Blockchain Papers

Amy Sparrow Phelps, Allan Watt

No abstract is available for this record.

Assaf Shomer

We calculate the probability of success of block-hiding mining strategies in Bitcoin-like networks. These strategies involve building a secret branch of the block-tree and publishing it opportunistically, aiming to replace the top of the main branch and rip the reward associated with the secretly mined blocks. We identify two types of block-hiding strategies and chart the parameter space where those are more beneficial than the standard mining strategy described in Nakamoto's paper. Our analysis suggests a generalization of the notion of the relative hashing power as a measure for a miner's influence on the network. Block-hiding strategies are beneficial only when this measure of influence exceeds a certain threshold.

Cristina Pérez Solà, Jordi Herrera‐Joancomartí

Este trabajo esta parcialmente financiado por el Ministerio de Educacion, a traves de los proyectos TIN2011-27076-C03-02 CO-PRIVACY, TIN2010-15764 N-KHRONOUS, CONSOLIDER INGENIO 2010 CSD2007-0004 ARES, y de la beca FPU-AP2010-0078.

Toru Nakanishi, Nomura Tomoya, Nobuo Funabiki

In anonymous reputation systems, where after an interaction between anonymous users, one of the users evaluates the peer by giving a rating. Ratings for a user are accumulated, which becomes the reputation of the user. By using the reputation, we can know the reliability of an anonymous user. Previously, anonymous reputation systems have been proposed, using an anonymous e-cash scheme. However, in the e-cash-based systems, the bank grasps the accumulated reputations for all users, and the fluctuation of reputations. These are private information for users. Furthermore, the timing attack using the deposit times is possible, which makes the anonymity weak. In this paper, we propose an anonymous reputation system, where the reputations of users are secret for even the reputation manager such as the bank. Our approach is to adopt an anonymous credential certifying the accumulated reputation of a user. Initially a user registers with the reputation manager, and is issued an initial certificate. After each interaction with a rater, the user as the ratee obtains an updated certificate certifying the previous reputation summed up by the current rating. The update protocol is based on the zero-knowledge proofs, and thus the reputations are secret for the reputation manager. On the other hand, due to the certificate, the user cannot maliciously alter his reputation.

Hari Krishnan Ramachandran, Sai Saketh, Marichetty Venkata Teja Vaibhav

Cryptocurrency, a form of digital currency that has an open and decentralized system and uses cryptography to enhance security and control the creation of new units, is touted to be the next step from conventional monetary transactions. Many Cryptocurrencies exist today, with Bitcoin being the most prominent of them. Cryptocurrencies are generated by mining, as a fee for validating any transaction. The rate of generating hashes, which validate any transaction, has been increased by the use of specialized machine such as ASICs, running complex hashing algorithms like SHA-256, thereby leading to faster generation of Cryptocurrencies. With more people venturing into the world of virtual currency, generating hashes for this validation has become far more complex over the years, with miners having to invest huge sums of money on employing and maintaining multiple high performance ASICs. This paper throws light on the nuances of Cryptocurrency mining process, the issues of traditional mining machines and the implication of incorporating cloud technology to current mining infrastructure.

Ivan Hernandez, Masooda Bashir, Gahyun Jeon, Jeremiah Bohr

No abstract is available for this record.

Anton Badev, Matthew Chen

This paper provides the necessary technical background to understand basic Bitcoin operations and documents a set of empirical regularities related to Bitcoin usage. We present the micro-structure of the Bitcoin transaction process and highlight the use of cryptography for the purposes of transaction security and distributed maintenance of a ledger. Using publicly available transaction-level data, we examine patterns of general usage together with usage by Satoshi Dice, the largest online gambling service using Bitcoin as the method of payment. Our analysis suggests that less than 50 percent of all bitcoins in circulation are used in transactions. About half of these transactions involve less than U.S.$100 equivalent, and for the period for which we have data for Satoshi Dice, most of these small-value transactions were related to the online gambling service. Relatively less frequent large value transactions drive the average transaction value to levels above U.S.$40,00 0 equivalent value, and are not likely to involve payments for goods and services. Bitcoin exchange rates exhibit somewhat complicated dynamics. In the past 24 months, the USD-BTC exchange rate increased more than 50-fold. The daily variance of the USD-BTC exchange rate remained remarkably stable for this same period, once the variance calculations account for the changing exchange rate level. We also document that the exchange rates between bitcoin and other major currencies are not well aligned. We interpret this as lack of depth of the exchange markets and as costly exchange rather than as unexploited arbitrage opportunities. Finally, we examine the economic incentives for the participants in the distributed implementation of the Bitcoin scheme.

Aaron Yelowitz, Matthew W. Wilson

The anonymity of Bitcoin prevents analysis of its users. We collect Google Trends data to examine determinants of interest in Bitcoin. Based on anecdotal evidence regarding Bitcoin users, we construct proxies for four possible clientele: computer programming enthusiasts, speculative investors, Libertarians and criminals. Computer programming and illegal activity search terms are positively correlated with Bitcoin interest, while Libertarian and investment terms are not.

