Blockchain Terminology: a GLOSSARY for BEGINNERS
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Examining the Lightning Network on a Protocol Level
Examining the Lightning network on a protocol level Rene Pickhardt (Data Science Consultant) https://www.rene-pickhardt.de & https://twitter.com/renepickhardt München 19.7.2018 I've been told I should start any talk with something everybody in the audience should know A standard Bitcoin Transaction has 6 data fields ( The following is a brief summary of https://en.bitcoin.it/wiki/Transaction#Input ) ● Version number (4 Bytes) ● In-Counter (1-9 Bytes) ● List of inputs (depending on the Value of <In-Counter>) ● Out-Counter (1-9 Bytes) ● List of Outputs (depending on the Value of <Out-Counter>) ● Lock_time (4 Bytes) ( Bitcoin Transaction with 3 inputs and 2 outputs Data consists mainly of executable scripts! A chain of Bitcoin Transactions with 3 UTXO ● Outputs are references by the inputs ● The Script in the output defines how the transaction can be spent ● Owning Bitcoins means being able to spend the output of an unspent transaction ○ Provide an input script ○ Concatenate it with with some outputscript of an unspent transaction ○ The combined Script needs to evaluate to True Spending a Pay-to-PubkeyHash (standard TX) ● ScriptPubKey (aka the Output Script) ○ OP_DUP OP_HASH160 <pubKeyHash> OP_EQUALVERIFY OP_CHECKSIG ● ScriptSig: (aka the Input Script) ○ <sig> <pubKey> ● Explainations ○ OP_CODES are the instructions of the script language within Bitcoin ○ <data> is depicted like html tags with lesser than and greater than signs ○ The complete script is concatenated as Input || Output and then being executed on a Stack machine <sig> <pubKey> -
Deviant Decentralized Exchange
DDEEVVXX Deviant Decentralized Exchange A hybrid exchange leveraging Smartcoins on the Bitshares (BTS) blockchain. CONTENTS 03 What is the current landscape for trading crypto assets? 05 Centralized Exchanges 08 Decentralized Exchanges 11 Hybrid Exchanges 13 DEVX Platform 14 Platform Overview 16 DEVX Smart Coin 17 DEVX off-chain engine - The DEVX Transient Protocol (DEVTP) 19 Trading Process 25 What is the status of development / roadmap for these innovations? 26 DEVX Team 03 Crypto assets are here to stay. According to Apple co-founder Steve Wozniak, Bitcoin and WHAT IS THE blockchain will be the next major IT revolution, and will achieve full CURRENT potential in a decade. According to LANDSCAPE FOR Paypal co-founder Peter Thiel, Bitcoin is the next Digital Gold. TRADING CRYPTO Since Bitcoin’s release in 2009, 1,622 altcoin variants have been issued. ASSETS? 2018 has already broken all records with 345 Initial Coin Offerings, and over US$ 7.7 billion of capital raised. DEVX the next revolution 04 Growth in the number of crypto assets has also driven an increase in crypto asset trading, in order to satisfy the requirements of the increasingly numerous universe of holders, investors, arbitrageurs, market makers, speculators and hedgers. There are presently more than 500 crypto asset exchanges to bring together buyers and sellers, where crypto assets are traded for either different digital currencies, or for other assets such as conventional fiat money. These exchanges operate mostly outside Western countries, and range from fully-online platforms to bricks-and-mortar businesses. Currently, almost two thirds of all daily global crypto asset trading volume results from activity on just ten of these exchanges. -
Blocksci: Design and Applications of a Blockchain Analysis Platform
BlockSci: Design and applications of a blockchain analysis platform Harry Kalodner Steven Goldfeder Alishah Chator [email protected] [email protected] [email protected] Princeton University Princeton University Johns Hopkins University Malte Möser Arvind Narayanan [email protected] [email protected] Princeton University Princeton University ABSTRACT to partition eectively. In fact, we conjecture that the use of a tra- Analysis of blockchain data is useful for both scientic research ditional, distributed transactional database for blockchain analysis and commercial applications. We present BlockSci, an open-source has innite COST [5], in the sense that no level of parallelism can software platform for blockchain analysis. BlockSci is versatile in outperform an optimized single-threaded