Ziaur Rahman, Xun Yi, Ibrahim Khalil, Andrei Kelarev
The world has been experiencing a mind-blowing expansion of blockchain technology since it was first introduced as an emerging means of cryptocurrency called bitcoin. Currently, it has been regarded as a pervasive frame of reference across almost all research domains, ranging from virtual cash to agriculture or even supply-chain to the Internet of Things. The ability to have a self-administering register with legitimate immutability makes blockchain appealing for the Internet of Things (IoT). As billions of IoT devices are now online in distributed fashion, the huge challenges and questions require to addressed in pursuit of urgently needed solutions. The present paper has been motivated by the aim of facilitating such efforts. The contribution of this work is to figure out those trade-offs the IoT ecosystem usually encounters because of the wrong choice of blockchain technology. Unlike a survey or review, the critical findings of this paper target sorting out specific security challenges of blockchain-IoT Infrastructure. The contribution includes how to direct developers and researchers in this domain to pick out the unblemished combinations of Blockchain enabled IoT applications. In addition, the paper promises to bring a deep insight on Ethereum, Hyperledger blockchain and IOTA technology to show their limitations and prospects in terms of performance and scalability.
We present positive evidence of price stability of cryptocurrencies as a medium of exchange. For the sample years from 2016 to 2020, the prices of major cryptocurrencies are found to be stable, relative to major financial assets. Specifically, after filtering out the less-than-one-month cycles, we investigate the daily returns in US dollars of the major cryptocurrencies (i.e., Bitcoin, Ethereum, and Ripple) as well as their comparators (i.e., major legal tenders, the Euro and Japanese yen, and the major stock indexes, S&P 500 and MSCI World Index). We examine the stability of the filtered daily returns using three different measures. First, the Pearson correlations increased in later years in our sample. Second, based on the dynamic time-warping method that allows lags and leads in relations, the similarities in the daily returns of cryptocurrencies with their comparators have been present even since 2016. Third, we check whether the cumulative sum of errors to predict cryptocurrency prices, assuming stable relations with comparators' daily returns, does not exceeds the bounds implied by the Black-Scholes model. This test, in other words, does not reject the efficient market hypothesis.
Ignacio Amores-Sesar, Christian Cachin, Anna Parker
Despite the tremendous interest in cryptocurrencies like Bitcoin and Ethereum today, many aspects of the underlying consensus protocols are poorly understood. Therefore, the search for protocols that improve either throughput or security (or both) continues. Bitcoin always selects the longest chain (i.e., the one with most work). Forks may occur when two miners extend the same block simultaneously, and the frequency of forks depends on how fast blocks are propagated in the network. In the GHOST protocol, used by Ethereum, all blocks involved in the fork contribute to the security. However, the greedy chain selection rule of GHOST does not consider the full information available in the block tree, which has led to some concerns about its security. This paper introduces a new family of protocols, called Medium, which takes the structure of the whole block tree into account, by weighting blocks differently according to their depths. Bitcoin and GHOST result as special cases. This protocol leads to new insights about the security of Bitcoin and GHOST and paves the way for developing network- and application-specific protocols, in which the influence of forks on the chain-selection process can be controlled. It is shown that almost all protocols in this family achieve strictly greater throughput than Bitcoin (at the same security level) and resist attacks that can be mounted against GHOST.
Peer-to-peer (p2p) content delivery is promising to provide benefits like cost-saving and scalable peak-demand handling in comparison with conventional content delivery networks (CDNs) and complement the decentralized storage networks such as Filecoin. However, reliable p2p delivery requires proper enforcement of delivery fairness, i.e., the deliverers should be rewarded according to their in-time delivery. Unfortunately, most existing studies on delivery fairness are based on non-cooperative game-theoretic assumptions that are arguably unrealistic in the ad-hoc p2p setting. We for the first time put forth the expressive yet still minimalist securities for p2p content delivery, and give two efficient solutions FairDownload and FairStream via the blockchain for p2p downloading and p2p streaming scenarios, respectively. Our designs not only guarantee delivery fairness to ensure deliverers be paid (nearly) proportional to his in-time delivery, but also ensure the content consumers and content providers to be fairly treated. The fairness of each party can be guaranteed when the other two parties collude to arbitrarily misbehave. Moreover, the systems are efficient in the sense of attaining asymptotically optimal on-chain costs and optimal deliverer communication. We implement the protocols to build the prototype systems atop the Ethereum Ropsten network. Extensive experiments done in LAN and WAN settings showcase their high practicality.
