Recent technological progresses made it possible for complementary and community currencies to be increasingly transformed into digital currencies. An increasing number of them run on blockchain, a technology that allows for greater decentralization and trust-less systems. This fusion between social and cryptocurrencies opens a series of questionings: can social currencies maintain their values regarding the creation of community and a fuller citizenship? Is the total decentralization an important value for the communities that use social currencies? Can "trust", as defined for these monetary systems be replaced by a system that presupposes it? These comprehensive questions conform our current research project. With an inductive and multidisciplinary plan of demonstration in mind, this particular document tries to put in discussion the characteristics and potentialities, as well as the problems, limits and tensions generated by the circulation of digital currencies that run on Blockchain (cryptocurrencies), leaving for future research the in-depth discussion that this new mixture of technologies brings up. These issues will be addressed by studying the case of a digital social currency system running on blockchain, based on mutual credit, implemented in Argentina today: MonedaPAR, which was conceived as a defense mechanism against the economic crisis that plagues Argentina since 2016.
Abstract This article is an attempt to reconcile the requirements of the EU General Data Protection Regulation (GDPR) and anti-money laundering and combat terrorist financing (AML/CFT) instruments used in permissionless ecosystems based on distributed ledger technology (DLT). Usually, analysis is focused only on one of these regulations. Covering by this research the interplay between both regulations reveals their incoherencies in relation to permissionless DLT. The GDPR requirements force permissionless blockchain communities to use anonymization or, at the very least, strong pseudonymization technologies to ensure compliance of data processing with the GDPR. At the same time, instruments of global AML/CFT policy that are presently being implemented in many countries following the recommendations of the Financial Action Task Force, counteract the anonymity-enhanced technologies built into blockchain protocols. Solutions suggested in this article aim to induce the shaping of permissionless DLT-based networks in ways that at the same time would secure the protection of personal data according to the GDPR rules, while also addressing the money laundering and terrorist financing risks created by transactions in anonymous blockchain spaces or those with strong pseudonyms. Searching for new policy instruments is necessary to ensure that governments do not combat the development of all privacy-blockchains so as to enable a high level of privacy protection and GDPR-compliant data processing. This article indicates two AML/CFT tools which may be helpful for shaping privacy-blockchains that can enable the feasibility of such tools. The first tool is exceptional government access to transactional data written on non-transparent ledgers, obfuscated by advanced anonymization cryptography. The tool should be optional for networks as long as another effective AML/CFT measures are accessible for the intermediaries or for the government in relation to a given network. If these other measures are not available and the network does not grant exceptional access, the regulations should allow governments to combat the development of those networks. Effective tools in that scope should target the value of privacy-cryptocurrency, not its users. Such tools could include, as a tool of last resort, state attacks which would undermine the trust of the community in a specific network.
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.
Use of distributed ledger technologies like blockchain is becoming more common in transportation/mobility ecosystems. However, cyber-security failures may occur at places where the blockchain system connects with the real world. In this paper, we propose a novel risk assessment framework for blockchain applications in smart mobility. We aim at systematically quantifying the risk by presenting ordinal values because although vulnerabilities exist in a system, it's the probability that they can be exploited and the impact of this exploitation that determine if in fact, the vulnerability corresponds to a significant risk. As a case study, we carry out an analysis in terms of quantifying the risk associated to a multi-layered Blockchain framework for Smart Mobility Data-markets (BSMD). We first construct an actor-based analysis to determine the impact of the attacks. Then, a scenario-based analysis determines the probability of occurrence of each threat. Finally, a combined analysis is developed to determine which attack outcomes have the highest risk. In the case study of the public permissioned BSMD, the outcomes of the risk analysis highlight the highest risk factors according to their impact on the victims in terms of monetary, privacy, integrity and trust. The analysis uncovers specific blockchain technology security vulnerabilities in the transportation ecosystem by exposing new attack vectors.
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.
This literature review covers hyperinflation in Venezuela, from the 1980s to the present. Particular emphasis is placed on the role of cryptocurrency in the country and how the Venezuelan government has been using crypto, specifically the Petro, as a means to avoid further blunders with hyperinflation. From Hugo Chávez and “Socialism of the 21st Century” to the current regime of Nicolás Maduro, Chávez’ successor, the printing of money in Venezuela has sky-rocketed to the point of the government needing cryptocurrency, such as Bitcoin, as a means of circumventing inflation to fund the government’s ambitious social projects. A key element in its success, however, will be whether the Venezuelan people will opt to use the government-backed Petro, or whether they will opt to use a different, decentralized alternative digital currency to avoid the perils of hyperinflation. The paper will examine this issue from several diverse points of view: specifically, the Austrian School (Echarte Fernández, Hernández, & Zambrano, 2018), the neo-Keynesian school (Pagliacci & Barráez, 2010), and public policy and institutional perspective (Corrales, 1999). The use of cryptocurrencies by governments, in particular socialist governments, is a new occurrence and merits much attention for the future of public and monetary policy in those countries.
