This paper presents a design for a blockchain solution aimed at the prevention of unauthorized secondary use of data. This solution brings together advances from the fields of identity management, confidential computing, and advanced data usage control. In the area of identity management, the solution is aligned with emerging decentralized identity standards: decentralized identifiers (DIDs), DID communication and verifiable credentials (VCs). In respect to confidential computing, the Cheon-Kim-Kim-Song (CKKS) fully homomorphic encryption (FHE) scheme is incorporated with the system to protect the privacy of the individual’s data and prevent unauthorized secondary use when being shared with potential users. In the area of advanced data usage control, the solution leverages the PRIV-DRM solution architecture to derive a novel approach to licensing of data usage to prevent unauthorized secondary usage of data held by individuals. Specifically, our design covers necessary roles in the data-sharing ecosystem: the issuer of personal data, the individual holder of the personal data (i.e., the data subject), a trusted data storage manager, a trusted license distributor, and the data consumer. The proof-of-concept implementation utilizes the decentralized identity framework being developed by the Hyperledger Indy/Aries project. A genomic data licensing use case is evaluated, which shows the feasibility and scalability of the solution.
{"title":"A Decentralized Identity-Based Blockchain Solution for Privacy-Preserving Licensing of Individual-Controlled Data to Prevent Unauthorized Secondary Data Usage","authors":"Meng-Chow Kang, V. Lemieux","doi":"10.5195/ledger.2021.239","DOIUrl":"https://doi.org/10.5195/ledger.2021.239","url":null,"abstract":"This paper presents a design for a blockchain solution aimed at the prevention of unauthorized secondary use of data. This solution brings together advances from the fields of identity management, confidential computing, and advanced data usage control. In the area of identity management, the solution is aligned with emerging decentralized identity standards: decentralized identifiers (DIDs), DID communication and verifiable credentials (VCs). In respect to confidential computing, the Cheon-Kim-Kim-Song (CKKS) fully homomorphic encryption (FHE) scheme is incorporated with the system to protect the privacy of the individual’s data and prevent unauthorized secondary use when being shared with potential users. In the area of advanced data usage control, the solution leverages the PRIV-DRM solution architecture to derive a novel approach to licensing of data usage to prevent unauthorized secondary usage of data held by individuals. Specifically, our design covers necessary roles in the data-sharing ecosystem: the issuer of personal data, the individual holder of the personal data (i.e., the data subject), a trusted data storage manager, a trusted license distributor, and the data consumer. The proof-of-concept implementation utilizes the decentralized identity framework being developed by the Hyperledger Indy/Aries project. A genomic data licensing use case is evaluated, which shows the feasibility and scalability of the solution.","PeriodicalId":36240,"journal":{"name":"Ledger","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2021-11-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47547424","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}
Non-linear interactions between cryptocurrency price movements can elicit cross-frequency coupling (CFC) wherein one set of frequencies in the 1st timeseries is coupled to another set of frequencies in the 2nd timeseries. To investigate this, we use a generalized coherence approach to detect and quantify both linear (i.e., iso-frequency coupling, IFC) and non-linear coherence (CFC) and the associated phase relationships between the intra-day price changes of various pairs of cryptocurrencies for the year 2020. Using this information, we further assess the risk reduction associated with diversification of portfolios between each pair of a small market capital and a large market capital cryptocurrency, for both synchronous and asynchronous trading conditions. While mean pairwise IFC values were lower for smaller cryptocurrencies, pairwise CFC values were more heterogeneous and had no correlation with the market capital size. Diversification of portfolios resulted in reduced risk for synchronously-traded pairs of those cryptocurrencies which had low IFC. For asynchronous trading conditions, if the larger market capital cryptocurrency was traded at a higher frequency, diversification almost always reduced risk. Thus, the novel approach used in this study reveals important insights into the complex dynamics that govern the price trends of cryptocurrencies.
