Teechain: a secure payment network with asynchronous blockchain access

Blockchains such as Bitcoin and Ethereum execute payment transactions securely, but their performance is limited by the need for global consensus. Payment networks overcome this limitation through off-chain transactions. Instead of writing to the blockchain for each transaction, they only settle the final payment balances with the underlying blockchain. When executing off-chain transactions in current payment networks, parties must access the blockchain within bounded time to detect misbehaving parties that deviate from the protocol. This opens a window for attacks in which a malicious party can steal funds by deliberately delaying other parties' blockchain access and prevents parties from using payment networks when disconnected from the blockchain. We present Teechain, the first layer-two payment network that executes off-chain transactions asynchronously with respect to the underlying blockchain. To prevent parties from misbehaving, Teechain uses treasuries, protected by hardware trusted execution environments (TEEs), to establish off-chain payment channels between parties. Treasuries maintain collateral funds and can exchange transactions efficiently and securely, without interacting with the underlying blockchain. To mitigate against treasury failures and to avoid having to trust all TEEs, Teechain replicates the state of treasuries using committee chains, a new variant of chain replication with threshold secret sharing. Teechain achieves at least a 33X higher transaction throughput than the state-of-the-art Lightning payment network. A 30-machine Teechain deployment can handle over 1 million Bitcoin transactions per second

Invoice factoring through blockchain technology

(English) Invoice factoring has been a popular way to provide cash flow for businesses. The primary function of a factoring system is to prevent an invoice from being factored twice. In order to prevent double factoring, many factoring ecosystems use one or several centralized entities to register factoring agreements. However, this puts a lot of power in the hands of these centralized entities and makes it difficult for users to dispute situations in which factoring data is unavailable, wrongly recorded or manipulated by negligence or on purpose. This thesis presents our research around the current problems of invoice factoring and our new solutions to solve this process using the blockchain technology. A public blockchain can keep a permanent, secure, ordered and transparent record of transactions which are then available for everyone at any time to view and verify. In this thesis, we start proposing a base solution, and we gradually enhance it. In the base protocol, we propose an architecture for invoicing registration based on a general blockchain. The blockchain platform builds trust between the parties by executing transactions correctly. We employed a smart contract to complete the registration process, and prevent double factoring. The smart contract provides for auditing and dispute resolution in such a way that privacy is protected and relevant information is always available. In the second protocol, we add a relayer to our architecture for easier on-boarding. Only the relayer is required to submit blockchain transactions, and pay the corresponding fees. Other participants can proxy their transactions through the relayer, and pay the relayer in fiat money. We also enhance our identity management and authentication using the concept of verifiable credentials (VC) in order to better comply with the Know-Your-Customer (KYC) regulation. In fact, in this architecture, participants use their decentralized identifiers (DIDs) and the DIDComm protocol for asynchronous and secure off-chain interactions. In the final protocol, we greatly enhance our smart contract with respect to the conditions it checks before registering an invoice factoring. We integrate non-interactive zero-knowledge proofs and cryptographic commitments into our solution. With these cryptographic tools in place, we can prevent a special type of denial of service (DoS) attack and better verify invoice details without compromising privacy. Our protocols are very efficient in terms of blockchain costs. In particular, we only need one transaction to register an invoice factoring, and most of the details are recorded in low-cost blockchain storage. Our evaluations and comparison with the literature reveals that our protocols are superior to the related works with respect to efficiency, security, privacy, and ease of use.(Català) La venda de factures o "invoice factoring" ha estat una forma popular de proporcionar flux de caixa a les empreses. La funció principal d'un sistema de venda de factures és evitar que una factura sigui venuda dues vegades. Per evitar la doble venda, molts ecosistemes de factoring utilitzen entitats centralitzades per registrar els acords de venda de factures. Això, però, posa molt poder en mans d'aquestes entitats centralitzades i dificulta que els usuaris puguin impugnar o rebatre situacions en què les dades de venda no estan disponibles, es registren erròniament o es manipulen ja sigui per negligència o a propòsit. Aquesta tesi presenta la nostra recerca al voltant dels problemes actuals dels sistemes de registre de venda de factures i les nostres novedosses solucions per resoldre aquest procés utilitzant la tecnologia "blockchain" (cadena de blocs). Mitjançant una blockchain pública es pot mantenir un registre permanent, segur, ordenat i transparent de transaccions que estan disponibles per a tothom en qualsevol moment per poder ser observades i verificades. A la tesi, comencem proposant una solució base i la anem ampliant i millorant gradualment. La primera proposta és un protocol que utilitza una arquitectura amb blockchain. La plataforma blockchain genera confiança entre les parts ja que garanteix la correcta execució de les transaccions. En aquest sentit, fem servir un contracte intel·ligent per completar el procés de registre i evitar la doble venda. El contracte intel·ligent permet l'auditoria i la resolució de disputes de manera que protegim la privadesa i fem que la informació rellevant estigui sempre disponible. Al segon protocol, afegim un "relay" o retransmissor a la nostra arquitectura per facilitar la incorporació d'usuaris al sistema. El retransmissor és l'únic que envia transaccions a la cadena de blocs i el que paga les taxes corresponents. Els altres participants poden delegar l'enviament de les seves transaccions al repetidor i pagar amb diners fiduciaris. En aquesta proposta també millorem la gestió de la identitat i de l'autenticació utilitzant el concepte de credencials verificables (Verifiable Credentials o VC) per complir millor amb la normativa "Conegui el seu client" (Know Your Customer o KYC). De fet, en aquesta arquitectura, els participants utilitzen els seus identificadors descentralitzats (Decentralized Identifier o DID) i el protocol DIDComm per a les interaccions asíncrones i segures fora de la cadena. Al protocol final, millorem en gran mesura el nostre contracte intel·ligent pel que fa a les condicions que comprova abans de registrar una venda de factura. En aquesta última solució, integrem proves no interactives de coneixement nul (Zero Knowledge Proofs o ZKP) i compromisos criptogràfics. Amb aquestes eines, podem evitar un tipus especial d'atac de denegació de servei (Denial of Service o DoS) i verificar millor els detalls de les factures sense comprometre la privadesa. Els nostres protocols són molt eficients en termes de cost per comissions. En particular, només necessitem una transacció per registrar una factura i la majoria dels detalls es registren a l'emmagatzematge de la cadena de blocs de baix cost. Les nostres avaluacions i la comparació amb la literatura revelen que els nostres protocols són superiors als treballs relacionats pel que fa a l'eficiència, la seguretat, la privadesa i facilitat d'ús.Enginyeria telemàtic

