Unchaining the Blockchain Network Layer

Total Page:16

File Type:pdf, Size:1020Kb

Unchaining the Blockchain Network Layer NORTHWESTERN UNIVERSITY Unchaining the Blockchain Network Layer A DISSERTATION SUBMITTED TO THE GRADUATE SCHOOL IN PARTIAL FULFILLMENT OF THE REQUIREMENTS for the degree DOCTOR OF PHILOSOPHY Field of Computer Science By Uri Klarman EVANSTON, ILLINOIS March 2019 2 c Copyright by Uri Klarman 2019 All Rights Reserved 3 ABSTRACT Unchaining the Blockchain Network Layer Uri Klarman Blockchains are an exciting new type of Peer-to-Peer (P2P) distributed systems, which enable parties to transact directly, and maintain the record of said interactions in a dis- tributed manner. A unique feature of blockchains is their ability to maintain a consensus without requiring knowledge on the number of participants, nor their identities, opening the door for cross-border, self-organized, decentralized, open ecosystems. The original blockchain, Bitcoin, aims to be a Global P2P Electronic Cash System, and to replace fiat money, banks, payment-processors, and other financial middlemen. Other blockchains, e.g., Ethereum, aim to remove middlemen from other types of interactions, such as replac- ing custodians with Smart Contracts, and to securely store credentials, identities, health records, and private information. While blockchains have the potential to be transformative in many fields, their real- world usage is held back by practical limitations. First and foremost, for a blockchain to be used at a global scale, it must be capable of handling a high volume of transactions; for Bitcoin to replace Visa, MasterCard, PayPal and other payment processors, it must be 4 capable of processing roughly 5; 000 transactions per second (TPS), the average number of TPS these companies process today [26, 74]. To support online shopping, it must support peak demand, which for Alibaba stands at 325; 000 TPS [109]. In contrast to these significant requirements, Bitcoin can only process 3{4 TPS. Other significant limitations include the centralization and wastefulness of blockchain mining, the procedure which records transactions in the blockchain. Research in the blockchain field had thus far focused on new cryptographic primi- tives and alternative blockchain protocols to address these real-world challenges, while the networking aspects were largely ignored. In this thesis, I propose a definition for the blockchain Network Layer, and provide evidence that the Network Layer is the bottleneck and root-cause for some of the most pressing challenges blockchains face today. I further propose new networking primitives and novel network utilization methods, and explore how they can be used to overcome said challenges, including scalability, mining central- ization, and mining wastefulness, as well as to utilize blockchains to decentralize existing knowledge silos. First, I provide the necessary background to understand the operation of blockchains, and a definition for the blockchain Network Layer. Then, I present an analysis which outlines how the Network Layer is the bottleneck for blockchain scalabil- ity, and suggest a new networking primitive, the Blockchain Distribution Network (BDN) to overcome both blockchain scalability and mining centralization. Lastly, I present novel networking methods which enable blockchains to be utilized in new fields, focusing on the decentralization of the search engines market, and mitigate mining wastefulness. 