Pub Date : 2019-07-31DOI: 10.31585/JBBA-2-2-(4)2019
Robert Campbell
This research has two parts; the first is to identify enterprise Hyperledger Fabric (HLF) blockchain cybersecurity vulnerabilities, threats, and legal obligations in a Post-Quantum Cryptography (PQC) world. HLF is a permissioned blockchain designed by IBM and uses Public Key Infrastructure (PKI), for digital signatures, and digital identities (X.509 certificates), which are critical to the operational security of its network. On 24 January 2019, Aetna, Anthem, Health Care Service Corporation, PNC Bank, and IBM announced collaboration to establish a blockchain-based ecosystem for the healthcare industry [1]. Quantum computing poses a devasting impact on PKI and estimates of its large-scale commercial arrival should not be underestimated and cannot be predicted. The HIPAA (Health Insurance Portability and Accountability Act) and General Data Protection Regulation (GDPR), requires “reasonable” measures to be taken to protect Protected Health Information (PHI), and Personally Identifiable Information (PII). However, HLF’s ecosystem is not post-quantum resistant, and all data that is transmitted over its network is vulnerable to immediate or later decryption by large scale quantum computers. The second part of this research is the independent evaluation and testing of National Institute of Standards and Technology (NIST), based Second Round Candidate PQC, lattice-based digital signature scheme, qTESLA. It’s, second-round submission is much improved, however; its algorithm characteristics and parameters are such that it is unlikely to be a quantum-resistant “as is,” simple “plug-and-play” function and replacement for HLF’s PKI. This work also proposes qTESLA’s public keys be used to create a quantum-resistantclassical hybrid PKI near-term replacement.
本研究分为两个部分;第一个是确定企业超级账本结构(HLF)区块链网络安全漏洞、威胁和后量子加密(PQC)世界中的法律义务。HLF是由IBM设计的许可区块链，并使用公钥基础设施(PKI)进行数字签名和数字身份(X.509证书)，这对其网络的操作安全性至关重要。2019年1月24日，Aetna、Anthem、Health Care Service Corporation、PNC Bank和IBM宣布合作建立一个基于区块链的医疗行业生态系统[1]。量子计算对PKI造成了毁灭性的影响，对其大规模商业到来的估计不应被低估，也无法预测。HIPAA(健康保险流通与责任法案)和通用数据保护条例(GDPR)要求采取“合理”措施来保护受保护的健康信息(PHI)和个人身份信息(PII)。然而，HLF的生态系统并不具有后量子抗性，通过其网络传输的所有数据都容易被大规模量子计算机立即或稍后解密。本研究的第二部分是美国国家标准与技术研究院(NIST)的独立评估和测试，基于第二轮候选PQC，基于格子的数字签名方案，qTESLA。然而，第二轮的提交有了很大的改进;它的算法特征和参数是这样的，它不太可能成为一个抗量子的“现状”，简单的“即插即用”功能，也不太可能取代HLF的PKI。这项工作还建议使用qTESLA的公钥来创建一个抗量子的经典混合PKI的近期替代品。
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Pub Date : 2019-06-28DOI: 10.31585/JBBA-2-2-(3)2019
R. Greene, David Lee Kuo Chuen
The overall global public’s ability to purchase some portion of a digital token project’s initial batch of tokens is the defining feature of an open digital token offering. Using a dataset that differentiates this token distribution model from other varieties – a distinction often underemphasised in regional analyses of digital token sale trends – this research estimates 2017-18 open digital token offering activity by jurisdiction, finding that Singapore-registered projects accounted for 21 percent of Q3/Q4 2018 dollar-volume, more than any other country. Conversely, by late 2018, previous hubs of this distribution model represented a much smaller share. Reasons for Singapore’s rise as a global hub of the open digital token offering are explored, with a particular focus on examining contrasting regulatory approaches to distinguishing between this token distribution model and traditional securities offerings. Notably, 11 percent of Singapore-registered Q3/Q4 2018 token offering dollar-volume was purely-private, versus 94 percent in the U.S. Policy considerations related to this distribution method and the open digital token offering are presented, as are contrasting outcomes: this research estimates that over 70 percent of Singapore’s one-to-two-year-old open token offerings resulted in operational networks or minimum-viable-products, versus fewer than 40 percent of U.S. private sales. Also, about 40 percent of smart contract platform projects that conducted 2017-18 token sales were Singapore-registered – many more than in any other country. For reasons explored in this research, these findings support the view that open digital token offerings benefit projects aiming to concurrently raise funds, build up a user-base, and incentivise technologists to contribute to project development. Moreover, risks to retail participants posed by this distribution method are manageable. Singapore’s policy approach towards open digital token offerings has benefited the Lion City, which was likely home to more digital token projects that conducted 2018 token sales than any other city in the world.
