V. U. Wickramarachchi, Chamath Keppitiyagama, Kasun Gunawardana
Financial contracts play a major role in the modern economy. Due to a large variation of contracts being traded in financial markets, a standard representation for contracts was required in order to eliminate the ambiguity imposed by natural languages. Peyton Jones et al. catered this need by proposing a combinator library embedded in Haskell which enabled contract representation and valuation. However, every financial contract represented as such suffered from the same fundamental problem. If a contract is executable, the parties involved in the contract needed to trust a central counterparty to give them the correct results after execution. The interference of this middleman introduced certain risks as well as a significant amount of overhead. In this paper, a novel approach to facilitate autonomous contract execution was proposed, exploiting the features and use cases of the Ethereum blockchain and its scripting language, Solidity. The approach involves transforming contracts written in Peyton Jones Contract Descriptive language (CDL) to Solidity using a special purpose compiler. The result of this transformation is a smart contract equivalent to the traditional financial contract. The transformed smart contract is deployed and executed on the Ethereum blockchain using an Ethereum client. The proposed solution was evaluated against existing attempts to design autonomous financial contracts. The research shows that a contract written using CDL can be transformed into a smart contract which executes autonomously in a trust-less environment. As a result, it was concluded that financial contracts could operate without a central counterparty with increased performance and reduced overheads in comparison to traditional financial contracts.
ฮฮตฯฯฮณฮนฮฟฯ ฮฯฮฑฮบฯฯฮฟฯ ฮปฮฟฯ, Eleanna Kafeza, Haseena Al Katheeri
Blockchain is a prime example of disruptive technology in multiple levels. With the advent of blockchains becomes obsolete the need for a mutually trusted third party acting as intermediary between agents which do not necessarily trust each other in transactions of any kind, including political or shareholder voting, crowdfunding, financial deals, logistics and supply chain management, and contract formulation. An integral part of the blockchain stack is the proof system, namely the mechanism efficiently verifying the claims of various blockchain stakeholders. Thus, trust is effectively established in a literally trustless environment with purely computational means. This is especially critical in the digital formulation of smart contracts where clauses are to be strictly upheld by intelligent agents. The most prominent proof systems recently proposed in the scientific literature are reviewed. Additionally, the applications of blockchain technology to smart contracts is discussed. The latter allows clause re-negotiation, increasing thus the flexibility factor in transactions. As a concrete example, a simple smart contract written in Solidity, a high level language for the Ethereum Virtual Machine, is presented.
Suzan Bayhan, Anatolij Zubow, Piotr Gawลowicz, Adam Wolisz
Mobile network operators (MNO) can opportunistically use the licensed bands of the primary users (PU) provided that they monitor the spectrum and stop their transmission upon detection of the PU. As deploying spectrum sensors may be prohibitively expensive, the MNO can buy spectrum sensing service from sensing helpers in its proximity. However, such a trade requires a framework with three key functions: helper selection, faulty or malicious helper identification, and payment to honest helpers. Here, we introduce Spass which provides these functions and facilitates a fair exchange between the entities without a trusted third party via smart contracts (SC) running on a blockchain network. While payments via SCs seem conceptually simple, realizing it is difficult due to the cost of using SC functions which might be prohibitive as write/computation operations on the SCs might have a cost, e.g., in Ethereum. Considering our design goals and SC-related overhead, we derive the optimal Spass parameters maximizing the MNO's profit. Moreover, we propose a K-means clustering approach to identify independent malicious helpers, and using both lossless and lossy compression on the helpers' sensing report to decrease the cost of write operations. Via simulations, we show under which conditions Spass-powered service leads to a profitable business for an MNO.
Purpose The application of smart contract can greatly reduce transaction costs and improve transaction efficiency. The existing smart contract are expensive, single application scenario and inefficient. This paper aims to propose a new smart contract model to solve these problems. Design/methodology/approach By investigating the research history, models and platforms, this paper summarizes the shortcomings of existing smart contracts. Based on the content and architecture of traditional contract, a smart contract model with wider application scope is designed. Findings In this paper, several models are used to describe the operation mechanism of smart contracts. To facilitate computer execution, a decomposition method is proposed, which divides smart contracts into several sub-contracts. Then, the advantages and deployment methods of smart contract are discussed. On this basis, a specific example is given to illustrate how the application of smart contract will change our life. Originality/value Smart contract is gradually applied to more fields. In this paper, the structure and operation mechanism of smart contract system in reality are given, which will be beneficial to the application of smart contract to more complex systems.
