Today, developing technology is one of the most effective tools to make our lives easier. One of these developing technologies is blockchain that enables securely transferring digital assets between peers without requiring a trusted third party. In particular, blockchain poses new opportunities to effectively satisfy transparency, verifiability and anonymity for e-voting schemes. Based on recent proposals, it can be easily seen that applicability of blockchain technology for e-voting systems is actively researched. In this paper, we first summarized the set of e-voting requirements based on studies by Popoveniuc et al., Fujioka et al., Cranor et al., Benaloh et al., Juels et al. and etinkaya et al. In the light of these studies and requirement set, we analyzed recently proposed blockchain-based e-voting systems. As a result of these analyzes, one can determine that a mature blockchain based e-voting system that can meet all criteria has not been proposed yet. Particularly, we show that either the proposed schemes misses the basic requirements or does not fulfill these while claiming otherwise. Additionally, by simulating a large-scale election, we show that time complexity of e-voting schemes utilizing cryptocurrency blockchain such Bitcoin or Ethereum is impractical. Besides, we also emphasize new risks of utilizing public cryptocurrency blockchains for e-voting schemes. Accordingly, the readiness of blockchain-based e-voting has been discussed, from which it can be deduced that it would be more advantageous to research for e-voting specific blockchain technologies instead of utilizing existing cryptocurrency blockchains.
This study explores the return and volatility spillovers between S&P 500 and cryptocurrencies [Litecoin (LTC), Bitcoin (BTC) and Ethereum (ETH)] during the pre-COVID-19 period and COVID-19 period using the VAR–BEKK–AGARCH model on hourly data. Furthermore, this study also quantifies the optimal portfolio weights and hedge ratios during both sample periods. The findings of study show that the return and volatility spillovers between the US stock and cryptocurrency markets are not significant during the pre-COVID-19 period. However, the study finds unidirectional return transmission from S&P 500 to all the cryptocurrencies during the COVID-19 period. During the COVID-19 period, the volatility spillover is unidirectional from S&P 500 to Litecoin, whereas the volatility transmissions are not significant for the pairs of S&P 500–Bitcoin and S&P 500–Ethereum. Based on optimal weights, the portfolio managers are recommended to slightly decrease their investments in S&P 500 for the portfolios of S&P 500/BTC, S&P 500/ETH and S&P 500/LTC during the COVID-19 period. Finally, during the COVID-19 period, all hedge ratios were found to be higher, implying higher hedging costs during the COVID-19 period compared to the pre-COVID-19 period. Our research offers valuable insights to the fund managers, investors and policymakers regarding diversification opportunities, hedging, optimal asset allocation and risk management.
The real estate market in many African countries reflects inefficiency, indiscipline, suspicion, and fraudulent activity. Beyond the direct personal and financial costs, the friction of the existing property transfer process prevents assets from being utilized and valued at their maximum utility. The frustrations and lack of trust affect most real estate markets across Africa, including Ghana, where we will focus the investigation and examples in this paper. Remarkably, the existing Ethereum blockchain platform and smart contract capabilities can be used to bring efficiency, accuracy, trust, and value to the property transfer and registration process without a significant investment in new infrastructure.
Investing in cryptoassets can be tricky. At the moment, there are many different cryptocurrencies operating on different blockchains with different ecosystems. The use of cryptoassets requires defining a goal in relation to the type of cryptoassets and the degree to which their properties affect their functioning and development. In this article, the author analyzes two of the most popular and significant cryptocurrencies for the cryptoindustry Bitcoin and Ethereum on two different blockchains. The author specifically took two cryptocurrencies that are completely different in their meaning and purpose. In view of the fact that the author does not see an ideal solution to several problems, he described the need for diversification of assets by purpose of use. The author describes each cryptocurrency as a separate ecosystem with its own properties, which requires playing by the rules. The author cites socio-economic factors due to which he chose these two blockchains for analysis, tries to analyze the dependence of the properties of each cryptocurrency on the level of popularization, and gives empirical data stating the consequences in a historical context.The author also considers technical properties as a factor of scalability and attractiveness of each of the blockchains, how cryptocurrencies interact with each other, influencing the financial mood of users. The author of the article also tries to determine the technical and social factors that led to the adaptation of these cryptocurrencies to the traditional financial sector and how they depend on each other. The author describes Bitcoin as a system for saving and multiplying funds, while Ethereum sees it as an ecosystem, an intermediary protocol between already formed market sectors and decentralized applications within the network. After analyzing the results of the study, the author provides general criteria for the formation of a methodology for choosing a cryptocurrency and blockchain for conducting effective operational activities, as well as the formation of its own mechanism for managing the efficiency of cryptocurrency operations.