5 Thesis Committee Aleksandar Kuzmanovic, Northwestern University, Committee Chair Fabi´anBustamante, Northwestern University, Committee Member Peter A. Dinda, Northwestern University, Committee Member Cristina Nita-Rotaru, Northeastern University, Committee Member 6 Acknowledgements First, I would like to thank my advisor, mentor, and partner, Aleksandar Kuzmanovic, for his continuous support of my research, and for his wise guidance. His focus on exciting ideas, his confidence in our ability to overcome any obstacle we encounter, and his genuine enthusiasm about our joint work, are the cornerstones for my approach towards science, research, and academia. I would further like to express my gratitude to my co-advisor, Fabi´anBustamante, for supporting my research, for sharing his insights on conducting research across multiple domains and its implications, and for his valuable feedback and advice. My sincere thanks also go to the other members of my committee, Peter Dinda and Cristina Nita-Rotaru, for their valuable insight and candid feedback. Their insights and comments during my proposal had a significant effect on the shaping of my thesis, for which I am grateful. I thank my lab-mates and fellow students at the Northwestern Networking Group: Marcel Flores, Ning Xia, Marc Warrior, Qurat-Ul-Ann Akbar, Andrew Kahn, and Alexan- der Wenzel, for their camaraderie, technical assistance, and wise advice. It had been my pleasure to work alongside each and every one of you. Additional thanks go to the entire bloXroute Labs team, and to Soumya Basu in particular, for investing countless hours in the development and deployment of bloXroute, bridging the gap between clever ideas and solid reality. 7 I would like to thank my parents, brothers, in-laws, nephews and nieces, for contin- uously supporting me in this endeavor, and throughout my life. Finally, I would like to thank my wife Yaara, without whom I would have never set out on this exciting academic journey, nor would it had been half as exciting. 8 Table of Contents ABSTRACT 3 Thesis Committee 5 Acknowledgements 6 List of Figures 12 Chapter 1. Introduction 16 1.1. The Blockchain Network Layer 17 1.2. Blockchain Networking Resources 18 1.3. Thesis Organization 18 Chapter 2. Thesis 20 Chapter 3. Blockchain Fundamentals and the Blockchain Network Layer 21 3.1. The Operation of Bitcoin 21 3.1.1. Bitcoin Users 21 3.1.2. Nodes, Miners and Validators 22 3.1.3. Block Mining 24 3.1.4. Blockchain Security 25 3.1.5. Forks 26 3.1.6. Mining Pools 28 9 3.1.7. Alternative Blockchain Designs 30 3.2. The Blockchain Stack and the Network Layer 31 3.2.1. Layer-1: Consensus Layer 31 3.2.2. Layer-2: Intermittent Consensus Layer 32 3.2.3. Layer-3: Inference Layer 33 3.2.4. Layer-0: Network Layer 34 Chapter 4. bloXroute: the First Blockchain Distribution Network (BDN) 35 4.1. Analysis of the Blockchain Scalability Problem 35 4.1.1. Scalability Constraints 36 4.1.2. Block Propagation Time Analysis 37 4.1.3. Forks, Security and Usability 39 4.1.4. Decentralization 41 4.1.5. Block Size and Inter-Block Time Interval 41 4.2. Related Work 42 4.2.1. Centralized Propagation Systems 42 4.2.2. Off-Chain Scaling Solutions 44 4.2.3. On-Chain Scaling Solutions 44 4.3. Blockchain Distribution Network (BDN): a New Networking Primitive 45 4.3.1. Trust Model 46 4.3.2. System Components 47 4.3.3. bloXroute Scalability Improvement 48 4.3.4. bloXroute's Provable Neutrality 50 4.3.5. Adversary Behaviors, System Failure, and Safety Measures 55 10 4.4. bloXroute Empirical Evaluation 62 4.4.1. Real-World Performance 62 4.4.2. High TPS Performance 66 4.5. Mining Decentralization 70 Chapter 5. Webcoin: Decentralizing Search Engines with Blockchain Networking Resources 73 5.1. From Bitcoin to Webcoin 77 5.1.1. Webcoin's Goals 77 5.1.2. Webcoin's Non-Goals 78 5.1.3. Proof-of-Work Wastefulness 79 5.2. The Webcoin Protocol 81 5.2.1. Webcoin's Proof-of-Work 81 5.2.2. Index Collectors 83 5.3. Web Indexing and Index Validation 85 5.3.1. Statistical Index Validation 86 5.3.2. Statistical Validation Accuracy 87 5.4. Webcoin's Security 88 5.4.1. Block Mining 90 5.4.2. Block Validation 94 5.4.3. Resource Aggregation and Security 95 5.4.4. Minimal Inter-Block Time 96 5.5. Webcoin Evaluation 97 5.5.1. Crawling Feasibility 97 11 5.5.2. Network Usage 100 5.5.3. Mining at Large Scales 103 5.5.4. Collectors' Properties. 