Cryptocurrencies, like Bitcoin, are designed to facilitate payments even when there is a lack of trust. In this article, the authors discuss the features that are necessary for cryptocurrencies to play this role. They conclude that the specific features required to allow cryptocurrencies to facilitate payments when there is a lack of trust make these currencies less convenient as a payment mechanism than alternatives that rely on trust. The authors conclude that as long as sufficient trust exist in payment intermediaries, cryptocurrencies are likely too inconvenient to be widely adopted. <b>TOPICS:</b>Currency, portfolio construction, wealth management
This article identifies the many risk factors an investor should consider before adding cryptocurrencies to their investment portfolio. The returns yielded by these digital assets can in some cases be high, but an investor should seek to understand what risks exist as well. There are numerous factors to consider when investing in any asset. Traditional assets may prompt a fundamental analysis of an industry, company (business plan, financials, leadership) and other considerations. However, cryptocurrencies are not traditional assets. This investment/speculative environment contains: extremely volatile assets, a largely unregulated crowd funding mechanism, chronic theft and loss, money laundering, high transaction processing latency, potential market manipulation, and an overhanging ethical question. This article is not meant as investment advice, but points to many risk factors that are not generally present when investing in traditional assets/companies, and highlights the fact that the data needed to perform due diligence is often lacking. <b>TOPICS:</b>Currency, portfolio construction, wealth management
Christopher S. Henry, Kim P. Huynh, Gradon Nicholls
This article provides an update of the results of the 2017 Bitcoin Omnibus Survey (BTCOS) conducted by the Bank of Canada from December 12 to 15, 2017. The BTCOS was previously conducted in November and December 2016 and the results were reported in Henry, Huynh, and Nicholls (2017, forthcoming). The 2017 survey took place in an interesting time, as Bitcoin prices were increasing and reached an all-time high on December 17, 2017. During this period, the level of awareness of Bitcoin increased from 64 percent in the 2016 BTCOS to 85 percent in the 2017 BTCOS, while ownership rose from 2.9 to 5.0 percent respectively. The main reason cited by survey participants for owning Bitcoin changed from transactional purposes in 2016 to investment purposes in 2017. Further, only about half of Bitcoin owners were found to regularly use Bitcoin to buy goods or services or to send money to other people. <b>TOPICS:</b>Currency, portfolio construction, wealth management
Christopher Copeland, Mikaela Wallin, Thomas J. Holt
The development of the Darknet as a parallel network to the Web in the 21st century has facilitated illegal trafficking in small arms, as defined by the United Nations. The authors have used investigative research methodologies to observe six weapon sale sites on the Darknet over a six-month period to identify sellers of firearms, the type and caliber of weapons for sale, manufacturer, price in Bitcoin, and the principle national origins of the firearms. This is the first study of its type to explore the illegal sale of firearms on the Darknet. This evidence can be used by law enforcement to intercept and shut down said sites and provide insight to the nature of the illegal arms trade on the Darknet.
More than 500,000 people experience homelessness in America each day. Local and federal solutions to the problem have had limited success because of the fragmentation of services and lack of valid and timely information. Billions of dollars spent to provide reliable, timely, and actionable information in health care have exposed the difficulty of establishing such a system using the prevalent information technology solutions. However, relying on successful examples of the use of blockchain to help refugee populations and poor farmers internationally, we have partnered to propose an innovative solution to this problem using the case of people experiencing homelessness in Austin, Texas. This paper aims to describe one of the first applications of blockchain technology for addressing homelessness in the United States by creating a digital identity for people experiencing homelessness and engaging emergency medical services and clinical providers. The authors argue that a lack of documentation to prove personal identity and the inability to access own records are major hurdles for empowering persons experiencing homelessness to be resilient and overcome the life challenges they face. Furthermore, it is argued that this lack of information causes misdiagnosis, duplication, and fragmentation in service delivery, which can be potentially addressed by blockchain technology. Further planning for creating a program on the ground with additional funding will demonstrate the results of using blockchain technology to establish digital identity for persons experiencing homelessness.
