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SoK: Tools for Game Theoretic Models of Security for Cryptocurrencies [article]

Sarah Azouvi, Alexander Hicks
2020 arXiv   pre-print
Understanding how to incorporate this into the models used to design cryptocurrencies has motivated a large body of work, yet many open problems still exist and current systems rarely deal with incentive  ...  One interesting aspect of cryptocurrencies is their explicit consideration of incentives at the protocol level.  ...  Following the work presented above, Garay et al. propose Rational Protocol Design (RPD) [57] . In this setting, they define a game between the designer of the protocol D and the attacker A.  ... 
arXiv:1905.08595v2 fatcat:qmg2qtn3avf4jlqaorbnix3t4e

Rationality is Self-Defeating in Permissionless Systems [article]

Bryan Ford, Rainer Böhme
2019 arXiv   pre-print
We outline a metacircular argument explaining why it is rational to be irrational when attacking open-world decentralized systems, and why systems whose security depend on rationality assumptions are insecure  ...  Acknowledgements We wish to thank Jeff Allen, Ittay Eyal, Damir Filipovic, Patrik Keller, Alexander Lipton, Andrew Miller, and Haoqian Zhang for helpful feedback on earlier drafts of this work.  ...  Almost all game-theoretic treatments of (parts of) the Bitcoin protocol deliver negative results.  ... 
arXiv:1910.08820v1 fatcat:kjj5gwurjjcz5ezs5ggnoi5t5i

Economic Aspects of Bitcoin and Other Decentralized Public-Ledger Currency Platforms

David S. Evans
2014 Social Science Research Network  
The economic efficiency and possibly viability of a public ledger platform ultimately depend on the design of these incentive and governance systems.  ...  A number of internet-based digital currency platform based on decentralized public ledgers have started since the introduction of the blockchain concept by the founder of Bitcoin in 2008.  ...  The Bitcoin community discouraged the operation of such a large pool but it does not appear, other than moral suasion, it has any ability to prevent it.  ... 
doi:10.2139/ssrn.2424516 fatcat:uvegliiuirb4xeca34bvq6nlaq

Mixcoin: Anonymity for Bitcoin with Accountable Mixes [chapter]

Joseph Bonneau, Arvind Narayanan, Andrew Miller, Jeremy Clark, Joshua A. Kroll, Edward W. Felten
2014 Lecture Notes in Computer Science  
We propose Mixcoin, a protocol to facilitate anonymous payments using the Bitcoin currency system.  ...  We demonstrate that incentives of mixes and clients can be aligned to ensure that rational mixes will not steal from clients.  ...  We thank our anonymous referees and all who read drafts and contributed valuable suggestions to this work, especially Aaron Johnson, Ian Miers, Roger Dingledine, George Danezis, Peter Eckersley and Eran  ... 
doi:10.1007/978-3-662-45472-5_31 fatcat:bnnvhrmqbzbuvhsl3l2ixukcwa

SoK: Research Perspectives and Challenges for Bitcoin and Cryptocurrencies

Joseph Bonneau, Andrew Miller, Jeremy Clark, Arvind Narayanan, Joshua A. Kroll, Edward W. Felten
2015 2015 IEEE Symposium on Security and Privacy  
Within two years of its quiet launch in 2009, Bitcoin grew to comprise billions of dollars of economic value despite only cursory analysis of the system's design.  ...  Drawing from a scattered body of knowledge, we identify three key components of Bitcoin's design that can be decoupled.  ...  ACKNOWLEDGMENTS The authors would like to thank the following colleagues for feedback on drafts of this paper: Sergio Demian Lerner  ... 
doi:10.1109/sp.2015.14 dblp:conf/sp/BonneauMCNKF15 fatcat:ziajrymw3bdd7houz56culqkoi

How to Use Bitcoin to Design Fair Protocols [chapter]

Iddo Bentov, Ranjit Kumaresan
2014 Lecture Notes in Computer Science  
Rational adversaries. There is a long line of work that attempts to unify cryptography and game theory. Applications of cryptography to game theory include the works of [39, 1, 2, 62].  ...  Naturally, this abstraction allows us to design fair protocols in a hybrid model in which parties have access to the F CR functionality, and is otherwise independent of the Bitcoin ecosystem.  ...  Conceptually, our work provides the missing piece that simultaneously allows (1) designing protocols of fair secure computation that rely on Bitcoin (and not a trusted central bank), and (2) designing  ... 
doi:10.1007/978-3-662-44381-1_24 fatcat:tkhrhni6lfa5xmedvsi7v6h3my

Formal Models of Bitcoin Contracts: A Survey

Massimo Bartoletti, Roberto Zunino
2019 Frontiers in Blockchain  
These are computer protocols which allow users to exchange bitcoins according to complex pre-agreed rules.  ...  Although Bitcoin is mostly used as a decentralized application to transfer cryptocurrency, over the last 10 years there have been several studies on how to exploit Bitcoin to execute smart contracts.  ...  The security of the consensus protocol relies on the assumption that miners are rational (i.e., that following the protocol is more convenient than trying to attack it).  ... 
doi:10.3389/fbloc.2019.00008 fatcat:d26v5jdvy5gwhpnyolc6zmeata