105 5.6. Related Work 105 5.7. Discussion 107 Chapter 6. Conclusion 111 References 113 12 List of Figures 3.1 The blockchain stack. The Network Layer (Layer-0) supports the operation of the Consensus Layer (Layer-1), which encapsulates blockchain functionalities. The Intermittent Consensus Layer (Layer-2) extends these functionalities outside the consensus, while the Inference Layer (Layer-3) adds new functionalities outside the consensus. 31 4.1 The components of the bloXroute system: the bloXroute BDN, and the Peer Network nodes utilizing it. Each Peer Network node runs a Gateway process as an intermediary between its blockchain application and the bloXroute BDN. 47 4.2 Naive block propagation using bloXroute. (1) Blockchain node passes block to local bloXroute Gateway. (2) Gateway transmits block to bloXroute server. (3) bloXroute server streams block to all bloXroute servers as first bytes arrive. (4) bloXroute servers stream block to all Gateways as first bytes arrive. (5) Gateways validate block structure, and pass block to blockchain nodes. 51 4.3 Encrypted block propagation using bloXroute. (1) Blockchain node passes block to local bloXroute Gateway, which encrypts block. Then, propagation follows path of naive propagation (solid line). (2) Gateways 13 form a P2P network, where each notifies its peer of encrypted blocks received. p1 and p2 both notify psource of receiving encrypted block. (3) Once psource learns its peers received the encrypted block, it sends encryption key to its peers, to be propagated to all Gateways. (4) Upon receiving the encryption key, each gateway decrypts the encrypted block and pass it to the blockchain node it serves. 52 4.4 Indirect relay of encrypted block to bloXroute. (1) As in encrypted block propagation, blockchain node passes block to local bloXroute Gateway, to be encrypted. (2) Gateway transmits encrypted block to a Gateway peer, to be relayed to a bloXroute server. Encrypted block then propagates, followed by its encryption key, as in encrypted block propagation (solid line). 53 4.5 The ratios by which bloXroute compresses the blocks mined on January 1st, 2019 on the Bitcoin (BTC), Bitcoin Cash (BCH), and Ethereum (ETH).
Recommended publications
  • Creation and Resilience of Decentralized Brands: Bitcoin & The
    Creation and Resilience of Decentralized Brands: Bitcoin & the Blockchain Syeda Mariam Humayun A dissertation submitted to the Faculty of Graduate Studies in partial fulfillment of the requirements for the degree of Doctor of Philosophy Graduate Program in Administration Schulich School of Business York University Toronto, Ontario March 2019 © Syeda Mariam Humayun 2019 Abstract: This dissertation is based on a longitudinal ethnographic and netnographic study of the Bitcoin and broader Blockchain community. The data is drawn from 38 in-depth interviews and 200+ informal interviews, plus archival news media sources, netnography, and participant observation conducted in multiple cities: Toronto, Amsterdam, Berlin, Miami, New York, Prague, San Francisco, Cancun, Boston/Cambridge, and Tokyo. Participation at Bitcoin/Blockchain conferences included: Consensus Conference New York, North American Bitcoin Conference, Satoshi Roundtable Cancun, MIT Business of Blockchain, and Scaling Bitcoin Tokyo. The research fieldwork was conducted between 2014-2018. The dissertation is structured as three papers: - “Satoshi is Dead. Long Live Satoshi.” The Curious Case of Bitcoin: This paper focuses on the myth of anonymity and how by remaining anonymous, Satoshi Nakamoto, was able to leave his creation open to widespread adoption. - Tracing the United Nodes of Bitcoin: This paper examines the intersection of religiosity, technology, and money in the Bitcoin community. - Our Brand Is Crisis: Creation and Resilience of Decentralized Brands – Bitcoin & the Blockchain: Drawing on ecological resilience framework as a conceptual metaphor this paper maps how various stabilizing and destabilizing forces in the Bitcoin ecosystem helped in the evolution of a decentralized brand and promulgated more mainstreaming of the Bitcoin brand. ii Dedication: To my younger brother, Umer.