Recently, the world has seen the emergence of new phenomenal technology named crypto currency (Bitcoin) which is attracted to several international networkers across the globe. Yet, the Bitcoin was the online currency which is replaced the hard currency in a business online transaction and was accepted only by internet users so far. Though, this invisible currency was not allowed or even accepted in Arab world society because of religious circumstances or governmental consent. In this study, we tried to analyze the real challenges and necessitates that face the Bitcoin in the Arabian region. Therefore, the outcomes have been found that Islamic business rules somehow have restricted the using of the Bitcoin process in financial transactions. Furthermore, the lowest and highest service cost of internet represent the key consequences behind lessen of using Bitcoin. According to Google trends Data from 2013 to 2019, many Arabian-individuals did not know or even unfamiliar with the use of Bitcoin. Keywords: key words, Bitcoin; Arabic countries; Islamic; Internet services DOI : 10.7176/JESD/10-6-18 Publication date :March 31 st 2019
YuâJin Kwon, Hyoungshick Kim, Jinwoo Shin, Yongdae Kim
Bitcoin has become the most popular cryptocurrency based on a peer-to-peer network. In Aug. 2017, Bitcoin was split into the original Bitcoin (BTC) and Bitcoin Cash (BCH). Since then, miners have had a choice between BTC and BCH mining because they have compatible proof-of-work algorithms. Therefore, they can freely choose which coin to mine for higher profit, where the profitability depends on both the coin price and mining difficulty. Some miners can immediately switch the coin to mine only when mining difficulty changes because the difficulty changes are more predictable than that for the coin price, and we call this behavior fickle mining. In this paper, we study the effects of fickle mining by modeling a game between two coins. To do this, we consider both fickle miners and some factions (e.g., BITMAIN for BCH mining) that stick to mining one coin to maintain that chain. In this model, we show that fickle mining leads to a Nash equilibrium in which only a faction sticking to its coin mining remains as a loyal miner to the less valued coin (e.g., BCH), where loyal miners refer to those who conduct mining even after coin mining difficulty increases. This situation would cause severe centralization, weakening the security of the coin system. To determine which equilibrium the competing coin systems (e.g., BTC vs. BCH) are moving toward, we traced the historical changes of mining power for BTC and BCH and found that BCH often lacked loyal miners until Nov. 13, 2017, when the difficulty adjustment algorithm of BCH mining was changed. However, the change in difficulty adjustment algorithm of BCH mining led to a state close to the stable coexistence of BTC and BCH. We also demonstrate that the lack of BCH loyal miners may still be reached when a fraction of miners automatically and repeatedly switches to the most profitable coin to mine (i.e., automatic mining). According to our analysis, as of Dec. 2018, loyal miners to BCH would leave if more than about 5% of the total mining capacity for BTC and BCH has engaged in the automatic mining. In addition, we analyze the recent âhash warâ between Bitcoin ABC and SV, which confirms our theoretical analysis. Finally, we note that our results can be applied to any competing cryptocurrency systems in which the same hardware (e.g., ASICs or GPUs) can be used for mining. Therefore, our study brings new and important angles in competitive coin markets: a coin can intentionally weaken the security and decentralization level of the other rival coin when mining hardware is shared between them, allowing for automatic mining.
Blockchain technology is an electronic ledger of digital records that is distributed over a network of computers rather than located on single or multiple servers. As the technology is by itself transparent and secure even without a trusted third party involvement, many applications are being developed as a means of eliminating corruption around the world. This article examines how the blockchain technology could be used to curb corruption and take integrity to higher standards at a firm level, within-country level and cross-country level. Possible risks and challenges related to the technology were identified and found that without considering the data governance and security issues, the blockchain technology may not always lead to a socio-economic benefit.
