Blockchain Papers

Jona Stinner

No abstract is available for this record.

Novriana Sumarti, Febi A. D. F. Suryawan, Ahmad R. Sumitro

This paper develop an approach to evaluate Bitcoin Mining Project using Real Option Method. In evaluating a project not yet being run, there is opportunity made available to the manager of company to expand or abandon the project if some particular conditions would occur in the time period being projected. The methods are based on Binomial Tree with varying time of Learning Option. Having evaluated the project for five years, it concludes that the project with Real Option methods can increase the value of the project.

Ilya Sergey

No abstract is available for this record.

Guenther Dobrauz-Saldapenna, Mark A. Schrackmann

No abstract is available for this record.

Amir Kafshdar Goharshady

Suppose that Alice plans to buy a physical good from Bob over a programmable Blockchain. Alice does not trust Bob, so she is not willing to pay before the good is delivered off-chain. Similarly, Bob does not trust Alice, so he is not willing to deliver the good before getting paid on-chain. Moreover, they are not inclined to use the services of a trusted third-party. Traditionally, such scenarios are handled by game-theoretic escrow smart contracts, such as BitHalo. In this work, we first show that the common method for this problem suffers from a major flaw which can be exploited by Bob in order to extort Alice. We also show that, unlike the case of auctions, this flaw cannot be addressed by a commitment-scheme-based approach. We then provide a much more general result: assuming that the two sides are rational actors and the smart contract language is Turing-complete, there is no escrow smart contract that can facilitate this exchange without either relying on third parties or enabling at least one side to extort the other.∗∗A preprint of this work appeared in [1].

Alon Benhaim, Brett Hemenway, Gerry Tsoukalas

In the high-stakes race to develop more scalable blockchains, some platforms (Binance, Cosmos, EOS, TRON, etc.) have adopted committee-based consensus (CBC) protocols, whereby the blockchain's record-keeping rights are entrusted to a committee of elected block producers. In theory, the smaller the committee, the faster the blockchain can reach consensus and the more it can scale. What's less clear, is whether such protocols ensure that honest committees can be consistently elected, given blockchain users typically have limited information on who to vote for. We show that the approval voting mechanism underlying most CBC protocols is complex and can lead to intractable optimal voting strategies. We empirically characterize some simpler intuitive voting strategies that users tend to resort to in practice and prove that these nonetheless converge to optimality exponentially quickly in the number of voters. Exponential convergence ensures that despite its complexity, CBC exhibits robustness and has some efficiency advantages over more popular staked-weighted lottery protocols currently underlying many prominent blockchains such as Ethereum.

Mathias Hall-Andersen, Nikolaj I. Schwartzbach

We propose a model for games in which the players have shared access to a blockchain that allows them to deploy smart contracts to act on their behalf. This changes fundamental game-theoretic assumptions about rationality since a contract can commit a player to act irrationally in specific subgames, making credible otherwise non-credible threats. This is further complicated by considering the interaction between multiple contracts which can reason about each other. This changes the nature of the game in a nontrivial way as choosing which contract to play can itself be considered a move in the game. Our model generalizes known notions of equilibria, with a single contract being equivalent to a Stackelberg equilibrium, and two contracts being equivalent to a reverse Stackelberg equilibrium. We prove a number of bounds on the complexity of computing SPE in such games with smart contracts. We show that computing an SPE is \(\textsf {PSPACE}\)-hard in the general case. Specifically, in games with k contracts, we show that computing an SPE is \(\varSigma _k^\textsf {P}\)-hard for games of imperfect information. We show that computing an SPE remains \(\textsf {PSPACE}\)-hard in games of perfect information if we allow for an unbounded number of contracts. We give an algorithm for computing an SPE in two-contract games of perfect information that runs in time \(O(m\ell )\) where m is the size of the game tree and \(\ell \) is the number of terminal nodes. Finally, we conjecture the problem to be \(\textsf {NP}\)-complete for three contracts.