    [Show full text]
  • Segwit2x –
    SegWit2x – A New Statement The Overwhelming power of SegWit2x In order to safeguard the community from an undesired chain split, the upgrade should be overwhelming, but it’s not enough. It should also ‘appear’ as overwhelming. People, businesses and services needs to be certain about what is going to happen and the risks if they won’t follow. My impression is that still too many speaking english people in the western world think the upgrade will be abandoned before or immediately after block 494784 is mined, thus they are going to simply ignore it. That could lead to unprepared patch up and confusion, while naïve users risk to harm themselves. For this reason and for the sake of the Bitcoin community as a whole, we need to show again, clearly and publicly the extent of the support to SegWit2x. We also need to commit ourselves in a widespread communication campaign. I know this is not a strict technical matter, but it could help a lot avoiding technical issues in the future. What we have to do First, we need a new statement from the original NYA signers and all the business, firms and individuals who joined the cause later. That statement should be slightly different from the original NYA though, and I am explaining why. We all know that what Bitcoin is will be ultimately determined by market forces, comprehensive of all the stakeholders involved: businesses, miners, users, developers, traders, investors, holders etc. Each category has its own weight in the process, and everybody has incentives in following the market.
    [Show full text]
  • Facilitating Cross-Chain Cryptocurrency Exchanges: an Inquiry Into Blockchain Technology and Interoperability with an Emphasis on Cryptocurrency Arbitrage
    Eastern Michigan University DigitalCommons@EMU Senior Honors Theses & Projects Honors College 2020 Facilitating cross-chain cryptocurrency exchanges: An inquiry into blockchain technology and interoperability with an emphasis on cryptocurrency arbitrage Samuel Grone Follow this and additional works at: https://commons.emich.edu/honors Part of the Computer Sciences Commons Facilitating cross-chain cryptocurrency exchanges: An inquiry into blockchain technology and interoperability with an emphasis on cryptocurrency arbitrage Abstract Since the introduction and proliferation of the blockchain-based cryptocurrency Bitcoin, alternative cryptocurrencies also based on blockchain technology have exploded in number. It was once believed that one, or very few, cryptocurrencies would eventually dominate the market and drive out competitors. This assumption, however, was incorrect. Thousands of cryptocurrencies exist concurrently. The vast number of cryptocurrencies leads to a problem—what if the cryptocurrency that an individual possesses does not meet their current needs as well as another cryptocurrency might? The attempt to solve this problem has led to the rise of many cryptocurrency exchanges and exchange schemes. In this paper, we will discuss the motivations for an individual to be interested in exchanging two or more cryptocurrencies by describing and comparing various popular cryptocurrencies with different desirable attributes. While we will discuss these attributes, this paper will give special focus to arbitrage in particular. In addition, we will describe various cryptocurrency exchange schemes and their advantages and disadvantages. Finally, we contribute to the understanding of cryptocurrency exchangeability and interoperability by comparing the historical price data of several cryptocurrencies to determine how often arbitrage has been possible in the past. Degree Type Open Access Senior Honors Thesis Department Computer Science First Advisor Weitian Tong Second Advisor S.
    [Show full text]
  • Bitcoin Mining Bitcoin
    Bitcoin Mining Explained BITCOIN MINING BITCOIN MINING Bitcoin Mining Explained Copyright © 2018 2 Table of Contents INTRODUCTION 4 WHAT IS BITCOIN MINING? 5 BITCOIN MINING TERMINOLOGY 6 WHY DO PEOPLE MINE BITCOIN? 9 GETTING STARTED MINING 12 TOP HARDWARE FOR BITCOIN MINING 13 WHAT SOFTWARE IS NEEDED? 16 MINING APPS 17 ELECTRICAL COSTS FOR MINING 22 OTHER BITCOIN MINING OPTIONS 23 CLOUD MINING 23 MINING POOLS 23 HOW TO SET UP A BITCOIN MINING OPERATION 25 HOW TO CALCULATE BITCOIN MINING PROFITS 26 RISKS AND REWARDS OF BITCOIN MINING 27 RISKS 27 REWARDS 27 CONCLUSION 29 3 Introduction It is no longer news that the adoption of digital currencies as a means of making payment is rapidly gaining momentum around the world. Bitcoin, which is the first example of the growing category of money known as the cryptocurrency, is the most popular and widely accepted of them all. Bitcoin is a peer-to-peer electronic cash system that was invented by a software developer called Satoshi Nakamoto, and it is currently taking the lead amongst other digital currencies. It is an electronic payment system based on mathematical proof that is created and held electronically. Bitcoin is also a decentralized form of cryptocurrency that is independent of any central authority – meaning, there is no single institution controlling the Bitcoin network. This eBook is going to help you go beyond a basic understanding of Bitcoin and the mining of it. When you are finished reading, you’ll be ready to get started mining Bitcoins today! 4 What is Bitcoin Mining? In traditional fiat currency systems, money is printed by the government and released into circulation whenever it is needed.