В даній дипломній роботі було досліджено існуючі системи та технології, що дозволяють проводити обмін токенами різних блокчейнів атомарно, розроблено та описано алгоритм проведення атомарного обміну криптовалютами, розроблено хешовані смарт-контракти з часовою затримкою для мереж Bitcoin та Ethereum, розроблено інтерактивну систему, що дозволяє провести атомарний обмін криптовалютами. Результатом дипломної роботи є програмне забезпечення для проведення атомарного обміну криптовалютами для токенів мереж Bitcoin та Ethereum.
Cryptocurrencies are attracting more investors and are reaching higher prices than ever, hence it becomes important to analyse whether the new asset class is a bubble or not. Previous literature on examination of cryptocurrency bubbles has primarily focused on Bitcoin, but the newer cryptocurrencies such as Ethereum are innovating the space with smart contracts, upstaging Bitcoin on some aspects, hence it becomes important to analyse the newer cryptocurrencies apart from Bitcoin as well for rational bubbles. The methods of recursive unit root tests suggested by Phillips, Shi and Yu (2015) has been used in this study to check for the presence of bubbles and to date stamp the periods of exuberance in three major cryptocurrencies: Bitcoin, Ethereum and Ripple from 2016 to 2021. Similarity in exuberance periods of Bitcoin and Ethereum is also detected in this research.
A blockchain system is a distributed ledger that typically maintains ownership of digital assets. Its popularity stems from its promises to automate critical services. A blockchain system operates as a distributed system of nodes and needs them to reach consensus on the current state. The blockchain consensus is still susceptible to the fallacies of distributed computing and in particular, the fact that the network is neither reliable nor secure. \nAs we illustrate in this thesis, the delay of communication in blockchain network allows double-spending, the situation where the same asset could be used concurrently in two transactions or more. This research studies the feasibility of double-spending using network attacks against blockchain consensus, particularly in the context of proof-of-work (PoW) and proof-of-authority (PoA) Ethereum. We propose and experiment with the network attacks in controlled environments to emulate the Ethereum network in various settings. We implement an attacker, who could partition the network for some duration, to participate in the blockchain consensus. We then measure the success rate of double-spending. In addition, we consider the state and network topology of the public Ethereum to understand how this impacts double-spending. \nOur findings highlight that the Internet topology creates difficulties for an attacker to partition the public PoW Ethereum. For consortium and private PoW Ethereum, however, it is sufficient to partition the network for only 5 minutes to achieve about 50% chance of double-spending. As for the PoA Ethereum, the experimental results show that the attacker always succeeds for two protocols, Aura and Clique. \nFinally, we explore how to mitigate these attacks. We show that overlay networks could be used to avoid a network partition on the public Internet. We also discuss how to change the parameters of the blockchain consensus to lower the success rate of double-spending (PoW) or even eliminate such a risk (PoA).
Deni Memić, Selma Skaljic Memic, Mohamed Noor Saifuddin Mohamed Noor Saif Almehairi
We observe the relationship and causality between cryptocurrencies on one, and commodities, currencies, equity indexes and web search results on the other side. We use prices of Bitcoin and Ethereum for cryptocurrencies, prices of crude oil and gold for commodities, Euro-US Dollar, Euro-Swiss Franc exchange rates for currencies, Dow Jones Industrial Average for market index and Google Trends® data as a measure of worldwide web search results for cryptocurrencies of interest. We find that Bitcoin and web search results correlation went from highly positive to low negative during the COVID-19 period. The results of the study show that the price of Bitcoin and Ethereum can be modelled using different combinations of commodities, currencies, indexes and web search results, with web search results and Dow Jones Industrial Average exhibiting best predictive power both concurrently and one day in advance. Our best performing models were able to explain more than 95% and 90% of Bitcoin and Ethereum price variability respectively. We also find strong evidence of web search traffic impacting both Bitcoin and Ethereum prices at all tested lags, as well as some evidence of gold impact on Bitcoin and EUR/CHF impact on Ethereum.
In the Ethereum ecosystem, the transfer of value between users is often realized by the use of tokens that represent digital assets. Ether is the default token and the de facto currency used for transactions and for initializing smart contracts on the network. Ethereum also supports the creation of new kinds of tokens that can represent any commonly traded commodities as digital assets. All tokens are implemented using the standard protocol, so the tokens are compatible with any Ethereum wallet on the network. The tokens are distributed to users interested in the given specific use case through an Initial Coin Offering (ICO). In this chapter, we will focus our attention on tokens created for a very specific use case: high-performance computing (HPC). More precisely, we will discuss a model of distributed HPC where miners offer computational resources for a task and get rewarded in some form of Ethereum token.
