Mohamed Kareem AlAshery, Zhehan Yi, Di Shi, Xiao Lu · 7 authors
The concept of peer-to-peer (P2P) trading, or transactive energy (TE), is gaining momentum as a future grid restructure. It has the potentials to utilize distributed energy resources (DERs), proactive demand side management (DSM), and the infusion in information and communication technologies (e.g., blockchain and Internet of Things (IoT)) for promoting the technical and economic efficiency of the system in its entirety. An efficient market framework is vital for the successful and sustainable implementation of such a concept. This article proposes a P2P energy trading framework enabled by blockchain. It consolidates bilateral contracts, an electronic-commerce platform, a double-auction Vickrey-Clarke-Groves (VCG) mechanism, and trading functionalities with the main grid. Through these multi-layer mechanisms, various trading preferences and attributes of electricity generation and/or consumption are accommodated. Meanwhile, the VCG mechanism eliminates any potential for market power exercise via incentivizing truthful bidding of participants. Different remedies are proposed to overcome the drawback of VCG, i.e., the lack of balanced-budget property. Accordingly, the proposed trading framework is described as multi-settlement and quasi-ideal. Case studies are conducted to analyze and evaluate the proposed trading framework and demonstrate the effectiveness of the proposed remedies in handling probable market deficiencies.
The pool-hopping attack casts down the expected profits of both the mining pool and honest miners in Blockchain. The mainstream countermeasures, namely PPS (pay-per-share) and PPLNS (pay-per-last-N-share), can hedge pool hopping but need to charge miners some fees when they join in a pool. Obviously, the higher fee charged, the higher cost of joining the pool, the less motivation of a miner to mine in the pool. In this article, we apply the zero-determinant (ZD) theory to design a novel pooled mining which offers an incentive mechanism for motivating miners not to switch in pools strategically by economic means without fee charged. In short, the proposed pooled mining has three unique features: 1) fee-free. No fee is charged if the miner does not hop, 2) wide applicability. It can be employed in both prepaid and postpaid mechanisms, and 3) fairness. Even can dominate the game with any miner, a pool has to cooperate when a miner does not hop among pools, implying that the pool cannot squeeze the honest miners financially. The fairness of our scheme makes it have long-term sustainability. Both theoretical analyses and numerical simulations demonstrate the effectiveness of our scheme.
This paper addresses the problem of the traditional online auctions by proposing an Ethereum based implementation for three of the most popular auctions: English, Dutch, First-price sealed-bid (FPSB). Such centralized systems are subjects to malicious attacks, unreliable third-party for payment module or repudiation of bids. We present a set of properties that advantages a blockchain auction, which tackles the drawbacks of a traditional one. Furthermore, we define smart contracts for expressing the auctions based on strict rules regarding the role of the participants and stage delimitation. While English and Dutch auction have a public character, the sealed bids from a FPSB can be questioned. The proposed solution incorporates the Merkle proof algorithm for honest verification of these offers. The experimental results show that a Dutch auction is more suitable for sellers, while an English auction for bidders in terms of transaction fees. Based on the behavior of each type of auction, the solution is exemplified by an English auction in the real-estate field, including a protocol for storing data off-chain.
The confluence of Internet of Things(IoT) , Blockchain(BC) and Artificial Intelligence(AI) acts as a key accelerator for enabling Machine Economy. To be ready for future businesses these technologies needs to be adapted by extending the IoT capabilities to Economy of Things (EoT) capabilities. In this paper we focus on one such implementation experience for Smart Toll Transaction application in the domain of mobility. Our paper showcases a possible solution by leveraging negotiations, decision making, distributed learning capabilities at the devices level using AI-enabled Multi-Agent Systems and the real-time smart contracts between the Cars and Tolls using Blockchain. This solution also showcases the monetization of real time data coming from various IoT devices which are part of vehicles and infrastructure. While blockchain secures the privacy of the participants it also acts as an economic transactional layer and governance layer between the devices in the network.
Moritz Platt, Francesco Pierangeli, Giacomo Livan, Simone Righi
This article discusses a protocol to facilitate decentralised exchanges on an order-driven market through a consortium of market services operators. We discuss whether this hybrid protocol combining a centralised initiation phase with a decentralised execution phase outperforms fully centralised exchanges with regards to efficiency and security. Here, a fully efficient and fully secure protocol is defined as one where traders incur no trading costs or opportunity costs and counterparty risk is absent. We devise a protocol addressing the main downsides in the decentralised exchange process that uses a facilitating distributed ledger, maintains an order book and monitors the order status in real-time to provide accurate exchange rate information and performance scoring of participants. We show how performance ratings can lower opportunity costs and how a rolling benchmark rate of verifiable trades can be used to establish a trustworthy exchange rate between cryptocurrencies. The formal validation of the proposed technical mechanisms is the subject of future work.
