Securing Proof-Of-Work Ledgers Via Checkpointing
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Useful Computation on the Block Chain The Harvard community has made this article openly available. Please share how this access benefits you. Your story matters Citation Yeung, Fuk. 2019. Useful Computation on the Block Chain. Master's thesis, Harvard Extension School. Citable link https://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37364565 Terms of Use This article was downloaded from Harvard University’s DASH repository, and is made available under the terms and conditions applicable to Other Posted Material, as set forth at http:// nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of- use#LAA 111 Useful Computation on the Block Chain Fuk Yeung A Thesis in the Field of Information Technology for the Degree of Master of Liberal Arts in Extension Studies Harvard University November 2019 Copyright 2019 [Fuk Yeung] Abstract The recent growth of blockchain technology and its usage has increased the size of cryptocurrency networks. However, this increase has come at the cost of high energy consumption due to the processing power needed to maintain large cryptocurrency networks. In the largest networks, this processing power is attributed to wasted computations centered around solving a Proof of Work algorithm. There have been several attempts to address this problem and it is an area of continuing improvement. We will present a summary of proposed solutions as well as an in-depth look at a promising alternative algorithm known as Proof of Useful Work. This solution will redirect wasted computation towards useful work. We will show that this is a viable alternative to Proof of Work. Dedication Thank you to everyone who has supported me throughout the process of writing this piece. -
Rev. Rul. 2019-24 ISSUES (1) Does a Taxpayer Have Gross Income Under
26 CFR 1.61-1: Gross income. (Also §§ 61, 451, 1011.) Rev. Rul. 2019-24 ISSUES (1) Does a taxpayer have gross income under § 61 of the Internal Revenue Code (Code) as a result of a hard fork of a cryptocurrency the taxpayer owns if the taxpayer does not receive units of a new cryptocurrency? (2) Does a taxpayer have gross income under § 61 as a result of an airdrop of a new cryptocurrency following a hard fork if the taxpayer receives units of new cryptocurrency? BACKGROUND Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and a store of value other than a representation of the United States dollar or a foreign currency. Foreign currency is the coin and paper money of a country other than the United States that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance. See 31 C.F.R. § 1010.100(m). - 2 - Cryptocurrency is a type of virtual currency that utilizes cryptography to secure transactions that are digitally recorded on a distributed ledger, such as a blockchain. Units of cryptocurrency are generally referred to as coins or tokens. Distributed ledger technology uses independent digital systems to record, share, and synchronize transactions, the details of which are recorded in multiple places at the same time with no central data store or administration functionality. A hard fork is unique to distributed ledger technology and occurs when a cryptocurrency on a distributed ledger undergoes a protocol change resulting in a permanent diversion from the legacy or existing distributed ledger. -
User Manual Ledger Nano S
User Manual Ledger Nano S Version control 4 Check if device is genuine 6 Buy from an official Ledger reseller 6 Check the box contents 6 Check the Recovery sheet came blank 7 Check the device is not preconfigured 8 Check authenticity with Ledger applications 9 Summary 9 Learn more 9 Initialize your device 10 Before you start 10 Start initialization 10 Choose a PIN code 10 Save your recovery phrase 11 Next steps 11 Update the Ledger Nano S firmware 12 Before you start 12 Step by step instructions 12 Restore a configuration 18 Before you start 19 Start restoration 19 Choose a PIN code 19 Enter recovery phrase 20 If your recovery phrase is not valid 20 Next steps 21 Optimize your account security 21 Secure your PIN code 21 Secure your 24-word recovery phrase 21 Learn more 22 Discover our security layers 22 Send and receive crypto assets 24 List of supported applications 26 Applications on your Nano S 26 Ledger Applications on your computer 27 Third-Party applications on your computer 27 If a transaction has two outputs 29 Receive mining proceeds 29 Receiving a large amount of small transactions is troublesome 29 In case you received a large amount of small payments 30 Prevent problems by batching small transactions 30 Set up and use Electrum 30 Set up your device with EtherDelta 34 Connect with Radar Relay 36 Check the firmware version 37 A new Ledger Nano S 37 A Ledger Nano S in use 38 Update the firmware 38 Change the PIN code 39 Hide accounts with a passphrase 40 Advanced Passphrase options 42 How to best use the passphrase feature 43 -
Blockchain & Distributed Ledger Technologies