Nektarios Aslanidis, Aurelio F. Bariviera, Óscar G. López
This paper shows that Bitcoin is not correlated to a general uncertainty index as measured by the Google Trends data of Castelnuovo and Tran (2017). Instead, Bitcoin is linked to a Google Trends attention measure specific for the cryptocurrency market. First, we find a bidirectional relationship between Google Trends attention and Bitcoin returns up to six days. Second, information flows from Bitcoin volatility to Google Trends attention seem to be larger than information flows in the other direction. These relations hold across different sub-periods and different compositions of the proposed Google Trends Cryptocurrency index.
Jan 1, 2021·Proceedings of the ... Annual Hawaii International Conference on System Sciences/Proceedings of the Annual Hawaii International Conference on System Sciences
This paper demonstrates the use of network analysis to identify core nodes associated with ransomware attacks in cryptocurrency transaction networks. The method helps trace the cyber entities involved in cryptocurrency attacks and supports intelligence efforts to identify and disrupt cryptocurrency networks. A data corpus is built by the unsupervised machine learning graph algorithm ‘DeepWalk’ [1]. DeepWalk evaluates the position of nodes within networks. It compares the relative position of different nodes (similarity) and identifies those whose removal would most affect the network (riskiness). This method helps identify on the blockchain the key nodes that are involved in the execution of a ransomware attack. When applied to the ransomware “cash out” graph, the method derived “riskiness” scores for specific nodes. Analysing the derived “riskiness” at a community level (groups of nodes in the network) provides an enhanced granularity for identifying and targeting influential nodes. Such insight could potentially support both intelligence and forensics investigations.
Central banks and governments all over the world are increasingly exploring digital versions of fiat money, known as retail Central Bank Digital Currencies (CBDCs). Most initiatives rely on Distributed Ledger Technologies and are presented as alternatives to physical cash. Consequently, anonymity-related regulatory questions have naturally started to arise in terms of Anti-Money Laundering and Counter-Terrorist Financing compliance. Against this backdrop, this paper provides a techno-legal taxonomy of approaches to balance privacy and transparency in CBDCs without thwarting accountability, but it also underlines cross-sectoral impacts. The contribution heeds regulation-by-design as its core methodological foundation, with Privacy-Enhancing Technologies as the relevant use case. Thus, it highlights that not only technology aids legal purposes, but also that some regulatory requirements ought to be designed into technology for one to reach agreed-upon results and/or standards.
Non-Fungible Token (NFT) is regarded as one of the important applications of blockchain technology. In this article, we propose an asset-backed securities (ABS) scheme that splits the complete NFT into a certain number of units, which are shared by multiple participants. On the one hand, ABS plans to promise high-value and long-term investment returns by enhancing the market liquidity of NFTs. On the other hand, securitized NFTs can participate in De-Fi as an automated market maker (AMM), just like AMM in alternative tokens. However, when a participant with a portion of the NFT tries to obtain full ownership of the NFT, the acquisition process may face some obstacles, including strategic bidding. Therefore, we proposed a game theory model and de- signed a novel NFT repurchase mechanism to overcome these obstacles. Our solution helps to successfully carry out the repurchase process at a reasonable price when issuing single-chip NFT asset-backed securities.
Non Fungible Token (NFT) Industry has been witnessing multi-million dollar trade in recent times. With rapid innovation of the NFT market environment by technology, innovation, and decentralization, it is becoming hard to distinguish between genuine NFT from fads and scams. This article discuss the NFT market microstructure, with a focus on price formation, market structure, transparency, and applications to other financial areas. Market manipulation in NFT market with the context of wash-sale patterns has also been surveyed. The article concludes by providing pointers on due-diligence activity that can be adopted by investors to mitigate NFT trading risk.
This chapter reviews the history of blockchain from its ideation in the early 1990s to the widespread development efforts of private enterprise and governments two decades into the 21st century. The chapter covers the early developments in securing the digital record; the origins of the immutable, decentralized ledger; and trustless digital transactions. The key people in blockchain's development are addressed including the pseudonymous Satoshi Nakamoto, developer of the first cryptocurrency, Bitcoin, which became for a while synonymous with blockchain. The successes and failures of blockchain are covered in this history as well as its status and the problems that need to be solved for blockchain to have a global economic and cultural impact.