Victor von Wachter, Johannes Rude Jensen, Omri Ross
Decentralized financial (DeFi) applications on the Ethereum blockchain are highly interoperable because they share a single state in a deterministic computational environment. Stakeholders can deposit claims on assets, referred to as 'liquidity shares', across applications producing effects equivalent to rehypothecation in traditional financial systems. We seek to understand the degree to which this practice may contribute to financial integration on Ethereum by examining transactions in 'composed' derivatives for the assets DAI, USDC, USDT, ETH and tokenized BTC for the full set of 344.8 million Ethereum transactions computed in 2020. We identify a salient trend for 'composing' assets in multiple sequential generations of derivatives and comment on potential systemic implications for the Ethereum network.
In cryptocurrencies, the block reward is meant to serve as the incentive mechanism for miners to commit resources to create blocks and in effect secure the system. Existing systems primarily divide the reward in proportion to expended resources and follow one of two static models for total block reward: (i) a fixed reward for each block (e.g., Ethereum), or (ii) one where the block reward halves every set number of blocks (e.g., the Bitcoin model of halving roughly every 4 years) but otherwise remains fixed between halvings. In recent work, a game-theoretic analysis of the static model under asymmetric miner costs showed that an equilibrium always exists and is unique. Their analysis also reveals how asymmetric costs can lead to large-scale centralization in blockchain mining, a phenomenon that has been observed in Bitcoin and Ethereum and highlighted by other studies. In this work we introduce a novel family of mining reward functions, HaPPY-Mine (HAsh-Pegged Proportional Yield), which peg the value of the reward to the hashrate of the system, decreasing the reward as the hashrate increases. HaPPY-Mine distributes rewards in proportion to expended hashrate and inherits the safety properties of the generalized proportional reward function. We study HaPPY-Mine under a heterogeneous miner cost model and show that an equilibrium always exists with a unique set of miner participants and a unique total hashrate. Significantly, we prove that a HaPPY-Mine equilibrium is more decentralized than the static model equilibrium under a set of metrics including number of mining participants and hashrate distribution. Finally, we show that any HaPPY-Mine equilibrium is also safe against collusion and sybil attacks, and explore how the market value of the currency affects the equilibrium.
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.
Purpose. The aim of the article is elaboration of theoretical and practical aspects of definition and functioning of cryptocurrencies as money. Methodology of research. The following methods were used in the study: statistical analysis and comparison – in the study of problematic aspects of the definition of cryptocurrency as a kind of money; logical assessment – in substantiating the principles of determining cryptocurrency as a kind of money; generalization – in the process of formulating conclusions based on the results of the analysis. Findings. It is established that money is a financial asset with high liquidity, which can be quickly converted into paper money or coins, serve as an intermediary in money circulation (i.e. play the role of equivalent in exchange) and can be used for savings and therefore anything that can function as money, are money (including cryptocurrency coins). It is substantiated that cryptocurrency coins, as a type of money, perform the following functions: there is a potential to perform the function of a measure of value after reducing the significant volatility of the value of cryptocurrencies; partly as a medium of exchange due to high volatility, regulatory resistance and low prevalence, but prevalence will increase as traditional payment systems begin to integrate cryptocurrencies, cryptocurrencies have high convenience and inclusiveness, have the potential to reduce transaction costs, increase settlement speeds, develop cryptocurrency markets and increasing their prevalence; due to opposition from ESG investors and regulators, low confidence from a significant number of citizens (especially over the age of forty) and a significant speculative component of cryptocurrency coins, only partially serve as a means of accumulation, however, the demand for cryptocurrencies from investors is constantly growing. Originality. The definition of cryptocurrency (cryptocurrency coin, cryptocoin) as a new digital type of money, which can measure the value of goods, services and other currencies, used for circulation, savings and investment, protected by cryptographic code with the inability to counterfeit or copy, and issue which everyone has the opportunity with the Internet and the necessary equipment with complete anonymity of the issuer (miner). Practical value. The main results of the conducted study will create favourable conditions for a better understanding of cryptocurrency as a new type of money, which will allow them to be more widely used in the economic activities of businesses and countries. Key words: money, cryptocurrency, cryptocoin, cryptocurrency coin, mining, cryptocurrency functions, Ethereum, Monero, monetary aggregate.