{"title":"Singapore’s Open Digital Token Offering Embrace: Context & Consequences","authors":"R. Greene, David Lee Kuo Chuen","doi":"10.31585/JBBA-2-2-(3)2019","DOIUrl":"https://doi.org/10.31585/JBBA-2-2-(3)2019","url":null,"abstract":"The overall global public’s ability to purchase some portion of a digital token project’s initial batch of tokens is the defining feature of an open digital token offering. Using a dataset that differentiates this token distribution model from other varieties – a distinction often underemphasised in regional analyses of digital token sale trends – this research estimates 2017-18 open digital token offering activity by jurisdiction, finding that Singapore-registered projects accounted for 21 percent of Q3/Q4 2018 dollar-volume, more than any other country. Conversely, by late 2018, previous hubs of this distribution model represented a much smaller share. Reasons for Singapore’s rise as a global hub of the open digital token offering are explored, with a particular focus on examining contrasting regulatory approaches to distinguishing between this token distribution model and traditional securities offerings. Notably, 11 percent of Singapore-registered Q3/Q4 2018 token offering dollar-volume was purely-private, versus 94 percent in the U.S. Policy considerations related to this distribution method and the open digital token offering are presented, as are contrasting outcomes: this research estimates that over 70 percent of Singapore’s one-to-two-year-old open token offerings resulted in operational networks or minimum-viable-products, versus fewer than 40 percent of U.S. private sales. Also, about 40 percent of smart contract platform projects that conducted 2017-18 token sales were Singapore-registered – many more than in any other country. For reasons explored in this research, these findings support the view that open digital token offerings benefit projects aiming to concurrently raise funds, build up a user-base, and incentivise technologists to contribute to project development. Moreover, risks to retail participants posed by this distribution method are manageable. Singapore’s policy approach towards open digital token offerings has benefited the Lion City, which was likely home to more digital token projects that conducted 2018 token sales than any other city in the world.","PeriodicalId":33145,"journal":{"name":"The Journal of The British Blockchain Association","volume":"445 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-06-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"82896529","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-05-28DOI: 10.31585/JBBA-2-2-(2)2019
J. Liew, R. Li, T. Budavári, Avinash Sharma
In this work we examine the largest 100 cryptocurrency return series ranging from 2015 to early 2018. We concentrate our analysis on daily returns and find several interesting stylized facts. First, principal components analysis reveals a complex return generating process. As we examine our data in the most recent year, we find that surprisingly more than one principal component appears to explain the cross-sectional variation in returns. Second, similar to hedge fund returns, cryptocurrency returns suffer from the “beta-in-the-tails” hidden risk. Third, we find that predicting cryptocurrency movements with machine learning and artificial intelligence algorithms is marginally attractive with variation in predictability power per cryptocurrency. Fourth, lower volatile cryptocurrencies are slightly more predictable than more volatile ones. Fifth, evidence exists that efficacy of distinct information sets varies across machine learning algorithms, showing that predictability may be much more complex given a set of machine learning algorithms. Finally, short-term predictability is very tenuous, which suggests that near-term cryptocurrency markets are semi-strong form efficient and therefore, day trading cryptocurrencies may be very challenging. Keywords: cryptocurrency, blockchain, machine learning, bitcoin, beta-in-the-tails, risks