Stefano Angieri, Alberto Garcรญa-Martรญnez, Bingyang Liu, Zhiwei Yan ยท 6 authors
The current system to manage the global pool of IP addresses is centralized in five transnational organizations, known as regional internet registries (RIRs). Each of them manages the address pool for many countries. In this paper, we present InBlock, a distributed autonomous organization that provides the decentralized management of IP addresses. The InBlock also fulfills the same objectives as those fulfilled by the current IP address allocation organizations, i.e., uniqueness, fairness, conservation, aggregation, registration, and minimized overhead. The InBlock is implemented as a set of blockchain's smart contracts in Ethereum, and it implements all the functions needed for the management of a global pool of addresses without any human intervention. Any entity may request an allocation of addresses to the InBlock registry by performing a (crypto)currency transfer to the InBlock. The fee required, along with the annual renewal fee, serves as a mechanism to deter stockpiling and other wasteful practices. As with any novel technology, there are many open questions about the usage of blockchains to build an IP address registry. For this reason, we believe that practical experimentation is required in order to have hands-on experience, so we propose to conduct an experiment on the InBlock as a starting point to inform about the future directions in this space.
Purpose Blockchain technologies have pervaded modern crowdfunding and capital sourcing through a variety of financial instruments implemented as smart contracts. Smart contracts provide a unique mechanism not only to create a unique one-of-a-type financial instrument, but also to enable unique innovations atop existing financial instruments due to underlying efficiencies. The smartness comes from the flexibility that programs provide which can create extremely unique financial instruments that are often complex to implement, yet easy to create, maintain through versioning, trade and destroy. The purpose of this paper is to describe the security token architecture as an application of smart contracts. Further, the author illustrates the implementation and design of a commonly used financial instrument known as Simple Agreement for Future Equity (SAFE) using the security token architecture proposed and smart contract functionality. The author then models the transaction using relational algebra, and, models the utility maximization. The author shows how on account of reduced information asymmetry between the investors and SAFE users (i.e. startups) utility is positive when smart contract-based security tokens are deployed for each state in the SAFE contract. Design/methodology/approach Using an existing well-adopted instrument called a SAFE contract, the author illustrates the architecture of a smart contract-based security token system. The author illustrates how different components of a SAFE contract can be implemented as a smart contract and discusses the advantages and disadvantages of applying blockchain-based smart contracts to design SAFE instruments. The author deploys two methods: a state space diagram to explain state transitions and a utility model to explain the utilities. Findings The key findings of this research study are the design of a security token architecture, which can be used to convert any the physical or contract-based financial instrument to a smart contract that runs on the blockchain. However, there are limitations to the implementation of the same which can be overcome. The model illustrates the positive utilities derived for all economic actors, i.e. the contractors, the utility providers, etc., in the market. Originality/value This paper is an original paper. For the very first time, the author explored the architecture of a security token system. Using a well-known financial instrument, namely the SAFE, the author describes various components, e.g. the four contracts that form SAFE and then model the utilities for the system.
Aug 1, 2019ยท2019 IEEE 21st International Conference on High Performance Computing and Communications; IEEE 17th International Conference on Smart City; IEEE 5th International Conference on Data Science and Systems (HPCC/SmartCity/DSS)
Blockchain technique has been widely applied in various fields, such as finance, Internet of Things, law, etc. However, it is a challenge to apply blockchain technique for mobile applications, as the mobile devices cannot afford computing resources required by the mining processes. This paper proposes a mechanism based on a combinatorial double auction to offload the mining process of miners to the edge servers. The mechanism is formulated as a resource allocation problem. The corresponding allocation algorithms and payment scheme are proposed to allocate resources and calculate trade prices, respectively. Moreover, this paper proves that the proposed mechanism is efficient in terms of computation, and it satisfies three properties of economic auction which are budget balance, individual rationality and truthfulness. Experimental results show that the proposed mechanism is able to yield higher total utility, together with good scalability. For the case of 900 miners in the auction, the total utility of the proposed mechanism is higher than two existing works by 39.2% and 569.9% on average, respectively.
