TumbleBit: an untrusted Bitcoin-compatible anonymous payment hub

This paper presents TumbleBit, a new unidirectional unlinkable payment hub that is fully compatible with today s Bitcoin protocol. TumbleBit allows parties to make fast, anonymous, off-blockchain payments through an untrusted intermediary called the Tumbler. TumbleBits anonymity properties are similar to classic Chaumian eCash: no one, not even the Tumbler, can link a payment from its payer to its payee. Every payment made via TumbleBit is backed by bitcoins, and comes with a guarantee that Tumbler can neither violate anonymity, nor steal bitcoins, nor print money by issuing payments to itself. We prove the security of TumbleBit using the real/ideal world paradigm and the random oracle model. Security follows from the standard RSA assumption and ECDSA unforgeability. We implement TumbleBit, mix payments from 800 users and show that TumbleBits offblockchain payments can complete in seconds.https://eprint.iacr.org/2016/575.pdfPublished versio

Cryptocurrencies and Bitcoin: Charting the Research Landscape

This systematic literature review examines cryptocurrencies (CCs) and Bitcoin. Because cryptocurrency research has not gained much attention from Information Systems (IS) researchers and needs a more vivid discussion, this review summarizes the main concepts of 42 papers and aligns them to IS Research. Although, cryptocurrency research has not reached IS mainstream yet, there is massive potential for multifaceted research ranging from protocol development to designing alternative digital currency schemes. Cryptocurrencies entail a core digital artifact and present a rich phenomenon based on the intertwining of technological artifacts and social contexts. We argue that cryptocurrencies are an alternative payment method that may replace intermediaries with cryptographic methods and should be embedded in the research areas of SIGeBIZ and SIGSEC. At the end of this literature review, we discuss some open research gaps like new business models based on cryptocurrencies or the influence of culture on cryptocurrencies and Bitcoin

Centrally Banked Cryptocurrencies

Current cryptocurrencies, starting with Bitcoin, build a decentralized blockchain-based transaction ledger, maintained through proofs-of-work that also generate a monetary supply. Such decentralization has benefits, such as independence from national political control, but also significant limitations in terms of scalability and computational cost. We introduce RSCoin, a cryptocurrency framework in which central banks maintain complete control over the monetary supply, but rely on a distributed set of authorities, or mintettes, to prevent double-spending. While monetary policy is centralized, RSCoin still provides strong transparency and auditability guarantees. We demonstrate, both theoretically and experimentally, the benefits of a modest degree of centralization, such as the elimination of wasteful hashing and a scalable system for avoiding double-spending attacks.Comment: 15 pages, 4 figures, 2 tables in Proceedings of NDSS 201

