Physical Sciences and Mathematics Commons^™

On The Effects Of Information Asymmetry In Digital Currency Trading, Kwansoo Kim, Robert John Kauffman

Research Collection School Of Computing and Information Systems

We report on two studies that examine how social sentiment influences information asymmetry in digital currency markets. We also assess whether cryptocurrency can be an investment vehicle, as opposed to only an instrument for asset speculation. Using a dataset on transactions from an exchange in South Korea and sentiment from Korean social media in 2018, we conducted a study of different trading behavior under two cryptocurrency trading market microstructures: a bid-ask spread dealer's market and a continuous trading buy-sell, immediate trade execution market. Our results highlight the impacts of positive and negative trader social sentiment valences on the effects of …

Book Review: Tracers In The Dark: The Global Hunt For The Crime Lords Of Cryptocurrency, Marion Jones

International Journal of Cybersecurity Intelligence & Cybercrime

Doubleday released Andy Greenberg’s Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency in November 2022. Through vivid case studies of global criminal investigations, the book dispels myths about the anonymizing power of cryptocurrency. The book details how the ability to identify cryptocurrency users and payment methods successfully brought down several large criminal empires, while also highlighting the continuous cat-and-mouse game between law enforcement officials and criminal actors using cryptocurrency. The book is an excellent resource for law enforcement officials, academics, and general cybersecurity practitioners interested in cryptocurrency-related criminal activities and law enforcement techniques.

From Asset Flow To Status, Action And Intention Discovery: Early Malice Detection In Cryptocurrency, Ling Cheng, Feida Zhu, Yong Wang, Ruicheng Liang, Huiwen Liu

Research Collection School Of Computing and Information Systems

Cryptocurrency has been subject to illicit activities probably more often than traditional financial assets due to the pseudo-anonymous nature of its transacting entities. An ideal detection model is expected to achieve all three critical properties of early detection, good interpretability, and versatility for various illicit activities. However, existing solutions cannot meet all these requirements, as most of them heavily rely on deep learning without interpretability and are only available for retrospective analysis of a specific illicit type. To tackle all these challenges, we propose Intention Monitor for early malice detection in Bitcoin, where the on-chain record data for a certain …

Evolve Path Tracer: Early Detection Of Malicious Addresses In Cryptocurrency, Ling Cheng, Feida Zhu, Yong Wang, Ruicheng Liang, Huiwen Liu

Research Collection School Of Computing and Information Systems

With the boom of cryptocurrency and its concomitant financial risk concerns, detecting fraudulent behaviors and associated malicious addresses has been drawing significant research effort. Most existing studies, however, rely on the full history features or full-fledged address transaction networks, both of which are unavailable in the problem of early malicious address detection and therefore failing them for the task. To detect fraudulent behaviors of malicious addresses in the early stage, we present Evolve Path Tracer, which consists of Evolve Path Encoder LSTM, Evolve Path Graph GCN, and Hierarchical Survival Predictor. Specifically, in addition to the general address features, we propose …

Evolve Path Tracer: Early Detection Of Malicious Addresses In Cryptocurrency, Ling Cheng, Feida Zhu, Yong Wang, Ruicheng Liang, Huiwen Liu

Research Collection School Of Computing and Information Systems

With the boom of cryptocurrency and its concomitant financial risk concerns, detecting fraudulent behaviors and associated malicious addresses has been drawing significant research effort. Most existing studies, however, rely on the full history features or full-fledged address transaction networks, both of which are unavailable in the problem of early malicious address detection and therefore failing them for the task. To detect fraudulent behaviors of malicious addresses in the early stage, we present Evolve Path Tracer, which consists of Evolve Path Encoder LSTM, Evolve Path Graph GCN, and Hierarchical Survival Predictor. Specifically, in addition to the general address features, we propose …

The Future Of Cryptocurrency And Blockchain Technology In Finance, Wanyi Wong, Alan @ Ali Madjelisi Megargel

Research Collection School Of Computing and Information Systems

Cryptocurrencies have been all the rage in recent years, with many being drawn to their appeal as speculative investment assets. Its proponents also champion the secure and decentralised nature of the technology it is based on, called the blockchain. Given the secure nature of blockchain technology, the idea of adopting cryptocurrencies as legal tender currency has also been mooted and experimented with – with the most famous example being the Central American nation of El Salvador’s bold move to adopting the cryptocurrency Bitcoin as legal tender in September 2021. In theory, this would provide a solution to the high transaction …