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.
Pratyush Kumar Patro, Raja Wasim Ahmad, Ibrar Yaqoob, Khaled Salah · 5 authors
Product recall management in the automotive industry is a challenging problem that affects human lives and the safe operation of automobiles. Product recalls can assist in removing potentially unsafe products from the marketplace and minimizing a company’s responsibility for corporate negligence. Today’s systems and technologies leveraged for product recall management in the automotive supply chain fall short in providing transparency, traceability, reliability, audit, security, and trust features. In this paper, we propose a blockchain-based approach to overcome the aforementioned problems related to product recall management. We employ the public Ethereum blockchain and integrate it with the decentralized storage of the InterPlanetary File System (IPFS) to deal with the large-sized data problem. We present the system design and six algorithms explaining the working principles, information exchange flow, and stakeholders’ detail and their sequential interactions. We discuss the implementation details, generalization aspects, and cost and security analyses to evaluate the performance of the proposed approach. The proposed solution is cost-effective, secure, and enables automakers to have end-to-end visibility of information during product recalls. We make the smart contracts’ code publicly available on GitHub.
Diana Hawashin, Dunia J. Mahboobeh, Khaled Salah, Raja Jayaraman · 7 authors
Today’s a large number of blood donation management systems fall short in providing traceability, immutability, transparency, audit, privacy, and security features. Also, they are vulnerable to the single point of failure problem due to centralization. In this paper, we propose a private Ethereum blockchain-based solution to automate blood donation management in a manner that is decentralized, transparent, traceable, auditable, private, secure, and trustworthy. The proposed solution stores non-critical and large data off-chain using the decentralized storage of the InterPlanetary File System (IPFS). We present the system architecture, sequence diagrams, entity-relationship diagram, and algorithms to briefly explain the working principles of our blood donation management solution. We evaluate the performance of our solution in terms of efficiency and effectiveness through performing security analysis. We make our smart contract code publicly available on Github1.
Blockchain is being hailed as a technical breakthrough that has the potential to transform the way society trades and communicates. This reputation stems from its ability to enable mutually distrusting entities to exchange financial value and communicate without the need for a trusted third party. Furthermore, a blockchain enables for the preservation of data with integrity and the transparency of processes. In this article, we examine whether or not a blockchain is the best technological solution for a certain application situation. We compare the characteristics of permissionless (such as Bitcoin/Ethereum) and permissioned (such as Hyperledger/Corda) blockchains to those of a centrally controlled database. We provide a systematic approach for determining the best technological solution for a given application issue. We examine three use cases in detail, namely Supply Chain Management, Interbank and International Payments, and Decentralized Autonomous Organizations, using our approach, and end the paper with a forecast for future possibilities.
Both cryptocurrency researchers and early adopters of cryptocurrencies agree that they possess a special kind of materiality, based on the laborious productive process of digital ‘mining’ [1]. This idea first appears in the Bitcoin White Paper [2] that encourages Bitcoin adopters to construct and justify its value in metaphoric comparison to gold mining. In this paper, I explore three material aspects of blockchain: physical infrastructure, human language and computer code. I apply the concept of 'continuous materiality' [3] to show how these three aspects interact in practical implementations of blockchain such as Bitcoin and Ethereum. I start from the concept of ‘digital metallism’ that stands for ‘fundamental value’ of cryptocurrencies, and end with the move of Ethereum to ‘proof-of-stake’, partially as a countermeasure against ‘evil miners’. I conclude that ignoring material aspects of blockchain technology can only further problematize complicated relations between their technical, semiotic and social materiality.
With the development of Internet of things, more and more objects are connected to the Internet. It will lead to data leakage caused by arbitrary access easily. Thus, an effective method to prevent data leakage is needed. Traditional access control schemes include role-based access control (RBAC), attribute-based access control (ABAC), and capability-based access control (CapBAC) are all using a central or a third trusted party to manage user information, which is prone to single failure. In order to solve the problems, in this paper, a fine-grained access control scheme based on blockchain technology named SFAC is proposed. In recent years, blockchain technology has been widely studied and applied in various fields. It has the advantages of decentralization, imitation tampering, and traceability, and is a distributed public ledger. Therefore, combined with blockchain, SFAC can not only solve the problem of centralization, but also allow users to request resources in batches, and uses token mechanism to facilitate users’ requests. After the user gets a token, it can directly use the token to revoke resources. Besides, we use a smart contract to implement our proposed scheme and carrying out a series of experiments on the test network of Ethereum. The experimental results show that our SAFC is feasible.