Валерія Аркадіївна Динту, В. А. Динту, Валерия Аркадиевна Дынту, Валерия Аркадиевна Дынту · 9 authors
The purpose of the article is to explain the use of cryptocurrency as a terrorist financing tool. This article has emphasized the ways, which terrorists appraise for being a reliable fundraising means and their adoption. Methodology. For the purposes of the study, the methods of scientific abstraction, synthesis, observation, generalization, as well as the method of induction of literature and legal documents were used to determine the features of bitcoin, promoting and preventing its use for terrorism financing. Results. The development of the Internet and electronic devices has radically changed all spheres of human life, including criminal activity. Digitalization has led to the improvement of ordinary crimes and the emergence of new types of crime, which, in principle, cannot exist without special digital electronic devices. Among the first implementers of new technologies were terrorists, who took advantage of digitalization to increase profitability. Thus, terrorists have now significantly increased their attention to cryptocurrency as a digital means of payment, namely Bitcoin. Bitcoin has a number of features that have attracted the attention of criminals as a way to evade responsibility for a crime. In particular, decentralization avoids the need for confirmation by a central authority, and pseudo-anonymity provides a certain level of anonymity. In addition, terrorists are aware that Bitcoin's confidentiality is extremely fragile and needs to be enhanced. The paper analyzes several ways to enhance anonymity, such as software that anonymizes traffic and prevents IP identification, peer-to-peer mixers, centralized mixing services (tumbler), and other approaches. It is worth emphasizing that for the fight against crime, the main issue is the de-anonymization of the Bitcoin owner/user, which allows the identification of the criminal. Currently, law enforcement agencies use direct and indirect de-anonymization, proliferation analysis, quantitative analysis, time analysis, and transactional network analysis, among others, to achieve the above goal, which are discussed in detail in this article. In addition, agencies around the world investigated and uncovered terrorist groups and their financial facilitators. Specifically, on August 13, 2020, the U.S. Department of Justice's Office of Public Affairs announced "the largest cryptocurrency seizure in the context of terrorism in history." To investigate the agenda, the legal documents of those investigations that contain information about the terrorist fund-raising mechanism were examined and analyzed. The legal documents revealed that these investigations used the aforementioned de-anonymization approaches.
Han Yu, Tiantian Ji, Zhongru Wang, Hao Liu · 7 authors
A smart contract honeypot is a special type of smart contract. This type of contract seems to have obvious vulnerabilities in contract design. If a user transfers a certain amount of funds to the contract, then the user can withdraw the funds in the contract. However, once users try to take advantage of this seemingly obvious vulnerability, they will fall into a real trap. Consequently, the user’s investment in the contract cannot be retrieved. The honeypot induces other accounts to launch funds, which seriously threatens the security of property on the blockchain. Detection methods for honeypots are available. However, studying the manner by which to defend existing honeypots is insufficient to fight against honeypots. The new honeypots that may appear in the future from the perspective of an attacker must also be predicted. Therefore, we propose a type of adversarial honeypot. The code and behavioral features of honeypots are obtained through a comparative analysis of the 158,568 non-honeypots and 352 honeypots. To build an adversarial honeypot, we try to separately hide these features and make the honeypot bypass the existing detection technology. We construct 18 instances on the basis of the proposed adversarial honeypot and use an open-source honeypot detection tool to detect these instances. The experimental result shows that the proposed honeypot can bypass the detection tool with a 100% ratio. Therefore, this type of honeypot should be given attention, and defensive measures should be proposed as soon as possible.
Diego Cagigas, Judith Clifton, Daniel Díaz‐Fuentes, Marcos Fernández Gutiérrez
Blockchain is heralded as being “the next big thing” that promises to radically transform society and the economy in near-future applications. While scholarly literature on blockchain has largely focused on bitcoin and cryptofinance, in recent years, a body of scholarship has started to emerge on blockchain in the public sector. The characteristics of blockchain have made it a promising technology to transform many activities related to public policy and public service provision, such as administrative processes, welfare provision and regulation practices. This article provides, to the best of our knowledge, the first systematic literature review of the use of blockchain across all the main public services. This systematic review identifies the public services most likely to be impacted by the introduction of blockchain. It also highlights the main potential benefits, costs and risks of blockchain for government, civil servants and citizens. Governments are found to benefit mainly from improvements in efficiency and traceability, while regulatory uncertainty and questions around scalability represent major costs and risks for them. Civil servants, the least studied actor in the literature, could benefit from blockchain through the reduction of red tape and improvements in coordination between agencies. Their lack of blockchain knowledge and skills represent a major cost as regards adoption. Regarding citizens, security and transparency are identified as being the most important benefits, while risks are mainly associated with data security concerns. The article concludes by noting several limitations in the literature and providing suggestions towards fruitful lines of research.
Building on the groundswell of scholarly, practitioner, cultural, and investor interest in non-fungible tokens (NFTs), the aim of this paper is twofold. First, the paper presents early thoughts on the NFT space circa 2021, allowing for an ex-post evaluation of the assessments made at the time. Second, the paper recommends a multidisciplinary research agenda on NFTs, as encapsulated in the edited volume Non-Fungible Tokens (NFTs): Multidisciplinary Perspectives, highlighting the main areas of research promise and avenues of further enquiry. As such, the paper attempts to serve as a form of shorthand-guidebook for researchers interested in the domain of NFTs.