Blockchain Papers

Bin Shen, Xiaoyan Xu, Quan Yuan

No abstract is available for this record.

Youshui Lu, Yong Qi, Saiyu Qi, Yue Li · 6 authors

As the most successful application of the sharing economy, ride-hailing service is popular worldwide and serves millions of users per day worldwide. Ride-hailing service providers (SPs) usually collect users’ personal data to improve their services via big data technologies. However, SPs may also use the collected user data to apply personalized prices to different users, which raises price fairness concerns. In this paper, we propose a smart price auditing system named Spas. Spas allows a user to purchaseFair Price Insurancein the form ofPrice Auditing Contract, then the price of ride-hailing service (RHS) order will be audited automatically once completed. According to the auditing result, the contract punishes misbehaving SPs and also compensates affected users automatically. By replacing an untrustworthy centralized auditor with carefully designed smart contracts, we construct a decentralized price auditing system which is trustworthy and transparent. We demonstrate a theoretical model for practical payment flows based on real RHS user data and we implement Spas in Hyperledger Fabric to show that decentralizing and automating price auditing for RHS with financial incentives is technically feasible.

Juanjuan Li, Yong Yuan, Fei–Yue Wang

No abstract is available for this record.

Juanjuan Li, Xiaochun Ni, Yong Yuan, Fei–Yue Wang

Bitcoin is gaining ground in recent years. In the Bitcoin system, miners provide computing power to confirm transactions in pursuit of transaction fees, while users compete by bidding transaction fees for faster confirmation. This process is in essence analogous to online ad auctions, where advertisers bid for more prominent ad slots. Therefore, inspired by ad auction research, we propose to apply the Generalized Second Price (GSP) auction mechanism in the dynamic confirmation game on Bitcoin transactions. Our model is targeted to deal with the problems caused by instability and low efficiency in the currently-adopted Generalized First Price (GFP) auction model in Bitcoin confirmation games. Besides, we use the “rank-by-cost” rule to replace the “rank-by-fee” rule, where each transaction’s cost is calculated by the user-submitted fee and the waiting time. Aiming to probe users’ equilibrium strategy, we first discuss the GSP game with complete information under synchronous submissions, and show that it has the Locally Envy-Free equilibrium. Then, we study the GSP game with incomplete information under asynchronous submissions, and define two types of strategies, i.e., the Farsighted Balanced (FB) strategy and the Instant Balanced (IB) strategy. The FB strategy is in line with users’ practical needs of determining fees so as to maximize the long-term payoffs; however it cannot generate a stable equilibrium. Alternatively, the IB strategy focuses on the instant payoff maximization, and if all users follow the IB strategy, their equilibrium fees can finally converge to a stable profile. Finally, we design computational experiments to validate our theoretical models and analysis. Our research findings indicate that this novel GSP mechanism is superior to the currently adopted GFP mechanism. Besides, the convergence of the GSP game under the IB strategy has also been illustrated by the computational experiments.

Guido Felipe Valderrama Herrera, Leonardo Garcia Sanchez

Este trabajo analiza la relación que tienen las ventas en corto, los sesgos de los agentes junto la interacción de los fundamentales de oferta y demanda respecto la formación de precios en el mercado del Bitcoin. Dentro del análisis encontramos que las tendencias aportadas en la literatura se mantienen en cuanto a las ventas en corto y sus restricciones a pesar de no encontrar evidencia estadística.

Hans‐Peter Burghof, Achim Fecker, Patrick Jaquart, Benedikt Notheisen

The 5th European Retail Investment Conference was hosted at Börse Stuttgart, Germany, from April 10th to 12th 2019. The conference chairs invited academics and practitioners to participate and discuss empirical and theoretical research focusing on retail investor products and services, the impact of technology on retail investors, investors’ decision-making, investor protection schemes, and market microstructure. Albert Menkveld, Professor of Finance at Vrije Universiteit Amsterdam and Fellow at the Tinbergen Institute, held the keynote about the fundamental value of bitcoin.

John Fry, Jean‐Philippe Serbera

Purpose The authors develop new quantitative methods to estimate the level of speculation and long-term sustainability of Bitcoin and Blockchain. Design/methodology/approach The authors explore the practical application of speculative bubble models to cryptocurrencies. They then show how the approach can be extended to provide estimated brand values using data from Google Trends. Findings The authors confirm previous findings of speculative bubbles in cryptocurrency markets. Relatedly, Google searches for cryptocurrencies seem to be primarily driven by recent price rises. Overall results are sufficient to question the long-term sustainability of Bitcoin with the suggestion that Ethereum, Bitcoin Cash and Ripple may all enjoy technical advantages relative to Bitcoin. Our results also demonstrate that Blockchain has a distinct value and identity beyond cryptocurrencies – providing foundational support for the second generation of academic work on Blockchain. However, a relatively low estimated long-term growth rate suggests that the benefits of Blockchain may take a long time to be fully realised. Originality/value The authors contribute to an emerging academic literature on Blockchain and to a more established literature exploring the use of Google data within business analytics. Their original contribution is to quantify the business value of Blockchain and related technologies using Google Trends

Tsan‐Ming Choi, Shu Guo, Suyuan Luo

No abstract is available for this record.