Yue Li, Han Liu, Zhiqiang Yang, Bin Wang · 7 authors
While smart contracts have enabled a wide range of applications in many public blockchains, e.g., Ethereum, their security issues have been raising an increasing number of threats on the stability of blockchain ecosystem. In practice, many external attacks on smart contracts result from broken payments with digital assets, e.g., cryptocurrencies. While an increasing number of research works have been focusing on such problems, many of them adopted pattern-based heuristics (e.g., reentrancy) to find payment-related attacks thus can incur a considerably large portion of both false positives and negatives. To overcome these limitations and achieve better payment security on blockchain, we introduced a new class of payment attacks in this paper, i.e., unfair payment (UP). Compared to existing heuristics, UP semantically captures a wider range of payment attacks. Furthermore, we highlighted the general framework SAFEPAY to systematically detect UP. The key insight behind is a novel security invariant, i.e., fair value exchange (FVE), which models the fairness for blockchain payments between multiple parties. More specifically, SAFEPAY systematically explores the transaction space of a given smart contract and generates a bounded set of transaction sequences. For each of the sequence, SAFEPAY reports a UP attack once a violation on FVE is confirmed. We have further instantiated SAFEPAY for Ethereum and applied it in real-world smart contracts. In the empirical evaluation, SAFEPAY managed to identify previously unreported UP attacks and effectively avoid false alarms compared to analyzers in the literature as well.
Token models introduced by Distributed Ledger Systems (DLS) such as Bitcoin or Ethereum enabled a fundamental shift in the economic structures of our society. This led not only to a large number of different token models but also to a multitude of development strategies for them. However, only a few of existing tokens proved a significant success on the market. The reason for that is a missing unified understanding of parameters required for success and the lack of standardization in token economics in general. This paper derives a unified token economics taxonomy considering regulatory authorities, practitioners, and academics. The taxonomy encompasses five dimensions which are essential for classifying token economics. Finally, this work derives eight universal success parameters of a token model and in a broader sense of DLS. The clear taxonomy and parameters will enable a more efficient and expedient approach for token development.
Bitcoin’s main innovation lies in allowing a decentralized system that relies on anonymous, profit-driven miners who can freely join the system. We formalize these properties in three axioms: anonymity of miners, no incentives for miners to consolidate, and no incentive to assuming multiple fake identities. This novel axiomatic formalization allows us to characterize what other protocols are feasible: every protocol with these properties must have the same reward scheme as Bitcoin. This implies an impossibility result for risk-averse miners. Furthermore, any protocol either gives up on some degree of decentralization or its reward scheme is equivalent to Bitcoin’s. (JEL D82, E42, O33)
We propose a smart contract that allows two mutually distrusting parties to transact any non-digital good or service by deploying a smart contract on a blockchain to act as escrow. The contract settles disputes by letting parties wager that they can convince an arbiter that they were the honest party. We analyse the contract as an extensive-form game and prove that the honest strategy is secure in a strong game-theoretic sense if and only if the arbiter is biased in favor of honest parties. By relaxing the security notion, we can replace the arbiter by a random coin toss. Finally, we show how to generalize the contract to multiparty transactions in a way that amortizes the transaction fees.
The traceable execution of business processes and choreographies using smart contracts is one prominent application of blockchain technology in Business Process Management (BPM). Existing approaches support a large set of patterns, modeling languages, and blockchain architectures, which cover a wide range of practical scenarios. However, they largely neglect the important aspect of time, a crucial part of process and choreography models manifested in deadlines, delays, and other temporal constraints. We argue that this deficit is due to inherent limitations of smart contracts---in particular the absence of a natural notion of measuring time---on popular blockchain platforms used in research and practice. We introduce a set of time measures available on blockchain platforms to alleviate these issues, and systematically compare their properties. We also give hints as to their suitability for facilitating various temporal constraints commonly found in process models.
Yeray Mezquita, Roberto Casado‐Vara, Alfonso González‐Briones, Javier Prieto · 5 authors
Abstract Logistics services involve a wide range of transport operations between distributors and clients. Currently, the large number of intermediaries are a challenge for this sector, as it makes all the processes more complicated. To face that problem, we propose a system that uses smart contracts to remove intermediaries and speed up logistics activities. Our new model combines smart contracts and a multi-agent system in a single platform to improve the current logistics system by increasing organization, security and getting rid of several human intermediaries to automate its processes, making distribution times significantly faster. Also, with this kind of approach, it is possible to apply penalties to parties that do not comply with the terms of using this platform.