Decentralized factoring for self-sovereign identities

Invoice factoring is a handy tool for developing businesses that face liq- uidity problems. The main property that a factoring system needs to fulfill is to prevent an invoice from being factored twice. Distributed ledger tech- nology is suitable for implementing the platform to register invoice factor- ing agreements and prevent double-factoring. Several works have been proposed to use this technology for invoice factoring. However, current proposals lack in one or several aspects such as decentralization and secu- rity against corruption, protecting business and personally identifiable in- formation (PII), providing non-repudiation for handling disputes, Know- Your-Customer (KYC) compliance, easy user on-boarding, and being cost- efficient. In this article, a factoring registration protocol is proposed for invoice factoring registration based on a public distributed ledger which adheres to the before-mentioned requirements. We include a relayer in our architecture to address the entry barrier that the users have due to the need of managing cryptocurrencies for interacting with the public ledger. Moreover, we leverage the concept of Verifiable Credentials (VCs) for KYC compliance, and allow parties to implement their self-sovereign identities by using decentralized identifiers (DIDs). DIDs enable us to relay on the DIDComm protocol for asynchronous and secure off-chain communica- tions. We analyze our protocol from several security aspects, compare it to the related work, and study a possible business use case. Our evalu- ations demonstrate that our proposal is secure and efficient, and covers requirements not addressed by existing related work.This research has been funded by i3Market (H2020-ICT-2019-2 grant number 871754). This work is also supported by the TCO-RISEBLOCK (PID2019-110224RB-I00), ARPASAT (TEC2015- 70197-R), and by the Generalitat de Catalunya grant 2014-SGR-1504.Peer ReviewedPostprint (published version

