502 research outputs found
Cryptocurrency with a Conscience: Using Artificial Intelligence to Develop Money that Advances Human Ethical Values
Cryptocurrencies like Bitcoin are offering new avenues for economic empowerment
to individuals around the world. However, they also provide a powerful tool that
facilitates criminal activities such as human trafficking and illegal weapons sales
that cause great harm to individuals and communities. Cryptocurrency advocates
have argued that the ethical dimensions of cryptocurrency are not qualitatively new,
insofar as money has always been understood as a passive instrument that lacks
ethical values and can be used for good or ill purposes. In this paper, we challenge
such a presumption that money must be ‘value-neutral.’ Building on advances in
artificial intelligence, cryptography, and machine ethics, we argue that it is possible
to design artificially intelligent cryptocurrencies that are not ethically neutral but
which autonomously regulate their own use in a way that reflects the ethical values
of particular human beings – or even entire human societies. We propose a technological framework for such cryptocurrencies and then analyse the legal, ethical, and
economic implications of their use. Finally, we suggest that the development of
cryptocurrencies possessing ethical as well as monetary value can provide human
beings with a new economic means of positively influencing the ethos and values
of their societies
Bitcoin: a Money-like Informational Commodity
The question "what is Bitcoin" allows for many answers depending on the
objectives aimed at when providing such answers. The question addressed in this
paper is to determine a top-level classification, or type, for Bitcoin. We will
classify Bitcoin as a system of type money-like informational commodity (MLIC)
What are the main drivers of the Bitcoin price? Evidence from wavelet coherence analysis
Bitcoin has emerged as a fascinating phenomenon of the financial markets.
Without any central authority issuing the currency, it has been associated with
controversy ever since its popularity and public interest reached high levels.
Here, we contribute to the discussion by examining potential drivers of Bitcoin
prices ranging from fundamental to speculative and technical sources as well as
a potential influence of the Chinese market. The evolution of the relationships
is examined in both time and frequency domains utilizing the continuous
wavelets framework so that we comment on development of the interconnections in
time but we can also distinguish between short-term and long-term connections.Comment: 19 pages, 5 figure
Majority is not Enough: Bitcoin Mining is Vulnerable
The Bitcoin cryptocurrency records its transactions in a public log called
the blockchain. Its security rests critically on the distributed protocol that
maintains the blockchain, run by participants called miners. Conventional
wisdom asserts that the protocol is incentive-compatible and secure against
colluding minority groups, i.e., it incentivizes miners to follow the protocol
as prescribed.
We show that the Bitcoin protocol is not incentive-compatible. We present an
attack with which colluding miners obtain a revenue larger than their fair
share. This attack can have significant consequences for Bitcoin: Rational
miners will prefer to join the selfish miners, and the colluding group will
increase in size until it becomes a majority. At this point, the Bitcoin system
ceases to be a decentralized currency.
Selfish mining is feasible for any group size of colluding miners. We propose
a practical modification to the Bitcoin protocol that protects against selfish
mining pools that command less than 1/4 of the resources. This threshold is
lower than the wrongly assumed 1/2 bound, but better than the current reality
where a group of any size can compromise the system
Trends in crypto-currencies and blockchain technologies: A monetary theory and regulation perspective
The internet era has generated a requirement for low cost, anonymous and
rapidly verifiable transactions to be used for online barter, and fast settling
money have emerged as a consequence. For the most part, e-money has fulfilled
this role, but the last few years have seen two new types of money emerge.
Centralised virtual currencies, usually for the purpose of transacting in
social and gaming economies, and crypto-currencies, which aim to eliminate the
need for financial intermediaries by offering direct peer-to-peer online
payments.
We describe the historical context which led to the development of these
currencies and some modern and recent trends in their uptake, in terms of both
usage in the real economy and as investment products. As these currencies are
purely digital constructs, with no government or local authority backing, we
then discuss them in the context of monetary theory, in order to determine how
they may be have value under each. Finally, we provide an overview of the state
of regulatory readiness in terms of dealing with transactions in these
currencies in various regions of the world
Modeling Bitcoin Contracts by Timed Automata
Bitcoin is a peer-to-peer cryptographic currency system. Since its
introduction in 2008, Bitcoin has gained noticeable popularity, mostly due to
its following properties: (1) the transaction fees are very low, and (2) it is
not controlled by any central authority, which in particular means that nobody
can "print" the money to generate inflation. Moreover, the transaction syntax
allows to create the so-called contracts, where a number of
mutually-distrusting parties engage in a protocol to jointly perform some
financial task, and the fairness of this process is guaranteed by the
properties of Bitcoin. Although the Bitcoin contracts have several potential
applications in the digital economy, so far they have not been widely used in
real life. This is partly due to the fact that they are cumbersome to create
and analyze, and hence risky to use.
In this paper we propose to remedy this problem by using the methods
originally developed for the computer-aided analysis for hardware and software
systems, in particular those based on the timed automata. More concretely, we
propose a framework for modeling the Bitcoin contracts using the timed automata
in the UPPAAL model checker. Our method is general and can be used to model
several contracts. As a proof-of-concept we use this framework to model some of
the Bitcoin contracts from our recent previous work. We then automatically
verify their security in UPPAAL, finding (and correcting) some subtle errors
that were difficult to spot by the manual analysis. We hope that our work can
draw the attention of the researchers working on formal modeling to the problem
of the Bitcoin contract verification, and spark off more research on this
topic
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