[Springer Proceedings in Business and Economics] Mathematical Research for Blockchain Economy (1st International Conference MARBLE 2019, Santorini, Greece) ||

This book presents the best papers from the 1st International Conference on Mathematical Research for Blockchain Economy (MARBLE) 2019, held in Santorini, Greece. While most blockchain conferences and forums are dedicated to business applications, product development or Initial Coin Offering (ICO) launches, this conference focused on the mathematics behind blockchain to bridge the gap between practice and theory. Every year, thousands of blockchain projects are launched and circulated in the market, and there is a tremendous wealth of blockchain applications, from finance to healthcare, education, media, logistics and more. However, due to theoretical and technical barriers, most of these applications are impractical for use in a real-world business context. The papers in this book reveal the challenges and limitations, such as scalability, latency, privacy and security, and showcase solutions and developments to overcome them. MARBLE 2019 Conference Proceedings Volume: Preface Contents Topological Analysis of Bitcoin's Lightning Network 1 Background on Lightning Network 2 Lightning Network's Topology 2.1 Analysis of LN's Degree Distribution 3 Robustness of LN 3.1 Random Failures 3.2 Targeted Attacks 3.3 Improving LN's Resilience Against Random Failures and Attacks 4 Conclusion References Ping-Pong Governance: Token Locking for Enabling Blockchain Self-governance 1 Introduction 2 Ideal Properties of a Blockchain Governance Protocol 3 Review of Token Locking Reward Model 3.1 Transitioning Between Free and Pay Model 3.2 Generating Interest and Staking Tokens 4 Voting Mechanism 4.1 What We Govern 4.2 Proposing Changes 4.3 Vetoing Proposals, and Overriding Vetoes 4.4 Weighting of Votes 4.5 Multiple Proposals 5 Illustrated Example 6 Experimental Results 6.1 Simulating the Speed of Community Agreement 6.2 Simulating Multiple Simultaneous Votes 7 Discussion of Rational Behavior of Voters 8 Related Work 9 Conclusion and Future Work References Collusion Attack from Hubs in The Blockchain Offline Channel Network 1 Introduction 2 Related Literature 3 Collusion Attacks 3.1 Hubs in Bitcoin Lightning Network 3.2 Models of Collusion Attack 4 Potential of Collusion Attacks 5 Method to Reduce Possibility of Collusion Attacks 6 Evaluation with Bitcoin Lightning Network 7 Conclusion References Sharing of Encrypted Files in Blockchain Made Simpler 1 Introduction 2 Preliminaries 2.1 Definition 2.2 Generic Model of Self-encryption (SE) 2.3 Generic Model of Proxy Re-encryption with Self-encryption (SE-PRE) 2.4 Security Model 2.5 Security Model for Self-encryption 2.6 Security Model for Proxy Re-encryption with Self-encryption 3 The Self-encrypt (SE) Scheme 3.1 The Scheme 3.2 Security Proof 4 The Proxy Re-encryption with Self Encryption Scheme (SE-PRE) 4.1 The Scheme 4.2 Security Proof 5 Experimental Analysis 6 Conclusion References Digital Currencies: A Multivariate GARCH Approach 1 Introduction 2 Related Work 3 Data 4 Methodology 5 Empirical Results 6 Conclusion References Compact Storage of Superblocks for NIPoPoW Applications 1 Introdution 2 Superblocks and Proofs-of-Proofs 3 Superblock Distributions in Deployed Cryptocurrencies 4 Interlinks as Sets of Superblocks 5 Empirical Analysis of Improvement References On Comparing the Influences of Exogenous Information on Bitcoin Prices and Stock Index Values 1 Introduction 2 Methods 2.1 LagLasso 2.2 Kalman Filtering 3 Data 4 Results 5 Conclusion References Performance of Tip Selection Schemes in DAG Blockchains 1 Introduction 2 Background 2.1 IOTA 2.2 Tip Selection Methods 2.3 Differences