FairDrop: a Confidential Fair Exchange Protocol for Media Workers

In recent years, the asymmetry between open societies and regimes that control their media has increased, leading to the number of murdered journalists more than doubling worldwide. Even in countries in which freedom of the press is publicly recognized, the number of journalists jailed, assaulted, or criminally charged is relevant and growing. These attacks on media workers usually want to limit or control information regarding critical topics. In this context, the necessity of a system that allows reporters to publish their works without risking their own life is evident. Some systems to share information with newspapers while keeping the source anonymous exist. An example is SecureDrop, developed and maintained by the Freedom of the Press Foundation, and widely adopted by all major international newspapers. What limits them from extensively using this type of system is the lack of credibility in the information exchanged, which represents the main problem for the publisher's reputation. In this thesis, we present FairDrop, a system that allows the exchange of information between two untrusted parties and proposes a tradeoff between the anonymity of the source and the credibility of the information exchanged. We present a fair exchange protocol based on blockchain that allows sharing of a digital good fairly and confidentially. We also define the guidelines for a system based on ring signatures to measure the credibility of the exchanged information. All our design decisions are made taking into account the requirements of a journalist-newspaper communication, and the guidelines for anonymous sources applied by major newspapers around the world. We test the system in a real-world blockchain testnet, considering multi-seller and buyer situations, and introducing economic incentives for sources to use the system.In recent years, the asymmetry between open societies and regimes that control their media has increased, leading to the number of murdered journalists more than doubling worldwide. Even in countries in which freedom of the press is publicly recognized, the number of journalists jailed, assaulted, or criminally charged is relevant and growing. These attacks on media workers usually want to limit or control information regarding critical topics. In this context, the necessity of a system that allows reporters to publish their works without risking their own life is evident. Some systems to share information with newspapers while keeping the source anonymous exist. An example is SecureDrop, developed and maintained by the Freedom of the Press Foundation, and widely adopted by all major international newspapers. What limits them from extensively using this type of system is the lack of credibility in the information exchanged, which represents the main problem for the publisher's reputation. In this thesis, we present FairDrop, a system that allows the exchange of information between two untrusted parties and proposes a tradeoff between the anonymity of the source and the credibility of the information exchanged. We present a fair exchange protocol based on blockchain that allows sharing of a digital good fairly and confidentially. We also define the guidelines for a system based on ring signatures to measure the credibility of the exchanged information. All our design decisions are made taking into account the requirements of a journalist-newspaper communication, and the guidelines for anonymous sources applied by major newspapers around the world. We test the system in a real-world blockchain testnet, considering multi-seller and buyer situations, and introducing economic incentives for sources to use the system