implementation. its support for dierent blockchains and analysis tasks. It incorpo- BlockSci comes with batteries included. First, it is not limited rates an in-memory, analytical (rather than transactional) database, to Bitcoin: a parsing step converts a variety of blockchains into making it several hundred times faster than existing tools. We a common, compact format. Currently supported blockchains in- describe BlockSci’s design and present four analyses that illustrate clude Bitcoin, Litecoin, Namecoin, and Zcash (Section 2.1). Smart its capabilities. contract platforms such as Ethereum are outside our scope. Second, This is a working paper that accompanies the rst public release BlockSci includes a library of useful analytic and visualization tools, of BlockSci, available at github.com/citp/BlockSci. We seek input such as identifying special transactions (e.g., CoinJoin) and linking from the community to further develop the software and explore addresses to each other based on well-known heuristics (Section other potential applications. -
Accounting for and Auditing of Digital Assets Digital Assets Working Group
Practice aid Accounting for and auditing of digital assets Digital Assets Working Group Accounting Subgroup Matthew Schell, Chair Kevin Jackson Mark Murray Crowe LLP PwC RSM US LLP Michael Bingham Jin Koo Amy Park US Government Accountability BDO USA LLP Deloitte & Touche LLP Office Corey McLaughlin Beth Paul Brian Fields Cohen & Company PwC KPMG LLP Lan Ming Aleks Zabreyko Rahul Gupta Ernst & Young LLP Connor Group Grant Thornton LLP Christopher Moore Crowe LLP Auditing Subgroup Amy Steele, Chair Angie Hipsher-Williams Shelby Murphy Deloitte & Touche LLP Crowe LLP Deloitte & Touche LLP Michael Bingham Michael Kornstein Christian Randall US Government Accountability Office Ernst & Young LLP Cohen & Company Jay Brodish Sara Krople Jay Schulman PwC Crowe LLP RSM US LLP Damon Busse Bryan Martin Robert Sledge Baker Tilly Virchow Krause, LLP BDO USA LLP KPMG LLP Mary Grace Davenport Dylan McDermott Jagruti Solanki PwC Coinbase Aprio Jeremy Goss Grant Thornton LLP AICPA Senior Committees Financial Reporting Executive Committee Angela Newell, Chair Mark Crowley Jeff Sisk Kelly Ardrey Jr. Sean Lager Dusty Stallings Michelle Avery Mark Northan Lynne Triplett Lee Campbell Bill Schneider Mike Winterscheidt Cathy Clarke Rachel Simons Aleks Zabreyko Assurance Services Executive Committee Jim Burton, Chair Mary Grace Davenport Brad Muniz Christine Anderson Chris Halterman Dyan Rohol Daniel Balla Elaine Howle Kimberly Ellison-Taylor Jennifer Burns Bryan Martin Miklos Vasarhelyi Auditing Standards Board Tracy Harding, Chair AICPA staff Diana Krupica, -
The Lightning Network - Deconstructed and Evaluated
The Lightning Network - Deconstructed and Evaluated Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) professionals, especially those working in the blockchain and cryptocurrency environment, may have heard of the second layer evolution of Bitcoin's blockchain - the Lightning Network, (LN). This exciting new and rapidly deploying technology offers innovative solutions to solve issues around the speed of transaction times using bitcoin currently, but expandable to other tokens. Potentially however, this technology raises regulatory concerns as it arguably makes, (based on current technical limitations), bitcoin transactions truly anonymous and untraceable, as opposed to its current status, where every single bitcoin can be traced all the way back to its coinbase transaction1 on the public blockchain. This article will break down the Lightning Network - analyzing how it works and how it compares to Bitcoin’s current system, the need for the technology, its money laundering (ML) and terrorist financing (TF) risks, and some thoughts on potential regulatory applications. Refresher on Blockchain Before diving into the Lightning Network, a brief refresher on how the blockchain works - specifically the Bitcoin blockchain (referred to as just “Bitcoin” with a capital “B” herein) - is required. For readers with no knowledge or those wishing to learn more about Bitcoin, Mastering Bitcoin by Andreas Antonopoulos2 is a must read, and for those wishing to make their knowledge official, the Cryptocurrency Certification Consortium, (C4) offers the Certified Bitcoin Professional (CBP) designation.3 Put simply, the blockchain is a growing list of records that can be visualized as a series of blocks linked by chains. Each block contains specific information - in Bitcoin’s case, a list of transactions and their data, which includes the time, date, amount, and the counterparties4 of each transaction. -