Benedikt Pittl, Stefan Starflinger, Werner Mach, Erich Schikuta
Amazon's EC2 On-Demand marketspace is the dominant platform for trading Cloud services such as virtual machines. On such platforms consumers and providers do not negotiate with each other. Instead, consumers purchase predefined virtual machines at fixed-prices and so this approach is also termed take-it-or-leave-it approach. In the last years more dynamic platforms emerged such as Amazon's spot marketspace which was relaunched at the end of 2017 - here consumers can bid for virtual machines. The recent efforts of Amazon and other Cloud providers such as VirtuStream show that dynamic trading mechanisms are a promising approach for realizing future Cloud markets. Hence, multi-round bilateral negotiations which are executed autonomously have gained popularity in the scientific community. A key challenge towards the adoption of autonomous multi-round bilateral negotiations is to ensure the integrity and transparency so that the generated agreements are legally biding. In the paper at hand we present an approach which uses a smart contract - called Bazaar-Contract - to ensure integrity and transparency during multi-round bilateral negotiations. Thereby, consumers and providers exchange offers by calling methods of the Bazaar-Contract. Moreover, Cloud referees can use these Bazaar-Contracts in order to manage penalties resulting from poor service quality. In order to prove the technical feasibility of our approach we implemented the Bazaar-Contract using Ethereum and the Inter-Planetary File System. We evaluate the economical feasibility of our approach by considering the gas costs.
We propose a novel way of embedding functional smart contract languages into the Coq proof assistant using meta-programming techniques. Our framework allows for developing the meta-theory of smart contract languages using the deep embedding and provides a convenient way for reasoning about concrete contracts using the shallow embedding. The proposed approach allows to make a connection between the two embeddings in a form of a soundness theorem. As an instance of our approach we develop an embedding of the Oak smart contract language in Coq and verify several important properties of a crowdfunding contract. The developed techniques are applicable to all functional smart contract languages.
The Ethereum blockchain is essentially a globally replicated public database.\nPrograms called smart contracts can access this database. Over 10 million smart\ncontracts have been deployed on the Ethereum blockchain. Executing a method of\na smart contract generates a transaction that is also stored on the blockchain.\nThere are over 1 billion Ethereum transactions to date. Smart contracts that\nare transparent about their function are more successful than opaque contracts.\nWe have therefore developed a tool (ContractVis) to explore the transparency of\nsmart contracts. The tool generates a replay script for the historic\ntransactions of a smart contract. The script executes the transactions with the\nsame arguments as recorded on the blockchain, but in a minimal test\nenvironment. Running a replay script provides insights into the contract, and\ninsights into the blockchain explorer that was used to retrieve the contract\nand its history. We provide five concrete recommendations for blockchain\nexplorers like Etherscan to improve the transparency of smart contracts.\n
Open access
3 source records
Blockchain Technology Applications and Security
Auction Theory and Applications
Advanced Steganography and Watermarking Techniques
Bitcoin, a cryptocurrency built on the blockchain data structure, has generated significant academic and commercial interest. Contrary to prior expectations, recent research has shown that participants of the protocol (the so-called โminersโ) are not always incentivized to follow the protocol. We study the game induced by one such attack โ the pool block withholding attack โ in which mining pools (groups of miners) attack other mining pools. We focus on the case of two pools attacking each other, with potentially other mining power in the system.We show that this game always admits a pure Nash equilibrium, and its pure price of anarchy, which intuitively measures how much computational power can be wasted due to attacks in an equilibrium, is at most 3. We conjecture, and prove in special cases, that it is in fact at most 2. Our simulations provide compelling evidence for this conjecture, and show that players can quickly converge to the equilibrium by following best response strategies.
We propose a design for philanthropic or publicly funded seeding to allow (near) optimal provision of a decentralized, self-organizing ecosystem of public goods. The concept extends ideas from quadratic voting to a funding mechanism for endogenous community formation. Citizens make contributions to public goods of value to them. The amount received by the public good is (proportional to) the square of the sum of the square roots of contributions received. Under the โstandard model,โ this mechanism yields first best public goods provision. Variations can limit the cost, help protect against collusion, and aid coordination. We discuss applications to campaign finance and highlight directions for future analysis and experimentation. This paper was accepted by Joshua Gans, business strategy.
