Distributed Ledgers, such as blockchains implement business collaboration processes in the form of smart contracts (SCs). Blockchain technology and smart contracts have received significant attention as they exhibit autonomy, decentralization, trust, and transparency over peer-to-peer networks while moving the assets digitally among peers without a third-party such as lawyers in conventional contracts (CCs). Smart contracts are computerized scripts or protocols that execute contractual clauses when certain pre-defined conditions meet and thereby digitally enforce the negotiation and performance of a contract. Smart contracts, although, being self-executable and self-enforceable, are irreversible once written and lack contractual flexibility in the face of a contingency. A high degree of automation is sought to manifest blockchain enabled smart contracts into the so-called self-aware contracts (SAC) that can be aware of its internal contextual environment and the external environment or real-world events. This Ph.D. work aims to develop the belief-desire-intention (BDI) model based multi-agent system on the top of the blockchain technology-enabled smart contracts to yield the so-called self-aware contracts. This research follows the guidelines of Design Science Research (DSR) methodology.
Smart contracts enable autonomous decentralized organizations (DADs) in large, trustless and open trading networks by specifying conditions for automated transactions of cryptographically secured data. This data could represent cryptocurrencies but also sensor data or commands to Cyber-Physical Systems (CPS) connected to the Internet. To provide reliability, the contract code is enforced by consensus and the transactions it triggers are nonrevertible, even if they were not intended by the programmer, which could lead to dangerous system behavior. In this paper, we conduct a survey over existing smart contract platforms and languages to determine requirements for the design of a safer contract language. Subsequently we propose concepts that enhance the understanding of code by limiting confusing language constructs, such as nesting, arbitrary naming of operations, and unreadable hash identifiers. This enables human reasoning about the contract semantics on a much higher abstraction layer, because a common understanding can be derived from the language specification itself. We implement these concepts in a new domain specific language called SmaCoNat to illustrate the feasibility and show that our concepts are barely covered by existing languages but significantly enhance readability and safety without violating deterministic parsability.
Carlos Molina-Jiménez, Ioannis Sfyrakis, Ellis Solaiman, Irene C. L. Ng · 7 authors
Decentralised (on-blockchain) and centralised (off–blockchain) platforms are available for the implementation of smart contracts. However, none of the two alternatives can individually provide the services and quality of services (QoS) imposed on smart contracts involved in a large class of applications. The reason is that blockchain platforms suffer from scalability, performance, transaction costs and other limitations. Likewise, off–blockchain platforms are afflicted by drawbacks emerging from their dependence on single trusted third parties. We argue that in several applications, hybrid platforms composed from the integration of on and off–blockchain platforms are more adequate. Developers that informatively choose between the three alternatives are likely to implement smart contracts that deliver the expected QoS. Hybrid architectures are largely unexplored. To help cover the gap and as a proof of concept, in this paper we discuss the implementation of smart contracts on hybrid architectures. We show how a smart contract can be split and executed partially on an off–blockchain contract compliance checker and partially on the rinkeby ethereum network. To test the solution, we expose it to sequences of contractual operations generated mechanically by a contract validator tool.
Lars Brünjes, Aggelos Kiayias, Ηλίας Κουτσουπιάς, Aikaterini-Panagiota Stouka
We introduce and study reward sharing schemes (RSS) that promote the fair formation of {\em stake pools}\ in collaborative projects that involve a large number of stakeholders such as the maintenance of a proof-of-stake (PoS) blockchain. Our mechanisms are parameterized by a target value for the desired number of pools. We show that by properly incentivizing participants, the desired number of stake pools is a Nash equilibrium arising from rational play. Our equilibria also exhibit an efficiency / security tradeoff via a parameter that calibrates between including pools with the smallest cost and providing protection against Sybil attacks, the setting where a single stakeholder creates a large number of pools in the hopes to dominate the collaborative project. We then describe how RSS can be deployed in the PoS setting, mitigating a number of potential deployment attacks and protocol deviations that include censoring transactions, performing Sybil attacks with the objective to control the majority of stake, lying about the actual cost and others. Finally, we experimentally demonstrate fast convergence to equilibria in dynamic environments where players react to each other's strategic moves over an indefinite period of interactive play. We also show how simple reward sharing schemes that are seemingly more "fair", perhaps counterintuitively, converge to centralized equilibria.