Optimal Ordering To Maximize Mev Arbitrage, Granton Michael White

Theses and Dissertations

The rise of cryptocurrencies has brought with it new math problems with new sets of constraints. The MEV problem entails solving for the ordering of pending trades that maximizes a block creator's profit. In decentralized finance, time is a big constraint, so an exhaustive search of all possible orderings is impossible. I propose a solution to the MEV problem that gives a near optimal result that can be solved in a reasonable amount of time. I layout the method and the formulas required for my solution. Additionally, I test my solution on synthesized data to show that it works as …

Blockchain Security: Double-Spending Attack And Prevention, William Henry Scott Iii

Electronic Theses and Dissertations

This thesis shows that distributed consensus systems based on proof of work are vulnerable to hashrate-based double-spending attacks due to abuse of majority rule. Through building a private fork of Litecoin and executing a double-spending attack this thesis examines the mechanics and principles behind the attack. This thesis also conducts a survey of preventative measures used to deter double-spending attacks, concluding that a decentralized peer-to-peer network using proof of work is best protected by the addition of an observer system whether internal or external.

A Systematic Review Of Cryptocurrencies Use In Cybercrimes, Kieran B D Human

Graduate Thesis and Dissertation 2023-2024

Cryptocurrencies are one of the most prominent applications of blockchain systems. While cryptocurrencies promise many features and advantages, such as decentralization, anonymity, and ease of access, those very features can be abused. For instance, as documented in various recent works, cryptocurrencies have been frequently abused in many different forms of cybercrime. Despite the plethora of works on measuring and understanding the abuse of cryptocurrencies in the digital space, there has been no work on systemizing this knowledge by comprehensively understanding those contributions, contrasting them based on their merit, and understanding the gap in this research space.

This thesis initiates the …

Secure Deterministic Wallet And Stealth Address: Key-Insulated And Privacy-Preserving Signature Scheme With Publicly Derived Public Key, Zhen Liu, Guomin Yang, Duncan S. Wong, Khoa Nguyen, Huaxiong Wang, Xiaorong Ke, Yining Liu

Research Collection School Of Computing and Information Systems

Deterministic Wallet (DW) and Stealth Address (SA) mechanisms have been widely adopted in the cryptocurrency community, due to their virtues on functionality and privacy protection, which come from a key derivation mechanism that allows an arbitrary number of derived keys to be generated from a master key. However, these algorithms suffer a vulnerability that, when one derived key is compromised somehow, the damage is not limited to the leaked derived key only, but to the master key and in consequence all derived keys are compromised. In this article, we introduce and formalize a new signature variant, called Key-Insulated and Privacy-Preserving …

Secure Hierarchical Deterministic Wallet Supporting Stealth Address, Xin Yin, Zhen Liu, Guomin Yang, Guoxing Chen, Haojin Zhu

Research Collection School Of Computing and Information Systems

Over the past decade, cryptocurrency has been undergoing a rapid development. Digital wallet, as the tool to store and manage the cryptographic keys, is the primary entrance for the public to access cryptocurrency assets. Hierarchical Deterministic Wallet (HDW), proposed in Bitcoin Improvement Proposal 32 (BIP32), has attracted much attention and been widely used in the community, due to its virtues such as easy backup/recovery, convenient cold-address management, and supporting trust-less audits and applications in hierarchical organizations. While HDW allows the wallet owner to generate and manage his keys conveniently, Stealth Address (SA) allows a payer to generate fresh address (i.e., …

Dynamics Of Dark Web Financial Marketplaces: An Exploratory Study Of Underground Fraud And Scam Business, Bo Ra Jung, Kyung-Shick Choi, Claire Seungeun Lee

International Journal of Cybersecurity Intelligence & Cybercrime

The number of Dark Web financial marketplaces where Dark Web users and sellers actively trade illegal goods and services anonymously has been growing exponentially in recent years. The Dark Web has expanded illegal activities via selling various illicit products, from hacked credit cards to stolen crypto accounts. This study aims to delineate the characteristics of the Dark Web financial market and its scams. Data were derived from leading Dark Web financial websites, including Hidden Wiki, Onion List, and Dark Web Wiki, using Dark Web search engines. The study combines statistical analysis with thematic analysis of Dark Web content. Offering promotions …