Invoice factoring through blockchain technology

(English) Invoice factoring has been a popular way to provide cash flow for businesses. The primary function of a factoring system is to prevent an invoice from being factored twice. In order to prevent double factoring, many factoring ecosystems use one or several centralized entities to register factoring agreements. However, this puts a lot of power in the hands of these centralized entities and makes it difficult for users to dispute situations in which factoring data is unavailable, wrongly recorded or manipulated by negligence or on purpose. This thesis presents our research around the current problems of invoice factoring and our new solutions to solve this process using the blockchain technology. A public blockchain can keep a permanent, secure, ordered and transparent record of transactions which are then available for everyone at any time to view and verify. In this thesis, we start proposing a base solution, and we gradually enhance it. In the base protocol, we propose an architecture for invoicing registration based on a general blockchain. The blockchain platform builds trust between the parties by executing transactions correctly. We employed a smart contract to complete the registration process, and prevent double factoring. The smart contract provides for auditing and dispute resolution in such a way that privacy is protected and relevant information is always available. In the second protocol, we add a relayer to our architecture for easier on-boarding. Only the relayer is required to submit blockchain transactions, and pay the corresponding fees. Other participants can proxy their transactions through the relayer, and pay the relayer in fiat money. We also enhance our identity management and authentication using the concept of verifiable credentials (VC) in order to better comply with the Know-Your-Customer (KYC) regulation. In fact, in this architecture, participants use their decentralized identifiers (DIDs) and the DIDComm protocol for asynchronous and secure off-chain interactions. In the final protocol, we greatly enhance our smart contract with respect to the conditions it checks before registering an invoice factoring. We integrate non-interactive zero-knowledge proofs and cryptographic commitments into our solution. With these cryptographic tools in place, we can prevent a special type of denial of service (DoS) attack and better verify invoice details without compromising privacy. Our protocols are very efficient in terms of blockchain costs. In particular, we only need one transaction to register an invoice factoring, and most of the details are recorded in low-cost blockchain storage. Our evaluations and comparison with the literature reveals that our protocols are superior to the related works with respect to efficiency, security, privacy, and ease of use.(Català) La venda de factures o "invoice factoring" ha estat una forma popular de proporcionar flux de caixa a les empreses. La funció principal d'un sistema de venda de factures és evitar que una factura sigui venuda dues vegades. Per evitar la doble venda, molts ecosistemes de factoring utilitzen entitats centralitzades per registrar els acords de venda de factures. Això, però, posa molt poder en mans d'aquestes entitats centralitzades i dificulta que els usuaris puguin impugnar o rebatre situacions en què les dades de venda no estan disponibles, es registren erròniament o es manipulen ja sigui per negligència o a propòsit. Aquesta tesi presenta la nostra recerca al voltant dels problemes actuals dels sistemes de registre de venda de factures i les nostres novedosses solucions per resoldre aquest procés utilitzant la tecnologia "blockchain" (cadena de blocs). Mitjançant una blockchain pública es pot mantenir un registre permanent, segur, ordenat i transparent de transaccions que estan disponibles per a tothom en qualsevol moment per poder ser observades i verificades. A la tesi, comencem proposant una solució base i la anem ampliant i millorant gradualment. La primera proposta és un protocol que utilitza una arquitectura amb blockchain. La plataforma blockchain genera confiança entre les parts ja que garanteix la correcta execució de les transaccions. En aquest sentit, fem servir un contracte intel·ligent per completar el procés de registre i evitar la doble venda. El contracte intel·ligent permet l'auditoria i la resolució de disputes de manera que protegim la privadesa i fem que la informació rellevant estigui sempre disponible. Al segon protocol, afegim un "relay" o retransmissor a la nostra arquitectura per facilitar la incorporació d'usuaris al sistema. El retransmissor és l'únic que envia transaccions a la cadena de blocs i el que paga les taxes corresponents. Els altres participants poden delegar l'enviament de les seves transaccions al repetidor i pagar amb diners fiduciaris. En aquesta proposta també millorem la gestió de la identitat i de l'autenticació utilitzant el concepte de credencials verificables (Verifiable Credentials o VC) per complir millor amb la normativa "Conegui el seu client" (Know Your Customer o KYC). De fet, en aquesta arquitectura, els participants utilitzen els seus identificadors descentralitzats (Decentralized Identifier o DID) i el protocol DIDComm per a les interaccions asíncrones i segures fora de la cadena. Al protocol final, millorem en gran mesura el nostre contracte intel·ligent pel que fa a les condicions que comprova abans de registrar una venda de factura. En aquesta última solució, integrem proves no interactives de coneixement nul (Zero Knowledge Proofs o ZKP) i compromisos criptogràfics. Amb aquestes eines, podem evitar un tipus especial d'atac de denegació de servei (Denial of Service o DoS) i verificar millor els detalls de les factures sense comprometre la privadesa. Els nostres protocols són molt eficients en termes de cost per comissions. En particular, només necessitem una transacció per registrar una factura i la majoria dels detalls es registren a l'emmagatzematge de la cadena de blocs de baix cost. Les nostres avaluacions i la comparació amb la literatura revelen que els nostres protocols són superiors als treballs relacionats pel que fa a l'eficiència, la seguretat, la privadesa i facilitat d'ús.Postprint (published version