{"title":"Cryptocurrency Investing Examined","authors":"J. Liew, R. Li, T. Budavári, Avinash Sharma","doi":"10.31585/JBBA-2-2-(2)2019","DOIUrl":"https://doi.org/10.31585/JBBA-2-2-(2)2019","url":null,"abstract":"In this work we examine the largest 100 cryptocurrency return series ranging from 2015 to early 2018. We concentrate our analysis on daily returns and find several interesting stylized facts. First, principal components analysis reveals a complex return generating process. As we examine our data in the most recent year, we find that surprisingly more than one principal component appears to explain the cross-sectional variation in returns. Second, similar to hedge fund returns, cryptocurrency returns suffer from the “beta-in-the-tails” hidden risk. Third, we find that predicting cryptocurrency movements with machine learning and artificial intelligence algorithms is marginally attractive with variation in predictability power per cryptocurrency. Fourth, lower volatile cryptocurrencies are slightly more predictable than more volatile ones. Fifth, evidence exists that efficacy of distinct information sets varies across machine learning algorithms, showing that predictability may be much more complex given a set of machine learning algorithms. Finally, short-term predictability is very tenuous, which suggests that near-term cryptocurrency markets are semi-strong form efficient and therefore, day trading cryptocurrencies may be very challenging.\u0000\u0000Keywords: cryptocurrency, blockchain, machine learning, bitcoin, beta-in-the-tails, risks","PeriodicalId":33145,"journal":{"name":"The Journal of The British Blockchain Association","volume":"2 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-05-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"90327654","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-05-04DOI: 10.31585/jbba-2-1-(8)2019
N. Naqvi
{"title":"Full Text PDF of The JBBA Vol 2, Issue 1, May 2019","authors":"N. Naqvi","doi":"10.31585/jbba-2-1-(8)2019","DOIUrl":"https://doi.org/10.31585/jbba-2-1-(8)2019","url":null,"abstract":"","PeriodicalId":33145,"journal":{"name":"The Journal of The British Blockchain Association","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-05-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77767437","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-04-12DOI: 10.31585/JBBA-2-1-(7)2019
Maxwell Stanley
Blockchain projects have seen a rush of investment in the form of Initial Coin Offerings (ICOs) in 2016 and 2017, yet little is understood about how to valuate these projects. This research explored the application of behavioural heuristics to ICO valuation and investing. Identified were six variables that may impact investment decision making due to key behavioural biases. These variables - coin value, market capitalisation, ease of understanding, market sentiment, maximum ICO bonus level, and pre ICO social media levels - were analysed using Pearson’s Correlation against return on investment (ROI). The data was collected from numerous ICO websites and Twitter. Fundamental analysis was taken from Coincheckup due to it being a major source of information for many retail investors and using a well-defined methodology. Sentiment data was collected from Twitter and assessed using Crimson Hexagon’s social sentiment analysis tool. Ease of understanding was evaluated using AWS Blockchain business canvas. All information was compiled into a single dataset and the top 47 projects in terms of ROI were utilised for this research. Ease of understanding was found to be significantly correlated with ROI. Ease of understanding was then combined with fundamental analysis to develop a hybrid model of evaluation for cryptocurrency projects. This model substantially outperformed fundamental analysis alone, with a 33.6% improvement on ROI. In conclusion, current methods of fundamental analysis for blockchain projects are an inadequate method for capturing their full potential future value. Investors lacking appropriate tools and with limited knowledge and experience - along with the relatively recent advent of cryptocurrencies - are being influenced by behavioural factors such as ease of understanding. It is therefore important that investors and entrepreneurs alike take such factors into consideration.