{"title":"Strategic Diversification for Asynchronous Asset Trading: Insights from Generalized Coherence Analysis of Cryptocurrency Price Movements","authors":"Nirvik Sinha, Yuan Yang","doi":"10.5195/ledger.2021.227","DOIUrl":"https://doi.org/10.5195/ledger.2021.227","url":null,"abstract":"Non-linear interactions between cryptocurrency price movements can elicit cross-frequency coupling (CFC) wherein one set of frequencies in the 1st timeseries is coupled to another set of frequencies in the 2nd timeseries. To investigate this, we use a generalized coherence approach to detect and quantify both linear (i.e., iso-frequency coupling, IFC) and non-linear coherence (CFC) and the associated phase relationships between the intra-day price changes of various pairs of cryptocurrencies for the year 2020. Using this information, we further assess the risk reduction associated with diversification of portfolios between each pair of a small market capital and a large market capital cryptocurrency, for both synchronous and asynchronous trading conditions. While mean pairwise IFC values were lower for smaller cryptocurrencies, pairwise CFC values were more heterogeneous and had no correlation with the market capital size. Diversification of portfolios resulted in reduced risk for synchronously-traded pairs of those cryptocurrencies which had low IFC. For asynchronous trading conditions, if the larger market capital cryptocurrency was traded at a higher frequency, diversification almost always reduced risk. Thus, the novel approach used in this study reveals important insights into the complex dynamics that govern the price trends of cryptocurrencies.","PeriodicalId":36240,"journal":{"name":"Ledger","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2021-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47339662","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}
We analyze the intraday time series of Bitcoin, comparing its features with those of traditional financial assets such as stocks and exchange rates. The results shed light on similarities as well as significant deviations from the standard patterns. In particular, our most interesting finding is the unusual presence of significant negative first-order autocorrelation of returns calculated on medium-frequency timeframes, such as one, two and four hours, signaling the presence of systematic mean reversion. It is also found that larger price movements lead to stronger reversals, in percentage terms. We finally point out the potential exploitability of the phenomenon by implementing a basic algorithmic trading strategy and retroactively applying it to the data. We explain the findings mainly through (i) investor and trader overreaction, (ii) excess volatility and (iii) cascading liquidations due to excessive use of leverage by market participants.
{"title":"On the Intraday Behavior of Bitcoin","authors":"Giacomo De Nicola","doi":"10.5195/LEDGER.2021.213","DOIUrl":"https://doi.org/10.5195/LEDGER.2021.213","url":null,"abstract":"We analyze the intraday time series of Bitcoin, comparing its features with those of traditional financial assets such as stocks and exchange rates. The results shed light on similarities as well as significant deviations from the standard patterns. In particular, our most interesting finding is the unusual presence of significant negative first-order autocorrelation of returns calculated on medium-frequency timeframes, such as one, two and four hours, signaling the presence of systematic mean reversion. It is also found that larger price movements lead to stronger reversals, in percentage terms. We finally point out the potential exploitability of the phenomenon by implementing a basic algorithmic trading strategy and retroactively applying it to the data. We explain the findings mainly through (i) investor and trader overreaction, (ii) excess volatility and (iii) cascading liquidations due to excessive use of leverage by market participants.","PeriodicalId":36240,"journal":{"name":"Ledger","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2021-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48659860","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}
Voting is one of the most fundamental aspects of democracy. Over the past few decades, voting methods around the world have expanded from traditional paper ballot systems to electronic voting (e-voting), in which votes are written directly to computer memory. Like any computer system, voting machines are susceptible to technical vulnerabilities that open up opportunities for hackers to tamper with votes, causing the use of electronic voting technology to raise concerns about ballot security. We describe how electronic voting can be supported by blockchain technology to ensure voter secrecy, vote correctness, and equal voting rights. In this paper, we present a system using two separate blockchains, each with separate transactions and consensus algorithms. We describe a prototype implementation that validates our ideas by executing several proof-of-concept simulations of a range of voting scenarios.