Ladislav Krištoufek

Digital currencies have emerged as a new fascinating phenomenon in the financial markets. Recent events on the most popular of the digital currencies--BitCoin--have risen crucial questions about behavior of its exchange rates and they offer a field to study dynamics of the market which consists practically only of speculative traders with no fundamentalists as there is no fundamental value to the currency. In the paper, we connect two phenomena of the latest years--digital currencies, namely BitCoin, and search queries on Google Trends and Wikipedia--and study their relationship. We show that not only are the search queries and the prices connected but there also exists a pronounced asymmetry between the effect of an increased interest in the currency while being above or below its trend value.

Marie Claire Van Hout, Tim Bingham

No abstract is available for this record.

Nicolas Christin

We perform a comprehensive measurement analysis of Silk Road, an anonymous, international online marketplace that operates as a Tor hidden service and uses Bitcoin as its exchange currency. We gather and analyze data over eight months between the end of 2011 and 2012, including daily crawls of the marketplace for nearly six months in 2012. We obtain a detailed picture of the type of goods sold on Silk Road, and of the revenues made both by sellers and Silk Road operators. Through examining over 24,400 separate items sold on the site, we show that Silk Road is overwhelmingly used as a market for controlled substances and narcotics, and that most items sold are available for less than three weeks. The majority of sellers disappears within roughly three months of their arrival, but a core of 112 sellers has been present throughout our measurement interval. We evaluate the total revenue made by all sellers, from public listings, to slightly over USD 1.2 million per month; this corresponds to about USD 92,000 per month in commissions for the Silk Road operators. We further show that the marketplace has been operating steadily, with daily sales and number of sellers overall increasing over our measurement interval. We discuss economic and policy implications of our analysis and results, including ethical considerations for future research in this area.

Nevena Vratonjić

Online advertising is at the core of today’s Web: it is the main business model, generating large annual revenues expressed in tens of billions of dollars that sponsor most of the online content and services. Online advertising consists of delivering marketing messages, embedded into Web content, to a targeted audience. In this model, entities attract Web traffic by offering the content and services for free and charge advertisers for including advertisements in this traffic (i.e., advertisers pay for users’ attention and interests). Online advertising is a very successful form of advertising as it allows for advertisements (ads) to be targeted to individual users’ interests; especially when advertisements are served on users’ mobile devices, as ads can be targeted to users’ locations and the corresponding context. However, online advertising also introduces a number of problems. Given the high ad revenue at stake, fraudsters have economic incentives to exploit the ad system and generate profit from it. Unfortunately, to achieve this goal, they often compromise users’ online security (e.g., via malware, phishing, etc.). For the purpose of maximizing the revenue by matching ads to users’ interests, a number of techniques are deployed, aimed at tracking and profiling users’ digital footprints, i.e., their behavior in the digital world. These techniques introduce new threats to users’ privacy. Consequently, some users adopt ad-avoidance tools that prevent the download of advertisements and partially thwart user profiling. Such user behavior, as well as exploits of ad systems, have economic implications as they undermine the online advertising business model. Meddling with advertising revenue disrupts the current economic model of the Web, the consequences of which are unclear. Given that today’s Web model relies on online advertising revenue in order for users to have access and consume content and services for “free”, coupled with the fact that there are many threats that could jeopardize this model, in this thesis we address the security, privacy and economic issues stemming from this fundamental element of the Web. In the first part of the thesis, we investigate the vulnerabilities of online advertising systems. We identify how an adversary can exploit the ad system to generate profit for itself, notably by performing inflight modification of ad traffic. We provide a proof-of-concept implementation of the identified threat on Wi-Fi routers. We propose a collaborative approach for securing online advertising and Web browsing against such threats. By investigating how a certificate-based authentication is deployed in practice, we assess the potential of relying on certificate-based authentication as a building block of a solution to protect the ad revenue. We propose a multidisciplinary approach for improving the current state of certificate-based authentication on the Web. In the second part of the thesis, we study the economics of ad systems’ exploits and certain potential countermeasures. We evaluate the potential of different solutions aimed at protecting ad revenue being implemented by the stakeholders (e.g., Internet Service Providers or ad networks) and the conditions under which this is likely to happen. We also study the economic ramifications of ad-avoidance technologies on the monetization of online content. We use game-theory to model the strategic behavior of involved entities and their interactions. In the third part of the thesis, we focus on privacy implications of online advertising. We identify a novel threat to users’ location privacy that enables service providers to geolocate users with high accuracy, which is needed to serve location-targeted ads for local businesses. We draw attention to the large scale of the threat and the potential impact on users’ location privacy.