Chika A. Anisiuba, Obiamaka P. Egbo, Felix C. Alio, Chuka Uzoma Ifediora · 7 authors
We analyzed cryptocurrency dynamics in the global U.S. dollar–denominated market and the emerging market economies (EMEs) with a view to ascertaining whether activities in these markets are predominantly shaped by reinforcement or substitution effect. Cryptocurrencies analyzed include the Bitcoins, Ethereum, Litecoin, Steller, Bitcoin Cash, and USD Tether. The results suggest that, on average, correlation between digital assets in the cryptocurrencies’ ecosystem is positive. However, there is evidence of an outlier with respect to the USD Tether (USDT) in the global market, revealing that the USDT is negatively associated with all other cryptocurrencies. This is supported by the dynamic regression results that provided evidence of reinforcement effect in favor of the USDT in the global crypto market, thus confirming the status of the USDT as “Stablecoin” as it is pegged 1:1 to USD. In the global market context, the results also revealed that USDT/USD returns had identical outliers that could portend lesser chances of extreme gains or losses compared with suggestions of extreme gains or losses in the EMEs. Furthermore, USDT did not seem to have similar evolution in the EMEs where it had relatively marginal influence in the markets. The vector error correction (VEC) estimate showed mixed results between Altcoins in all the markets; moreover, our finding showed that reinforcement effects hold in favor of Steller (XLM) both in the Russian ruble and Indian rupee crypto markets, whereas the Chinese yuan crypto market was predominantly characterized by substitution effect in favor of Bitcoin.
The cryptocurrency market recently gained a lot of attention from investors. But, its volatility has been acting as a disincentive to investment. Volatility plays an important role in shaping market riskiness and investment behavior. We study the volatility of the Ethereum (ETH) cryptocurrency from the following perspectives. The first goal of this study is to identify risk-seeking behavior in the ETH cryptocurrency market. We examine this propensity by measuring the effect of the volatility of Ethereum on the total ETH assets. This investigation also takes the form of a case-study of an unexpected ETH fund-stolen event, DAO Hack, and the hard fork treatment. We also forecast a downward volatility trend in the near future based on Autoregressive models. This is the first study to analyze DAO Hack with empirical methods and marks the starting point for more rigorous models to predict the volatility of Ethereum.
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.
The idea of smart contracts has been around for a long time. The introduction of Ethereum has taken the concept of smart contracts to new heights because of its integration with Blockchain technology. As a result, the applications of smart contracts have also surged in areas such as e-Voting, Insurance, Crowdfunding, etc. In this paper, we aim to present the construction of a “Fully Anonymous e-Voting” protocol using the concepts of zkHawk and Zcash. zkHawk is a novel smart contract protocol designed during this Ph.D. that improves upon the Hawk protocol by solving the underlying anonymity problem of a trusted manager. We will leverage the concept of zk-SNARKs in Zcash to carry out the voting phase of the election and the zkHawk smart contract protocol to tally the results of the election. The voting phase employing Zcash will be initially designed with Non-Universal zk-SNARKs and improved upon with Universal zk-SNARKs.
2 source records
Internet Traffic Analysis and Secure E-voting
Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
For long, different e-voting systems have been provided with the goal of increasing security and minimizing cost. Blockchain is a major breakthrough in the technological industry that provide immense secured platform. With the launch of Ethereum, a decentralized platform which runs decentralized applications (DApps) on it, a secured voting system now seems possible. Many organizations have now shifted their focus on voting through blockchain platforms. There’s a very high chance that a normal voting method won’t lead to a clear majority. There can be many ways to deal with this issue which includes another voting process to take place which can be quite expensive in terms of time and resources. In our paper, we introduce the vote-trading concept where the votes can be redistributed to other candidates in case if there is no clear majority and also this ‘ majority’ factor can be set by the organization according to their requirement. We discuss the design for the blockchain based preferential e-voting system using the Solidity programming language where instead of one vote per candidate, we provide the concept of giving preference to the candidates.