In the era of the Internet of Things (IoT), smart connected devices have the ability to generate data that could be of interest to the public. This paves the way for an emerging market for monetized data exchanges, where IoT device owners can sell access to live data generated by their connected devices to interested users. Implementing a trusted, cost‐efficient, automatic monetization solution of IoT data can be a challenging problem and usually involves intermediaries and centralised governance and management. Blockchain and smart contracts introduce a secure and trusted platform to carry out transactions in a highly trusted, secure, decentralised manner. In this study, they present a blockchain‐solution and implementation using Ethereum smart contracts for monetizing IoT data with automated payment involving no intermediary. The authors discuss key aspects related to architectural design, entity relations, interactions among participants, logic flow, implementation and testing of the overall system functionality.
Similar1 to the economic system of the resource allocation of market and enterprise, distributed ledger technology may support an institutional form between decentralization and centralization, especially the smart contract that runs on it. The smart contract supports a more flexible, de-intermediary economic contractual relationship potentially. So distributed ledger technology can also be considered as an institutional technology [1]. According to the economic method, regarding the transaction cost as the basic unit, based on the technical and business characteristics of the distributed ledger, we analyzed economic contract innovation scenarios of distributed ledgers, and found important institutional features, including de-intermediation, intelligence and miniaturization. In addition, we made a preliminary empirical analysis through decentralized exchanges.
We study and develop an automated platform for shareholder rights management using Distributed Ledger Technology (DLT), in collaboration with an equity crowdfunding company. DLT has high impact potential for the multi-agent systems domain, as it allows participants to agree on the values of shared variables and keep a history of how the values change over time. DLT also enables participants to know that the shared values are common knowledge. In our application, the shared variables that the agents agree on are the shareholder rights. Knowing that there is common agreement on these rights allows us to develop related applications, such as a shareholder voting system. In this paper, we discuss the shareholder rights management platform and briefly mention a related shareholder voting system, both currently under development.
Ethereum platforma za pametne ugovore svjetlo dana je ugledala 2015. godine, a bila je predložena već 2013. godine. Ona je uvelike inspirirana prvom i najpoznatijom kriptovalutom Bitcoin. Mi smo upotrijebili Ethereum platformu da napravimo pametni ugovor u programskom jeziku Solidity. Svrha tog pametnog ugovora je prediktivno definiranje budućih događaja. Nad tim pametnim ugovorim izgradili smo odgovarajuću web aplikaciju. Pri implementaciji naišli smo na određene tehničke probleme i probleme u vezi sinkronizacije. Takvi problemi su uobičajeni u većini distribuiranih aplikacija. U ovome diplomskom radu smo adresirali i raspravili te konkretne probleme.
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
Blockchain-based systems such as cryptocurrencies are achieving widespread usage, with a market capitalization of $150B (USD)as of September 2017. However, the most prominent platforms that account for over 70% of this market - Bitcoin & Ethereum - are exhibiting increasingly lower levels of decentralization. This poses the problem of concentrating levers of consensus to a select group of agents in the system. At the same time, attempts at higher levels of decentralization poses the problem of limiting scalability of such systems. In this paper, using mechanism design we propose a way of designing payoffs in order to disincentivize certain exhibited behaviors and incentivize desired behaviors of miners in such systems. Our approach indicates potential for research in this area for solving the much larger problem of centralization in decentralized systems such as blockchain.
Today, Cloud services are mainly traded on provider platforms such as on Amazon's EC2 On-Demand marketspace. Thereby, consumers and providers neither negotiate the price nor the characteristics of the services. The recent years underpin a trend to more dynamic Cloud markets. So e.g. the Cloud provider Virtustream released a revenue model where consumers are charged based on consumed μVMs while Amazon extended it's spot market with spot blocks and spot fleet management. Hence, multi-round bilateral negotiations are a promising approach for trading Cloud services on future Cloud markets. Such negotiations are based on an alternating exchange of offers and hence, they are termed Bazaar-negotiations. Specifications such as the WS-Agreement Negotiation - which is maintained by the Open Grid Forum - foster the development of Bazaar-based markets. To ensure integrity and transparency of negotiations with untrusted negotiation partners - which is a precondition for the adaption of Bazaar-based Cloud markets - blockchains are a promising approach. In this paper we introduce a concept of a blockchain for Bazaar-negotiations whereby we assume that the offers exchanged during negotiations follow the structure defined in the WS-Agreement Negotiation specification. We implemented it within a CloudSim based simulation environment which is able to simulate such Bazaar-based markets to show its technical feasibility.
