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IOTA: a Cryptographic Perspective
IOTA: A Cryptographic Perspective Bryan Baek Jason Lin Harvard University Georgia Institute of Technology [email protected] [email protected] 1 Introduction IOTA is an open-source distributed ledger protocol that presents a unique juxtaposition to the blockchain-based Bitcoin. Instead of using the traditional blockchain approach, IOTA stores individual transactions in a directed-acyclic graph (DAG) called Tangle. IOTA claims that this allows several benefits over its blockchain-based predecessors such as quantum-proof properties, no transaction fees, fast transactions, secure data transfer, and infinite scalability. Currently standing at 16th place in the CoinMarketCap, it topped 7 during the height of the bullish period of late 2017. Given these claims and attractions, this paper seeks to analyze the benefits and how they create vulnerabilities and/or disadvantages compared to the standard blockchain approach. Based upon our findings, we will discuss the future of IOTA and its potential of being a viable competitor to blockchain technology for transactions. 2 Background IOTA, which stands for Internet of Things Application [1], is a crypto technology in the form of a distributed ledger that facilitates transactions between Internet of Things (IoT) devices. IoT encompass smart home devices, cameras, sensors, and other devices that monitor conditions in commercial, industrial, and domestic settings [2]. As IoT becomes integrated with different facets of our life, their computational power and storage is often left to waste when idle. David Sonstebo, Sergey Ivancheglo, Dominik Schiener, and Serguei Popov founded the IOTA Foundation in June 2015 after working in the IoT industry because they saw the need to create an ecosystem where IoT devices share and allocate resources efficiently [3]. -
Peer Co-Movement in Crypto Markets
Peer Co-Movement in Crypto Markets G. Schwenkler and H. Zheng∗ February 4, 2021y Abstract We show that peer linkages induce significant price co-movement in crypto markets in excess of common risk factors and correlated demand shocks. When large abnormal return shocks hit one crypto, its peers experience unusually large abnormal returns of the opposite sign. These effects are primarily concentrated among smaller peers and revert after several weeks, resulting in predictable returns. We develop trading strategies that exploit this rever- sal, and show that they are profitable even after accounting for trading fees and frictions. We establish our results by identifying crypto peers through co-mentions in online news using novel natural language processing technologies. Keywords: Cryptocurrencies, peers, co-movement, competition, natural language pro- cessing. JEL codes: G12, G14, C82. ∗Schwenkler is at the Department of Finance, Santa Clara University Leavey School of Business. Zheng is at the Department of Finance, Boston University Questrom School of Business. Schwenkler is corresponding author. Email: [email protected], web: http://www.gustavo-schwenkler.com. yThis is a revision of a previous paper by the two authors called \Competition or Contagion: Evidence from Cryptocurrency Markets." We are grateful to Jawad Addoum (discussant), Daniele Bianchi (discussant), Will Cong, Tony Cookson, Sanjiv Das, Seoyoung Kim, Andreas Neuhierl, Farzad Saidi, and Antoinette Schoar, seminar participants at Boston University and the Society for Financial Econometrics, and the participants at the 2020 Finance in the Cloud III Virtual Conference, the 2020 MFA Annual Meeting, the 3rd UWA Blockchain, Cryptocurrency and FinTech Conference, and the 2020 INFORMS Annual Meeting for useful comments and suggestions. -
Wallance, an Alternative to Blockchain for Iot Loïc Dalmasso, Florent Bruguier, Achraf Lamlih, Pascal Benoit
Wallance, an Alternative to Blockchain for IoT Loïc Dalmasso, Florent Bruguier, Achraf Lamlih, Pascal Benoit To cite this version: Loïc Dalmasso, Florent Bruguier, Achraf Lamlih, Pascal Benoit. Wallance, an Alternative to Blockchain for IoT. IEEE 6th World Forum on Internet of Things (WF-IoT 2020), Jun 2020, New Orleans, LA, United States. 10.1109/WF-IoT48130.2020.9221474. hal-02893953v2 HAL Id: hal-02893953 https://hal.archives-ouvertes.fr/hal-02893953v2 Submitted on 1 Oct 2020 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés. Wallance, an Alternative to Blockchain for IoT Loïc Dalmasso, Florent Bruguier, Achraf Lamlih, Pascal Benoit LIRMM University of Montpellier, CNRS Montpellier, France [email protected] Abstract—Since the expansion of the Internet of Things a decentralized Machine-to-Machine (M2M) communication (IoT), connected devices became smart and autonomous. Their protocol. A security mechanism has to ensure the trust exponentially increasing number and their use in many between devices, securing all interactions without a central application domains result in a huge potential of cybersecurity authority like Cloud. In this context, the blockchain system threats. Taking into account the evolution of the IoT, security brings many benefits in terms of reliability and security. -
CASP) Software-Only, Ledger Agnostic, Platform Agnostic, Crypto Agile Bank-Grade Security for Crypto Assets