Bitcoin, cryptocurrencies, and blockchains have become buzzwords in the media and are attracting increasing academic interest, mainly from the fields of computer science and financial economics. In this essay, I argue that cryptocurrencies and blockchains are important objects of general social science research and thought, but not for their âmoneynessâ per se. Through a historical sociology of the antecedents and discourse leading up to Bitcoin, I show that it was never meant to be âmoneyâ in the economic sense, but rather a solution to a technical puzzle for preventing opportunistic actors from double-spending digital âcoins,â as well as a fervent ideology surrounding online privacy and infringement of individual rights in the digital age. Drawing from themes in science and technology studies, I suggest that Bitcoin and other âcryptoassetsâ are properly socio-technological assemblages that constitute new and important objects of social inquiry that must be understood beyond the myopic context of crypto-money. I conclude by proposing three alternative ontologies for blockchains relevant to economic, political, and social life: as systems of accounting, as organizational forms, and as institutions in their own right.
In recent years, we have seen a great deal of both academic and practical interest in the topic of vulnerabilities in smart contracts, particularly those developed for the Ethereum blockchain. While most of the work has focused on detecting *vulnerable* contracts, in this paper, we focus on finding how many of these vulnerable contracts have actually been *exploited*. We survey the 23,327 vulnerable contracts reported by six recent academic projects and find that, despite the amounts at stake, only 1.98% of them have been exploited since deployment. This corresponds to at most 8,487 ETH (~1.7 million USD), or only 0.27% of the 3 million ETH (600 million USD) at stake. We explain these results by demonstrating that the funds are very concentrated in a small number of contracts which are *not exploitable* in practice.
Donncha Kavanagh, Gianluca Miscione, Paul J. Ennis
The global financial crisis and the contemporaneous emergence of the digital currency Bitcoin invite us to think about money and how it often functions almost imperceptibly in society. In this article, we show that Bitcoin is a ânew object of concernâ that also compels us to reimagine ethnography in a digital age. We present a method, which we term ethno-resonance, that is both a reaction to the conditions presented by the Bitcoin phenomenon and a way of maintaining critical distance from its cyberlibertarian politics. We explicate six aspects of the method, framed around answers to what, why, how, who, when and where questions. Applied to cryptocurrencies, the method leads us to depict Bitcoin as a game, and we analyse the gameâs dynamics through mapping the interplay between four foundational myths that animate, complicate and sustain the game. More broadly, this contributes to our understanding of the nature of money and alternative currencies.
innovations in peer-to-peer software protocols 3 commonly known as blockchain technology.These protocols make it possible for individuals to safely and securely complete transactions in digital information of some value, also known as "cryptocurrency," 4 without the need for either a central authority 5 to act as a third party or government-enforced rule of law. 6 But what happens when code fails to protect the basic rights that our existing laws have always sought to protect?Bitcoin-a cryptocurrency that is one form of blockchain information-continues to dominate the daily headlines, primarily due to its wild fluctuations in market price. 7 The all-time-high market price reached in 2017 correlates, unsurprisingly, with the record number of transactions 8 and wallet users 9 achieved.But the meteoric rise in price occurred without much public discussion of blockchain's technological innovation outside of a relatively small group of COINREPORT (July 27, 2016), https://coinreport.net/into-the-ether-ethereum/[https://perma.cc/GB9X-K53K].3. Protocols, in this sense, are the rules written into the code that govern how the software may be used.See PEDRO FRANCO, UNDERSTANDING BITCOIN:
Cryptocurrency such as bitcoin, Ethereum, and, more recently, Monero has become the currency of choice for many drug dealers and extortionists. The criminal activities extend to tax evasion, money laundering, Ponzi schemes, and the theft of cryptocurrencies to kidnapping for ransom. As the demand for cryptocurrencies increases, it provides opportunities for criminals to hide behind the presumed privacy and anonymity. Identifying these cryptocurrency-related crimes have posed challenges for law enforcement due to the cross-border nature of transactions, the use of evasion technology to mask the identity of users, and inconsistent regulations. To address the role of cryptocurrencies in criminal activities, the study focused on four research questions: (1) What role do cryptocurrencies such as bitcoin (BTC) play in criminal activities? (2) What factors facilitate cryptocurrency-related criminal activities? (3) What role do politics play in regulating cryptocurrencies? and (4) What are the challenges they pose for regulators and law enforcement? To answer the questions, the study utilized a systematic content review of the news reports, court cases, scholarly articles, online search engines, and commentaries relevant to regulations and reforms. The findings help to understand the current climate of virtual currencies, their use in criminal activities, and the complexities involved in regulating cryptocurrencies.