Between IOTA, Other Work and TangleSim 3 Metrics 4 The TangleSim Simulation Model and Its Parameters 4.1 Interface and Implementation 4.2 Module Communication 4.3 Parameters 5 Results 6 Conclusions References Committing to Quantum Resistance, Better: A Speed-and-Risk-Configurable Defence for Bitcoin Against a Fast Quantum Computing Attack 1 Introduction 2 Background 2.1 Bitcoin Fundamentals 2.2 Quantum Computing and Algorithms 2.3 Symmetric Encryption 3 Quantum Computing Impact on Bitcoin 3.1 Mining with Grover's Algorithm 3.2 Solving the Elliptic Curve Discrete Logarithm Problem 3.3 Transaction Hijacking 3.4 Hindering Transition to Quantum Resistance 4 Protocol Specification 4.1 Upgraded Consensus Rules 4.2 Overview 4.3 First Valid Commitment 4.4 Configurable Delay Considerations 4.5 Quantum Resistant Surrogate 5 Related Work 6 Conclusion References Neural Networks for Cryptocurrency Evaluation and Price Fluctuation Forecasting 1 Introduction 2 Methods 2.1 Cryptocurrency Features 2.2 Neural Networks 3 Results 3.1 Classification 3.2 Regression 4 Discussion and Future Work References Decentralized Incentive-Compatible and Sybil-Proof Transaction Advertisement 1 Introduction 1.1 Our Contributions 2 Model 2.1 Rewarding Mechanism 3 Related Work 4 Our Rewarding Function 4.1 Sybil-Proofness 4.2 Incentive Compatibility 4.3 Rewarding Function 4.4 Tuning Γell 4.5 On Countermeasures Against Forking Attacks 5 Conclusion References PoolSim: A Discrete-Event Mining Pool Simulation Framework 1 Introduction 2 Preliminaries 2.1 Solo Mining 2.2 Mining Pools 2.3 Mining Pool Reward Schemes 3 Reward Scheme Vulnerabilities 3.1 Block Withholding 3.2 Pool-Hopping 3.3 Queue-Based Manipulation Attacks 3.4 Queue-Based Uncle Mining 4 PoolSim: Design and Implementation 5 Simulations 5.1 Existing Research 5.2 Normal Multi-miner and Attack Scenarios 5.3 Queue-Based Pool-Hopping 6 Future Research Using PoolSim 7 Conclusion References Oceanic Games: Centralization Risks and Incentives in Blockchain Mining 1 Introduction 1.1 Outline 2 The Model: Oceanic Games on the Blockchain 2.1 An Example: Why Values and Not Shares? 3 Individual Mining Is Not Stable 3.1 Applications of Theorem 1 4 General Issues, Research Perspectives and Limitations 5 Conclusions References Smart Contract-Driven Mechanism Design to Mitigate Information Diffusion in Social Networks 1 Introduction 1.1 Our Contribution 1.2 Example 2 Related Works 2.1 Integrating Blockchain Technology to Social Networks 2.2 Anonymization of Social Networks 2.3 Mechanism Design Towards Social Choices in Networks 3 Preliminaries 3.1 Blockchain 3.2 Smart Contracts 3.3 Mechanism Design 4 Social Network Privacy Mechanism (SNPM) 4.1 Our Model 4.2 Our Mechanism 4.3 Example 4.4 Properties 5 Conclusions and Future Work References Balancing Cryptoassets and Gold: A Weighted-Risk-Contribution Index for the Alternative Asset Space 1 Introduction 2 Background 2.1 Shannon's Demon 2.2 Equal Risk Contribution 3 Weighted Risk Contribution 4 Index Overview 4.1 Design Goals 4.2 Constituent Eligibility and Selection 4.3 Constituent Weighting 4.4 Rebalancing Schedule 4.5 Index Calculation 4.6 Hard Fork and Airdrop Policy 5 Results 5.1 Methodology and Data Source 5.2 Analysis and Results 6 Conclusion References An Introduction to the Use of zk-SNARKs in Blockchains 1 Introduction and Paper Layout 2 Zero-Knowledge Proofs 2.1 Zero-Knowledge and NP 2.2 Interactive and Non-interactive Proofs of Knowledge 3 Why zk-SNARKs? 3.1 Performance 3.2 Security 3.3 Existing Snarks 4 Use in Blockchains 5 QAP-Based Snarks 5.1 Arithmetic Circuits 5.2 Rank-1 Constraint Systems 5.3 Polynomial-Encoding 5.4 Proof Construction 6 Tools 6.1 Zk-SNARK Support Libraries 6.2 DSL Tools References