Summary This paper investigates what are referred to as ‘open information transactions’. Such transactions are in contrast to traditional transactions, where typically two parties to a transaction are the only ones with information about the transaction. For example, in a sale, the seller and the purchaser typically are the only ones with information about the transaction. However, some emerging technologies, such as blockchain accounting, supply chain social media, and hashtag commerce are making information about the transactions potentially openly available to others. This paper investigates some of the implications and strategies that include the use of that open information. For example, open information in accounting and supply chain transactions provides the potential for both business intelligence analysis of the information and possibly misleading and illusory transactions, analogous to those that have garnered the recent attention of the Justice Department in cryptocurrencies. Finally, this paper suggests that blockchain transaction processing will provide reliable information in those settings where there is a “single truth” feed of information flow for the phenomena of interest, no ability to do off‐blockchain transactions (or a large penalty cost) and limitation to a single identity for each enterprise on the blockchain.
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
Muskan Vinayak, Har Amrit Pal Singh Panesar, Saulo dos Santos, Ruppa K. Thulasiram · 6 authors
The recent advancement in Blockchain technology and cryp-tocurrencies like Bitcoin and Ethereum has captured interest of many researchers in academia and industry. Since its advent, the Blockchain was inherently supposed to be used in combination with cryptocurrencies but currently this technology is being used in other areas as well. One particular area based on the distributed ledger technology that has grabbed the attention of many technologist and financial marketers is “Smart Contracts”. Based on a cryptocurrency framework known as Ethereum, these smart contracts can be used for different applications such as Option Pricing, Currency Exchange, Revenue Management System, Crowd-funding and Peer-to-Peer networking. In our current effort, we have designed a smart contract and demonstrate that this smart contract could be used to take various possible positions in an European style option. We have analyzed the contract for potential security vulnerabilities when implemented in Blockchain. These option based smart contracts could be used for collateral contract services among finance industries.
Many consensus protocols are based on the assumption that participants are either “good” or “bad” but ignore the fact that they may be affected by direct or indirect economic interests involved in the corresponding smart contracts. We analyze consensus in decentralized environments and demonstrate that the system cannot guarantee correct execution results.
Jul 1, 2018·2018 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom) and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)
Prediction markets are markets where participants trade contracts whose payoffs are tied to a future event, thereby yielding prices that can be interpreted as market aggregated forecasts. Past studies have shown that the prediction markets can provide accurate forecasts, sometimes better than sophisticated statistical tools. Due to their advantages, prediction markets have been widely used in the prediction of elections, project management, product quality, and impact of events. However, prediction markets also have some limitations, e.g., poor anonymity and limited market liquidity. In this paper, we propose to apply blockchain powered smart contracts to the prediction markets. First, we give a comprehensive overview on the prediction markets, including their theoretical basis, classification and applications. Second, we present how to design prediction markets based on smart contracts. Then, the algorithm of contracts implementation is proposed. Finally, in order to verify the effectiveness of the algorithm, an intra-enterprise prediction market is built based on a private blockchain. The experimental results show that the market can make accurate prediction for a particular event. In addition, the autonomy, self-sufficiency, and decentralization characteristics of blockchain make the prediction markets more efficient and robust.
John R. Adler, Ryan Berryhill, Andreas Veneris, Zissis Poulos · 6 authors
The public blockchain was originally conceived to process monetary transactions in a peer-to-peer network while preventing double-spending. It has since been extended to numerous other applications including execution of programs that exist on the blockchain called "smart contracts." Smart contracts have a major limitation, namely they only operate on data that is on the blockchain. Trusted entities called oracles attest to external data in order to bring it onto the blockchain but they do so without the robust security guarantees that blockchains generally provide. This has the potential to turn oracles into centralized points-of-failure. To address this concern, this paper introduces Astraea, a decentralized oracle based on a voting game that decides the truth or falsity of propositions. Players fall into two roles: voters and certifiers. Voters play a low-risk/low-reward role that is resistant to adversarial manipulation while certifiers play a high-risk/high-reward role so they are required to play with a high degree of accuracy. This paper also presents a formal analysis of the parameters behind the system to measure the probability of an adversary with bounded funds being able to successfully manipulate the oracle's decision, that shows that the same parameters can be set to make manipulation arbitrarily difficult---a desirable feature for the system. Further, this analysis demonstrates that under those conditions a Nash equilibrium exists where all rational players are forced to behave honestly.