An Investigation into Premium Price in Korean Bitcoin Market

학위논문(석사)--서울대학교 대학원 :행정대학원 글로벌행정전공,2019. 8. 권일웅.최근 몇 년간 세계는 가상화폐라는 새로운 매체의 탄생과 관련 시장의 폭풍적인 변동을 경험하였다. 정부나 중앙의 통제를 받지 않으며 실물이 존재하지 않는 가상화폐의 개념과 운영원리의 신기성(novelty)이 초창기 학계의 주된 관심사였다면, 최근 학계는 가상화폐 가격의 폭등과 높은 변동성 및 그 투기적인 속성을 연구하는 데 주력하고 있다. 본 논문 역시 가상화폐가 학계에 던진 수많은 연구주제 중 하나에 기여함을 목표로 하고 있다. 특히 본 논문은 한국의 비트코인 시장을 주제로 다른 외국의 시장에 비해 한국에서 비트코인이 크게 높은 가격에서 거래되는 양상을 보였던 소위김치 프리미엄현상을 탐구한다. 본 연구는 한국 비트코인 시장의 프리미엄이 시간에 따라 어떻게 변화하는지 살펴본다. 특히, 유보적인 입장을 취했던 한국 정부가 2017년 12월부터 강도 높은 시장개입 노선으로 입장을 변경한 후 두 달에 걸쳐 쏟아낸 일련의 규제정책들을 중심으로 규제 전(2017년 12월 이전), 본격적인 규제정책 도입기 (2017년 12월~2018년 1월), 제도 정착 (2018년 2월 이후) 이후에 비트코인 프리미엄이 어떻게 변화하였는지 조망한다. 이러한 분석은 가상화폐 프리미엄에 대한 기존 선행연구가 연구가 정부의 정책이나 시장 개입에 대한 고려 없이 이루어져왔던 것과 차이를 보인다. 조사 결과 한국 정부의 일련의 규제정책 이후에 김치 프리미엄은 대부분 소멸한 것으로 밝혀졌다. 가격 프리미엄은 기본적으로 다른 시장보다 투기적인 수요가 높을 때 나타난다는 선행연구의 가정에 따르면 정부정책 이후 상대적으로 한국시장에서 강도 높게 나타났던 투기적인 수요가 적어도 다른 외국의 시장 수준으로 감소한 것으로 해석된다. 이에, 본 연구는 정부의 정책이 투기적 수요 진작에 긍정적인 영향을 미친 것으로 판단하고 정부 정책이 어떠한 내용과 방식으로 집행되었는지 살펴보았다. 본 논문에서는 정부가 거래 자체를 규율하기 위한 정책들을 집행하는 한편, 투기적인 수요 진작을 위한 대국민 홍보라는 두 가지 방식으로 시장 진화에 나선 것으로 분석하였다. 본 연구는 기존의 선행연구들에서 가격 프리미엄이 높게 나타나는 국가들의 경우 시금융기관의 후진적 운영으로 수익이 낮기 때문에 가상화폐 보유의 유인이 높고 자본이동의 장벽이 높아 차익거래가 이루어지기 힘들다는 주장을 주로 펼쳐왔던 것의 반론이 될 수 있다는 데 그 의의가 있다. 새로운 매체나 기술에 대한 정부의 정책이 신속하게 도입되지 못한 경우 규제의 공백으로 인한 투기적인 시장이 형성될 수 있고, 적절한 규제를 통해서 시장의 비이성적 과열을 진화할 수 있다는 것을 비트코인 시장을 통해 확인하였다. 다만 트렌드 분석과 정부 정책의 대강을 살펴봄으로써 이러한 가능성을 제시하는 데에 머물러 각국 시장의 규제수준을 수치화하여 통계적으로 가설을 검증하는 데까지 나아가지는 못한 바, 이러한 한계를 보완하기 위한 후속 연구가 요청된다고 하겠다.This study aims to explore a background for a so-called Kimchi premium on Korean Bitcoin market. Korea has garnered considerable attention around the globe because the level of the Bitcoin price was set far higher than in other countries. This paper tries to find a reason for the Korean Bitcoin premium in relation to government policies. Following previous studies that suggest a premium price that one country pays more than other countries reflects a higher speculative demand in the cryptocurrency market, this paper focuses on the environment that allowed higher speculative demand could grow in Korean Bitcoin market. Compared to other countries, Korea is found out to be late in making their first move in cryptocurrency markets. While other major countries such as the US, Japan and China recognized the need for a regulatory system and started to take measures to deal with relevant issues as early as 2013, it was not until 2017 that Korean government issued their first official announcement toward cryptocurrency markets. In other words, Korea had to face a frenzy cryptocurrency craze peaked on December 2017 basically with no regulatory frame. This paper regards that the absence of a regulatory framework in Korea provided a favorable soil for speculative demands to grow. So this paper traces a trend of Bitcoin Kimchi premium, analyzing changes made between ex-ante and ex-post a series of intensive government policies targeting the cryptocurrency market. The fact that Kimchi premium is found out to have vanished after a strong government intervention implies higher speculative demand reflected in high Bitcoin premium was due to a lack of appropriate regulatory framework. The most important contribution of this paper is that it offers a different view toward premium price in cryptocurrency from precedent studies. Previous studies tend to argue that countries with high premiums have a larger incentive to invest in alternative means, such as cryptocurrency because their financial system is poorly functioning. Apart from this dominant view, this paper thinks existence and non-existence of an appropriate regulatory framework are important in the creation and extinction of speculative demands that lead to premium price.Abstract in English 01 Abstract in Korean 04 Chapter 1. Introduction 06 1.1. Concept of cryptocurrency and Bitcoin market 1.2. Bitcoin market and government policies Chapter 2. Literature Review 18 2.1. Early researches on cryptocurrency 2.2. Speculative demand and Bitcoin 2.3. Price deviations and Bitcoin premium 2.4. Limitations of precedent studies Chapter 3. Bitcoin Premium in Korea 40 3.1. Research Design and Data Description 3.2. Changes in Bitcoin premium 3.3. Additional Analysis Chapter 4. Korean Government Interventions 54 4.1. Introduction 4.2. Policies providing a regulatory framework 4.3. Public relations activities to depress market sentiment Chapter 5. Conclusion 68 Bibliography 72Maste