Giuseppe Santomauro, Daniela Alderuccio, Fiorenzo Ambrosino, Andrea Fronzetti Colladon · 5 authors

No abstract is available for this record.

Guanghui Yan, Shan Wang, Zhifei Yang, Yi Zhou

Bitcoin is the first and most successful Blockchain system so far. In the Bitcoin system, miners use transaction attached fees as a driving force to mine a new block and package transactions, while users compete by bidding transaction fees for faster confirmation. Considering the particularity of Bitcoin trading system, we take time series into consideration to analyze the transaction rules of Bitcoin system from the perspective of multiple cycles and establish a dynamic game model related to time under Generalised Second Price(GSP) mechanism, and also confirm the model's superiority on saving users' fees, compared with the static game model. Also, we propose the quantification of the user experience quantified by calculating the price difference between the transactions uploaded by the same user within adjacent times, making the transaction process of the Bitcoin system no longer the final say of the transaction price. The dynamic game model shows that there is a perfect Bayesian game equilibrium solution in the payment decision, so there is no incentive for users to change the attached fee, and the whole system is maintained stably. In addition, we verify the dynamic game model from computational experiment. Firstly, it is proved that with the help of revenue discount, the cost saving of the dynamic model is generally higher than that of the static model. Then the user's revenue under the dynamic model is showing an upward trend, and the transactions order under the dynamic model is more stable than that under static model, which can be illustrated mathematically and computationally that the proposed dynamic game model in this paper will help all transactions be processed more efficiently in a uniform pipeline.

Garud Iyengar, Fahad Saleh, Jay Sethuraman, Wenjun Wang

We construct an economic framework for understanding the incentives of the participants of a permissioned blockchain for supply chains and other related industries. Our study aims to determine whether adoption of blockchain is socially beneficial and whether such adoption arises in equilibrium. We find that blockchain reduces information asymmetry for consumers, thereby enhancing consumer welfare. Consumer welfare gains can be sufficiently large that blockchain adoption is socially beneficial; nonetheless, we find that blockchain adoption does not arise in equilibrium. This situation arises because blockchain adoption costs are borne by manufacturers, and manufacturers cannot extract consumer gains through prices due to the competitive nature of the manufacturing sector. We offer a system of transfers to generate blockchain adoption in equilibrium when it is socially beneficial. This paper was accepted by Vishal Gaur, operations management. Funding: This research was partially supported by a seed grant from the Columbia–IBM Center for Blockchain and Data Transparency. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2022.4532 .

Zoltán Bán, Jan Lánský, Stanislava Mildeová, Petr Tesar

Cryptocurrencies have become a major phenomenon in recent years. For IT, a breakthrough is both the cryptocurrency itself as a commodity and the technology that cryptocurrency development has brought. The article focuses on the bitcoin cryptocurrency as the most important cryptocurrency. A relatively unexplored topic is what goods or services are purchased for bitcoins. To track what bitcoins are spent on, it is necessary to look for places that are dedicated to trading cryptocurrencies. The bitcointalk.org forum was chosen as a source for our data mining. The aim of the article is to find an answer to the research question: What are bitcoins on the discussion forum bitcointalk.org planned to be spent on? As part of the research, an application was developed using a PHP script to gather information from the discussion forum (bitcointalk.org). There is some evidence which suggests what types of products or services people spend cryptocurrencies on. This research has proven that cryptocurrencies are used to buy and sell goods or services in the electronics and computer world segments. Today, these segments are widespread, which may speed up the integration of cryptocurrencies into everyday life. This applies, of course, only if the risks associated with cryptocurrencies do not increase.

Liudmila Zavolokina, Gianluca Miscione, Gerhard Schwabe

The second-hand automotive market is one with the least trust from consumers. Customers on the second-hand car market suffer from such problems as the car being in worse condition than initially indicated, accident damage that is not disclosed, fraud, etc. Akerlof, described the market for used cars as an example of the problem of information asymmetries and resulting quality uncertainty. In order to cope with quality uncertainties, used car buyers actively engage themselves in information seeking. Blockchain technology promises to automatize the tracking of cars through their lifecycles and provide reliable information at any point in time it is needed. In our study, we investigate the problems car buyers face during information seeking and propose requirements for the design of a blockchain-based system to address these.

