186 research outputs found
The Stability and the Security of the Tangle
In this paper we study the stability and the security of the distributed data structure at the base of the IOTA protocol, called the Tangle. The contribution of this paper is twofold. First, we present a simple model to analyze the Tangle and give the first discrete time formal analyzes of the average number of unconfirmed transactions and the average confirmation time of a transaction.
Then, we define the notion of assiduous honest majority that captures the fact that the honest nodes have more hashing power than the adversarial nodes and that all this hashing power is constantly used to create transactions. This notion is important because we prove that it is a necessary assumption to protect the Tangle against double-spending attacks, and this is true for any tip selection algorithm (which is a fundamental building block of the protocol) that verifies some reasonable assumptions. In particular, the same is true with the Markov Chain Monte Carlo selection tip algorithm currently used in the IOTA protocol.
Our work shows that either all the honest nodes must constantly use all their hashing power to validate the main chain (similarly to the Bitcoin protocol) or some kind of authority must be provided to avoid this kind of attack (like in the current version of the IOTA where a coordinator is used).
The work presented here constitute a theoretical analysis and cannot be used to attack the current IOTA implementation. The goal of this paper is to present a formalization of the protocol and, as a starting point, to prove that some assumptions are necessary in order to defend the system again double-spending attacks. We hope that it will be used to improve the current protocol with a more formal approach
Trustless communication across distributed ledgers: impossibility and practical solutions
Since the advent of Bitcoin as the first decentralized digital currency in 2008, a plethora of distributed ledgers has been created, differing in design and purpose. Considering the heterogeneous nature of these systems, it is safe to say there shall not be ``one coin to rule them all". However, despite the growing and thriving ecosystem, blockchains continue to operate almost exclusively in complete isolation from one another: by design, blockchain protocols provide no means by which to communicate or exchange data with external systems. To this date, centralized providers hence remain the preferred route to exchange assets and information across blockchains~-- undermining the very nature of decentralized currencies.
The contribution of this thesis is threefold.
First, we critically evaluate the (im)possibilty, requirements, and challenges of cross-chain communication by contributing the first systematization of this field. We formalize the problem of Cross-Chain Communication (CCC) and show it is impossible without a trusted third party by relating CCC to the Fair Exchange problem. With this impossibility result in mind, we develop a framework to design new and evaluate existing CCC protocols, focusing on the inherent trust assumptions thereof, and derive a classification covering the field of cross-chain communication to date.
We then present XCLAIM, the first generic framework for transferring assets and information across permissionless distributed ledgers without relying on a centralized third party.
XCLAIM leverages so-called cryptocurrency-backed assets, blockchain-based assets one-to-one backed by other cryptocurrencies, such as Bitcoin-backed tokens on Ethereum. Through the secure issuance, transfer, and redemption of these assets, users can perform cross-chain exchanges in a financially trustless and non-interactive manner, overcoming the limitations of existing solutions.
To ensure the security of user funds, XCLAIM relies on collateralization of intermediaries and a proof-or-punishment approach, enforced via smart contracts equipped with cross-chain light clients, so-called chain relays.
XCLAIM has been adopted in practice, among others by the Polkadot blockchain, as a bridge to Bitcoin and other cryptocurrencies.
Finally, we contribute to advancing the state of the art in cross-chain light clients.
We develop TxChain, a novel mechanism to significantly reduce storage and bandwidth costs of modern blockchain light clients using contingent transaction aggregation, and apply our scheme to Bitcoin and Ethereum individually, as well as in the cross-chain setting.Open Acces
Formalizing Nakamoto-Style Proof of Stake
Fault-tolerant distributed systems move the trust in a single party to a
majority of parties participating in the protocol. This makes blockchain based
crypto-currencies possible: they allow parties to agree on a total order of
transactions without a trusted third party. To trust a distributed system, the
security of the protocol and the correctness of the implementation must be
indisputable.
We present the first machine checked proof that guarantees both safety and
liveness for a consensus algorithm. We verify a Proof of Stake (PoS)
Nakamoto-style blockchain (NSB) protocol, using the foundational proof
assistant Coq. In particular, we consider a PoS NSB in a synchronous network
with a static set of corrupted parties. We define execution semantics for this
setting and prove chain growth, chain quality, and common prefix which together
implies both safety and liveness
SoK: Consensus in the Age of Blockchains
The core technical component of blockchains is consensus: how to reach agreement among a distributed network of nodes. A plethora of blockchain consensus protocols have been proposed---ranging from new designs, to novel modifications and extensions of consensus protocols from the classical distributed systems literature. The inherent complexity of consensus protocols and their rapid and dramatic evolution makes it hard to contextualize the design landscape. We address this challenge by conducting a systematization of knowledge of blockchain consensus protocols. After first discussing key themes in classical consensus protocols, we describe: (i) protocols based on proof-of-work; (ii) proof-of-X protocols that replace proof-of-work with more energy-efficient alternatives; and (iii) hybrid protocols that are compositions or variations of classical consensus protocols. This survey is guided by a systematization framework we develop, to highlight the various building blocks of blockchain consensus design, along with a discussion on their security and performance properties. We identify research gaps and insights for the community to consider in future research endeavours
Democracy Through The Blocks: Towards the Era of Law Engineering
As we enter the age of decentralization, technological and political tensions stress the fabric of modern Democracies. Understanding the theoretical and practical challenges that we will be forced to face is the focus of this project. From the technological choices and their implementations, passing through their political and philosophical consequences, a new path needs to be drawn in order to understand whether DLTs will fundamentally change the very concepts of eDemocracy and governance, or improve existing models
Cryptocurrencies and tokenization of assets: the managerial implications of a new financial reality
Cryptocurrency and tokenization of assets is a phenomenon that is yet to change many sectors
in the economy. Already, its impact has had a significant effect on many financial markets.