Ring Confidential Transactions
ISSN 2379-5980 (online) DOI 10.5195/LEDGER.2016.34 RESEARCH ARTICLE Ring Confidential Transactions Shen Noether,∗ Adam Mackenzie, the Monero Research Lab† Abstract. This article introduces a method of hiding transaction amounts in the strongly decentralized anonymous cryptocurrency Monero. Similar to Bitcoin, Monero is a cryptocur- rency which is distributed through a proof-of-work “mining” process having no central party or trusted setup. The original Monero protocol was based on CryptoNote, which uses ring signatures and one-time keys to hide the destination and origin of transactions. Recently the technique of using a commitment scheme to hide the amount of a transaction has been dis- cussed and implemented by Bitcoin Core developer Gregory Maxwell. In this article, a new type of ring signature, A Multilayered Linkable Spontaneous Anonymous Group signature is described which allows one to include a Pedersen Commitment in a ring signature. This construction results in a digital currency with hidden amounts, origins and destinations of transactions with reasonable efficiency and verifiable, trustless coin generation. The author would like to note that early drafts of this were publicized in the Monero Community and on the #bitcoin-wizards IRC channel. Blockchain hashed drafts are available showing that this work was started in Summer 2015, and completed in early October 2015.17 An eprint is also available at http://eprint.iacr.org/2015/1098. 1. Introduction Recall that in Bitcoin each transaction is signed by the owner of the coins being sent and these signatures verify that the owner is allowed to send the coins. This is entirely analogous to the signing of a check from your bank. -
100 Percent Reserve Money: the Small Change Challenge
THE QUARTERLY JOURNAL OF AUSTRIAN ECONOMICS 12, NO. 1 (2009): 3–16 Articles 100 PERCENT RESERVE MONEY: THE SMALL CHANGE CHALLENGE GEORGE SELGIN Abstract: In a free market economy from which fiduciary media are excluded, economic progress will be limited, perhaps severely, by the high cost and correspondingly limited supply of small-denom- ination money—money that is needed to accomplish retail and other low-value exchanges. Historically, fiduciary token coins have proven to be the only practical means for addressing the small change problem, whether officially or unofficially. In partic- ular, privately-supplied, fiduciary token coins played a crucial part in Great Britain’s Industrial Revolution, which might not have been possible without them. INTRODUCTION he debate on 100 percent versus fractional reserve money and banking has already taken up a large part of contemporary Aus- Ttrian discussions of monetary economics. Yet, in the course of researching my book on private coinage during Great Britain’s Industrial Revolution (Selgin 2008), I became aware of an important, practical challenge to any 100 percent money scheme that has been overlooked by participants in the debate thus far. That challenge concerns the provi- sion of small change, that is, of exchange media suitable for small pay- ments, and especially for giving change to purchasers of retail goods. I will argue that, absent government intervention (or an unlikely degree of charity), an otherwise free-market economy in which fiduciary media are outlawed will be unable to solve what Cipolla (1956, p. 31) and Thomas George Selgin ([email protected]) is professor of economics at the University Georgia. -
Durand Lawyers