Monica J. Barratt, Simon Lenton, Matthew Allen

Governments have traditionally censored drug-related information, both in traditional media and, in recent years, in online media. We explore Internet content regulation from a drug-policy perspective by describing the likely impacts of censoring drug websites and the parallel growth in hidden Internet services. Australia proposes a compulsory Internet filtering regime that would block websites that ‘depict, express or otherwise deal with matters of… drug misuse or addiction’ and/or ‘promote, incite or instruct in matters of crime’. In this article, we present findings from a mixed-methods study of online drug discussion. Our research found that websites dealing with drugs, that would likely be blocked by the filter, in fact contributed positively to harm reduction. Such sites helped people access more comprehensive and relevant information than was available elsewhere. Blocking these websites would likely drive drug discussion underground at a time when corporate-controlled ‘walled gardens’ (e.g. Facebook) and proprietary operating systems on mobile devices may also limit open drug discussion. At the same time, hidden Internet services, such as Silk Road, have emerged that are not affected by Internet filtering. The inability for any government to regulate Tor websites and the crypto-currency Bitcoin poses a unique challenge to drug prohibition policies.

Nicolas Christin

We perform a comprehensive measurement analysis of Silk Road, an anonymous, international online marketplace that operates as a Tor hidden service and uses Bitcoin as its exchange currency. We gather and analyze data over eight months between the end of 2011 and 2012, including daily crawls of the marketplace for nearly six months in 2012. We obtain a detailed picture of the type of goods being sold on Silk Road, and of the revenues made both by sellers and Silk Road operators. Through examining over 24,400 separate items sold on the site, we show that Silk Road is overwhelmingly used as a market for controlled substances and narcotics, and that most items sold are available for less than three weeks. The majority of sellers disappears within roughly three months of their arrival, but a core of 112 sellers has been present throughout our measurement interval. We evaluate the total revenue made by all sellers, from public listings, to slightly over USD 1.2 million per month; this corresponds to about USD 92,000 per month in commissions for the Silk Road operators. We further show that the marketplace has been operating steadily, with daily sales and number of sellers overall increasing over our measurement interval. We discuss economic and policy implications of our analysis and results, including ethical considerations for future research in this area.

Stefano Braghin, Tan, Jackson, Rajesh Sharma, Anwitaman Datta

In this work we describe the PriSM framework for decentralized deployment of a federation of autonomous social networks (ASN). The individual ASNs are centrally managed by organizations according to their institutional needs, while cross-ASN interactions are facilitated subject to security and confidentiality requirements specified by administrators and users of the ASNs. Such decentralized deployment, possibly either on private or public clouds, provides control and ownership of information/flow to individual organizations. Lack of such complete control (if third party online social networking services were to be used) has so far been a great barrier in taking full advantage of the novel communication mechanisms at workplace that have however become commonplace for personal usage with the advent of Web 2.0 platforms and online social networks. PriSM provides a practical solution for organizations to harness the advantages of online social networking both in intra/inter-organizational settings without sacrificing autonomy, security and confidentiality needs.

Keita Emura, Atsuko Miyaji, Mohammad Shahriar Rahman

No abstract is available for this record.

Mohsen Sharifi, Alireza Saberi, Mojtaba Vahidi, Mohammad Zorufi

No abstract is available for this record.

Iftach Haitner, Omer Reingold

Interactive hashing, introduced by Naor, Ostrovsky, Venkatesan, and Yung (J. Cryptol. 11(2):87–108, 1998 ), plays an important role in many cryptographic protocols. In particular, interactive hashing is a major component in all known constructions of statistically hiding commitment schemes and of statistical zero-knowledge arguments based on general one-way permutations/functions. Interactive hashing with respect to a one-way function f is a two-party protocol that enables a sender who knows y = f ( x ) to transfer a random hash z = h ( y ) to a receiver such that the sender is committed to y : the sender cannot come up with x and x ′ such that f ( x )≠ f ( x ′), but h ( f ( x ))= h ( f ( x ′))= z . Specifically, if f is a permutation and h is a two-to-one hash function, then the receiver does not learn which of the two preimages { y , y ′}= h −1 ( z ) is the one the sender can invert with respect to f . This paper reexamines the notion of interactive hashing, and proves the security of a variant of the Naor et al. protocol, which yields a more versatile interactive hashing theorem. When applying our new proof to (an equivalent variant of) the Naor et al. protocol, we get an alternative proof for this protocol that seems simpler and more intuitive than the original one, and achieves better parameters (in terms of how security preserving the reduction is).

A. Saxena

In this paper, we introduce the concept of additive zero knowledge. Essentially, an additive proof can be considered as a proof system involving many provers and one verifier such that the statements of all the provers are proved simultaneously. Our model of additive proofs is presented using constructions of blind group identification, aggregate signatures and chained signatures. The security of our protocols relies on the difficulty of the underlying Diffie-Hellman problem in bilinear maps. As applications, we present a novel method to prevent spam.