Science, Technology Assessment, SEPTEMBER 2019 and Analytics WHY THIS MATTERS Distributed ledger technology (e.g. blockchain) allows users to carry out digital transactions without the need SCIENCE & TECH SPOTLIGHT: for a centralized authority. It could fundamentally change the way government and industry conduct BLOCKCHAIN & DISTRIBUTED business, but questions remain about how to mitigate fraud, money laundering, and excessive energy use. LEDGER TECHNOLOGIES /// THE TECHNOLOGY What is it? Distributed ledger technologies (DLT) like blockchain are a secure way of conducting and recording transfers of digital assets without the need for a central authority. DLT is “distributed” because multiple participants in a computer network (individuals, businesses, etc.), share and synchronize copies of the ledger. New transactions are added in a manner that is cryptographically secured, permanent, and visible to all participants in near real time. Figure 2. How blockchain, a form of distributed ledger technology, acts as a means of payment for cryptocurrencies. Cryptocurrencies like Bitcoin are a digital representation of value and represent the best-known use case for DLT. The regulatory and legal frameworks surrounding cryptocurrencies remain fragmented across Figure 1. Difference between centralized and distributed ledgers. countries, with some implicitly or explicitly banning them, and others allowing them. How does it work? Distributed ledgers do not need a central, trusted authority because as transactions are added, they are verified using what In addition to cryptocurrencies, there are a number of other efforts is known as a consensus protocol. Blockchain, for example, ensures the underway to make use of DLT. For example, Hyperledger Fabric is ledger is valid because each “block” of transactions is cryptographically a permissioned and private blockchain framework created by the linked to the previous block so that any change would alert all other Hyperledger consortium to help develop DLT for a variety of business users. -
Artificial Intelligence Integrated Blockchain Technology for Decentralized Applications and Smart Contracts
International Journal of Advanced Science and Technology Vol. 29, No.02, (2020), pp. 1023-1031 Artificial Intelligence Integrated Blockchain Technology for Decentralized Applications and Smart Contracts MAAN NAWAF ABBOOD Al-Imam Al-Adham college Abstract In the present period, Blockchain Technology is one of the key regions of research just as execution explicitly in the space of Cryptocurrency. Presently days, various advanced digital forms of money are very conspicuous and shared all through the world in spite of enormous analysis and debates. These cryptographic forms of money incorporate BitCoin, Ethereum, LiteCoin, PeerCoin, GridCoin, PrimeCoin, Ripple, Nxt, DogeCoin, NameCoin, AuroraCoin, Dash, Neo, NEM, PotCoin, TitCoin, Verge, Stellar, VertCoin, Tether, Zcash and numerous others. These blockchain based digital forms of money don't have any middle of the road bank or installment passage to record the log of the transactions. That is the primary reason in light of which numerous nations are not permitting the cryptographic forms of money as legitimate cash transaction. In any case, these blockchain based cryptographic forms of money are extremely celebrated and utilized as a result of colossal security highlights. This manuscript is focusing on the blockchain technology that is directly associated as the application domain of artificial intelligence. Keywords: Artificial Intelligence, AI, AI based Blockchain, Blockchain Security Introduction The blockchain organize is having a square of records in which every single record is related with the dynamic cryptography so every one of the transactions can be scrambled with no likelihood of sniffing or hacking endeavors [1, 2]. In current situation, the blockchain innovation is progressively engaged towards cryptographic forms of money in which the disseminated record is kept up for the transactions [3, 4]. -
A Survey on Volatility Fluctuations in the Decentralized Cryptocurrency Financial Assets
Journal of Risk and Financial Management Review A Survey on Volatility Fluctuations in the Decentralized Cryptocurrency Financial Assets Nikolaos A. Kyriazis Department of Economics, University of Thessaly, 38333 Volos, Greece; [email protected] Abstract: This study is an integrated survey of GARCH methodologies applications on 67 empirical papers that focus on cryptocurrencies. More sophisticated GARCH models are found to better explain the fluctuations in the volatility of cryptocurrencies. The main characteristics and the optimal approaches for modeling returns and volatility of cryptocurrencies are under scrutiny. Moreover, emphasis is placed on interconnectedness and hedging and/or diversifying abilities, measurement of profit-making and risk, efficiency and herding behavior. This leads to fruitful results and sheds light on a broad spectrum of aspects. In-depth analysis is provided of the speculative character of digital currencies and the possibility of improvement of the risk–return