Montreal, Canada, July 15, 2020 BY EMAIL : [email protected] Secretariat to the Financial Stability Board Bank for International Settlements Centralbahnplatz 2 CH-4002 Basel Switzerland Subject : Addressing the regulatory, supervisory and oversight challenges raised by “global stablecoin” arrangements: Consultative document1 (“Consultation”) Dear Sirs and Madams : We welcome the Financial Stability Board’s (“FSB”) invitation to respond to its Consulation on global stablecoin (“GSC”) arrangements, and hope that the present submission will useful in your deliberations regarding the foregoing. This submission forms part of a series of submissions filed before the Canadian Standing Committee of Finance (FINA)2 in its statutory review of the Proceeds of Crime and Terrorist Financing Act (of which myself, David Durand, and Mr. Drew Dorweiler presented thereto) as well as IIROC/CSA3 and IOSCO4 consultation. A copy of our FINA submission is enclosed at Schedule 15 hereof; of which, our recommendations are found at Section 11 (at page 26) thereof, namely : concentrating regulatory efforts at the locus of cryptoasset transactions – the convertibility mechanism, as well as address definitions of key terms, such as commodity, currency, cryptoasset and securities. INTRODUCTION Little did we know the stir the Satoshi Nakatomo white paper6 of October 2008 was going to create. Indeed the Nakatomo paper, cited over ten thousand times per Google®, has caused government, public and private sector, advocates, as well as the legal system to spend an incalculable amount of hours studying the attributes of cryptoassets and their impact on the financial system, monetary policy7,8, data 1 https://www.fsb.org/2020/04/addressing-the-regulatory-supervisory-and-oversight-challenges-raised-by-global-stablecoin- arrangements-consultative-document/. -
The Lightning Network Jagger S
View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by AIS Electronic Library (AISeL) Association for Information Systems AIS Electronic Library (AISeL) International Conference on Information Resources CONF-IRM 2019 Proceedings Management (CONF-IRM) 5-2019 The potential effect off-chain instant payments will have on cryptocurrency scalability issues – The Lightning Network Jagger S. Bellagarda The University of Pretoria, [email protected] Follow this and additional works at: https://aisel.aisnet.org/confirm2019 Recommended Citation Bellagarda, Jagger S., "The potential effect off-chain instant payments will have on cryptocurrency scalability issues – The Lightning Network" (2019). CONF-IRM 2019 Proceedings. 2. https://aisel.aisnet.org/confirm2019/2 This material is brought to you by the International Conference on Information Resources Management (CONF-IRM) at AIS Electronic Library (AISeL). It has been accepted for inclusion in CONF-IRM 2019 Proceedings by an authorized administrator of AIS Electronic Library (AISeL). For more information, please contact [email protected]. The potential effect off-chain instant payments will have on cryptocurrency scalability issues – The Lightning Network Jagger S. Bellagarda The University of Pretoria [email protected] Abstract The rapid increase in popularity regarding cryptocurrency and specifically Bitcoin has been unprecedented over the past number of years. However, scalability has become a major barrier keeping it from gaining wide spread mass adoption. The purpose of this paper will be to investigate the potential effect off-chain instant payments will have on cryptocurrency scalability issues, with a focus on the Lightning Network. This will be achieved by means of a quantitative study through the process of testing various factors associated with the Lightning Network against another potential scalability solution, increasing block size limit. -
Cryptocurrencies Without Proof of Work
Cryptocurrencies without Proof of Work Iddo Bentov1, Ariel Gabizon2, and Alex Mizrahi3 1 Department of Computer Science, Technion, [email protected] 2 Department of Computer Science, Technion, [email protected] 3 chromaway.com, [email protected] Abstract. We study decentralized cryptocurrency protocols in which the participants do not deplete physical scarce resources. Such protocols commonly rely on Proof of Stake, i.e., on mechanisms that extend voting power to the stakeholders of the system. We offer analysis of existing protocols that have a substantial amount of popularity. We then present our novel pure Proof of Stake protocols, and argue that they help in mitigating problems that the existing protocols exhibit. 