Mehrnoosh Mirtaheri, Sami Abu-El-Haija, Fred Morstatter, Greg Ver Steeg · 5 authors
Interest surrounding cryptocurrencies, digital or virtual currencies that are used as a medium for financial transactions, has grown tremendously in recent years. The anonymity surrounding these currencies makes investors particularly susceptible to fraud---such as ``pump and dump'' scams---where the goal is to artificially inflate the perceived worth of a currency, luring victims into investing before the fraudsters can sell their holdings. Because of the speed and relative anonymity offered by social platforms such as Twitter and Telegram, social media has become a preferred platform for scammers who wish to spread false hype about the cryptocurrency they are trying to pump. In this work we propose and evaluate a computational approach that can automatically identify pump and dump scams as they unfold by combining information across social media platforms. We also develop a multi-modal approach for predicting whether a particular pump attempt will succeed or not. Finally, we analyze the prevalence of bots in cryptocurrency related tweets, and observe a significant increase in bot activity during the pump attempts.
Abstract The purpose of this article is to determine the effectiveness of the Cybercrimes Bill of 2018 in investigating and prosecuting cryptocurrency crime. The method used to determine this enquiry is based on the analysis of certain criminal, procedural, and investigatory support provisions of the bill, accompanied by recommendations where necessary. An analysis of the Cybercrimes Bill of 2018 in its entirety falls outside the scope of this article. The significance of this enquiry rests on the increasing use of cryptocurrencies in criminal activity (including money laundering, investment scams, fraud, hacking, and cyber extortion). The investigation and prosecution of such criminal activity may be exacerbated by the unique characteristics inherent in a cryptocurrency; a cryptocurrency is an unregulated, online, encrypted (and thus pseudonymous) âcurrencyâ denominated in its own units of value. Cryptocurrencies are thus an international online âcurrencyâ with multijurisdictional presence. Any criminal activity associated with its use will therefore invariably possess a cyber-element. Such criminal activity will thus need to be addressed from a legal basis that caters for the criminal and procedural processes necessary in the investigation and subsequent prosecution of such crime.
The use of cryptocurrencies such as Bitcoin and Ethereum in performing online transactions has been on the rise in the world. Africa as a continent is not left out in the adoption of blockchain and cryptocurrencies. This paper explores the prospects and challenges of developing a cryptocurrency in Rwanda which we denote Rwandacoin. In addition, the paper discusses the potentials of Rwandacoin easing intercountry trading in East Africa.