A P2P Networking Simulation Framework For Blockchain Studies

Recently, blockchain becomes a disruptive technology of building distributed applications (DApps). Many researchers and institutions have devoted their resources to the development of more effective blockchain technologies and innovative applications. However, with the limitation of computing power and financial resources, it is hard for researchers to deploy and test their blockchain innovations in a large-scape physical network. Hence, in this dissertation, we proposed a peer-to-peer (P2P) networking simulation framework, which allows to deploy and test (simulate) a large-scale blockchain system with thousands of nodes in one single computer. We systematically reviewed existing research and techniques of blockchain simulator and evaluated their advantages and disadvantages. To achieve generality and flexibility, our simulation framework lays the foundation for simulating blockchain network with different scales and protocols. We verified our simulation framework by deploying the most famous three blockchain systems (Bitcoin, Ethereum and IOTA) in our simulation framework. We demonstrated the effectiveness of our simulation framework with the following three case studies: (a) Improve the performance of blockchain by changing key parameters or deploying new directed acyclic graph (DAG) structure protocol; (b) Test and analyze the attack response of Tangle-based blockchain (IOTA) (c) Establish and deploy a new smart grid bidding system for demand side in our simulation framework. This dissertation also points out a series of open issues for future research

Scaling Distributed Ledgers and Privacy-Preserving Applications

This thesis proposes techniques aiming to make blockchain technologies and smart contract platforms practical by improving their scalability, latency, and privacy. This thesis starts by presenting the design and implementation of Chainspace, a distributed ledger that supports user defined smart contracts and execute user-supplied transactions on their objects. The correct execution of smart contract transactions is publicly verifiable. Chainspace is scalable by sharding state; it is secure against subsets of nodes trying to compromise its integrity or availability properties through Byzantine Fault Tolerance (BFT). This thesis also introduces a family of replay attacks against sharded distributed ledgers targeting cross-shard consensus protocols; they allow an attacker, with network access only, to double-spend resources with minimal efforts. We then build Byzcuit, a new cross-shard consensus protocol that is immune to those attacks and that is tailored to run at the heart of Chainspace. Next, we propose FastPay, a high-integrity settlement system for pre-funded payments that can be used as a financial side-infrastructure for Chainspace to support low-latency retail payments. This settlement system is based on Byzantine Consistent Broadcast as its core primitive, foregoing the expenses of full atomic commit channels (consensus). The resulting system has extremely low-latency for both confirmation and payment finality. Finally, this thesis proposes Coconut, a selective disclosure credential scheme supporting distributed threshold issuance, public and private attributes, re-randomization, and multiple unlinkable selective attribute revelations. It ensures authenticity and availability even when a subset of credential issuing authorities are malicious or offline, and natively integrates with Chainspace to enable a number of scalable privacy-preserving applications

Sustainable Development Report: Blockchain, the Web3 & the SDGs

This is an output paper of the applied research that was conducted between July 2018 - October 2019 funded by the Austrian Development Agency (ADA) and conducted by the Research Institute for Cryptoeconomics at the Vienna University of Economics and Business and RCE Vienna (Regional Centre of Expertise on Education for Sustainable Development).Series: Working Paper Series / Institute for Cryptoeconomics / Interdisciplinary Researc