Protect Your Crypto Assets with Unbound’s Crypto Assets Security Platform (CASP) Software-Only, Ledger Agnostic, Platform Agnostic, Crypto Agile Bank-Grade Security for Crypto Assets Mathematically proven security Cryptography is one of the foundational security elements used by guarantee – the key material never organizations to protect sensitive data, transactions, services and identities. exists in the clear throughout its At the core of any cryptography implementation is the management of lifecycle including creation, in-use cryptographic keys and their protection from compromise and misuse. and at-rest With crypto assets, the protection of private keys is top priority, since the Any currency, any ledger, any private key is used to sign each transaction. It is therefore mandatory platform, any client to keep the key secure – not only from compromise, but also from any Programmatically derived malicious usage – as it takes only one fraudulent transaction (i.e. a single sign addresses (BIP 32/44) that are operation, to empty a wallet). cryptographically protected Backed by proven mathematical guarantees of security, Unbound’s Crypto Stronger and more flexible than Asset Security Platform (CASP) provides its customers with a software-only multi-signature – ledger-agnostic support of flexible quorum security platform that is as safe as hardware. With CASP, one can fully manage structures, any number of human the keys’ lifecycle, define cryptographically-based approval policies, while and/or servers, internal and supporting any currency, any ledger, any platform and any client type. external, that are required to sign a transaction Any Currency, Any Ledger, Any Platform Infinite scalability – easily scale capacity when and where it is Traditionally, securing the keys and secrets that guard the organizations’ most needed valuable assets required the use of dedicated hardware, such as hardware Intuitive and easy to use SDK – security modules (HSMs) and smartcards. -
Crypto Daily Report – June 9
This document is being provided publicly in the following form. Please subscribe to FSInsight.com for more. Members Area Crypto Daily Crypto Daily Report – June 9 Crypto Daily Crypto Daily Report – June 9 June 9 FSInsight Team Crypto Daily Report The Most Important Daily Data for Digital Assets Daily Analysis from FSInsight June 9, 2021 Late Tuesday evening, lawmakers in El Salvador's Congress voted by a supermajority in favor of making bitcoin legal tender. The law allows for the prices of goods and services to be denominated and paid in BTC, and perhaps more notably, exempts any exchanges in bitcoin from capital gains tax. Coinbase (Nasdaq: COIN) revealed Tuesday that its institutional holdings grew 170% from $45 billion to $122 billion in Q1 2021 as demand skyrocketed alongside the latest crypto bull run. The Company has over 8,000 institutional clients, many of which use its Coinbase Custody product. Crypto exchange Gemini acquired custody specialist Shard X for an undisclosed amount on Wednesday morning. Gemini COO, Noah Perlman, stated that the acquisition will enable Gemini " to meet the current demand for fast withdrawals, interacting with DeFi staking, or the transferring of digital assets with greater efficiency." Daily Important Metrics CRYPTO SIZE SENTIMENT BULLISH SIGNAL Bullish signal is tied to the crypto market growing Market Cap $1.5T +$42B ( +2.79% ) BTC Dominance 41.64% ( +1.49% ) STABLE COINS FUTURES CME BULLISH SIGNAL A positive spread between Futures Prices and Spot BULLISH SIGNAL Prices is Bullish Increase in circulating -
Implementation of Smart Contracts for Blockchain Based Iot Applications
Implementation of smart contracts for blockchain based IoT applications Georgios Papadodimas, Georgios Palaiokrasas, Antoniοs Litke, Theodora Varvarigou Electrical and Computer Engineering Department National Technical University of Athens Athens, Greece [email protected], [email protected], [email protected], [email protected] Abstract—An increasing number of people, organizations [11], funding mechanisms [12] and many more. A milestone and corporations are expressing their interest in the for the course of blockchain technology was the development decentralization technology of the blockchain. The creation of of Ethereum project, offering new solutions by enabling smart the blockchain marks the time when we start building contracts’ implementation and execution. The Ethereum distributed peer-to-peer networks consisting of non-trusting blockchain is a Turing complete platform for executing smart members that interact with each other without a trusted contracts [13], [14], and not just a ledger serving financial intermediary but in a verifiable manner. In this paper, we transactions. It is a suite of tools and protocols for the creation propose a decentralized application (DApp) based on and operation of Decentralized Applications (DApps), blockchain technology for sharing Internet of Things (IoT) “applications that run exactly as programmed without any sensors’ data, and demonstrate various challenges addressed possibility of downtime, censorship, fraud or third-party during the development process. This application combines blockchain technology with IoT and operates through smart interference”. It also supports a contract-oriented, high-level, contracts that are executed on the Ethereum blockchain. More Turing-complete programming language [15], allowing specifically the application is a platform for sharing (buying and anyone to write smart contracts and create DApps. -