We consider zero-knowledge proofs, a class of cryptographic protocols by which an agent (a Prover) can prove to another agent (a Verifier) that a statement is true without revealing any additional information. For example, a zero-knowledge proof allows one to prove knowledge of a password to somebody at the other end of the communication without actually revealing the password. \nWe present an introduction to and survey literature on zero-knowledge proofs, covering the history, formal definition, and classical applications of zero-knowledge proofs. In addition, we consider connections to complexity, demonstrating that all problems in the complexity class NP have zero-knowledge proofs, and also discuss more exotic applications of zero-knowledge, namely in electronic voting and nuclear disarmament. \nWe then consider applications of zero-knowledge to financial regulation, specifically in balancing transparency and confidentiality in financial reporting. Namely, we polled professionals in the financial industry to identify three major classes of regulatory problems. We then utilize zero-knowledge proofs to develop and present cryptographic protocols/mechanisms and solutions to these regulatory problems: (1) An employer verifying an employee has no financial holdings on a blacklist without revealing the other (allowed) holdings of the employee, (2) A fund convincing its investors that its holdings subscribe to particular risk constraints, without disclosing the actual holdings, (3) A collection of investors of a fund verifying aggregate information provided by the fund, while preserving pairwise anonymity. Applications (1) and (3) are novel applications developed in this paper, while (2) is drawn from [47].
Péter Garamvölgyi, Imre Kocsis, Benjamin Gehl, Attila Klenik
Applications of Distributed Ledger Technologies (DLTs) in IoT and Cyber-Physical Systems (CPS) are rapidly emerging. However, developing correct and resilient smart contracts for these use cases is even less understood than it is for cryptocurrency-based contracts. This paper presents an initial approach for generating smart contracts for coordinating the usage of cyber-physical system elements from UML statecharts. While the current target platform is Ethereum, our approach can easily be extended to other blockchain platforms.
Most cryptocurrency systems mint new coins according to a predetermined rate, which contributes to inflation instead of solely by the actual demand. On the other hand, the blockchain, or whatever distributed consensus protocol underlying the cryptocurrency, can only process a limited number of transactions in a given time interval. To address both of these two issues, we propose a methodology that connects the coin minting with the prosperity of a cryptocurrency. Specifically, when there are fewer transactions, any cryptocurrency adopting our methodology will introduce a greater inflation to motivate transactions. Moreover, this methodology provides deflations and turns the currency towards a reserve of value when the network burden is too heavy.
Recently, blockchain systems have attracted intensive attentions from academia, industrial circles and governments, which make smart contract a hit since it is an important research topic for blockchain system. We propose a logic-based smart contract model Logic-SC for blockchain system based on semantics and syntax of Active-U-Datalog with some temporal extensions. Logic-SC model owns a triggering mechanism by temporal active rules, which can satisfy the expressiveness and flexibility of the smart contracts for blockchain system. The paper introduces the rules, structure of contracts and implementation of the model. Finally, an application is exampled to show the effectiveness of the model.
Blockchain Technology Applications and Security
Auction Theory and Applications
Advanced Steganography and Watermarking Techniques
Given the parallels between game theory and consensus, it makes sense to intelligently design blockchain or DAG protocols with an incentive-compatible-first mentality. To that end, we propose a new blockchain or DAG protocol enhancement based on delayed rewards. We devise a new method for imposing slashing conditions on miner behavior, using their delayed rewards as stake in a Proof of Work system. Using fraud proofs, we can slash malicious miner behavior and reward long-lived, honest behavior.
Farinaz Sabz Ali Pour, Unal Tatar, Adrian Gheorghe
Sand is a key ingredient for many industries, including concrete, glass, and electronics. Sand extraction is now exceeding fossil fuels and biomass. The absence of data on aggregates sand mining makes assessments difficult and has contributed to the lack of awareness about this issue. A sand governance business framework is developed applying the blockchain technology as the main goal of this study to regulate the sand extraction and trade. Blockchain technology provides a distributed concurrency monitoring system for the supply management. Agent-Based Modeling and Simulation (ABMS) as an effective bottom-up tool is applied to demonstrate the application of the model. The sand providers and users are modeled as a collection of autonomous decision-making entities called agents. The agents interact with each other, the regulators participate in making decisions on the basis of a set of rules that are defined within the blockchain network.
E-government system has greatly improved the efficiency and transparency of daily operations of a government. However, most of existing e-government services are provided in a centralized manner and heavily rely on human individuals to control. The highly centralized IT infrastructure is more vulnerable to outside attacks. Also, it is relatively easy to compromise the data integrity by inside rogue users. Furthermore, relying on individuals to monitor and control some of the working flows makes the system error-prone and leaves room for corruption. To address these challenges, we propose to use the blockchain technology and decentralized autonomous organization (DAO) to improve the e-government system. The blockchain-based DAO system works in a fully decentralized way and is immune to both outside and inside attacks. At the same time, operations of such system is only controlled by pre-defined rules; thus, the uncertainty and errors caused by human processes are greatly reduced. We provide a concrete use case to demonstrate the usage of DAO e-government and evaluate its effectiveness.