Decentralized Inverse Transparency With Blockchain

Employee data can be used to facilitate work, but their misusage may pose risks for individuals. Inverse transparency therefore aims to track all usages of personal data, allowing individuals to monitor them to ensure accountability for potential misusage. This necessitates a trusted log to establish an agreed-upon and non-repudiable timeline of events. The unique properties of blockchain facilitate this by providing immutability and availability. For power asymmetric environments such as the workplace, permissionless blockchain is especially beneficial as no trusted third party is required. Yet, two issues remain: (1) In a decentralized environment, no arbiter can facilitate and attest to data exchanges. Simple peer-to-peer sharing of data, conversely, lacks the required non-repudiation. (2) With data governed by privacy legislation such as the GDPR, the core advantage of immutability becomes a liability. After a rightful request, an individual's personal data need to be rectified or deleted, which is impossible in an immutable blockchain. To solve these issues, we present Kovacs, a decentralized data exchange and usage logging system for inverse transparency built on blockchain. Its new-usage protocol ensures non-repudiation, and therefore accountability, for inverse transparency. Its one-time pseudonym generation algorithm guarantees unlinkability and enables proof of ownership, which allows data subjects to exercise their legal rights regarding their personal data. With our implementation, we show the viability of our solution. The decentralized communication impacts performance and scalability, but exchange duration and storage size are still reasonable. More importantly, the provided information security meets high requirements. We conclude that Kovacs realizes decentralized inverse transparency through secure and GDPR-compliant use of permissionless blockchain.Comment: Peer-reviewed version accepted for publication in ACM Distributed Ledger Technologies: Research and Practice (DLT). arXiv admin note: substantial text overlap with arXiv:2104.0997

The SEC Rides into Town: Defining an ICO Securities Safe Harbor in the Cryptocurrency “Wild West”

This Note recommends a viable way for the Securities and Exchange Commission (SEC) to apply the Regulation S foreign-issuer safe harbor to Initial Coin Offerings (ICOs). In the last two years, cryptocurrencies and blockchain-based companies have witnessed dramatic rises in price and value. New entrants to the crypto-markets often use ICOs as virtual public offerings to earn capital and develop their projects. The SEC has signaled that they plan to fold ICOs and blockchain offerings into existing securities law. How these new virtual capital-raising mechanisms will fit into this framework is still largely unknown. As a defensive measure, many ICOs have banned US investors in an attempt to become foreign offerings that are outside the SEC\u27s reach. Regulation S is the existing safe harbor that conventional securities offerings utilize to ensure that they are foreign offerings. While ICOs are novel and do not fit perfectly into Regulation S\u27s language, the safe harbor can be adapted to appropriately set parameters for ICOs. This Note suggests the correct interpretation that both protects US consumers and sets acceptable requirements for corporations seeking to fall within Regulation S

Towards Secure and Fair IIoT-Enabled Supply Chain Management via Blockchain-based Smart Contracts

Integrating the Industrial Internet of Things (IIoT) into supply chain management enables flexible and efficient on-demand exchange of goods between merchants and suppliers. However, realizing a fair and transparent supply chain system remains a very challenging issue due to the lack of mutual trust among the suppliers and merchants. Furthermore, the current system often lacks the ability to transmit trade information to all participants in a timely manner, which is the most important element in supply chain management for the effective supply of goods between suppliers and the merchants. This thesis presents a blockchain-based supply chain management system in the IIoT. The proposed system takes advantage of blockchain technology in terms of its transparency and tamper-proof nature to support fair goods exchange between merchants and suppliers. Additionally, the decentralization and pseudonymity property will play a significant role in preserving the privacy of participants in the blockchain. In particular, fairness in the IIoT is first defined. Then, a design for a smart contract for fair goods exchange is presented to prevent malicious behaviour through imposing penalties. The proposed system was prototyped on Ethereum and experiments were conducted to demonstrate its feasibility