{"title":"Enhancing Electronic Voting With A Dual-Blockchain Architecture","authors":"Kees Leune, Jai Punjwani","doi":"10.5195/LEDGER.2021.199","DOIUrl":"https://doi.org/10.5195/LEDGER.2021.199","url":null,"abstract":"Voting is one of the most fundamental aspects of democracy. Over the past few decades, voting methods around the world have expanded from traditional paper ballot systems to electronic voting (e-voting), in which votes are written directly to computer memory. Like any computer system, voting machines are susceptible to technical vulnerabilities that open up opportunities for hackers to tamper with votes, causing the use of electronic voting technology to raise concerns about ballot security. We describe how electronic voting can be supported by blockchain technology to ensure voter secrecy, vote correctness, and equal voting rights. In this paper, we present a system using two separate blockchains, each with separate transactions and consensus algorithms. We describe a prototype implementation that validates our ideas by executing several proof-of-concept simulations of a range of voting scenarios.","PeriodicalId":36240,"journal":{"name":"Ledger","volume":"6 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"2021-03-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45038972","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}
All existing secured loans, including crypto-secured loans, are provided under the condition that the collateral entrusted by the borrower is kept safe during the loan term. In other words, they use a one-way collateral function. Thus, a frequent drawback of these loans is that the collateral value increases if and only if the collateral price increases. To resolve this problem, this paper proposes a new crypto-secured lending system incorporating a new two-way collateral function. It would allow a borrower to invest proportions of their own collateral by predicting the market in both directions to make profits irrespective of whether the price of the collateral increases or decreases. This benefits the borrower since profit can be made even if the price of the collateral drops, by betting on the price decrease. This new lending system could include a new hedged portion, unlike traditional secured lending systems. As a result, larger loans can be made under this arrangement; further, this portion provides the advantage of reducing the underlying collateral price volatility risk.
{"title":"New Crypto-Secured Lending System with a Two-Way Collateral Function","authors":"Sungil Kim","doi":"10.5195/ledger.2021.215","DOIUrl":"https://doi.org/10.5195/ledger.2021.215","url":null,"abstract":"All existing secured loans, including crypto-secured loans, are provided under the condition that the collateral entrusted by the borrower is kept safe during the loan term. In other words, they use a one-way collateral function. Thus, a frequent drawback of these loans is that the collateral value increases if and only if the collateral price increases. To resolve this problem, this paper proposes a new crypto-secured lending system incorporating a new two-way collateral function. It would allow a borrower to invest proportions of their own collateral by predicting the market in both directions to make profits irrespective of whether the price of the collateral increases or decreases. This benefits the borrower since profit can be made even if the price of the collateral drops, by betting on the price decrease. This new lending system could include a new hedged portion, unlike traditional secured lending systems. As a result, larger loans can be made under this arrangement; further, this portion provides the advantage of reducing the underlying collateral price volatility risk.","PeriodicalId":36240,"journal":{"name":"Ledger","volume":"12 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"2021-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70754381","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}
Kim P. Huynh, Christopher S. Henry, Gradon Nicholls, Mitchell Nicholson
The Bank of Canada commissioned the Bitcoin Omnibus Survey in 2016 to monitor trends in the adoption and use of Bitcoin and other cryptoassets. This report presents findings from the latest iteration of the survey, which was conducted in 2018. We find that between 2016 and 2018 the share of Canadians who were aware of Bitcoin increased from 62 percent to 89 percent and those that owned Bitcoin increased from 3 percent to 5 percent. However, the share of past owners also increased, suggesting an influx of Bitcoin owners who subsequently divested after the steep rise of prices in 2017. The main reason for owning Bitcoin remains speculation, though this share decreased slightly since 2017. On the other hand, the share of Canadians who reported using Bitcoin for transactions a few times a month or more increased. Finally, we discuss how Bitcoin adopters differ from overall Canadians with respect to their financial literacy and cash holdings.