Smart contracts on a blockchain are programs running in a distributed, transparent, and trustless environment, being one of the major assets of this new technology. They give rise to innovative applications and business models, with their potential and lasting impact still open. In this situation, it is interesting to understand what smart contracts are actually doing. While public announcements, by their nature, make promises of what smart contracts might achieve, the openly available data of blockchains provides a more balanced view on what is actually going on. In this paper, we analyze the activities of smart contracts on the Ethereum blockchain, the most prominent platform for smart contracts with all blockchain data visible. However, contracts operate behind the scenes. Their activities are only accessible by looking beyond the mere blockchain data that records external transactions. We also use all internal messages caused by contracts interacting with other addresses. In particular, we investigate the activities of smart contracts in their quantitative and temporal aspects. Based on lifespan and activity patterns, we identify particular groups like mayflies, loners, breeders, busy bees, sleepers, self-destructed and bonkers contracts and visualize their temporal characteristics. To gain insights into the purpose of these smart contracts we perform a basic analysis of code and message content including deployment code. We consider data up to Ethereum block 6900000 (end of 2018).
Lots of privacy and security issues in the current cloud-based data markets will be eliminated by taking advantage of blockchain-based decentralized storage services, which can provide a new paradigm for safe data outsourcing and correct remote search. However, existing data markets are also questioned on their inflexible and opaque pricing, where the value of data ownership and the cost of query search are mixed. Thus, a better pricing model is necessarily needed in an emerging decentralized data market. In this paper, we envision an Ethereum-based data market, in which the pricing model for each query includes two parties: owner (paid for his data ownership) and miner (rewarded by query search). We study a new cooperative search scheme through a proxy to reduce cost on the client (user) side. Suppose each user query is charged based on the number of keywords in the query. The cost reduction is based on combining multiple queries into a group subject to the constraint that the resulting combined query is not significantly larger than any of its original query in terms of the number of keywords. The total price is based on total number of keywords in all groups. As the optimal grouping depends on the pricing of both owner and miner, we build a small testbed to analyze how price setting will affect grouping results. Since it is a cooperative model with shared resources, we also study various incentive properties on the client side, thereby yielding a cost sharing mechanism to split joint cost in a truth-revealing and fair manner.
Employment and workforce industry become more important because the human capital value is linked to the company's profitability. Company becomes employee-centric in the 21st century. To hire an appropriate employee, and reduce hiring liability workplace violence, background screening marketing growth quickly. However, in the human resource industry, background check still is a pain point, especially for employment, education, and skill verification. The traditional background check is prolonged and inaccurate. For overseas recruitment, background check will be more troublesome. This paper comprehensively addresses the challenge of the education, employment and skill verification problem. We propose an innovation E^2 C-Chain which is a two-stage blockchain based education, employment and skill certification system. In the first stage, the new blocks are created when a trust organization verifies the education and employment information of the employee. In the second stage, to encourage the verifiers to participate in the skill verification process, we employ a Vickrey-Clarke-Groves (VCG) game based incentive mechanism to find the Nash Equilibrium and ensure social cost minimization. We also present the theoretical proofs and extensive simulations to demonstrate beneficial properties and efficiency of our proposed system.
As data marketplaces are becoming common place, it is also becoming clear that data streams generated from Internet of Things (IoT) devices hold value for potential third party consumers. We envision a marketplace for IoT data streams that can unlock such potential value in a scalable way, by enabling any pairs of data providers and consumers to engage in data exchange transactions without any prior assumption of mutual trust. We present a marketplace model and architecture to support trading of streaming data, from the advertising of data assets to the stipulation of legally binding trading agreements, to their fulfilment and payment settlement. Crucially, we show that by using blockchain technology and Smart Contracts in particular, we can offer participants a trade-off between the cost of transactional data exchange, and the risk of data loss when trading with untrusted third parties. We experimentally assess such trade-offs on a testbed using Ethereum Smart Contracts.