trade-off in investors’ portfolios. Overall, it is found that the inclusion of Bitcoin in portfolios with conventional assets could significantly improve the risk–return trade-off of investors’ decisions. Results on whether Bitcoin resembles gold are split. The same is true about whether Bitcoins volatility presents larger reactions to positive or negative shocks. Cryptocurrency markets are found not to be efficient. This study provides a roadmap for researchers and investors as well as authorities. Keywords: decentralized cryptocurrency; Bitcoin; survey; volatility modelling Citation: Kyriazis, Nikolaos A. 2021. A Survey on Volatility Fluctuations in the Decentralized Cryptocurrency Financial Assets. Journal of Risk and 1. Introduction Financial Management 14: 293. The continuing evolution of cryptocurrency markets and exchanges during the last few https://doi.org/10.3390/jrfm years has aroused sparkling interest amid academic researchers, monetary policymakers, 14070293 regulators, investors and the financial press. -
Impossibility of Full Decentralization in Permissionless Blockchains
Impossibility of Full Decentralization in Permissionless Blockchains Yujin Kwon*, Jian Liuy, Minjeong Kim*, Dawn Songy, Yongdae Kim* *KAIST {dbwls8724,mjkim9394,yongdaek}@kaist.ac.kr yUC Berkeley [email protected],[email protected] ABSTRACT between achieving good decentralization in the consensus protocol Bitcoin uses the proof-of-work (PoW) mechanism where nodes earn and not relying on a TTP exists. rewards in return for the use of their computing resources. Although this incentive system has attracted many participants, power has, CCS CONCEPTS at the same time, been significantly biased towards a few nodes, • Security and privacy → Economics of security and privacy; called mining pools. In addition, poor decentralization appears not Distributed systems security; only in PoW-based coins but also in coins that adopt proof-of-stake (PoS) and delegated proof-of-stake (DPoS) mechanisms. KEYWORDS In this paper, we address the issue of centralization in the consen- Blockchain; Consensus Protocol; Decentralization sus protocol. To this end, we first define ¹m; ε; δº-decentralization as a state satisfying that 1) there are at least m participants running 1 INTRODUCTION a node, and 2) the ratio between the total resource power of nodes Traditional currencies have a centralized structure, and thus there run by the richest and the δ-th percentile participants is less than exist several problems such as a single point of failure and corrup- or equal to 1 + ε. Therefore, when m is sufficiently large, and ε and tion. For example, the global financial crisis in 2008 was aggravated δ are 0, ¹m; ε; δº-decentralization represents full decentralization, by the flawed policies of banks that eventually led to many bank which is an ideal state. -
New Technology Day
New Technology Day ISSA Report: Infrastructure for Crypto-Assets: A Review by Infrastructure Providers SIX - Urs Sauer, ISSA Working Group Chair “DLT – Principles for Industry-Wide Acceptance” A look back • Symposium in 2016 Distributed Ledger Technology (DLT) as a main focus • At SIBOS 2016 in Geneva, under the leadership of NSD and Strate, 12 CSDs met for the first ever “pre-SIBOS CSD DLT Workshop” • A core working-group of NSD, Strate, NASDAQ and SIX established itself • DCV (Chile), Caja de Valores (Argentina), SWIFT and SLIB joined the group and published via ISSA the product requirements for: "General Meeting Proxy Voting on Distributed Ledger“ in December 2017 2 Current working group members 3 Observations on DLT developments 1 Incumbents (FMIs & brokers, etc.) moves • Bringing traditional market activity onto distributed “New” ledgers market players Native e.g. Binance, coinbase • Starting tokenization of assets and payments tokens 2 • Aiming to achieve resource efficiencies and increased transparency and simplicity along the value chain 2 “New” market players moves FMIs and brokers Tokenization Traditional e.g. NYSE, Nasdaq, GS, 1 of assets + • Bringing public-blockchain assets to the traditional Assets SIX full value chain on universe of investors distributed ledger • Leveraging their digital market infrastructure and services for the traditional asset space threatening/ Traditional Model Digital Model disintermediating of incumbents business models 4 Source: SIX, Oliver Wyman 1 DLT plans by traditional market infrastructure -
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. -
Blockchain Consensus: an Analysis of Proof-Of-Work and Its Applications. Amitai Porat1, Avneesh Pratap2, Parth Shah3, and Vinit Adkar4