With the advancements in blockchain technology, it is possible to do business, manage supply chains, and do voting on it. Blockchain uses smart contracts for maintaining the rules and agreements between two parties. These smart contracts can be easily programmed using the Solidity programming language. Solidity is a statically typed, contract-oriented, high-level language employed for coding smart contracts. Using this, the developers can write robust, self-executing, and authoritative contracts. Solidity generates a byte code that executes on an Ethereum Virtual Machine (EVM). The solidity language is similar to other advanced languages such as C, JavaScript, and Python. It supports various libraries, complex user-defined data types, and OOP concepts like inheritance, among several other features. Some use cases of Solidity-coded smart contracts are systematic voting, auctions, and lottery. This chapter’s central focus is on clearly understanding the Solidity programming language. The need for Solidity is discussed. Its use case and implementation are addressed. Details regarding its environment setup and compilation are shown. Its important components are explained along with examples for a better understanding of syntax. By the end of this chapter, one will be familiar with Solidity and will be able to write smart contracts on it.
We use cooperative game theory to model mining pools and design reward allocation schemes in this paper. Specifically, we propose a cooperative game model named as “Decentralized Mining Pool Game (DMPG)” The player set of DMPG is the set of all pool managers and the utility function is defined as the sum of block rewards and transaction fees. In our model, we take miners in pools as normal nodes rather than only as computational powers, that is, all miners joining mining pools also participate in the propagation and validation of transactions in the network, this setting can effectively avoid the formation of centralized mining pools. We design two kinds of reward allocation schemes for DMPG and present efficient methods to compute them. One scheme is the stable allocation scheme which focuses on maintaining the rationality of miners (i.e. the core of DMPG) and the security of mining pools (i.e. resistance to pool block withholding attack). The other kind of scheme is the fair allocation scheme which focuses on the fairness of miners (i.e. the Shapley value of DMPG).
Dingjie Sheng, Mingjun Xiao, An Liu, Xiang Zou · 6 authors
Crowdsourcing data trading is a novel paradigm in which the crowdsourcing technology is adopted to collect big data for trading. At present, existing crowdsourcing data trading systems usually depend on a trusted broker and haven't considered the truthfulness and the quality of data (QoD) simultaneously. Besides, copyright protection is the another issue that has not been properly addressed. To tackle these problems, we propose a Copyright-Preserving crowdsourcing data trading framework based on Blockchain, named CPchain, which mainly includes a smart contract. We design an auction algorithm based on semantic similarity to guarantee the truthfulness and individual rationality while ensuring QoD. Moreover, we combine digital fingerprint technology with blockchain to protect data copyright without a third-party certification authority. Furthermore, we develop a simple prototype of our proposed trading framework on the Ethereum test network. We have carried out a lot of experiments to demonstrate the significant performances of our framework.
Aug 1, 2020·2020 IEEE Intl Conf on Dependable, Autonomic and Secure Computing, Intl Conf on Pervasive Intelligence and Computing, Intl Conf on Cloud and Big Data Computing, Intl Conf on Cyber Science and Technology Congress (DASC/PiCom/CBDCom/CyberSciTech)
Multi-Agent Systems (MAS), a group of agents that work together to solve complex problems, always have concerns around trust management among the agents in a cyber physical system. With the technological advancements in decentralization, automation, and interactions between physical and software agents, the demand for using MAS is increasing though trust management between the agents remain challenging. To alleviate these challenges, the focus of this paper is to explore blockchain based smart contracts for trust management in MAS, especially in the following three aspects: analyzing the interaction mechanism of smart contracts within a MAS environment; providing a potential framework for smart contract based trust management for MAS; and finally, discussing the challenges of deploying and integrating smart contracts within a MAS framework. The outcome of this paper provides a novel approach to solidifying agent to agent trustworthy communication.
A core challenge in studying the real return on artist' work is the extreme difficulty accessing private records from when an artwork was first sold and thus relying on public auction data. In addition, artists do not typically receive proceeds after the initial sale. This paper, for the first time, uses archivally sourced primary market records to model returns on art and introduces a novel fractional equity structure for artists. We first model what would happen if the American artists Jasper Johns and Robert Rauschenberg had retained 10% equity in their work when it was first sold. Second, we model a portfolio return using data from the Betty Parsons Gallery and the Green Gallery. To add a portfolio analysis to the performance of “star” artists, we model the galleries as a fund invested in all of artworks sold, using auction sales as the realization event. We find that the individual Johns and Rauschenberg works would have vastly outperformed equities markets. The gallery portfolio still substantially outperforms the S&P, even including 20% transaction costs. Beyond the art market, our larger conceptual framework for retained fractional equity has broad implications for compensation of early-stage creative work in any field and for potential applications of blockchain technology. This paper was accepted by Karl Diether, finance.
Tiantian Gong, Mohsen Minaei, Wenhai Sun, Aniket Kate
A fixed block reward and voluntary transaction fees are two sources of economic incentives for mining in Bitcoin and other cryptocurrencies. For Bitcoin, the block reward halves every 210,000 blocks and it is supposed to vanish gradually. The remaining incentive of transaction fees is optional and arbitrary, and an undercutting attack becomes a potential threat, where the attacker deliberately forks an existing chain by leaving wealthy transactions unclaimed to attract other miners. We look into the profitability of the undercutting attack in this work.