Cryptocurrencies are more than just a means of payment and transactions. The technology
behind it, blockchain, has an even greater impact because it can be adopted even beyond the
financial sector. The evolution of tokens and their popularity in the financial sector has had both
positive and negative implications on the financial markets and companies. This research seeks
to show the managerial implications of cryptocurrency and tokenization of assets. The present
dissertation aims to address this gap because of the need for regulation of the sector. To
understand the managerial implications of cryptocurrency and tokenization of assets, it is
essential that we first understand what the two aspects are and how they operate. Later in this
document, we shall observe that Bitcoin is currently the most popular cryptocurrency, although
various types exist. At its inception in 2008, there were only about 50 coins in circulation, which
has since evolved.
Although blockchain technology had long since been invented, it only became popular with
Bitcoin. The technology has three versions premised on virtual currency, smart contracts, and
other sectors beyond finance and markets. This technology operates through complex
algorithms and computers interconnected to minimize the possibility of fraud and hackings.
Using companies like PayPal and eBay, valuable assets can be tokenized and traded as well.
Blockchain is also popular for its ability to track records. The data is public and easily
accessible. However, the privacy and anonymity of persons are also emphasized. Research was
carried out using a qualitative method. This was done by reviewing and analyzing past literature
on cryptocurrencies and their general impact on the economy. The pros and cons of using
cryptocurrency were also examined to form a clear opinion on its economy usage. It was found
that cryptocurrency and tokenization of assets guarantee security, are efficient for payment and
promote transparency for business. However, it has limitations, such as the increased risk of
fraudsters and illegal transactions
On Finality in Blockchains
This paper focuses on blockchain finality, which refers to the time when it becomes impossible to remove a block that has previously been appended to the blockchain. Blockchain finality can be deterministic or probabilistic, immediate or eventual. To favor availability against consistency in the face of partitions, most blockchains only offer probabilistic eventual finality: blocks may be revoked after being appended to the blockchain, yet with decreasing probability as they sink deeper into the chain. Other blockchains favor consistency by leveraging the immediate finality of Consensus - a block appended is never revoked - at the cost of additional synchronization.
The quest for "good" deterministic finality properties for blockchains is still in its infancy, though. Our motivation is to provide a thorough study of several possible deterministic finality properties and explore their solvability. This is achieved by introducing the notion of bounded revocation, which informally says that the number of blocks that can be revoked from the current blockchain is bounded. Based on the requirements we impose on this revocation number, we provide reductions between different forms of eventual finality, Consensus and Eventual Consensus. From these reductions, we show some related impossibility results in presence of Byzantine processes, and provide non-trivial results. In particular, we provide an algorithm that solves a weak form of eventual finality in an asynchronous system in presence of an unbounded number of Byzantine processes. We also provide an algorithm that solves eventual finality with a bounded revocation number in an eventually synchronous environment in presence of less than half of Byzantine processes. The simplicity of the arguments should better guide blockchain designs and link them to clear formal properties of finality
SoK: A Consensus Taxonomy in the Blockchain Era
Consensus (a.k.a. Byzantine agreement) is arguably one of the most fundamental problems in distributed systems, playing also an important role in the area of cryptographic protocols as the enabler of a (secure) broadcast functionality. While the problem has a long and rich history and has been analyzed from many different perspectives, recently, with the advent of blockchain protocols like Bitcoin, it has experienced renewed interest from a much wider community of researchers and has seen its application expand to various novel settings.
One of the main issues in consensus research is the many different variants of the problem that exist as well as the various ways the problem behaves when different setup, computational assumptions and network models are considered. In this work we perform a systematization of knowledge in the landscape of consensus research starting with the original formulation in the early 1980s up to the present
blockchain-based new class of consensus protocols. Our work is a roadmap for studying the consensus problem under its many guises, classifying the way it operates in many settings and highlighting the exciting new applications that have emerged in the blockchain era
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