Renita Murimi, Grace Guiling Wang

A fundamental open question for oracles in blockchain environments is a determination of the amount of trust to be placed in the oracle. Oracles serve as intermediaries between a trusted blockchain environment and the untrusted external environment from where the oracles fetch data. As such, it is important to understand the uncertainty introduced by the oracle in the trusted blockchain environment and the implications of this uncertainty on blockchain performance. This paper develops a model for commoditization of trust. The model provides for dynamic trust environments that incorporates oracle selfishness. The work also considers the equilibrium behavior for the demand and supply for trust and introduces elastic incentives for increasing the trust. These results are used to determine optimum size of the network that can be served by an oracle with varying degrees of selfishness. Key consequences and challenges of incorporating oracles in trusted distributed ledger environments are presented.

Vincenzo Botta, Daniele Friolo, Daniele Venturi, Ivan Visconti

In this work, we consider executions of smart contracts for implementing secure multi-party computation (MPC) protocols on forking blockchains (e.g., Ethereum), and we study security and delay issues due to forks. In this setting, the classical double-spending problem tells us that messages of the MPC protocol should be confirmed on-chain before playing the next ones, thus slowing down the entire execution. Our contributions are twofold: For the concrete case of fairly tossing multiple coins with penalties, we notice that the lottery protocol of Andrychowicz et al. (S&P ’14) becomes insecure if players do not wait for the confirmations of several transactions. In addition, we present a smart contract that instead retains security even when all honest players immediately answer to transactions appearing on-chain. We analyze the performance using Ethereum as testbed.We design a compiler that takes any “digital and universally composable” MPC protocol (with or without honest majority), and transforms it into another one (for the same task and same setup) which maintains security even if all messages are played on-chain without delays. The special requirements on the starting protocol mean that messages consist only of bits (e.g., no hardware token is sent) and security holds also in the presence of other protocols. We further show that our compiler satisfies fairness with penalties as long as honest players only wait for confirmations once. By reducing the number of confirmations, our protocols can be significantly faster than natural constructions.

Adrian Hofmann, Julian Kolb, Luc Becker, Axel Winkelmann

As blockchain gained a lot of attention in IS research since its emergence, development into networks and applications have made it extremely relevant for multiple industry branches. Yet observations show, that there remains a lack of in-depth knowledge and standardization, particularly in the field of blockchain applications, DApps. These DApps often consist of multiple smart contracts, used to automate different processes and the technical elements have so far remained unexplored in depth. In this paper we address this problem by creating a data-driven taxonomy of the technical elements of 150 smart contracts within 101 DApps following the approach of Nickerson et al. (2013). We identified 28 dimension and 64 characteristics in our technical and code-based taxonomy.

Alon Benhaim, Brett Hemenway, Gerry Tsoukalas

In the high-stakes race to develop more scalable blockchains, some platforms (Cosmos, EOS, TRON, etc.) have adopted committee-based consensus protocols, whereby the blockchain's record-keeping rights are entrusted to a committee of elected block producers. In theory, the smaller the committee, the faster the blockchain can reach consensus and the more it can scale. What's less clear, is whether this mechanism ensures that honest committees can be consistently elected, given voters typically have limited information. Using EOS' Delegated Proof of Stake (DPoS) protocol as a backdrop, we show that identifying the optimal voting strategy is complex and practically out of reach. We empirically characterize some simpler (suboptimal) voting strategies that token holders resort to in practice and show that these nonetheless converge to optimality, exponentially quickly. This yields efficiency gains over other PoS protocols that rely on randomized block producer selection. Our results suggest that (elected) committee-based consensus, as implemented in DPoS, can be robust and efficient, despite its complexity.

S Thomas Zhang

No abstract is available for this record.

Eric Alston, Wilson Law, Ilia Murtazashvili, Martin B. H. Weiss

Abstract Institutional economists have analyzed permissionless blockchains as a novel institutional building block for voluntary economic exchange and distributed governance, with their unique protocol features such as automated contract execution, high levels of network and process transparency, and uniquely distributed governance. But such institutional analysis needs to be complemented by polycentric analysis of how blockchains change. We characterize such change as resulting from internal sources and external sources. Internal sources include constitutional (protocol) design and collective-choice processes for updating protocols, which help coordinate network participants and users. External sources include competitive pressure from other cryptocurrency networks. By studying two leading networks, Bitcoin and Ethereum, we illustrate how conceptualizing blockchains as competing and constitutional polycentric enterprises clarifies their processes of change.