The four essays contained herein this study focus on recently emerged questions in the field of Financial Technology (FinTech). This new finance domain has a growing importance in the finance discipline, policy, and practice. The FinTech is the common theme, while the thesis is organised to investigate the open questions separately in the essays. The first essay assesses the required human capital in FinTech. Recent technological developments have enabled a wide array of new applications in financial markets, e.g. big data, cloud computing, artificial intelligence, blockchain, cryptocurrencies, peer-to-peer lending, crowdfunding, and robo-advising, inter alia. While traditionally comprising of computer programs and other technology used to support or enable banking and financial services, the new FinTech is often seen as enabling transformation of the financial industry. A more moderate and critical view suggests that for the full transformative potential of FinTech to be enabled, there is a need for an updated educational curriculum that balances knowledge and understanding of finance and technology. A curriculum that provides a skill portfolio in these two core components and complements them with applied knowledge. This essay also makes an inquiry into the educational curriculum in finance and technology, aiming to inform this modern educational agenda, and into the skills shortages, as identified by firms and experts with examining some of the first educational programmes in FinTech. The second essay investigates the relationship between financial literacy and attitudes to cryptocurrencies, using microdata from 15 countries. The financial literacy proxy exerts a large negative effect on the probability of currently owning cryptocurrencies. The financially literate are also more likely to be aware of cryptocurrencies, and less to own them due to their price volatility. In addition, data from a second survey of retail investors in three Asian countries is used to externally validify the financial literacy proxy and findings. I show that the relationship between financial literacy and attitudes to cryptocurrencies is moderated by a different perception of the financial risk involved in cryptocurrencies versus traditional investments by the more financially literate. The findings shed light on the demand for cryptocurrencies among the general population and suggest has been largely driven by unsophisticated investors. The third and fourth essays are closer in their empirical investigation of asset price timeseries data. In the third essay, I assess the bitcoin futures introduction into the retail investor driven marketplace. Bitcoin futures were introduced in December 2017 as an effort to provide institutional and retail investors with additional trading tools for bitcoin. This study analyses the bitcoin Futures mid-quote data from CBOE, and Bitcoin market index applying VAR and VECM process methodologies, Hasbrouck’s information share and the Gonzalo-Granger component share measurement to examine price discovery in bitcoin markets. The results drawn on the intra-day prices show that the futures are leading the price discovery at different frequencies even with comparably low futures trading volumes. The empirical results support the extant literature of futures-spot market price discovery and the role of informed traders in the futures market. Finally, the fourth essay attempts to evidence the network externalities on digital assets using exchange-listed Initial Coin Offerings (ICOs) data. Utilising an online database comprising of self-reported ICO characteristics, measures of post-ICO performance, along with information on business social networks, higher fundraising figures are found to contribute positively to the ICO long-term success. This positive impact is multiplied by six times when fundraising is conducted to an existing, proprietary blockchain. This large impact is explained by the network effect. The modified information ratio measure is introduced to approximate the comparative quality signalling of ICO organisations using price timeseries and benchmarking these to already functioning blockchain technology, e.g. ethereum in the long-term. The ICO sample’s mean trading period on an exchange is 1.5 years and is used for long-period asset analysis. Additionally, the cointegration to the market technology benchmark is found to have a large, significant negative effect on long-term ICO organisational success as this indicates lower ICO intrinsic value. The final concluding chapter summarises the thesis contribution, implications and a selection of future research avenues relating to FinTech research sub-field.
The COVID-19 pandemic has had a two-pronged effect -health and economy. Economies worldwide have been impacted and forced to shut during the lockdowns. In India, SMEs had already been struggling to stay afloat due to absence of financing, creating an inadequate cash flow. With frequent lockdowns, the situation has worsened, making bank loan applications difficult. This paper explores P2P lending in the context of micro-loans using a blockchain-powered solution to provide the necessary funds in a quick, easy, secure and contactless manner. As part of our Proof-of-Concept, a peer-to-peer decentralized Web Application is setup, utilizing the services of the Ethereum blockchain.
Raúl Riesco Granadino, Xavier Larriva-Novo, Víctor A. Villagrá
Although cyber threat intelligence (CTI) exchange is a theoretically useful technique for improving security of a society, the potential participants are often reluctant to share \ntheir CTI and prefer to consume only, at least in voluntary based approaches. Such behavior destroys the idea of information exchange. On the other hand, governments are forcing specific entities and operators to report them specific incidents depending \non their impact. Obligations and sanctions are usually discouraging participants to share information voluntarily. We propose a paradigm shift of cybersecurity information exchange by ntroducing a new way to encourage all participants involved, at \nall levels, to share relevant information dynamically. Participants will have new and specific incentives to share, invest and consume threat intelligence and risk intelligence information depending on their different roles (producers, consumers, investors, donors and owner). Our proposal leverages from standards like Structured Threat Information Exchange (STIX™), W3C semantic web standards and from the Ethereum Blockchain to enable a workspace of knowledge related to behavioral threat intelligence patterning to characterize tactics, techniques and procedures (TTP) introducing new type of incentives.
