Trust, But Verify: Why the Blockchain Needs the Law by Kevin D. Werbach :: SSRN

The blockchain could be the most consequential development in information technology since the internet. Created to support the Bitcoin digital currency, the blockchain is actually something deeper: A novel solution to the age-old human problem of trust. Its potential is extraordinary. Yet without effective governance, this approach may not promote trust at all. Wholly divorced from legal enforcement, blockchain-based systems may be counterproductive or even dangerous. And they are less insulated from the law’s reach than it seems. The central question is not how to regulate blockchains, but how blockchains regulate. They may supplement, complement, or substitute for legal enforcement. Excessive or premature application of rigid legal obligations will stymie innovation and forego opportunities to leverage technology to achieve public policy objectives. Blockchain developers and legal institutions can work together. Each must recognize the unique affordances of the other system.

Source: Trust, But Verify: Why the Blockchain Needs the Law by Kevin D. Werbach :: SSRN

BACK TO THE FUTURE: THE DECENTRALIZED WEB

We offer case studies of the following decentralized publishing projects:

  • Freedom Box, a system for personal publishing
  • Diaspora, a federated social network
  • Mastodon, a federated Twitter-like service
  • Blockstack, a distributed system for online identity services
  • IPFS (Interplanetary File System), a distributed storage service with a proposed mechanism to incentivize resource sharing
  • Solid (Social Linked Data), a linked-data protocol that could act as a back-end for data sharing between social media networks
  • Appcoins, a digital currency framework that enables users to financially participate in ownership of platforms and protocols
  • Steemit, an online community that uses an appcoin to incentivize development and community participation in a social network

Cryptocurrencies: A Brief Thematic Review by Usman W. Chohan :: SSRN

Cryptocurrencies are an area of heightened pecuniary, numismatic, technological, and investment interest, and yet a comprehensive understanding of their theories and foundations is still left wanting among many practitioners and stakeholders. This discussion paper synthesizes and summarizes the salient literature on cryptocurrencies with a view to advancing a more general understanding of their order and purpose.

Source: Cryptocurrencies: A Brief Thematic Review by Usman W. Chohan :: SSRN

Blockcerts: Using blokchain for identity management is (mostly) ridiculous // Jaap-Henk Hoepman

I was invited to speak at the Bitcoin in Education (BCINED) conference held in Groningen, September 5, 2017. Topic of my presentation: “Blockchain & Identity: Why you should avoid the blockchain like the plague“. While listening to the morning keynotes, praising the many benefits of using blockchains in education and for managing (academic) credentials in particular, I realised my message might provide a very much needed counterpoint. The short summary: using blokchain for identity management is ridiculous.

Source: Blockcerts: Using blokchain for identity management is (mostly) ridiculous // Jaap-Henk Hoepman

BlockSci: a platform for blockchain science and exploration

The Bitcoin blockchain — currently 140GB and growing — contains a massive amount of data that can give us insights into the Bitcoin ecosystem, including how users, businesses, and miners operate. Today we’re announcing BlockSci, an open-source software tool that enables fast and expressive analysis of Bitcoin’s and many other blockchains, and an accompanying working paper that explains its design and applications. Our Jupyter notebook demonstrates some of BlockSci’s capabilities.Current tools for blockchain analysis depend on general-purpose databases that have full support for transactions. But that’s unnecessary for blockchain analysis where the data structures are append-only. We take advantage of this observation in the design of our custom in-memory blockchain database as well as an analysis library.BlockSci’s core infrastructure is written in C++ and optimized for speed. (For example, traversing every transaction input and output on the Bitcoin blockchain takes only 10.3 seconds on our r4.2xlarge EC2 machine.) To make analysis more convenient, we provide Python bindings and a Jupyter notebook interface. This interface is slower, but is ideal for exploratory analyses and allows users to quickly iterate when developing new queries.The code below shows the convenience of traversing the blockchain using straightforward Python idioms, built-in currency conversion using historical exchange-rate data, and the use of pandas DataFrames for analysis and visualization..fees = [sum(block.fees) for block in chain.range(‘2017’)]times = [block.time for block in chain.range(‘2017’)]converter = blocksci.CurrencyConverter()df = pandas.DataFrame({“Fee”:fees}, index=times)df = converter.satoshi_to_currency_df(df, chain)When plotted, it results in the following graph showing the average transaction fee per block:BlockSci uses a custom data format; it comes with a parser that generates this data from the serialized blockchain format recorded by cryptocurrency nodes such as bitcoind. The parser supports incremental updates when new blocks are received, and making it easy to stay up to date with the latest version of the blockchain. We’ve used BlockSci to analyze Bitcoin, Bitcoin Cash, Litecoin, Namecoin, Dash, and ZCash; many other cryptocurrencies make no changes to the blockchain format, and so should be supported with no changes to BlockSci.In our working paper, we present four analyses that show BlockSci’s usefulness for answering research questions. We show how multisignatures unfortunately weaken privacy and confidentiality; we apply the cluster intersection attack to Dash, a privacy-focused altcoin; we analyze inefficiencies in the usage of block space; and we present improved methods for estimating of how often coins change possession as opposed to just being shuffled around.Here’s an illustrative example. Exploratory graph analysis using BlockSci allowed us to discover a behavioral pattern in the usage of multisignatures that weakens security. Multisignatures are a security-enhancing mechanism that distribute control of an address over a number of different public keys. Surprisingly, we found that users often negate this security by moving their funds from a multisig address to a regular address and then back again after a period of a few hours to days. We think this happens when users are changing the access control policy on their wallet, although it is unclear why they transfer their funds to a regular address in the interim, and not directly to the new multisig address. This pattern of behavior has led over $12 million dollars to be left insecure over the course of  over 22,000 transactions. What users may not appreciate is that the temporary weakening of security is advertised to potential attackers on the blockchain.There’s far more to explore on public blockchains. BlockSci is publicly available now, and we hope you’ll find it useful. It is easy to get started using the EC2 image we’ve released, which includes the Bitcoin blockchain data in addition to the tool. BlockSci is open-source, and we welcome contributions. This is an alpha release; we’re continuing to improve it and the interface may change a bit in future releases. We look forward to working with the community and to hearing about other creative uses of the data and the to

