On Cyber Risk Management of Blockchain Networks: A Game Theoretic Approach

Open-access blockchains based on proof-of-work protocols have gained tremendous popularity for their capabilities of providing decentralized tamper-proof ledgers and platforms for data-driven autonomous organization. Nevertheless, the proof-of-work based consensus protocols are vulnerable to cyber-attacks such as double-spending. In this paper, we propose a novel approach of cyber risk management for blockchain-based service. In particular, we adopt the cyber-insurance as an economic tool for neutralizing cyber risks due to attacks in blockchain networks. We consider a blockchain service market, which is composed of the infrastructure provider, the blockchain provider, the cyber-insurer, and the users. The blockchain provider purchases from the infrastructure provider, e.g., a cloud, the computing resources to maintain the blockchain consensus, and then offers blockchain services to the users. The blockchain provider strategizes its investment in the infrastructure and the service price charged to the users, in order to improve the security of the blockchain and thus optimize its profit. Meanwhile, the blockchain provider also purchases a cyber-insurance from the cyber-insurer to protect itself from the potential damage due to the attacks. In return, the cyber-insurer adjusts the insurance premium according to the perceived risk level of the blockchain service. Based on the assumption of rationality for the market entities, we model the interaction among the blockchain provider, the users, and the cyber-insurer as a two-level Stackelberg game. Namely, the blockchain provider and the cyber-insurer lead to set their pricing/investment strategies, and then the users follow to determine their demand of the blockchain service. Specifically, we consider the scenario of double-spending attacks and provide a series of analytical results about the Stackelberg equilibrium in the market game

Blockchain for a Resilient, Efficient, and Effective Supply Chain, Evidence from Cases

In the modern acquisition, it is unrealistic to consider single entities as producing and delivering a product independently. Acquisitions usually take place through supply networks. Resiliency, efficiency, and effectiveness of supply networks directly contribute to the acquisition system\u27s resiliency, efficiency, and effectiveness. All the involved firms form a part of a supply network essential to producing the product or service. The decision-makers have to look for new methodologies for supply chain management. Blockchain technology introduces new methods of decentralization and delegation of services, which can transform supply chains and result in a more resilient, efficient, and effective supply chain. This research aims to review and analyze the selected current blockchain technology adoptions to enhance the resiliency of supply network management by facilitating collaboration and communication among suppliers and support the decision-making process. In the first part of this study, we discuss the limitations and challenges of the supply chain system that can be addressed by integrating blockchain technology. In the final part, we analyze multiple blockchain-based supply chain use cases to identify how the main features of blockchain are suited best for supply network management

Integration of Blockchain Technology into Supply Network for Resilient and Efficient Acquisition [video]

In the modern acquisition, it is unrealistic to consider single entities as producing and delivering a product independently. Acquisitions usually take place through supply networks. Resiliency, efficiency, and effectiveness of supply networks directly contribute to the acquisition system\u27s resiliency, efficiency, and effectiveness. All the involved firms form a part of a supply network essential to producing the product or service. The decision-makers have to look for new methodologies for supply chain management. Blockchain technology introduces new methods of decentralization and delegation of services, which can transform supply chains and result in a more resilient, efficient, and effective supply chain. This research aims to review and analyze the selected current blockchain technology adoptions to enhance the resiliency of supply network management by facilitating collaboration and communication among suppliers and support the decision-making process. In the first part of this study, we discuss the limitations and challenges of the supply chain system that can be addressed by integrating blockchain technology. In the final part, we analyze multiple blockchain-based supply chain use cases to identify how the main features of blockchain are suited best for supply network management

When Mobile Blockchain Meets Edge Computing

Blockchain, as the backbone technology of the current popular Bitcoin digital currency, has become a promising decentralized data management framework. Although blockchain has been widely adopted in many applications, e.g., finance, healthcare, and logistics, its application in mobile services is still limited. This is due to the fact that blockchain users need to solve preset proof-of-work puzzles to add new data, i.e., a block, to the blockchain. Solving the proof-of-work, however, consumes substantial resources in terms of CPU time and energy, which is not suitable for resource-limited mobile devices. To facilitate blockchain applications in future mobile Internet of Things systems, multiple access mobile edge computing appears to be an auspicious solution to solve the proof-of-work puzzles for mobile users. We first introduce a novel concept of edge computing for mobile blockchain. Then, we introduce an economic approach for edge computing resource management. Moreover, a prototype of mobile edge computing enabled blockchain systems is presented with experimental results to justify the proposed concept.Comment: Accepted by IEEE Communications Magazin

Exploring Blockchain Adoption Supply Chains: Opportunities and Challenges

Acquisition Management / Grant technical reportAcquisition Research Program Sponsored Report SeriesSponsored Acquisition Research & Technical ReportsIn modern supply chains, acquisition often occurs with the involvement of a network of organizations. The resilience, efficiency, and effectiveness of supply networks are crucial for the viability of acquisition. Disruptions in the supply chain require adequate communication infrastructure to ensure resilience. However, supply networks do not have a shared information technology infrastructure that ensures effective communication. Therefore decision-makers seek new methodologies for supply chain management resilience. Blockchain technology offers new decentralization and service delegation methods that can transform supply chains and result in a more flexible, efficient, and effective supply chain. This report presents a framework for the application of Blockchain technology in supply chain management to improve resilience. In the first part of this study, we discuss the limitations and challenges of the supply chain system that can be addressed by integrating Blockchain technology. In the second part, the report provides a comprehensive Blockchain-based supply chain network management framework. The application of the proposed framework is demonstrated using modeling and simulation. The differences in the simulation scenarios can provide guidance for decision-makers who consider using the developed framework during the acquisition process.Approved for public release; distribution is unlimited

Cloud/fog computing resource management and pricing for blockchain networks

The mining process in blockchain requires solving a proof-of-work puzzle, which is resource expensive to implement in mobile devices due to the high computing power and energy needed. In this paper, we, for the first time, consider edge computing as an enabler for mobile blockchain. In particular, we study edge computing resource management and pricing to support mobile blockchain applications in which the mining process of miners can be offloaded to an edge computing service provider. We formulate a two-stage Stackelberg game to jointly maximize the profit of the edge computing service provider and the individual utilities of the miners. In the first stage, the service provider sets the price of edge computing nodes. In the second stage, the miners decide on the service demand to purchase based on the observed prices. We apply the backward induction to analyze the sub-game perfect equilibrium in each stage for both uniform and discriminatory pricing schemes. For the uniform pricing where the same price is applied to all miners, the existence and uniqueness of Stackelberg equilibrium are validated by identifying the best response strategies of the miners. For the discriminatory pricing where the different prices are applied to different miners, the Stackelberg equilibrium is proved to exist and be unique by capitalizing on the Variational Inequality theory. Further, the real experimental results are employed to justify our proposed model.Comment: 16 pages, double-column version, accepted by IEEE Internet of Things Journa