Machine Learning And The Network Analysis Of Ethereum Trading Data, Santosh Sivakumar

Dartmouth College Undergraduate Theses

Since their conception, cryptocurrencies have captured the public interest, motivating a growing body of research aimed at exploring blockchain-based transactions. This said, little work has been done to draw conclusions from transaction patterns, particularly in the realm of predicting cryptocurrency price movements. Moreover, research in the cryptocurrency sphere largely focuses on Bitcoin, paying little attention to Ethereum, Bitcoin's second-in-line with respect to market capitalization. In this paper, we construct hourly networks for a year of Ethereum transactions, using computed graph metrics as features in a series of machine learning models. We find that regression-based approaches to predicting Ether prices/price deltas …

Blockchain: Key Principles, Nadezda Chikurova

Dissertations, Theses, and Capstone Projects

“Blockchain: Key Principles” is an interactive visual project that explains the importance of data privacy and security, decentralized computing, and open-source software in the modern digital world through the history of the underlying principles of blockchain technology. Some of these key concepts have their roots in the time before the Information Age. By explaining the history of these principles, I want to present the fact that over the past centuries, humanity has been fighting for their privacy, security, and the ability to efficiently express themselves one way or another. Blockchain technology, which was introduced to the public in 2008 through …

Privacy In Blockchain Systems, Murat Osmanoğlu, Ali̇ Aydin Selçuk

Turkish Journal of Electrical Engineering and Computer Sciences

Privacy of blockchains has been a matter of discussion since the inception of Bitcoin. Various techniques with a varying degree of privacy protection and complexity have been proposed over the past decade. In this survey, we present a systematic analysis of these proposals in four categories: (i) identity, (ii) transaction, (iii) consensus, and (iv) smart contract privacy. Each of these categories have privacy requirements of its own, and various solutions have been proposed to meet these requirements. Almost every technique in the literature of privacy enhancing technologies have been applied to blockchains: mix networks, zero-knowledge proofs, blind signatures, ring signatures, …

Strategies For Cryptocurrency Adoption In Contemporary Businesses, Jacqueline Rodriguez

Walden Dissertations and Doctoral Studies

Millions of Bitcoin transactions occur daily, worth nearly $2 billion annually. With the proliferation of cryptocurrency markets, the reluctance to adopt the currency as an alternate payment method could cause businesses to forgo growth opportunities within this expanding market. Grounded in the diffusion of innovation theory, the purpose of this qualitative multiple-case study was to explore strategies business leaders use to respond to the alternative payment concerns perpetuated by cryptocurrency markets. The participants comprised 6 business leaders who effectively employed cryptocurrency adoption strategies. Data were collected through semistructured interviews, corporate documents, and other company social media resources. Thematic analysis of …

Forecasting Bitcoin, Ethereum And Litecoin Prices Using Machine Learning, Sai Prabhu Jaligama

Graduate Research Theses & Dissertations

This research aims to predict the cryptocurrencies Bitcoin, Litecoin and Ethereum using Time Series Modelling with daily data of closing price from 16th of October 2018 to 9th of September 2021for a total of 1073 days. Augmented Dickey Fuller test was first used to check stationarity of the time series, then two forecasting algorithms called ARIMA, and PROPHET were used to make predictions. The findings show similar results for both the models for each of Bitcoin, Ethereum and Litecoin. The results achieved show modelling cryptocurrencies which are volatile using a single variable produces satisfying results.

Traceable Monero: Anonymous Cryptocurrency With Enhanced Accountability, Yannan Li, Guomin Yang, Wily Susilo, Yong Yu, Man Ho Au, Dongxi Liu

Research Collection School Of Computing and Information Systems

Monero provides a high level of anonymity for both users and their transactions. However, many criminal activities might be committed with the protection of anonymity in cryptocurrency transactions. Thus, user accountability (or traceability) is also important in Monero transactions, which is unfortunately lacking in the current literature. In this paper, we fill this gap by introducing a new cryptocurrency named Traceable Monero to balance the user anonymity and accountability. Our framework relies on a tracing authority, but is optimistic, in that it is only involved when investigations in certain transactions are required. We formalize the system model and security model …