Blockchain Consensus: An analysis of Proof-of-Work and its applications. Amitai Porat1, Avneesh Pratap2, Parth Shah3, and Vinit Adkar4 [email protected] [email protected] [email protected] [email protected] ABSTRACT Blockchain Technology, having been around since 2008, has recently taken the world by storm. Industries are beginning to implement blockchain solutions for real world services. In our project, we build a Proof of Work based Blockchain consensus protocol and evauluate how major applications can run on the underlying platform. We also explore how varying network conditions vary the outcome of consensus among nodes. Furthermore, to demonstrate some of its capabilities we created our own application built on the Ethereum blockchain platform. While Bitcoin is by and far the first major cryptocurrency, it is limited in the capabilities of its blockchain as a peer-to-peer currency exchange. Therefore, Ethereum blockchain was the right choice for application development since it caters itself specifically to building decentralized applications that seek rapid deployment and security. 1 Introduction Blockchain technology challenges traditional shared architectures which require forms of centralized governance to assure the integrity of internet applications. It is the first truly democratized, universally accessible, shared and secure asset control architecture. The first blockchain technology was founded shortly after the US financial collapse in 2008, the idea was a decentralized peer-to-peer currency transfer network that people can rely on when the traditional financial system fails. As a result, blockchain largely took off and made its way into large public interest. We chose to investigate the power of blockchain consensus algorithms, primarily Proof of Work. -
Aquareum: a Centralized Ledger Enhanced with Blockchain and Trusted Computing
Aquareum: A Centralized Ledger Enhanced with Blockchain and Trusted Computing Ivan Homoliak;yz Pawel Szalachowskiy ySingapore University of Technology and Design zBrno University of Technology ABSTRACT database is equivocated, thus completely undermining the security Distributed ledger systems (i.e., blockchains) have received a lot of of the entire system. Finally, centralized systems are inherently attention recently. They promise to enable mutually untrusted par- prone to censorship. A ledger operator can refuse any request or a ticipants to execute transactions, while providing the immutability transaction at her will without leaving any evidence of censoring. of the transaction history and censorship resistance. Although de- This may be risky especially when a censored client may suffer centralized ledgers may become a disruptive innovation, as of today, from some consequences (e.g., fines when being unable to settle they suffer from scalability, privacy, or governance issues. There- a transaction on time) or in the case when the operator wishes to fore, they are inapplicable for many important use cases, where hide some ledger content (e.g., data proving her misbehavior). On interestingly, centralized ledger systems quietly gain adoption and the other hand, recently emerged public distributed ledgers com- find new use cases. Unfortunately, centralized ledgers have also bine an append-only cryptographic data structure with a consensus several drawbacks, like a lack of efficient verifiability or a higher algorithm, spreading trust across all participating consensus nodes. risk of censorship and equivocation. These systems are by design publicly verifiable, non-equivocating, In this paper, we present Aquareum, a novel framework for cen- and censorship resistant. -
Research and Applied Perspective to Blockchain Technology: a Comprehensive Survey
applied sciences Review Research and Applied Perspective to Blockchain Technology: A Comprehensive Survey Sumaira Johar 1,* , Naveed Ahmad 1, Warda Asher 1, Haitham Cruickshank 2 and Amad Durrani 1 1 Department of Computer Science, University of Peshawar, Peshawar 25000, Pakistan; [email protected] (N.A.); [email protected] (W.A.); [email protected] (A.D.) 2 Institute of Communication Systems, University of Surrey, Guildford GU2 7JP, UK; [email protected] * Correspondence: [email protected] Abstract: Blockchain being a leading technology in the 21st century is revolutionizing each sector of life. Services are being provided and upgraded using its salient features and fruitful characteristics. Businesses are being enhanced by using this technology. Countries are shifting towards digital cur- rencies i.e., an initial application of blockchain application. It omits the need of central authority by its distributed ledger functionality. This distributed ledger is achieved by using a consensus mechanism in blockchain. A consensus algorithm plays a core role in the implementation of blockchain. Any application implementing blockchain uses consensus algorithms to achieve its desired task. In this paper, we focus on provisioning of a comparative analysis of blockchain’s consensus algorithms with respect to the type of application. Furthermore, we discuss the development platforms as well as technologies of blockchain. The aim of the paper is to provide knowledge from basic to extensive from blockchain architecture to consensus methods, from applications to development platform, from challenges and issues to blockchain research gaps in various areas. Citation: Johar, S.; Ahmad, N.; Keywords: blockchain; applications; consensus mechanisms Asher, W.; Cruickshank, H.; Durrani, A.