Linking Wallets and Deanonymizing Transactions in the Ripple Network
Proceedings on Privacy Enhancing Technologies ; 2016 (4):436–453 Pedro Moreno-Sanchez*, Muhammad Bilal Zafar, and Aniket Kate* Listening to Whispers of Ripple: Linking Wallets and Deanonymizing Transactions in the Ripple Network Abstract: The decentralized I owe you (IOU) transac- 1 Introduction tion network Ripple is gaining prominence as a fast, low- cost and efficient method for performing same and cross- In recent years, we have observed a rather unexpected currency payments. Ripple keeps track of IOU credit its growth of IOU transaction networks such as Ripple [36, users have granted to their business partners or friends, 40]. Its pseudonymous nature, ability to perform multi- and settles transactions between two connected Ripple currency transactions across the globe in a matter of wallets by appropriately changing credit values on the seconds, and potential to monetize everything [15] re- connecting paths. Similar to cryptocurrencies such as gardless of jurisdiction have been pivotal to their suc- Bitcoin, while the ownership of the wallets is implicitly cess so far. In a transaction network [54, 55, 59] such as pseudonymous in Ripple, IOU credit links and transac- Ripple [10], users express trust in each other in terms tion flows between wallets are publicly available in an on- of I Owe You (IOU) credit they are willing to extend line ledger. In this paper, we present the first thorough each other. This online approach allows transactions in study that analyzes this globally visible log and charac- fiat money, cryptocurrencies (e.g., bitcoin1) and user- terizes the privacy issues with the current Ripple net- defined currencies, and improves on some of the cur- work. -
Versus Decentralized Prediction Markets for Financial Assets
Wolfgang Pacher Centralized- versus Decentralized Prediction Markets for Financial Assets Are blockchain-based prediction market applications simply the better solution to forecasting financial assets? MASTER THESIS submitted in fulfilment of the requirements for the degree of Master of Science Programme: Master's programme Applied Business Administration Branch of study: General Management Alpen-Adria-Universität Klagenfurt Evaluator Assoc.Prof.Mag.Dr. Alexander Brauneis Alpen-Adria-Universität Klagenfurt Institut für Finanzmanagement Klagenfurt, May 2019 Affidavit I hereby declare in lieu of an oath that - the submitted academic paper is entirely my own work and that no auxiliary materials have been used other than those indicated, - I have fully disclosed all assistance received from third parties during the process of writing the thesis, including any significant advice from supervisors, - any contents taken from the works of third parties or my own works that have been included either literally or in spirit have been appropriately marked and the respective source of the information has been clearly identified with precise bibliographical references (e.g. in footnotes), - to date, I have not submitted this paper to an examining authority either in Austria or abroad and that - when passing on copies of the academic thesis (e.g. in bound, printed or digital form), I will ensure that each copy is fully consistent with the submitted digital version. I understand that the digital version of the academic thesis submitted will be used for the purpose of conducting a plagiarism assessment. I am aware that a declaration contrary to the facts will have legal consequences. Wolfgang Pacher m.p. -
Pwc I 2Nd Global Crypto M&A and Fundraising Report
2nd Global Crypto M&A and Fundraising Report April 2020 2 PwC I 2nd Global Crypto M&A and Fundraising Report Dear Clients and Friends, We are proud to launch the 2nd edition of our Global Crypto M&A and Fundraising Report. We hope that the market colour and insights from this report will be useful data points. We will continue to publish this report twice a year to enable you to monitor the ongoing trends in the crypto ecosystem. PwC has put together a “one stop shop” offering, focused on crypto services across our various lines of services in over 25 jurisdictions, including the most active crypto jurisdictions. Our goal is to service your needs in the best possible way leveraging the PwC network and allowing you to make your project a success. Our crypto clients include crypto exchanges, crypto investors, crypto asset managers, ICOs/IEOs/STOs/stable and asset backed tokens, traditional financial institutions entering the crypto space as well as governments, central banks, regulators and other policy makers looking at the crypto ecosystem. As part of our “one stop shop” offering, we provide an entire range of services to the crypto ecosystem including strategy, legal, regulatory, accounting, tax, governance, risk assurance, audit, cybersecurity, M&A advisory as well as capital raising. More details are available on our global crypto page as well as at the back of this report. 2nd Global Crypto M&A and Fundraising Report April 2020 PwC 2 3 PwC I 2nd Global Crypto M&A and Fundraising Report 5 Key takeaways when comparing 2018 vs 2019 There -
