Bitcoin: Perils of an Unregulated Global P2P Currency

Ali, Syed Taha; Clarke, Dylan; McCorry, Patrick

doi:10.1007/978-3-319-26096-9_29

Cited by 23 publications

(18 citation statements)

References 12 publications

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“…Hundreds of thousands of computers were affected. Even law enforcement departments fell victim to the WannaCry worm (Ali et al ., , p. 287).…”

Section: What Purpose Do Crypto‐currencies Serve?mentioning

confidence: 97%

“…() and Ali et al . () discuss the online Silk Road market place, which facilitated transactions in drugs and firearms and other illegal activities until it was shut down by the Federal Bureau of Investigation in 2011. Silk Road used bitcoins to settle transactions and had an estimated revenue of USD 1.2 billion annually (Ali et al ., ).…”

Section: What Purpose Do Crypto‐currencies Serve?mentioning

confidence: 99%

“…() discuss the online Silk Road market place, which facilitated transactions in drugs and firearms and other illegal activities until it was shut down by the Federal Bureau of Investigation in 2011. Silk Road used bitcoins to settle transactions and had an estimated revenue of USD 1.2 billion annually (Ali et al ., ). Crypto‐currency transactions, together with the use of the Onion Router, which obscures IP addresses, made it possible for sellers on the Silk Road market place to remain pseudonymous because there was no centralized authority connecting addresses to individuals.…”

Section: What Purpose Do Crypto‐currencies Serve?mentioning

confidence: 99%

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Crypto‐currencies – An Introduction to Not‐so‐funny Moneys

Smith

Kumar²

2018

Journal of Economic Surveys

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We introduce the distributed ledger (blockchain) technology of crypto‐currencies. We examine the ‘monetary’ attributes of crypto‐currencies, and describe some of the reasons they have been adopted. The paper discusses the mechanics of Bitcoin – the original crypto‐currency – to illustrate the fundamental elements of decentralized crypto‐currencies. We then provide a high‐level summary of the implications of crypto‐currencies for consumers, financial systems, and for monetary and regulatory authorities. We argue that crypto‐currencies are unlikely to supplant traditional fiat currencies and we anticipate an enduring role for financial intermediaries in facilitating credit.

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“…Hundreds of thousands of computers were affected. Even law enforcement departments fell victim to the WannaCry worm (Ali et al ., , p. 287).…”

Section: What Purpose Do Crypto‐currencies Serve?mentioning

confidence: 97%

Section: What Purpose Do Crypto‐currencies Serve?mentioning

confidence: 99%

Section: What Purpose Do Crypto‐currencies Serve?mentioning

confidence: 99%

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Crypto‐currencies – An Introduction to Not‐so‐funny Moneys

Smith

Kumar²

2018

Journal of Economic Surveys

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“…Bitcoin was first described in 2008 [1] and ever since has attracted the attention of the research community from diverse academic fields [2] [3] [4] and gained mainstream popularity due to its unique characteristics, such as the absence of centralised control and an assumed high degree of anonymity.…”

Section: Introductionmentioning

confidence: 99%

“…Moreover, there have been articles and reports [6][7][8] stating that Bitcoin has been used for terror financing, thefts, scams and ransomware. This is why financial regulators, law enforcement, intelligence services and companies who transact on the Bitcoin Blockchain have become wary observers of technical developments in, economic issues with, and the societal adoption of the cryptocurrency Bitcoin [2][3][4]. For companies, interacting with high-risk counterparties on the Bitcoin Blockchain may yield negative consequences, either because of legal obligations (such as anti-money laundering procedures) or reputational risks.…”

Section: Introductionmentioning

confidence: 99%

Breaking Bad: De-Anonymising Entity Types on the Bitcoin Blockchain Using Supervised Machine Learning

Harlev¹,

Yin²,

Langenheldt³

et al. 2018

Proceedings of the 51st Hawaii International Conference on System Sciences

114

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Bitcoin is a cryptocurrency whose transactions are recorded on a distributed, openly accessible ledger. On the Bitcoin Blockchain, an entity's real-world identity is hidden behind a pseudonym, a so-called address. Therefore, Bitcoin is widely assumed to provide a high degree of anonymity, which is a driver for its frequent use for illicit activities. This paper presents a novel approach for reducing the anonymity of the Bitcoin Blockchain by using Supervised Machine Learning to predict the type of yet-unidentified entities. We utilised a sample of 434 entities (with ≈ 200 million transactions), whose identity and type had been revealed, as training set data and built classifiers differentiating among 10 categories. Our main finding is that we can indeed predict the type of a yet-unidentified entity. Using the Gradient Boosting algorithm, we achieve an accuracy of 77% and F1-score of ≈ 0.75. We discuss our novel approach of Supervised Machine Learning for uncovering Bitcoin Blockchain anonymity and its potential applications to forensics and financial compliance and its societal implications, outline study limitations and propose future research directions.

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Crypto‐Currencies – An Introduction to Not‐So‐Funny Moneys

Kumar¹,

Smith²

2019

Contemporary Topics in Finance

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This paper introduces the distributed ledger technology of crypto-currencies. We aim to increase public understanding of these technologies, highlight some of the risks involved in using cryptocurrencies, and discuss some of the potential implications of these technologies for consumers, financial systems, monetary policy and financial regulation.Crypto-currencies have no physical existence, but are best thought of as electronic accounting systems that keep track of people's transactions and hence remaining purchasing power. Cryptocurrencies are typically decentralised, with no central authority responsible for maintaining the ledger and no central authority responsible for maintaining the code used to implement the ledger system, unlike the ledgers maintained by commercial banks for example. As crypto-currencies are denominated in their own unit of account, they are like foreign currencies relative to traditional fiat currencies, such as dollars and pounds.We examine the 'monetary' attributes of crypto-currencies, and describe some of the reasons they have been adopted. While crypto-currencies are clearly used for exchange, we argue that theyare not yet generally accepted, and for the most part they are not used as a unit of account.Bitcoin, the most-traded crypto-currency, has been a volatile and hence imperfect store of value.In the particular case of Bitcoin, the ultimate supply of bitcoins approaches a fixed limit, which means that any fluctuation in the demand for bitcoins is reflected in substantial movements in its price. Like fiat currencies, crypto-currencies have no secondary use. Their utility as a payment mechanism stems from a belief that others will continue to use the corresponding ledger systems to exchange goods and services in future.The paper discusses the mechanics of Bitcoin -the original crypto-currency -to illustrate the fundamental elements of decentralized crypto-currencies. In short, transactions are implemented as messages that debit or credit account balances in duplicate ledgers. Programming protocols ensure that ledgers are synchronized, and agents are rewarded for updating and quality-assuring the ledgers with transaction data, which accumulate in 'blocks'. Cryptography is used to secure the transaction messages and the integrity of the ledgers containing account balances.The latter part of the article provides a high-level summary of the implications of crypto-currencies for consumers, financial systems, monetary policy, and regulatory policy. Crypto-currencies ex-1 We would like to thank Jonathan Chiu and Thorsten Koeppl for providing access to their own research on blockchain technology, which helped to improve our understanding of its implementation and the issues that arise. Helpful comments were also received from

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Bitcoin: Perils of an Unregulated Global P2P Currency

Cited by 23 publications

References 12 publications

Crypto‐currencies – An Introduction to Not‐so‐funny Moneys

Crypto‐currencies – An Introduction to Not‐so‐funny Moneys

Breaking Bad: De-Anonymising Entity Types on the Bitcoin Blockchain Using Supervised Machine Learning

Crypto‐Currencies – An Introduction to Not‐So‐Funny Moneys

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