Who am I? Secure identity registration on distributed ledgers

Bitcoin is a decentralized cryptocurrency that uses a ledger (or “blockchain”) to keep track of the transactions made between its users. Because it is a fully decentralized system and anyone can join, every transaction is by necessity public. Thus, to preserve some semblance of privacy, users in the system are represented not by their real-world identities but by pseudonyms. While pseudonyms are acceptable for a standalone cryptocurrency, the emergence of other potential blockchain-based applications — e.g., using them to administer benefits and pensions — poses a need to associate certain attributes with the users of the system. In this paper, we address the question of how to register identities and attributes in a system built on globally visible ledgers. We propose a variety of possible solutions and in each case, we analyze the tradeoff our solution provides between privacy (ensuring that no one can associate the user’s real-world identity with the pseudonym or other attributes they use on the ledger), usability (ensuring that verification of their attributes poses the lowest possible burden to users), and integrity (ensuring that no one can impersonate a user). We also present an implementation of one of our solution using Ethereum

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

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

Multilateral Transparency for Security Markets Through DLT

For decades, changing technology and policy choices have worked to fragment securities markets, rendering them so dark that neither ownership nor real-time price of securities are generally visible to all parties multilaterally. The policies in the U.S. National Market System and the EU Market in Financial Instruments Directive— together with universal adoption of the indirect holding system— have pushed Western securities markets into a corner from which escape to full transparency has seemed either impossible or prohibitively expensive. Although the reader has a right to skepticism given the exaggerated promises surrounding blockchain in recent years, we demonstrate in this paper that distributed ledger technology (DLT) contains the potential to convert fragmented securities markets back to multilateral transparency. Leading markets generally lack transparency in two ways that derive from their basic structure: (1) multiple platforms on which trades in the same security are matched have separate bid/ask queues and are not consolidated in real time (fragmented pricing), and (2) highspeed transfers of securities are enabled by placing ownership of the securities in financial institutions, thus preventing transparent ownership (depository or street name ownership). The distributed nature of DLT allows multiple copies of the same pricing queue to be held simultaneously by a large number of order-matching platforms, curing the problem of fragmented pricing. This same distributed nature of DLT would allow the issuers of securities to be nodes in a DLT network, returning control over securities ownership and transfer to those issuers and thus, restoring transparent ownership through direct holding with the issuer. A serious objection to DLT is that its latency is very high—with each Bitcoin blockchain transaction taking up to ten minutes. To remedy this, we first propose a private network without cumbersome proof-of-work cryptography. Second, we introduce into our model the quickly evolving technology of “lightning networks,” which are advanced two-layer off-chain networks conducting high-speed transacting with only periodic memorialization in the permanent DLT network. Against the background of existing securities trading and settlement, this Article demonstrates that a DLT network could bring multilateral transparency and thus represent the next step in evolution for markets in their current configuration

Bitproperty

Property is the law of lists and ledgers. County land records, stock certificate entries, mortgage registries, UCC filings on personal property, United States Copyright and Patent registries of interests in intellectual property, bank accounts, domain name systems, and consumers’ Kindle eBook collections in the cloud — all are merely entries in a list, determining who owns what.Each such list has suffered under a traditional limitation. To prevent falsification or duplication, a single entity must maintain the list, and users must trust (and pay) that entity. As a result, transactions must proceed at significant expense and delay. Yet zero or near-zero expense is the fuel of internet scalability. Until technologies get cheap and fast enough, they cannot benefit from the full power of the internet. Property transactions have not yet truly seen an internet revolution because they are constrained by the cost of creating centralized trusted authorities.This article retheorizes the contours of digital property if that central constraint were removed. There is every reason to believe it can be. A spate of interest in cryptocurrencies has driven the development of a series of technologies for creating public, cryptographically secure ledgers of property interests that do not rely on trust in a specific entity to curate the list. Previously, the digital objects that users could buy and sell online were not rivalrous in the same way as offline physical objects, unless some centralized entity such as a social network, digital currency issuer, or game company served the function of trusted list curator. Trustless public ledgers change this dynamic. Counterparties can hand one another digital, rivalrous objects in the same way that they used to hand each other gold bars or dollar bills. No intermediary or curator is needed.Trustless public ledgers can help to reshape property law online. They offer the kind of near-zero transaction costs that have provoked radical disruptive innovation across the internet. With near-zero transaction costs, online property transactions can finally benefit from the huge scaling effects of internet technologies.In addition, the advent of this disruptive technology provides an opportunity to more deeply theorize property interests in information environments. Property online is anemic. Consumers control few online resources and own even less. This is in no small part due to antiquated notions of property as the law of physical, tangible resources. With the advent of new technology that can create digital, scarce, and rival intangible assets, these basic assumptions should be reexamined, discarded, and replaced with a theory of property as an information communication and storage system. That is the project of this piece

Levels of Decentralization and Trust in Cryptocurrencies: Consensus, Governance and Applications