{"title":"Benchmarking Bitcoin Adoption in Canada: Awareness, Ownership and Usage in 2018","authors":"Kim P. Huynh, Christopher S. Henry, Gradon Nicholls, Mitchell Nicholson","doi":"10.5195/ledger.2020.206","DOIUrl":"https://doi.org/10.5195/ledger.2020.206","url":null,"abstract":"The Bank of Canada commissioned the Bitcoin Omnibus Survey in 2016 to monitor trends in the adoption and use of Bitcoin and other cryptoassets. This report presents findings from the latest iteration of the survey, which was conducted in 2018. We find that between 2016 and 2018 the share of Canadians who were aware of Bitcoin increased from 62 percent to 89 percent and those that owned Bitcoin increased from 3 percent to 5 percent. However, the share of past owners also increased, suggesting an influx of Bitcoin owners who subsequently divested after the steep rise of prices in 2017. The main reason for owning Bitcoin remains speculation, though this share decreased slightly since 2017. On the other hand, the share of Canadians who reported using Bitcoin for transactions a few times a month or more increased. Finally, we discuss how Bitcoin adopters differ from overall Canadians with respect to their financial literacy and cash holdings.","PeriodicalId":36240,"journal":{"name":"Ledger","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2020-11-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48884776","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}
Chad Albrecht, S. Hawkins, Kristopher McKay Duffin
Cryptocurrency, and especially Bitcoin, has struggled to gain recognition as a legitimate currency from governments, financial institutions, and consumers. This has occurred because many analysts and consumers believe that Bitcoin is not a stable and consistent store of value, a unit of measurement, or a medium of exchange. One way to overcome this challenge is for Bitcoin to be used as both a currency and store of value by a greater percentage of the world’s population. This paper seeks to identify how a change in Bitcoin’s monetary measurement (or denomination) can more easily facilitate Bitcoin transactions to increase its use. Specifically, we posit that applying whole number bias theory, from the cognitive psychology and mathematics fields, to Bitcoin’s unit of measurement will allow the value of Bitcoin to be referenced in smaller and easier tounderstand units with fewer numbers after the decimal point—such as the “Bit” or the “Satoshi.” In the process, the use of Bitcoin will include more whole numbers and allow the general public to more easily assign value to Bitcoin in day-to-day transactions.
{"title":"Legitimizing Bitcoin as a Currency and Store of Value: Using Discrete Monetary Units to Consolidate Value and Drive Market Growth","authors":"Chad Albrecht, S. Hawkins, Kristopher McKay Duffin","doi":"10.5195/ledger.2020.167","DOIUrl":"https://doi.org/10.5195/ledger.2020.167","url":null,"abstract":"Cryptocurrency, and especially Bitcoin, has struggled to gain recognition as a legitimate currency from governments, financial institutions, and consumers. This has occurred because many analysts and consumers believe that Bitcoin is not a stable and consistent store of value, a unit of measurement, or a medium of exchange. One way to overcome this challenge is for Bitcoin to be used as both a currency and store of value by a greater percentage of the world’s population. This paper seeks to identify how a change in Bitcoin’s monetary measurement (or denomination) can more easily facilitate Bitcoin transactions to increase its use. Specifically, we posit that applying whole number bias theory, from the cognitive psychology and mathematics fields, to Bitcoin’s unit of measurement will allow the value of Bitcoin to be referenced in smaller and easier tounderstand units with fewer numbers after the decimal point—such as the “Bit” or the “Satoshi.” In the process, the use of Bitcoin will include more whole numbers and allow the general public to more easily assign value to Bitcoin in day-to-day transactions.","PeriodicalId":36240,"journal":{"name":"Ledger","volume":"5 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"2020-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41947107","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}
A proof-of-work blockchain uses a retargeting algorithm, also termed a difficulty adjustment algorithm, to manage the rate of block production in the presence of changing hashrate. To derive the parameters that guide the search for the next block, nearly all such algorithms rely on averages of past inter-block time observations, as measured by on-chain timestamps. We are motivated to seek better responsiveness to changing hashrate, while improving stability of the block production rate and retaining the progress-free property of mining. We describe a class of retargeting algorithms for which the sole inter-block time input is that of the block being searched for, and whose response is nonlinear in that time. We discuss how these algorithms allow the other consensus rules that govern allowable timestamps to be tightened, which may improve the blockchain’s effectiveness as a time-stamping machine.
