experiments with more than 4000 nodes show that the protocol achieves the required scalability and has better latency than the current solution Gasper, which was shown insecure by recent attacks.
Within cryptoassets we can find cryptocurrencies (e.g. Bitcoin, Ethereum) and digital tokens which are specific right or value representatives. One of areas that there are a lot of doubts regarding these new technological solutions is accounting. It is not clear how we can classify particular groups of cryptoassets and how to value them in financial statement. The aim of the chapter is to present the essence, use and valuation issues of cryptoassets and also to review the definitions of selected asset groups in the currently applicable accounting regulations to identify those asset groups to which cryptocurrencies can be classified. The chapter also discusses available accounting models under IFRS, with a major focus being put on the recognition and presentation in balance sheet. The assessment of models is based on distinguishing different types of tokens (payment, security, utility) as well as on differentiating between holders’ and issuers’ perspective.
This paper sets out to explore the nexus between economic policy uncertainty (EPU) and digital currencies. An integrated survey takes place based on eleven primary studies. Furthermore, an econometric analysis is conducted by the threshold ARCH, simple asymmetric ARCH and non-linear ARCH specifications covering the bull and the bear markets as well as the highly volatile period up to the present. Threshold ARCH is found to provide the best fit for estimations. Outcomes reveal that Bitcoin is strongly connected with EPU while Ethereum and Litecoin are not but are strongly linked with Bitcoin performance. Moreover, weak negative effects of the VIX on both cryptocurrencies are detected while oil exerts weak positive impacts on Ethereum. Overall, Ethereum and Litecoin could serve for diversifiers against Bitcoin or hedgers against traditional assets during highly stressed periods with the advantage of not being affected by economic policy uncertainty news.