GJR-GARCH Volatility Modeling Under NIG and ANN for Predicting Top Cryptocurrencies
Journal of Risk and Financial Management Article GJR-GARCH Volatility Modeling under NIG and ANN for Predicting Top Cryptocurrencies Fahad Mostafa 1,* , Pritam Saha 2, Mohammad Rafiqul Islam 3 and Nguyet Nguyen 4,* 1 Department of Mathematics and Statistics, Texas Tech University, Lubbock, TX 79409, USA 2 Rawls College of Business, Texas Tech University, Lubbock, TX 79409, USA; [email protected] 3 Department of Mathematics, Florida State University, Tallahassee, FL 32306, USA; [email protected] 4 Department of Mathematics and Statistics, Youngstown State University, Youngstown, OH 44555, USA * Correspondence: [email protected] (F.M.); [email protected] (N.N.) Abstract: Cryptocurrencies are currently traded worldwide, with hundreds of different currencies in existence and even more on the way. This study implements some statistical and machine learning approaches for cryptocurrency investments. First, we implement GJR-GARCH over the GARCH model to estimate the volatility of ten popular cryptocurrencies based on market capitalization: Bitcoin, Bitcoin Cash, Bitcoin SV, Chainlink, EOS, Ethereum, Litecoin, TETHER, Tezos, and XRP. Then, we use Monte Carlo simulations to generate the conditional variance of the cryptocurrencies using the GJR-GARCH model, and calculate the value at risk (VaR) of the simulations. We also estimate the tail-risk using VaR backtesting. Finally, we use an artificial neural network (ANN) for predicting the prices of the ten cryptocurrencies. The graphical analysis and mean square errors (MSEs) from the ANN models confirmed that the predicted prices are close to the market prices. For some cryptocurrencies, the ANN models perform better than traditional ARIMA models. Citation: Mostafa, Fahad, Pritam Saha, Mohammad Rafiqul Islam, and Keywords: artificial neural network; cryptocurrency; GJR-GARCH; NIG; Monte Carlo simulation; Nguyet Nguyen. -
Prism: Scaling Bitcoin by 10000
Prism: Scaling Bitcoin by 10,000× Lei Yang∗ Vivek Bagaria† Gerui Wang‡ Mohammad Alizadeh∗ David Tse† Giulia Fanti§ Pramod Viswanath‡ ABSTRACT and throughput in the blockchain (§4). A recent theoretical paper Bitcoin is the first fully-decentralized permissionless blockchain described the core protocol and analyzed its security properties [6]. protocol to achieve a high level of security: the ledger it maintains While these theoretical results are promising, it is not clear has guaranteed liveness and consistency properties as long as the ad- how well they can translate into real-world performance. First, the versary has less compute power than the honest nodes. However, its Prism consensus protocol is much more complex than the longest throughput is only 7 transactions per second and the confirmation chain protocol: clients must maintain over 1000 distinct blockchains, latency can be up to hours. Prism is a new blockchain protocol that is which refer to each other to create an intricate directed acyclic graph designed to achieve a natural scaling of Bitcoin’s performance while (DAG) structure, and they must process blocks at very high rates maintaining its full security guarantees. We present an implementa- (e.g., 100-1000s of blocks per second at 100s of Mbps) to update these tion of Prism that achieves a throughput of over 70;000 transactions blockchains and confirm transactions. Second, Prism’s theoretical per second and confirmation latency of tens of seconds on networks analysis relies on several simplifying assumptions (e.g., round-based of up to 1000 EC2 Virtual Machines. The code can be found at [5]. -
PWC and Elwood
2020 Crypto Hedge Fund Report Contents Introduction to Crypto Hedge Fund Report 3 Key Takeaways 4 Survey Data 5 Investment Data 6 Strategy Insights 6 Market Analysis 7 Assets Under Management (AuM) 8 Fund performance 9 Fees 10 Cryptocurrencies 11 Derivatives and Leverage 12 Non-Investment Data 13 Team Expertise 13 Custody and Counterparty Risk 15 Governance 16 Valuation and Fund Administration 16 Liquidity and Lock-ups 17 Legal and Regulatory 18 Tax 19 Survey Respondents 20 About PwC & Elwood 21 Introduction to Crypto Hedge Fund report In this report we provide an overview of the global crypto hedge fund landscape and offer insights into both quantitative elements (such as liquidity terms, trading of cryptocurrencies and performance) and qualitative aspects, such as best practice with respect to custody and governance. By sharing these insights with the broader crypto industry, our goal is to encourage the adoption of sound practices by market participants as the ecosystem matures. The data contained in this report comes from research that was conducted in Q1 2020 across the largest global crypto hedge funds by assets under management (AuM). This report specifically focuses on crypto hedge funds and excludes data from crypto index/tracking/passive funds and crypto venture capital funds. 3 | 2020 Crypto Hedge Fund Report Key Takeaways: Size of the Market and AuM: Performance and Fees: • We estimate that the total AuM of crypto hedge funds • The median crypto hedge fund returned +30% in 2019 (vs - globally increased to over US$2 billion in 2019 from US$1 46% in 2018). billion the previous year.