Since the apparition of Bitcoin, decentralization has become an ideal praised almost religiously. Indeed, removing the need for a central authority prevents many forms of abuse that could be performed by a trusted third party, especially when there are no transparency and accountability mechanisms in place. Decentralization is however a very subtle concept that has limits. In this thesis, we look at the decentralization of blockchains at three different levels. First we look at the consensus protocol, which is the heart of any decentralized system. The Nakamoto protocol, used by Bitcoin, has been shown to induce centralization through the shift to mining pools. Additionally, it is heavily criticized for the enormous amount of energy it requires. We propose a protocol, Fantômette, that incorporates incentives at its core and that consumes much less energy than Bitcoin and other proof-of-work based cryptocurrencies. If the consensus protocol makes it possible to decentralize the enforcement of rules in a cryptocurrency, there is still the question of who decides on the rules. Indeed, if a central authority is able to determine what those rules are then the fact that they are enforced in a decentralized way does not make it a decentralized system. We study the governance structure of Bitcoin and Ethereum by making measurements of their GitHub repositories and providing quantitative ways to compare their level of centralization by using appropriate metrics based on centrality measures. Finally, many applications are now built on top of blockchains. These can also induce or straightforwardly lead to centralization, for example by requiring that users register their identities to comply with regulations. We show how identities can be registered on blockchains in a decentralized and privacy-preserving way

Blockchains, Orphan Works, and the Public Domain

This Article outlines a blockchain based system to solve the orphan works problem. Orphan works are works still ostensibly protected by copyright for which an author cannot be found. Orphan works represent a significant problem for the efficient dissemination of knowledge, since users cannot license the works, and as a result may choose not to use them. Our proposal uses a blockchain to register attempts to find the authors of orphan works, and otherwise to facilitate use of those works. There are three elements to our proposal. First, we propose a number of mechanisms, included automated systems, to perform a diligent search for a rights holder. Second, we propose a blockchain register where every search for a work’s owner can be recorded. Third, we propose a legal mechanism that delivers works into orphanhood, and affords a right to use those works after a search for a rights holder is deemed diligent. These changes would provide any user of an orphan work with an assurance that they were acting legally as long as they had consulted the register and/or performed a diligent search for the work’s owner. The Article demonstrates a range of complementary legal and technological architectures that, in various formations, can be deployed to address the orphan works problem. We show that these technological systems are useful for enhancement of the public domain more generally, through the existence of a growing registry of gray status works and clarified conditions for their use. The selection and design of any particular implementation is a choice for policy makers and technologists. Rather than specify how that choice should look, the goal here is to demonstrate the utility of the technology and to clarify and promote its role in reforming this vexed area of law

Blockchains, Orphan Works, and the Public Domain

This Article outlines a blockchain based system to solve the orphan works problem. Orphan works are works still ostensibly protected by copyright for which an author cannot be found. Orphan works represent a significant problem for the efficient dissemination of knowledge, since users cannot license the works, and as a result may choose not to use them. Our proposal uses a blockchain to register attempts to find the authors of orphan works, and otherwise to facilitate use of those works. There are three elements to our proposal. First, we propose a number of mechanisms, included automated systems, to perform a diligent search for a rights holder. Second, we propose a blockchain register where every search for a work’s owner can be recorded. Third, we propose a legal mechanism that delivers works into orphanhood, and affords a right to use those works after a search for a rights holder is deemed diligent. These changes would provide any user of an orphan work with an assurance that they were acting legally as long as they had consulted the register and/or performed a diligent search for the work’s owner. The Article demonstrates a range of complementary legal and technological architectures that, in various formations, can be deployed to address the orphan works problem. We show that these technological systems are useful for enhancement of the public domain more generally, through the existence of a growing registry of gray status works and clarified conditions for their use. The selection and design of any particular implementation is a choice for policy makers and technologists. Rather than specify how that choice should look, the goal here is to demonstrate the utility of the technology and to clarify and promote its role in reforming this vexed area of law

Traceable Shares and Corporate Law

A healthy system of shareholder voting is crucial for any regime of corporate law. The proper allocation of governance power is subject to debate, of course, but the fitness of the underlying mechanism used to stuff the ballot boxes should concern everyone. Proponents of shareholder power, for instance, cannot argue for greater control if the legitimacy of the resulting tallies is suspect. And those who advocate for board deference do so on the bedrock of authority that reliable shareholder elections supposedly confer. Unfortunately, our trust in the corporate franchise was forged during an era that predates modern complexities in the way that stock ownership is now tracked and traded. We do not trace shares, and any clear-eyed look at the conferral of voting rights via back-end stock clearing practices is unsettling. Evidence of the various entanglements crops up from time to time—in the form of questionable voting outcomes or disputes about standing for shareholder lawsuits—but the underlying problems are systemic, not episodic. Our stock clearing system is a kludge. This is an important moment for corporate law, however, because new technology is approaching a state where clearing and settlement systems may soon support traceable shares. The rise of distributed ledgers and blockchain technology is poised to allow for specific share identification and precise records of share provenance. This may sound like an uninteresting technical sideshow, but as this Article will argue, the impact of traceable shares on corporate law will be profound. It will change the structure of shareholder lawsuits, alter the allocation of corporate governance rights, and require lawmakers to rethink fundamental principles of shareholder responsibility for corporate misdeeds