Purpose The purpose of this paper is to show how global regulation of cryptocurrencies and other cybercurrencies can assist in addressing the challenges of attribution when investigating ransomware attacks and other types of cybercrime using these payment methods. Design/methodology/approach A literature review, looking at current academic research and discourse on the topic cryptocurrency regulation, is conducted to highlight current thinking and perceived difficulties in implanting a global regulatory framework. In addition, the research explores how governments have addressed the risks posed by cryptocurrencies and how regulation has been implemented. The research focuses on the regulatory approaches of Australia, Europe and the Americas to determine whether they could feasibly address the risks posed by cryptocurrencies and be implemented on a global scale. Findings To date, few sustained efforts have been made to regulate Bitcoin or other cybercurrencies. Where regulation has been introduced, it has often proven too costly to implement, thereby, stifling Bitcoin industry growth, or too ad hoc to function effectively. These regulatory pitfalls are substantiated by the continuing difficulty faced by law enforcement agencies, in identifying individual Bitcoin users and separating those that are using them for nefarious purposes from those that are using them for legitimate ones. These challenges appear to grow exponentially when it comes to prosecuting criminals for Bitcoin-related offences, due to the enormous lack of agreement within the justice system of most countries as to the appropriate legal definition for Bitcoin. This research highlights three characteristics that will be vital to the success of any global regulatory framework. These are consistency, clarity and cost-effective implementation. A regulatory framework for Bitcoin that lacks any one of these elements will fail to meet the requirements of every stakeholder in the regulatory process. A framework that is too costly to implement will stifle fintech innovation, subsequently depriving national economies of the multitude of potential benefits promised by fostering fintech entrepreneurship. Equally, a framework that is inconsistent will hamper the global cooperation necessary to combat Bitcoin-related crime. Originality/value This research evaluates research, discourse and regulatory responses from academic and governmental sources and discusses how a global response to cryptocurrency regulation will help address the growing problem of attribution when it comes to ransomware attacks, which has experienced a considerable spike in recent months.
Much recent policy discourse has pivoted on the relationship between terrorist campaigns and an emergent feature of the global financial landscape in the form of cryptocurrencies. Cryptocurrencies are a subset of digital currencies that are distributed by the developers thereof. The various unique features of cryptocurrencies have led to discussion in punditry about how terrorists could benefit from this new mode of financial transaction but few policy-oriented works and scholarly assessments exist to outline and assess this claim. This article describes cryptocurrencies, and assesses them in line with the operational realities of terrorist campaigns. I argue that, while there is limited evidence that terrorists are likely to disproportionately benefit from use of cryptocurrencies at present, there do exist unique opportunities for money laundering and revenue generation.
Bitcoin is the most prominent cryptocurrency that is frequently debated nowadays, basically defined as decentralised âcurrencyâ, âpayment systemâ and âinvestment toolâ which is an opportunity offered by today's digital age. In this article, we aim to fulfil the analysis of the legal basis of the matter from both technical and legal point of view. Despite there are many legal issues related to Bitcoin, we will particularly draw attention to some of the fundamental legal problems caused by the anonymity feature of the Bitcoin. Among these problems that may arise, only the disputes that may fall within the scope of the cases relating to debt and asset which have an impact on enforcement law will be examined. We will discuss the anonymity feature, considering the possibility of accessing an anonymous Bitcoin wallet. The article examines the situation where a debtor or one of the parties in a lawsuit may conceal their assets unfairly via Bitcoin (with the anonymity feature) in civil disputes relating to debt and assets. Has Bitcoin turned into a tool that malevolent debtors can hide their wealth while at the same time, a secret place where they can invest their money? In this study, we will offer solutions on overcoming the anonymity feature in practice and how to reveal and reach the wealth that are stored via Bitcoin wallet. Likewise, it will be underlined what malevolent debtors or parties in a lawsuit who want to obscure their wealth via Bitcoin wallet can do to strengthen their anonymity. Finally, we provide a specific and practical guideline for judges and especially creditor's lawyers in order to reduce the potential adverse situation that Bitcoin's anonymity feature can cause.
In this paper, we present an analysis of the mining process of two popular assets, Bitcoin and gold. The analysis highlights that Bitcoin, more specifically its underlying technology, is a âsafe havenâ that allows facing the modern environmental challenges better than gold. Our analysis emphasizes that crypto-currencies systems have a social and economic impact much smaller than that of the traditional financial systems. We present an analysis of the several stages needed to produce an ounce of gold and an artificial agent-based market model simulating the Bitcoin mining process and allowing the quantification of Bitcoin mining costs. In this market model, miners validate the Bitcoin transactions using the proof of work as the consensus mechanism, get a reward in Bitcoins, sell a fraction of them to cover their expenses, and stay competitive in the market by buying and divesting hardware units and adjusting their expenses by turning off/on their machines according to the signals provided by a technical analysis indicator, the so-called relative strength index.