Our numerical simulations and experiments demonstrate that (i) only miners with mining power > 40% have a reasonable probability of successfully undercutting. (ii) As honest miners do not shift to the fork immediately in the first round, an undercutter's profit drops with the number of honest miners. Given the current transaction fee rate distribution in Bitcoin, with half of the miners being honest, undercutting cannot be profitable at all; With 25% honest mining power, an undercutter with > 45% mining power can expect income more than its fair share; With no honest miners present, the threshold mining power for a profitable undercutting is 42%. (iii) For the current largest Bitcoin mining pool with 17.2% mining power, the probability of successfully launching an undercutting attack is tiny and the expected returns are far below honest mining gains. (iv) While the larger the prize the undercutter left unclaimed, the higher is the probability of the attack succeeding but the attack's profits also go down. Finally, we analyze the best responses to undercutting for other rational miners. (v) For two rational miners and one of them being the potential undercutter with 45% mining power, we find the dominant strategy for the responding rational miner is to typical rational.
Ovaj rad nadograđuje alat za statičku analizu pametnih ugovora, Slither, sa novim detektorom za ranjivost zvanu umetanje ispred (eng. front running). Rad opisuje provedeno istraživanje potrebno za stvaranje početne hipoteze o načinu kojim će se moći detektirati umetanje ispred. Koraci implementacije novog detektora su dani zajedno sa poglavljem o provedenim eksperimentima i njihovim rezultatima. Implementirano rješenje ima određene mane, za koje postoji poglavlje u kojemu se diskutira o tome što se i kako može unaprijediti da bi se ostvarilo bolje rješenje.
Although the iterative double auction has been widely used in many different applications, one of the major problems in its current implementations is that they rely on a trusted third party to handle the auction process. This imposes the risk of single point of failures, monopoly, and bribery. In this article, we aim to tackle this problem by proposing a novel decentralized and trustless framework for iterative double auction based on blockchain. Our design adopts the smart contract and state channel technologies to enable a double auction process among parties that do not need to trust each other, while minimizing the blockchain transactions. In specific, we propose an extension to the original concept of state channels that can support multiparty computation. Then, we provide a formal development of the proposed framework and prove the security of our design against adversaries. Finally, we develop a proof-of-concept implementation of our framework using Elixir and Solidity, on which we conduct various experiments to demonstrate its feasibility and practicality.
David Yakira, Avi Asayag, Ido Grayevsky, Idit Keidar
We study the problem of providing blockchain applications with \emph{economically viable randomness} (EVR), namely, randomness that has significant economic consequences. Applications of EVR include blockchain-based lotteries and gambling. An EVR source guarantees (i) secrecy, assuring that the random bits are kept secret until some predefined condition indicates that they are safe to reveal (e.g., the lottery's ticket sale closes), and (ii) robustness, guaranteeing that the random bits are published once the condition holds. We formalize the EVR problem and solve it on top of an Ethereum-like blockchain abstraction, which supports smart contracts and a transferable native coin. Randomness is generated via a distributed open commit-reveal scheme by game-theoretic agents who strive to maximize their coin holdings. Note that in an economic setting, such agents might profit from breaking secrecy or robustness, and may engage in side agreements (via smart contracts) to this end. Our solution creates an incentive structure that counters such attacks. We prove that following the protocol gives rise to a stable state, called Coalition-Proof Nash Equilibrium, from which no coalition comprised of a subset of the players can agree to deviate. In this stable state, robustness and secrecy are satisfied. Finally, we implement our EVR source over Ethereum.
Software crowdsourcing is an emerging approach to software engineering with great potential for the subdivision and assignment of large-scale tasks. However, because of the centralization of the traditional crowdsourcing platform, information disclosure and nontransparent accounting may be difficult to avoid. To address this issue, we first introduce a novel blockchain-enabled crowdsourcing platform that integrates the functions of task assignment and resource lending via two dedicated smart contracts. Second, to ensure financial stability in the blockchain-enabled market and to match the difficulty of the received tasks with the ability of the workers, we design a dynamic, hierarchical pricing mechanism based on economic modeling methods and heterogeneous agent theory. With this mechanism, the market is divided dynamically into multiple levels according to the remuneration of the customers' offer and the market value of the workers' resources. Additional constraints are proposed to avoid possible malicious trading behavior from workers in the resource lending process. We prove theoretically the rationality of our model and demonstrate the dynamics of the model. We show that the market price and demand can be convergent and test the cost of executing the two smart contracts. Finally, extensive experimental results demonstrate the correctness and feasibility of the platform and confirm that the hierarchical pricing mechanism can maintain the stability of the market.