    [Show full text]
  • Trust and Verifiable Computation for Smart Contracts in Permissionless Blockchains
    DEGREE PROJECT IN INFORMATION AND COMMUNICATION TECHNOLOGY, SECOND CYCLE, 30 CREDITS STOCKHOLM, SWEDEN 2017 Trust and verifiable computation for smart contracts in permissionless blockchains DOMINIK HARZ KTH ROYAL INSTITUTE OF TECHNOLOGY SCHOOL OF INFORMATION AND COMMUNICATION TECHNOLOGY Abstract Blockchains address trust through cryptography and consensus. Bitcoin is the first digital currency without trusted agents. Ethereum extends this technology by enabling agents on a blockchain, via smart contracts. However, a systemic trust model for smart contracts in blockchains is missing. This thesis describes the ecosystem of smart contracts as an open multi-agent system. A trust model introduces social control through deposits and review agents. Trust-related attributes are quantified in 2,561 smart contracts from GitHub. Smart contracts employ a mean of three variables and functions and one in ten has a security-related issue. Moreover, blockchains restrict computation tasks. Resolving these restrictions while maintaining trust requires verifiable computation. An algorithm for verifiable computation is developed and implemented in Solidity. It uses an arbiter enforcing the algorithm, computation services providing and verifying solutions, and a judge assessing solutions. Experiments are performed with 1000 iterations for one to six verifiers with a cheater prior probability of 30%, 50%, and 70%. The algorithm shows linear complexity for integer multiplication. The verification depends on cheater prior probability and amount of verifiers. In the experiments, six verifiers are sufficient to detect all cheaters for the three prior probabilities. Keywords: blockchain; smart contract; trust; multi-agent system; verifiable compu- tation Referat Blockchains adresserar tillit genom kryptografi och konsensus. Bitcoin är den första digitala valutan utan betrodda agenter.
    [Show full text]
  • Altcoins, Ethereum Projects, and More – Bonus Content
    Altcoins, Ethereum projects, and More – Bonus Content Welcome to the bonus online content for Mastering Blockchain – Third Edition! This content complements the main text, with the intention to enhance the reader learning experience. The material covered here has not been included in the core book for reasons of brevity and scope, but it contains valuable information, and has thus been included here for reference and further learning. We'll list and briefly describe the topics covered in these pages here, as an idea of what will be covered in this package. The topics are best read in conjunction with the chapters specified here, but can also be accessed as a reference guide for various topics at any point! • Bitcoin forks: It is recommended that this topic is read after Chapter 7, Bitcoin Network and Payments. It covers alternative Bitcoin projects such as Bitcoin Cash and Bitcoin Unlimited. • Alternative coins: This is intended to be read in conjunction with Chapter 9, Alternative Coins. This topic covers some important cryptocurrency projects such as Zcash and Primecoin. We cover in detail, among other things, how various clients can be installed, and how mining can be performed. • Ethereum networks, trading and investment: It's recommended to read this material with Chapter 11, Ethereum 101. This topic briefly introduces the different types of Ethereum networks and some technical details. Also, we introduce some basics regarding the trading and investment of ether, the Ethereum cryptocurrency. • Ethereum EVM opcodes: This topic should be read in conjunction with Chapter 12, Further Ethereum. Here, we list all EVM opcodes, with descriptions and some technical details, such as their opcode representation and gas consumption.