Source: BlockSci: a platform for blockchain science and exploration

Ryan Bubb – Overview | NYU School of Law

Ryan Bubb joined the NYU School of Law faculty in 2010. He was formerly a senior researcher for the Financial Crisis Inquiry Commission and a policy analyst at the Office of Information and Regulatory Affairs at the Office of Management and Budget. He earned a JD from Yale Law School and a PhD in political economy and government from Harvard University. Bubb’s research focuses on regulatory policy, financial institutions, business organizations, and law and economics.

Source: Ryan Bubb – Overview | NYU School of Law

Paolo Tasca – UCL Blockchain

Paolo Tasca is a Digital economist specialising in P2P financial systems. An advisor on blockchain technologies for different international organisations including the EU Parliament and the United Nations. Paolo is founder and Executive Director of the Centre for Blockchain Technologies (UCL CBT) at University College London. Prior to this, he was Lead Economist on digital currencies and P2P financial systems at Deutsche Bundesbank, Frankfurt working on digital currencies and P2P lending.

Source: Paolo Tasca – UCL Blockchain

NYU Stern – David Yermack – Albert Fingerhut Professor of Finance and Business Transformation

David L. Yermack is the Albert Fingerhut Professor of Finance and Business Transformation at New York University Stern School of Business. He serves as Chairman of the Finance Department and Director of the NYU Pollack Center for Law and Business. Professor Yermack teaches joint MBA – Law School courses in Restructuring Firms & Industries and Bitcoin & Cryptocurrencies, as well as PhD research courses in corporate governance, executive compensation, and distress and restructuring.

Source: NYU Stern – David Yermack – Albert Fingerhut Professor of Finance and Business Transformation

Cryptocurrency Might be a Path to Authoritarianism – The Atlantic

Anarcho-capitalism is far more extreme than Silicon Valley’s usual brand of technological individualism. For one, the tech sector’s libertarianism is corporatist in its bent, and amenable to government, if in a strongly reduced capacity. And Silicon Valley takes a broader approach to the liberating capacity of technology: Facebook hopes to connect people, Google to make information more accessible, Uber to improve transit, and so on.The ancap worldview only supports sovereign individuals engaging in free-market exchange. Neither states nor corporations are acceptable intermediaries. That leaves a sparsely set table. At it: individuals, the property they own, the contracts into which they enter to exchange that property, and a market to facilitate that exchange. All that’s missing is a means to process exchanges in that market.

A different reinvention is more likely. Instead of defanging governments and big corporations, the distributed ledger offers those domains enormous incentive to consolidate their power and influence. For people like Eddie Lee Holloway, Jr, who’s African American, that might mean even greater exclusion, as the very institutions that locked him out of the voting booth might suppress his transformation into a digital-ledger citizen in the first place.

Or if not, other traumas might yet face citizens like Holloway in a society run by blockchain. A mandated DNA-test could accompany citizens’ blockchainification, allowing their ethnic origins and medical predispositions to become attached to an identity record. Financial assets would also be connected, thanks to an underlying cryptocurrency account through which they make debits and credits. Not to mention all the personal insights already consolidated by services like Facebook.

Businesses might subscribe to this data. Thanks to distributed ledger, it could be used to prevent their automated doors from opening for people whom a smart-contract risk-assessment service rates below a threshold of desirability. Left outside, privately-contracted security robots might deploy ledger-backed ID scanners to sweep loiterers from private property. Once delivered and booked into jails, smart courts could automate sentences based on an automated assessment of future crime potential.

And that’s just America. Imagine how a mature authoritarian state would fare under the rule of blockchain. Is this starting to feel like a Black Mirror episode yet? For Adam Greenfield, the anti-authoritarian left has profoundly misunderstood the corner into which such an ambitious aspiration paints society. “I believe distributed ledger enables the kind of central control they’ve never in their worst nightmares contemplated,” he tells me. The irony would be tragic if it weren’t also so frightening. The invitation to transform distributed-ledger systems into the ultimate tool of corporate and authoritarian control might be too great a temptation for human nature to forgo.

* * *

If this sounds familiar, it’s because contemporary culture has been here before. The existing, comparatively modest surveillance and control technologies in use by Google, Facebook, and their ilk—whose impact on governance we now know all too well—proliferated on the assumption that technology could make life better and more efficient. Nobody chose this life, exactly. People adopted technology in sufficient numbers to allow industry, and the culture that follows it, to conclude that the market had decided what was best.

Likewise, Bitcoin’s triumph hinges mostly on the financial success of speculators who never had any intention of using it as currency, and who appear to have strip-mined it into oblivion in the process. Similarly, blockchain’s future seems tied to the short-term vision of investors and entrepreneurs willing to speculate on a hypothetical, distributed utopia without hedging against the consolidated autocracy it seems equally likely to realize. “This is what happens,” Greenfield says, “when very bright people outsmart themselves.”

Source: Cryptocurrency Might be a Path to Authoritarianism – The Atlantic