1 Introductiony The decentralized nature of Bitcoin [7, 12] means that anyone can become a \miner" at any point in time, and thus participate in the security maintenance of the Bitcoin system and be compensated for this work. The miners continuously perform Proof of Work (PoW) computations, meaning that they attempt to solve difficult computational tasks. The purpose of the PoW element in the Bitcoin system is to reach consensus regarding the ledger history, thereby synchronizing the transactions and making the users secure against double-spending attacks. The miners who carry out PoW computations can be viewed as entities who vote on blocks of transactions that the users recently broadcasted to the network, so that the decision-making power of each miner is in proportion to the amount of computational power that she has. Thus, an individual miner who has a fraction p of the total mining power can create each new block with probability p, though other factors such as “selfish mining" [1,5,6] can influence p. -
2. Swedish Monetary Standards in a Historical Perspective1
2. Swedish monetary standards in a historical perspective1 Rodney Edvinsson 2.1. Introduction Since 1873 the krona (crown, abbreviated SEK), divisible into 100 öre, has been the main monetary unit in Sweden. Before that date Sweden had various domestic cur- rencies that were used as means of payment. In various periods there was a fluctuat- ing market exchange rate between these currencies. Inflation figures, for example, will therefore differ depending on which monetary unit one follows because the value of some currencies fell more over time than the value of others.2 This chapter classifies the monetary standards in Sweden from the Middle Ages to the present, and gives an overview of the various currencies that were in use. A com- modity standard was in place during most of Sweden’s history, while the fiat stan- dard is a rather late innovation. The classification into monetary standards is also related to the issue of debasement under the commodity standard and the mecha- nisms behind the rise of multiple currencies. Exchange rates of coins often deviated somewhat from the theoretical exchange rates based on the relations between their intrinsic metal values. The monetary history of Sweden provides examples of imme- diate as well as protracted adjustments of exchange rates and prices in response to debasement. The term “Sweden” used in this book could be questioned from a historical per- spective. Up to the 17th century, the monetary history of various regions within the present borders of Sweden coincided with Denmark’s. Since Finland was part of the kingdom of Sweden-Finland up to 1809, the monetary history of Sweden and Fin- 1 I want to thank especially Jan Bohlin, Bo Franzén, Klas Fregert, Cecilia von Heijne, Lars O. -
Lightning Network Summary
The Bitcoin Lightning Network http://lightning.network The Lightning Network is a decentralized system for instant, high-volume micropayments that removes the risk of delegating custody of funds to trusted third parties. Bitcoin, the world's most widely used and valuable Alice digital currency, allows anyone to send value without a trusted intermediary or depository. Bitcoin contains an advanced scripting system allowing users to program instructions for funds. There are, however, some Bob drawbacks to bitcoin's decentralized design. Transactions confirmed on the bitcoin blockchain take up to one hour before they are irrevesible. Micropayments, or payments less than a few cents, are inconsistently confirmed, and fees render such transactions unviable on the network today. The Lightning Network solves these problems. It is one of the first implementations of a multi-party Smart Contract (programmable money) using bitcoin's built-in scripting. The Lightning Network is leading technological development in multiparty financial computations with bitcoin. Instant Payments. Bitcoin aggregates transactions into blocks spaced ten minutes apart. Payments are widely regarded as secure on bitcoin after confirmation of six blocks, or about one hour. On the Lightning Network, payments don't need block confirmations, and are instant and atomic. Lightning can be used at retail point-of-sale terminals, with user device-to-device transactions, or anywhere instant payments are needed. Micropayments. New markets can be opened with the possibility of micropayments. Lightning enables one to send funds down to 0.00000001 bitcoin without custodial risk. The bitcoin blockchain currently enforces a minimum output size many hundreds of times higher, and a fixed per-transaction fee which makes micropayments impractical.