Arthur Carvalho

No abstract is available for this record.

Jonathan Sadighian

This paper sets forth a framework for deep reinforcement learning as applied to market making (DRLMM) for cryptocurrencies. Two advanced policy gradient-based algorithms were selected as agents to interact with an environment that represents the observation space through limit order book data, and order flow arrival statistics. Within the experiment, a forward-feed neural network is used as the function approximator and two reward functions are compared. The performance of each combination of agent and reward function is evaluated by daily and average trade returns. Using this DRLMM framework, this paper demonstrates the effectiveness of deep reinforcement learning in solving stochastic inventory control challenges market makers face.

Oliver James Scholten, Nathan Hughes, Sebastian Deterding, Anders Drachen · 6 authors

Ethereum crypto-games are a booming and relatively unexplored area of the games industry. While there is no consensus definition yet, 'crypto-games' commonly denotes games that store tokens, e.g. in-game items, on a distributed ledger atop a cryptocurrency network. This enables the trading of game items for cryptocurrency, which can then be exchanged for regular currency. Together with their chance-based mechanics, this makes crypto-games part of the recent convergence of digital gaming and gambling. In a first effort to scope the field, this paper surveys popular crypto-games, which use the Ethereum cryptocurrency, to tease out characteristic technical properties and gameplay. It then compares the games' features with criteria found in current legal and psychological definitions of gambling. We find that the popular crypto-games selected meet a combined legal and psychological definition of gambling, and conclude with ramifications for future research.

Juanjuan Li, Yong Yuan, Fei–Yue Wang

No abstract is available for this record.

Domhnall Carlin, Jonah Burgess, Philip O’Kane, Sakir Sezer

Traditional malicious attacks have evolved beyond file-based methods, with malicious files now existing as processes and services to evade detection. This article examines the rise of cryptojacking-the use of another's machine for profit through cryptocurrency mining-and how we're all at risk.

Willa Ariela Syafruddin, Sajjad Dadkhah, Mario Köppen

In recent years, applications of the Blockchain concept, esp. as ledger for bitcoin transactions, has already resulted in huge amounts of wasted electrical energy for performing the Proof-of-Work tasks (cryptographic puzzles). Here, we consider an alternative concept to have this energy used at least for a useful purpose, the solution of real-world optimization problems. By means of the Traveling Salesperson Problem as model problem, we propose a concept to use optimization algorithms in an iterative manner to provide the Proof-of-Work needed to expand the Blockchain by a new block. The basic idea is to improve the tour cost for the best tour found for block n, extended by adding one more city, as a requirement for the inclusion of a new block in the Blockchain. This allows for the design of limited Blockchains, solving the underlying combinatorial optimization problems at the same time. Independently, it calls in for new efficient optimization algorithms and can serve as a real-world contest. It is discussed that metaheuristic algorithms perform an attractive class of optimization algorithms that can be used for the proposed approach. Numerical experiments also demonstrate the growth in problem complexity being handled by a binary PSO, which is a basic requirement for the full concept to work in practice.

Archana Jain, Chinmay Jain

No abstract is available for this record.

Yasser Mustafa

No abstract is available for this record.

Vipul Aggarwal, Yong Tan

No abstract is available for this record.

Dionisis Philippas, Hatem Rjiba, Khaled Guesmi, Stéphane Goutte

No abstract is available for this record.

Andrew Chi-Chih Yao

In the Bitcoin system, miners are incentivized to join the system and validate transactions through fees paid by the users. A simple "pay your bid" auction has been employed to determine the transaction fees. Recently, Lavi, Sattath and Zohar [Lavi et al., 2019] proposed an alternative fee design, called the monopolistic price (MP) mechanism, aimed at improving the revenue for the miners. Although MP is not strictly incentive compatible (IC), they studied how close to IC the mechanism is for iid distributions, and conjectured that it is nearly IC asymptotically based on extensive simulations and some analysis. In this paper, we prove that the MP mechanism is nearly incentive compatible for any iid distribution as the number of users grows large. This holds true with respect to other attacks such as splitting bids. We also prove a conjecture in [Lavi et al., 2019] that MP dominates the RSOP auction in revenue (originally defined in [Goldberg et al., 2006] for digital goods). These results lend support to MP as a Bitcoin fee design candidate. Additionally, we explore some possible intrinsic correlations between incentive compatibility and revenue in general.