Bitcoin and Beyond: Exclusively Informational Monies [article]

Jan A. Bergstra, Karl de Leeuw
2013 arXiv   pre-print
It seems that a dual money can remedy some, but not all, of the ethical worries that arise when contemplating Bitcoin after hypothetically having become a dominant form of money.  ...  Bitcoin seems to meet the criteria of an EXIM, but the assertion that "Bitcoin is an EXIM", might also be considered problematic.  ...  to this work.  ... 
arXiv:1304.4758v3 fatcat:o5f4wi4srrhjlntaiqq7r364ji

Regulation Through Code as a Safeguard for Implementing Smart Contracts in No-Trust Environments

Helen Eenmaa-Dimitrieva, Maria Joss Schmidt-Kessen
2017 Social Science Research Network  
We contribute to the existing academic literature by addressing some of the concerns about the legal nature, anonymity and reliability of smart contracts.  ...  This is the path to unleash the full potential of smart contracts.  ...  But what does that mean?  ... 
doi:10.2139/ssrn.3100181 fatcat:bo7c7jvmrrao5gtzpndnuwskbi

Crypto-Securities Regulation: ICOs, Token Sales and Cryptocurrencies under EU Financial Law

Philipp Hacker, Chris Thomale
2017 Social Science Research Network  
It also argues that it is impossible to design sui generis payments services law for cryptocurrencies without curbing their essential features, especially decentralization.  ...  Several years after the inception of the most dominant cryptocurrency, bitcoin, the European Central Bank in 2015 indicated the need for establishing legal clarity by relevant authorities through explaining  ...  /news/2017/08/how-does-bitcoin-cash-work/.  ... 
doi:10.2139/ssrn.3075820 fatcat:ycbr5floargy7lchfv7kcdaesa

The Bitcoin Backbone Protocol: Analysis and Applications [chapter]

Juan Garay, Aggelos Kiayias, Nikos Leonardos
2015 Lecture Notes in Computer Science  
In this work, we extract and analyze the core of the Bitcoin protocol, which we term the Bitcoin backbone, and prove two of its fundamental properties which we call common prefix and chain quality in the  ...  Regarding BA, we observe that Nakamoto's suggestion falls short of solving it, and present a simple alternative which works assuming that the adversary's hashing power is bounded by 1/3.  ...  Summary and Directions for Future Work In this paper we presented a formal treatment of the Bitcoin backbone, the protocol used at the core of Bitcoin's transaction ledger.  ... 
doi:10.1007/978-3-662-46803-6_10 fatcat:o4dhxeta4rbylgyjhr5lwi6v3a

Bitcoin as a Transaction Ledger: A Composable Treatment [chapter]

Christian Badertscher, Ueli Maurer, Daniel Tschudi, Vassilis Zikas
2017 Lecture Notes in Computer Science  
In this work we put forth a universally composable treatment of the Bitcoin protocol. We specify the goal that Bitcoin aims to achieve as a ledger functionality in the (G)UC model of Canetti et al.  ...  Bitcoin is one of the most prominent examples of a distributed cryptographic protocol that is extensively used in reality.  ...  Evidently, the main use of the Bitcoin protocol is as a decentralized monetary system with a payment mechanism, which is what it was designed for.  ... 
doi:10.1007/978-3-319-63688-7_11 fatcat:vus3ynfb6vcjhezblssndeutii

Quo vadis Hungaria? – Arccal egy új világ felé

György Matolcsy
2020 Polgári szemle  
, so does its price.  ...  The rule to follow the longest chain incentivises miners to follow the computing majority, but it does not uniquely pin down the path of the majority itself.  ... 
doi:10.24307/psz.2020.0703 fatcat:m53cbv7rxvaazcqasc4h5koda4

Assessing the Evolution of Cryptocurrency: Demand Factors, Latent Value and Regulatory Developments

Ryan Clements
2018 Social Science Research Network  
It is not a scarce commodity (like precious metal) but, because of the blockchain, is rather a "software as a service-transactions for a price, like credit cards."  ...  See Tali Arbel, Why Bitcoin is the HBO Hackers' Payment of Choice, BUS. NEWS NETWORK (Aug. 8, 2017), http://www.bnn.ca/why-bitcoin-is-the-hbo-hackers-payment-of-choice- 1.824819. 46.  ...  "Bitcoin Visa" is in the works by London Block Exchange (a British cryp-  ... 
doi:10.2139/ssrn.3117635 fatcat:o36fk24gdrghboltyk7ggggdlu

Transaction Fee Mechanism Design [article]

Tim Roughgarden
2021 arXiv   pre-print
This paper investigates the problem of designing a blockchain transaction fee mechanism through the lens of mechanism design.  ...  We also introduce an alternative design, the "tipless mechanism," which offers an incomparable slate of incentive-compatibility guarantees -- it is MMIC and DSIC, and OCA-proof unless in the midst of a  ...  Related Work Transaction fee mechanisms have been an integral part of blockchain design since Nakamoto's original white paper introducing the Bitcoin protocol [24] .  ... 
arXiv:2106.01340v2 fatcat:ekicrcbk4jelznc5g22trowiom
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