Ricardo Barbosa, Ricardo Santos, Paulo Nováis

No abstract is available for this record.

Laura Lepomäki, Juho Kanniainen, Henri Hansen

Due to counterparty risks, some Bitcoin trading platforms allow users to rate the level of trust they have in others. We examine users' feedback behaviour on two Bitcoin trading platforms and provide statistically strong evidence that the feedback behaviour of Bitcoin users is dependent on how they are rated themselves, that is, they retaliate. In addition, user's reputation is strongly and positively associated with the scores they deliver, and there is a certain persistence in the scores a user gives to others. We find that peers deliver negative feedback relatively quickly to users with bad reputation. Moreover, well-reputed users withhold negative feedback longer and give positive feedback faster than users with bad reputation.

Marco Lambrecht, Andis Sofianos, Yilong Xu

We investigate how key features associated with the Proof-of-Work consensus mechanism of Bitcoin (commonly referred to as mining) affect pricing. In a controlled laboratory experiment, we observe that price bubble formation can be attributed to mining. Moreover, overpricing is more pronounced if the mining capacity is centralized to a small group of individuals. The order book data reveal that miners seem to play a crucial role in bubble formation. Further probing the mechanism in a second study, we find that both mining costs and decisions jointly with the sluggish rate of supply of the asset contribute to the bubble formation. Our results demonstrate that erratic pricing is an inherent feature of cryptocurrencies based on a mining protocol, thus seriously limiting any prospects for such assets becoming a medium of exchange. This paper was accepted by Yan Chen, behavioral economics and decision analysis. Funding: The funding provided by the University of Heidelberg, Hanken Foundation [Grant 271-6250], and Durham University is gratefully acknowledged. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.01238 .

Peyman Khezr, Vijay Mohan

No abstract is available for this record.

Baoyi An, Mingjun Xiao, An Liu, Yun Xu · 6 authors

Crowdsensed Data Trading (CDT) is a novel data trading paradigm, where each data consumer can publicize its data demand as some crowdsensing tasks, and some mobile users (i.e., data sellers) can compete for these tasks, collect the corresponding data, and sell the results to the consumers. Existing CDT systems generally depend on a data trading broker, which will inevitably cause consumers concerns on the trustworthiness of the systems and truthfulness of the data. To address this problem, we propose a Blockchain-based Crowdsensed Data Trading (BCDT) system, mainly containing a smart contract, called BCDToken. First, we replace the broker with blockchain to guarantee the trustworthiness of data trading. Meanwhile, BCDToken adopts Blockchain-based Reverse Auction (BRA) to assign tasks to data sellers. BRA holds truthfulness and individual rationality, which can ensure the sellers to report costs honestly and prevent sellers to manipulate the auction. Moreover, we implement a Secure Truth Discovery and reliability Rating (STDR) mechanism in BCDToken based on homomorphic cryptography, which can incentivize sellers to upload the truthful data and consumers to rate truthfully the reliabilities of sellers without revealing any privacy of data. Additionally, we also deploy BCDToken to the test network to demonstrate its practicability.

Mantas Jurgelaitis, Vaidotas Drungilas, Lina Čeponienė, Evaldas Vaičiukynas · 6 authors

No abstract is available for this record.

Jona Stinner, Marcel Tyrell

No abstract is available for this record.

Ryosuke Ushida, James J. Angel

No abstract is available for this record.

Irvin Steve Cardenas, John Brian May, Jonghoon Kim

No abstract is available for this record.

Joshua S. Gans, Neil Gandal

No abstract is available for this record.

Rowena Gan, Gerry Tsoukalas, Serguei Netessine

No abstract is available for this record.