2016年和2017年，区块链项目以首次代币发行(ico)的形式出现了投资热潮，但人们对如何评估这些项目知之甚少。本研究探讨了行为启发式在ICO估值和投资中的应用。由于关键的行为偏差，确定了可能影响投资决策的六个变量。这些变量——币价值、市值、易理解程度、市场情绪、ICO最高奖金水平和ICO前的社交媒体水平——使用Pearson’s Correlation against investment return (ROI)进行分析。这些数据是从众多ICO网站和Twitter上收集的。基本面分析来自Coincheckup，因为它是许多散户投资者的主要信息来源，并使用了明确的方法。情绪数据是从Twitter上收集的，并使用Crimson Hexagon的社会情绪分析工具进行评估。使用AWS区块链业务画布评估易于理解性。所有信息被汇编成一个单一的数据集，在投资回报率方面排名前47位的项目被用于这项研究。易理解性与ROI显著相关。然后，将易于理解与基础分析相结合，开发了一种用于加密货币项目评估的混合模型。该模型的表现明显优于单独的基本面分析，ROI提高了33.6%。总而言之，目前区块链项目的基础分析方法不足以捕捉其全部潜在的未来价值。缺乏适当工具、知识和经验有限的投资者，以及相对较新出现的加密货币，正受到易理解性等行为因素的影响。因此，投资者和企业家都必须考虑到这些因素。
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Pub Date : 2019-04-08DOI: 10.31585/JBBA-2-1-(6)2019
Lewis Laidin, K. Papadopoulou, N. Dane
Despite the demand and interest for the blockchain technology, there are still major challenges for blockchain application initiatives (projects and ventures) to be sustainable and reliable. While starting a non-blockchain initiative already comes with its own sets of challenges and has around 50% failure rate, starting a blockchain initiative rises the rate to 90% due to additional variables and confusion on top of this. Such a situation deters innovators and eventually dampens innovation, requiring priority for actions. This paper attempts to contribute by compiling and outlining the various key variables to be considered, as a set of parameters for blockchain initiators. Through secondary data collection: literature reviews, report studies and primary data collection: interventional and observational case study, interviews with blockchain researchers, businesses and entrepreneurs, this paper categorises variables into blockchain-related and business-related categories, outlining consideration points for each of the variables. By summarising and integrating the variables and referring to theories of innovation and adoption, it is concluded that concept validation entailing both initiative feasibility and user- demand, is of key importance for blockchain innovations.
{"title":"Parameters for Building Sustainable Blockchain Application Initiatives","authors":"Lewis Laidin, K. Papadopoulou, N. Dane","doi":"10.31585/JBBA-2-1-(6)2019","DOIUrl":"https://doi.org/10.31585/JBBA-2-1-(6)2019","url":null,"abstract":"Despite the demand and interest for the blockchain technology, there are still major challenges for blockchain application initiatives (projects and ventures) to be sustainable and reliable. While starting a non-blockchain initiative already comes with its own sets of challenges and has around 50% failure rate, starting a blockchain initiative rises the rate to 90% due to additional variables and confusion on top of this. Such a situation deters innovators and eventually dampens innovation, requiring priority for actions. This paper attempts to contribute by compiling and outlining the various key variables to be considered, as a set of parameters for blockchain initiators. Through secondary data collection: literature reviews, report studies and primary data collection: interventional and observational case study, interviews with blockchain researchers, businesses and entrepreneurs, this paper categorises variables into blockchain-related and business-related categories, outlining consideration points for each of the variables. By summarising and integrating the variables and referring to theories of innovation and adoption, it is concluded that concept validation entailing both initiative feasibility and user- demand, is of key importance for blockchain innovations.","PeriodicalId":33145,"journal":{"name":"The Journal of The British Blockchain Association","volume":"22 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-04-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"89704675","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-03-16DOI: 10.31585/JBBA-2-1-(4)2019
Robert Campbell
This paper evaluates the current cybersecurity vulnerability of the prolific use of Elliptical Curve Digital Signature Algorithm (**ECDSA**) cryptography in use by the Bitcoin Core, Ethereum, Bitcoin Cash, and enterprise blockchains such as Multi-Chain and Hyperledger projects Fabric, and Sawtooth Lake. These blockchains are being used in media, health, finance, transportation and government with little understanding, acknowledgment of the risk and no known plans for mitigation and migration to safer public-key cryptography. The second aim is to evaluate ECDSA against the threat of **Quantum Computing** and propose the most practical National Institute of Standards and Technology (NIST) Post-Quantum Cryptography candidate algorithm lattice-based cryptography countermeasure that can be implemented near-term and provide a basis for a coordinated industry-wide lattice-based public-key implementation. Commercial quantum computing research and development is rapid and unpredictable, and it is difficult to predict the arrival of fault-tolerant quantum computing. The current state of covert and classified quantum computing research and advancement is unknown and therefore, it would be a significant risk to blockchain and Internet technologies to delay or wait for the publication of draft standards. Since there are many hurdles Post-Quantum Cryptography (PQC) must overcome for standardisation, coordinated large-scale testing and evaluation should commence promptly.