Measurement Study Of Energy Impact On Blockchain Technologies: Cryptocurrency Mining, Qaylin Holliman

Cybersecurity: Deep Learning Driven Cybersecurity Research in a Multidisciplinary Environment

Blockchain technology facilitates the flow of information and the speed of information through a faster and more decentralized network. It has its advantages as compared to more centralized networks and legacy networks. With the evolution of mainstream technology, blockchains is predicted to be more effective and sufficient to consumers and commercial companies. In this paper, blockchains will be scaled to cryptocurrency mining, where cryptocurrencies utilize blockchain technology to record transactions and orders. Mining will also be examined through energy consumption, the algorithms behind some cryptocurrencies, their sustainability issue, and resolutions to combat high energy consumption. While the pace of energy …

Memory Foreshadow: Memory Forensics Of Hardware Cryptocurrency Wallets – A Tool And Visualization Framework, Tyler Thomas, Mathew Piscitelli, Ilya Shavrov, Ibrahim Baggili

Electrical & Computer Engineering and Computer Science Faculty Publications

We present Memory FORESHADOW: Memory FOREnSics of HArDware cryptOcurrency Wallets. To the best of our knowledge, this is the primary account of cryptocurrency hardware wallet client memory forensics. Our exploratory analysis revealed forensically relevant data in memory including transaction history, extended public keys, passphrases, and unique device identifiers. Data extracted with FORESHADOW can be used to associate a hardware wallet with a computer and allow an observer to deanonymize all past and future transactions due to hierarchical deterministic wallet address derivation. Additionally, our novel visualization framework enabled us to measure both the persistence and integrity of artifacts produced by the …

Understanding Impact Of Twitter Feed On Bitcoin Price And Trading Patterns, Ashrit Deebadi

Master's Projects

‘‘Cryptocurrency trading was one of the most exciting jobs of 2017’’. ‘‘Bit- coin’’,‘‘Blockchain’’, ‘‘Bitcoin Trading’’ were the most searched words in Google during 2017. High return on investment has attracted many people towards this crypto market. Existing research has shown that the trading price is completely based on speculation, and its trading volume is highly impacted by news media. This paper discusses the existing work to evaluate the sentiment and price of the cryptocurrency, the issues with the current trading models. It builds possible solutions to understand better the semantic orientation of text by comparing different machine learning techniques and …

Cyber Security’S Influence On Modern Society, Nicholas Vallarelli

Honors College Theses

The world of cyber security is evolving every day, and cyber-criminals are trying to take advantage of it to gain as much money and power as possible. As the Internet continues to grow, more people around the world join the Internet. The purpose of this is to see how much of an importance cyber security has and how cyber-criminals are able to utilize the cyberworld for their own personal gain. Research has been done on how the cyberworld got where it is today. Additionally, individual research has been done in an effort to learn how to hack. A hack lab …

Supporting Blockchain-Based Cryptocurrency Mobile Payment With Smart Devices, Lei Xu, Lin Chen, Zhimin Gao, Larry Carranco, Xinxin Fan, Nolah Shah

Computer Science Faculty Publications and Presentations

The smart device owning rate such as smart phone and smart watch is higher than ever before and mobile payment has become one of the major payment methods in many different areas. At the same time, blockchain-based cryptocurrency is becoming a nonnegligible type of currency and the total value of all types of cryptocurrency has reached USD 200 billion. Therefore, it is a natural demand to support cryptocurrency payment on mobile devices. Considering the poor infrastructure and low penetration of financial service in developing countries, this combination is especially attractive. The high storage cost and payment processing latency are the …

Gmdh-Based Models For Mid-Term Forecast Of Cryptocurrencies (On Example Of Waves), Pavel Mogilev, Anna Boldyreva, Mikhail Alexandrov, John Cardiff

Conference Papers

Cryptocurrencies became one of the main trends in modern economy. However by the moment the forecast of cryptocurrencies values is an open problem, which is almost non-reflected in publications related to finance market. Reasons consist in its novelty, large volatility and its strong dependence on subjective factors. In this experimental research we show possibilities of GMDH-technology to give weekly and monthly forecast for values of cryptocurrency 'Waves' (waves/euro rate). The source information is week data covering the period 2017-2019. We tests 4 algorithms from the GMDH Shell platform on the whole period and on the crisis period 4-th quarter 2017 …