{"title":"Real-Time Block Rate Targeting","authors":"T. M. Harding","doi":"10.5195/ledger.2020.195","DOIUrl":"https://doi.org/10.5195/ledger.2020.195","url":null,"abstract":"A proof-of-work blockchain uses a retargeting algorithm, also termed a difficulty adjustment algorithm, to manage the rate of block production in the presence of changing hashrate. To derive the parameters that guide the search for the next block, nearly all such algorithms rely on averages of past inter-block time observations, as measured by on-chain timestamps. We are motivated to seek better responsiveness to changing hashrate, while improving stability of the block production rate and retaining the progress-free property of mining. We describe a class of retargeting algorithms for which the sole inter-block time input is that of the block being searched for, and whose response is nonlinear in that time. We discuss how these algorithms allow the other consensus rules that govern allowable timestamps to be tightened, which may improve the blockchain’s effectiveness as a time-stamping machine.","PeriodicalId":36240,"journal":{"name":"Ledger","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2020-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43823077","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}
{"title":"Barter Machine: An Autonomous, Distributed Barter Exchange on the Ethereum Blockchain","authors":"C. Özturan","doi":"10.5195/ledger.2020.148","DOIUrl":"https://doi.org/10.5195/ledger.2020.148","url":null,"abstract":"","PeriodicalId":36240,"journal":{"name":"Ledger","volume":"5 1","pages":""},"PeriodicalIF":0.7,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"70754370","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}
We define and analyze three mechanisms for getting common knowledge, a posteriori truths about the world, onto a blockchain in a decentralized setting. We show that, when a reasonable economic condition is met, these mechanisms are individually rational, incentive compatible, and decide the true outcome of valid oracle queries in both the non-cooperative and cooperative settings. These mechanisms are based upon repeated games with two classes of players: queriers who desire to get common knowledge truths onto the blockchain and a pool of reporters who posses such common knowledge. Presented with a new oracle query, reporters have an opportunity to report the truth in return for a fee provided by the querier. During subsequent oracle queries, the querier has an opportunity to punish any reporters who did not report truthfully during previous rounds. While the set of reporters has the power to cause the oracle to lie, they are incentivized not to do so.
{"title":"Decentralized Common Knowledge Oracles","authors":"Austin K. Williams, Jack Peterson","doi":"10.5195/ledger.2019.166","DOIUrl":"https://doi.org/10.5195/ledger.2019.166","url":null,"abstract":"We define and analyze three mechanisms for getting common knowledge, a posteriori truths about the world, onto a blockchain in a decentralized setting. We show that, when a reasonable economic condition is met, these mechanisms are individually rational, incentive compatible, and decide the true outcome of valid oracle queries in both the non-cooperative and cooperative settings. These mechanisms are based upon repeated games with two classes of players: queriers who desire to get common knowledge truths onto the blockchain and a pool of reporters who posses such common knowledge. Presented with a new oracle query, reporters have an opportunity to report the truth in return for a fee provided by the querier. During subsequent oracle queries, the querier has an opportunity to punish any reporters who did not report truthfully during previous rounds. While the set of reporters has the power to cause the oracle to lie, they are incentivized not to do so.","PeriodicalId":36240,"journal":{"name":"Ledger","volume":" ","pages":""},"PeriodicalIF":0.7,"publicationDate":"2019-12-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45863046","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}
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