{"title":"Evaluation of Post-Quantum Distributed Ledger Cryptography","authors":"Robert Campbell","doi":"10.31585/JBBA-2-1-(4)2019","DOIUrl":"https://doi.org/10.31585/JBBA-2-1-(4)2019","url":null,"abstract":"This paper evaluates the current cybersecurity vulnerability of the prolific use of Elliptical Curve Digital Signature Algorithm (**ECDSA**) cryptography in use by the Bitcoin Core, Ethereum, Bitcoin Cash, and enterprise blockchains such as Multi-Chain and Hyperledger projects Fabric, and Sawtooth Lake. These blockchains are being used in media, health, finance, transportation and government with little understanding, acknowledgment of the risk and no known plans for mitigation and migration to safer public-key cryptography. \u0000\u0000The second aim is to evaluate ECDSA against the threat of **Quantum Computing** and propose the most practical National Institute of Standards and Technology (NIST) Post-Quantum Cryptography candidate algorithm lattice-based cryptography countermeasure that can be implemented near-term and provide a basis for a coordinated industry-wide lattice-based public-key implementation. Commercial quantum computing research and development is rapid and unpredictable, and it is difficult to predict the arrival of fault-tolerant quantum computing. The current state of covert and classified quantum computing research and advancement is unknown and therefore, it would be a significant risk to blockchain and Internet technologies to delay or wait for the publication of draft standards. Since there are many hurdles Post-Quantum Cryptography (PQC) must overcome for standardisation, coordinated large-scale testing and evaluation should commence promptly.","PeriodicalId":33145,"journal":{"name":"The Journal of The British Blockchain Association","volume":"131 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-03-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"73819619","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.31585/jbba-2-2-(post-265)2019
N. Naqvi
{"title":"JBBA: Creating a Global Impact","authors":"N. Naqvi","doi":"10.31585/jbba-2-2-(post-265)2019","DOIUrl":"https://doi.org/10.31585/jbba-2-2-(post-265)2019","url":null,"abstract":"","PeriodicalId":33145,"journal":{"name":"The Journal of The British Blockchain Association","volume":"26 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78628681","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.31585/jbba-2-2-(post-266)2019
N. Naqvi
{"title":"Blockchain Research: Engaging at Scale with the Communities that Matter","authors":"N. Naqvi","doi":"10.31585/jbba-2-2-(post-266)2019","DOIUrl":"https://doi.org/10.31585/jbba-2-2-(post-266)2019","url":null,"abstract":"","PeriodicalId":33145,"journal":{"name":"The Journal of The British Blockchain Association","volume":"6 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2019-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74652700","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-01-01DOI: 10.31585/JBBA-2-1-(2)2019
J. Pazos
The major difficulty to value equity security token offerings (STOs) is the gap in the corpus of finance theory to quantify the discount rate for start-up companies. In this paper, we develop a novel valuation method of equity-based securities token offerings (STO) for start-up companies. The closed-form discount rate function discovered in this paper is time-dependent and piecewise. The first part of the function is exponential; the second part is a power function. The reason is that, in the early years, the probability of survival of start-up firms descends more rapidly than in late years. The probability of survival function discovered has a remarkably good fit with empirical data- for the total of firms and ten industry sectors for which data is available. For the total of firms, we found that the highest discount rate has a 27.0 to 31.8% range when the liquidation value of the non-surviving start-up project is zero; this is considerably higher than observed discount rates of projects for mature firms (7.5%) but considerably less than some published discount rates for start-up projects financed by Venture Capital firms (40.6 to 70% range). To demonstrate the model, we work a valuation example in section six. A valuation method for equity STOs will help to develop a more transparent market for start-ups wanting to raise capital. Most importantly, our results show that for many start-up firms, equity STOs could be an economical alternative to raise capital.
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