    [Show full text]
  • Articles of Federation
    Bitcoin Unlimited: Articles of Federation Bitcoin is at a crossroads that will determine whether it becomes a worldwide public good, embodying a trustless ledger and currency for all people, companies, and financial institutions worldwide. The Bitcoin Unlimited project seeks to provide a voice, in terms of code and hash power, to all stakeholders in the Bitcoin ecosystem. As a foundational principle, we assert that Bitcoin is and should be whatever its users define by the code they run and the rules they vote for with their hash power. This project seeks to remove existing practical barriers to stakeholders expressing their views in these ways. We see in the Bitcoin ecosystem many companies, groups and economic actors that have made large investment decisions based on maintaining the current trajectory of growth - a growth that would naturally ensue if Bitcoin is available as a public good. These include payment processors, micro-payment solutions, exchanges, merchants, and more. We recognize the importance of the mining industry and the necessity to increase transaction revenue to support its growth as the block subsidy decreases. This growth is aligned with the interests of the Bitcoin network as a whole since it increases network security. In the Bitcoin Core variant, we do NOT see a venue for these actors to formally express their desires in regards to the evolution of the network. Instead we see a project controlled by a small group of developers employed by finance-oriented for- profit startup companies, and the emergence of corporate products (Lightning network, Side-chains and permissioned ledgers) that would materially benefit from a Bitcoin network that is incapable of handling the transactional demand required for a worldwide public good.
    [Show full text]
  • Transaction Fees, Block Size Limit, and Auctions in Bitcoin
    View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Archivio della Ricerca - Università degli Studi di Siena ISSN 2379-5980 (online) DOI 10.5915/LEDGER.2019.145 RESEARCH ARTICLE Transaction Fees, Block Size Limit, and Auctions in Bitcoin Nicola Dimitri*† Abstract. Confirmation of Bitcoin transactions is executed in blocks, which are then stored in the Blockchain. As compared to the number of transactions in the mempool, the set of transactions which are verified but not yet confirmed, available space for inclusion in a block is typically limited. For this reason, successful miners can only process a subset of such transactions, and users compete with each other to enter the next block by offering confirmation fees. Assuming that successful miners pursue revenue maximization, they will include in the block those mempool transactions that maximize earnings from related fees. In the paper we model transaction fees as a Nash Equilibrium outcome of an auction game with complete information. In the game the successful miner acts as an auctioneer selling block space, and users bid for shares of such space to confirm their transactions. Moreover, based on expected fees we also discuss what the optimal, revenue maximizing, block size limit should be for the successful miner. Consistently with the intuition, the optimal block size limit resolves the trade-off between including additional transactions (which possibly lower the unit fees collected) and keeping the block capacity limited (with, however, higher unit fees). 1. Introduction Cryptocurrencies, notably Bitcoin, have recently drawn much attention within the academic community, among investors and the public, for more than one reason, and in particular for the highly variable behavior of the Dollar/Bitcoin exchange rate.
    [Show full text]
  • A Study on Nine Years of Bitcoin Transactions: Understanding Real-World Behaviors of Bitcoin Miners and Users
    A Study on Nine Years of Bitcoin Transactions: Understanding Real-world Behaviors of Bitcoin Miners and Users Binbing Hou∗ Feng Chen LinkedIn Co. Louisiana State University [email protected] [email protected] Abstract—Bitcoin is the world’s first blockchain-based, peer-to- and finalize transactions to make payments. Being designed peer cryptocurrency system. Being tremendously successful, the to support reliable, secure, and trusted transactions between Bitcoin system is designed to support reliable, secure, and trusted untrusted peers, the Bitcoin system provides a high degree transactions between untrusted peers. Since its release in 2009, the Bitcoin system has rapidly grown to an unprecedentedly large of freedom for the participants, allowing them to prioritize scale. However, the real-world behaviors of miners and users in transaction processing, customize transaction implementation, the system and the efficacy of the original Bitcoin system design determine transaction confirmation, etc. In other words, ex- in the field deployment still remain unclear, hindering us from cept following several basic system protocols and rules, the understanding its internals and developing the next-generation participants in the Bitcoin system have a high degree of cryptocurrency system. In this paper, we study the behaviors of Bitcoin miners and flexibility and freedom to make decisions based on their own users and their interactions based on quantitative analysis of more interests. Unfortunately, such “optimizations” could sometimes than nine years of Bitcoin transaction history, from its first release be against the original design purposes and cause unexpected on January 3rd, 2009 to April 30th, 2018. We have analyzed system performance deficiency and even security loopholes, as over 300 million transaction records to study the transactions’ we will discuss later in this paper.