The primary intention behind this study is to assess and compare current studies, aggregate datasets and information from already existing investigations and add own datasets for explaining some effects of popularity and pricing of cryptocurrency on Bitcoin and Ethereum examples. The advantages and disadvantages of using cryptocurrency at the present stage of economic development of Ukraine are considered. The results of the research of the awareness of market participants regarding the disadvantages and advantages of cryptocurrency and the presence of interest in the usage of cryptocurrency in range period from beginning to now are given. The aim of this article is to study the possibilities of using cryptocurrency for economic development. The object of the research is the process of using cryptocurrency in the markets of Ukraine and the whole world. The results of a study of the demand for cryptocurrency in Ukraine. The research was conducted with the result of a questionnaire which were taken from previous investigation and compared with own datasets, and as a result of which it was found out: the level of awareness of cryptocurrency; subjective perception of cryptocurrency; the presence of the potential interest of Ukrainians in the acquisition of cryptocurrency; media effect on people interest; cryptocurrency pricing correlation from people interest; sources of awareness of cryptocurrency. It was found what exactly Ukrainians consider the main disadvantages and advantages of cryptocurrency. Cryptocurrency as a tool of payment and a type of electronic money is found in most countries of the world in the “grey” zone, and regulators, if not forbid, then at least do not recommend citizens to invest in such assets. However, the expertise of Ukrainian blockchain developers allows using cryptocurrency in the Ukrainian markets for the effective implementation of world experience.
Stefan Dziembowski, Grzegorz Fabiański, Sebastian Faust, Siavash Riahi
Blockchain is a disruptive new technology introduced around a decade ago. It can be viewed as a method for recording timestamped transactions in a public database. Most of blockchain protocols do not scale well, i.e., they cannot process quickly large amounts of transactions. A natural idea to deal with this problem is to use the blockchain only as a timestamping service, i.e., to hash several transactions tx_1,…,tx_m into one short string, and just put this string on the blockchain, while at the same time posting the hashed transactions tx_1,…,tx_m to some public place on the Internet ("off-chain"). In this way the transactions tx_i remain timestamped, but the amount of data put on the blockchain is greatly reduced. This idea was introduced in 2017 under the name Plasma by Poon and Buterin. Shortly after this proposal, several variants of Plasma have been proposed. They are typically built on top of the Ethereum blockchain, as they strongly rely on so-called smart contracts (in order to resolve disputes between the users if some of them start cheating). Plasmas are an example of so-called off-chain protocols. In this work we initiate the study of the inherent limitations of Plasma protocols. More concretely, we show that in every Plasma system the adversary can either (a) force the honest parties to communicate a lot with the blockchain, even though they did not intend to (this is traditionally called mass exit); or (b) an honest party that wants to leave the system needs to quickly communicate large amounts of data to the blockchain. What makes these attacks particularly hard to handle in real life is that these attacks do not have so-called uniquely attributable faults, i.e. the smart contract cannot determine which party is malicious, and hence cannot force it to pay the fees for the blockchain interaction. An important implication of our result is that the benefits of two of the most prominent Plasma types, called Plasma Cash and Fungible Plasma, cannot be achieved simultaneously. Besides of the direct implications on real-life cryptocurrency research, we believe that this work may open up a new line of theoretical research, as, up to our knowledge, this is the first work that provides an impossibility result in the area of off-chain protocols.
Blockchain is a technology that is decentralized. It has a lot of power when it comes to solving business issues. Blockchain technology has a lot of potential in a variety of applications, and it may be used for a variety of infrastructure. The technology makes resource management easier and communication more secure and efficient. A blockchain transaction's records are encrypted, and each transaction is linked to previous transactions or records. Algorithms on the nodes verify blockchain transactions. A transaction cannot be initiated by a single entity. Finally, blockchains provide transparency by allowing any participant to see transactions at any moment. Smart contracts provide safe transactions, reducing the risk of third-party interruption. Ethereum is a smart contract-based decentralized platform. This allows developers to build markets that transfer money according to instructions provided years ago. Decentralization and immutability are two key characteristics of block chain. Faster transactions, transaction and validation in seconds, and so forth.