In a Bitcoin market, miners participate in blockchain mining with an aim to make profits. Until reaching consensus, PoW-valid blocks (including validated transactions and proper PoW solutions) can be viewed as being successfully mined and are rewarded. There are two types of rewards for miners: fixed block subsidies and time-varying transaction fees. Block subsidies, predetermined by design, are the current major revenue source. Transaction fees, offered by Bitcoin transaction senders to accelerate their transactions, heavily depend on the corresponding transaction size. Thus, a larger-size block tends to contain higher transaction fees and hence more rewards. However, the probability of a miner to successfully mine a block diminishes as the block size increases, since a larger-size block takes a longer time to reach consensus. Thus, the reward included in the block is vitally affected by its size, which is independently decided by a miner. In this paper, we use a game-theoretic approach to study how a miner's payoff, i.e., expected profits, is determined by his block size. More specifically, we derive an expression to characterize the relation between the miner's payoff and block sizes. Besides, we use game theory to analyze how profit-driven miners will manipulate their block sizes to optimize payoff instead of adopting the default block size. We conduct numerical experiments on real-world data collected from Bitcoin to find peaceful equilibrium where miners have no incentive to misbehave. The achieved block sizes thereby give guidelines on the default block size, in order to deter miners from misbehaving. Our analysis suggests a block size of 4 MB.
Global real estate (RE) investments account more than twice the size of the stock market. Yet the number of investors in RE are much lower, because of the liquidity and global access. Tenants, owners, and investors are barely satisfied in the current system. In this paper, the goal is to try out the employment of blockchain in RE market and represent the facilities it can give to the RE market. The research to date leads to the following conclusions: Blockchain technology and smart contracts can sort out the classical issues that RE is facing with, and they offer much more meaningful tools for a game theoretic stable-priced market.
The emergence of e-commerce and e-voting platforms has resulted in the rise in the volume of sensitive information over the Internet. This has resulted in an increased demand for secure and private means of information computation. Towards this, the Yao's Millionaires' problem, i.e., to determine the richer among two millionaires' securely, finds an application. In this work, we present a new solution to the Yao's Millionaires' problem namely, Privacy Preserving Comparison (PPC). We show that PPC achieves this comparison in constant time as well as in one execution. PPC uses semi-honest third parties for the comparison who do not learn any information about the values. Further, we show that PPC is collusion-resistance. To demonstrate the significance of PPC, we present a secure, approximate single-minded combinatorial auction, which we call TPACAS, i.e., Truthful, Privacy-preserving Approximate Combinatorial Auction for Single-minded bidders. We show that TPACAS, unlike previous works, preserves the following privacies relevant to an auction: agent privacy, the identities of the losing bidders must not be revealed to any other agent except the auctioneer (AU), bid privacy, the bid values must be hidden from the other agents as well as the AU and bid-topology privacy, the items for which the agents are bidding must be hidden from the other agents as well as the AU. We demonstrate the practicality of TPACAS through simulations. Lastly, we also look at TPACAS' implementation over a publicly distributed ledger, such as the Ethereum blockchain.
Confirmation of Bitcoin transactions is executed in blocks, which are then stored in the Blockchain. As compared to the number of transactions in the mempool, the set of transactions which are verified but not yet confirmed, available space for inclusion in a block is typically limited. For this reason, successful miners can only process a subset of such transactions, and users compete with each other to enter the next block by offering confirmation fees. Assuming that successful miners pursue revenue maximization, they will include in the block those mempool transactions that maximize earnings from related fees. In the paper we model transaction fees as a Nash Equilibrium outcome of an auction game with complete information. In the game the successful miner acts as an auctioneer selling block space, and users bid for shares of such space to confirm their transactions. Moreover, based on expected fees we also discuss what the optimal, revenue maximizing, block size limit should be for the successful miner. Consistently with the intuition, the optimal block size limit resolves the trade-off between including additional transactions (which possibly lower the unit fees collected) and keeping the block capacity limited (with, however, higher unit fees).
Public procurement relies in an apparent irreconcilability between competition, which implies some confidentiality, and transparency. The latest Public Procurement Directives have made e-procurement a mandatory feature. Since blockchain technology has been developed and designed to accomplish integrity, transparency, efficiency and data accuracy, goals which are very much appreciated in public procurement, an interesting question then arises: is there room to apply this technology within public procurement procedures? Will smart contracts be an interesting tool within public procurement? Considering public duties such as data protection, which must be complied with by contracting authorities, and some blockchain features such as non-withdrawable information and the likely broad access to the information there enclosed, one can be drawn to conclude that there is no possible conciliation between these two procedures. The mandatory e-procurement implies some neighbouring problems with this technology. Yet, are there any technological solutions for some of the drawbacks?