    [Show full text]
  • CY18 Q4 December a Collection of Bitcoin Commentary from the Brightest Minds in the Crypto Community
    CY18 Q4 December A collection of Bitcoin commentary from the brightest minds in the crypto community. Crypto Words CY18 December Contents Goals and Scope ......................................................................................................................................................................... 2 Support Crypto Words .......................................................................................................................................................... 3 Skeptic’s Guide to Bitcoin: Unpacking Bitcoin’s Social Contract ...................................................... 4 The “Bitcoin mining death spiral” debate explained .................................................................................10 Beware of Lazy Research: Let’s Talk Electricity Waste & How Bitcoin Mining Can Power A Renewable Energy Renaissance......................................................................................................... 13 Skeptic’s Guide to Bitcoin: Bitcoin and the Promise of Independent Property Rights ................................................................................................................................................................................................................. 26 Introducing Realized Capitalization ........................................................................................................................ 32 Who Controls Bitcoin Core? .........................................................................................................................................
    [Show full text]
  • Note from the Editor
    ISSN 2379-5980 (online) DOI 10.5915/LEDGER.2018.115 Note From The Editor =======================BEGIN SIGNED MESSAGE======================= It has been a particularly exciting year in the blockchain technology space. Interest in blockchain technology has been growing continually since Bitcoin was unleashed on the world, but 2017 will be remembered, I believe, as a year of unusually rapid growth. This year’s volume of Ledger continues to exemplify the interdisciplinary nature of blockchain research. From computer science and game theory (see, “Equihash: Asymmetric Proof-of-Work Based on the Generalized Birthday Problem” by Alex Biryukov and Dmitry Khovratovich, and “Bitcoin Mining as a Contest” by Nicola Dimitri), to education research and political science (see, “From Smileys to Smileycoins: Using a Cryptocurrency in Education” by Gunnar Stefansson and Jamie Lentin, and “What Diplomacy in the Ancient Near East Can Tell Us About Blockchain Technology” by Chris Berg). In this issue we even have an article about the use of cryptocurrencies to help fund scientific research (see “Funding Science with Science: Cryptocurrency and Independent Academic Research Funding” by Edward Lehner, Dylan Hunzeker, and John R. Ziegler). What you do not see in this year’s volume are all of the interactions among academics and scholars in disparate fields who are only beginning to discover each other. There have been several new centers of blockchain research announced this year at universities around the globe. Whereas entrepreneurs and investors were quick to network with each other in the early years, we academics have been making cross-disciplinary connections at a more measured pace. Nevertheless, we are optimistic about the formation of new blockchain-focused academic communities in 2018.
    [Show full text]
  • Current Trends in Sustainability of Bitcoins and Related Blockchain Technology
    sustainability Review Current Trends in Sustainability of Bitcoins and Related Blockchain Technology Pasquale Giungato 1,* ID , Roberto Rana 2, Angela Tarabella 3 and Caterina Tricase 2 1 Department of Chemistry, University of Bari, Bari 70125, Italy 2 Department of Economics, University of Foggia, Foggia 71121, Italy; [email protected] (R.R.); [email protected] (C.T.) 3 Department of Economics and Management, University of Pisa, Pisa 56126, Italy; [email protected] * Correspondence: [email protected]; Tel.: +39-099-4725-234 Received: 26 October 2017; Accepted: 27 November 2017; Published: 30 November 2017 Abstract: Bitcoin is a digital currency based on a peer-to-peer payment system managed by an open source software and characterized by lower transaction costs, greater security and scalability than fiat money and no need of a central bank. Despite criticisms about illegal uses and social consequences, it is attracting the interest of the scientific community. The purpose of this work is to define and evaluate the current trends of the literature concerned with the sustainability of bitcoin, considering the environmental impacts, social issues and economic aspects. From the analysis it emerges that the transition of the whole monetary system in the new cryptocurrency will result in an unacceptable amount of energy consumed to mine new bitcoins and to maintain the entire virtual monetary system, and probably bitcoin will remain a niche currency. Blockchain, which is the base for a distributed and democratically-sustained public ledger of the transactions, could foster new and challenging opportunities. Sharing the framework of medical data, energy generation and distribution in micro-grids at the citizen level, block-stack and new state-driven cryptocurrencies, may benefit from the wide spread of blockchain-based transactions.
    [Show full text]