Optimal Execution In Cryptocurrency Markets, Ethan Kurz

CMC Senior Theses

The purpose of this paper is to study the Almgren and Chriss model on the optimal execution of large block orders both on the NYSE and in cryptocurrency exchanges. Their model minimizes execution costs, which include linear temporary and permanent price impacts. We focus on how the stock market microstructure differs from a cryptocurrency exchange microstructure and what that means for how the model functions. Once the model and microstructures are explained, we examine how the Almgren-Chriss model functions with stocks from the NYSE, looking at specifically selling a large number of shares. We then investigate how a large "wholesale" …

Automated Theme Search In Ico Whitepapers, Chuanjie Fu, Andrew Koh, Paul Griffin

Research Collection School Of Computing and Information Systems

The authors explore how topic modeling can be used to automate the categorization of initial coin offerings (ICOs) into different topics (e.g., finance, media, information, professional services, health and social, natural resources) based solely on the content within the whitepapers. This tool has been developed by fitting a latent Dirichlet allocation (LDA) model to the text extracted from the ICO whitepapers. After evaluating the automated categorization of whitepapers using statistical and human judgment methods, it is determined that there is enough evidence to conclude that the LDA model appropriately categorizes the ICO whitepapers. The results from a two-population proportion test …

A Lattice-Based Linkable Ring Signature Supporting Stealth Addresses, Zhen Liu, Khoa Nguyen, Guomin Yang, Huaxiong Wang, Duncan S. Wong

Research Collection School Of Computing and Information Systems

First proposed in CryptoNote, a collection of popular privacy-centric cryptocurrencies have employed Linkable Ring Signature and a corresponding Key Derivation Mechanism (KeyDerM) for keeping the payer and payee of a transaction anonymous and unlinkable. The KeyDerM is used for generating a fresh signing key and the corresponding public key, referred to as a stealth address, for the transaction payee. The stealth address will then be used in the linkable ring signature next time when the payee spends the coin. However, in all existing works, including Monero, the privacy model only considers the two cryptographic primitives separately. In addition, to be …

Key-Insulated And Privacy-Preserving Signature Scheme With Publicly Derived Public Key, Zhen Liu, Guomin Yang, Duncan S. Wong, Khoa Nguyen, Huaxiong Wang

Research Collection School Of Computing and Information Systems

Since the introduction of Bitcoin in 2008, cryptocurrency has been undergoing a quick and explosive development. At the same time, privacy protection, one of the key merits of cryptocurrency, has attracted much attention by the community. A deterministic wallet algorithm and a stealth address algorithm have been widely adopted in the community, due to their virtues on functionality and privacy protection, which come from a key derivation mechanism that an arbitrary number of derived keys can be generated from a master key. However, these algorithms suffer a vulnerability. In particular, when a minor fault happens (say, one derived key is …

Analysis Of Bitcoin Cryptocurrency And Its Mining Techniques, Suman Ghimire

UNLV Theses, Dissertations, Professional Papers, and Capstones

Bitcoin is a peer-to-peer digital, decentralized cryptocurrency created by an individual under pseudonym Satoshi Nakamoto. In fact, it is the first digital, decentralized currency. Several developers and organizations have explored the importance of digital cryptocurrency and the concept of the blockchain. Bitcoin is assumed to be one of the secure and comfortable payment methods that can be used in the upcoming days. The backbone of Bitcoin mining is the concept of the blockchain, which is assumed to beone of the ingenious invention of this century. The blockchain is the collection of blocks that are linked together in such a way …

Frameup: An Incriminatory Attack On Storj: A Peer To Peer Blockchain Enabled Distributed Storage System, Xiaolu Zhang, Justin Grannis, Ibrahim Baggili, Nicole Lang Beebe

Electrical & Computer Engineering and Computer Science Faculty Publications

In this work we present a primary account of frameup, an incriminatory attack made possible because of existing implementations in distributed peer to peer storage. The frameup attack shows that an adversary has the ability to store unencrypted data on the hard drives of people renting out their hard drive space. This is important to forensic examiners as it opens the door for possibly framing an innocent victim. Our work employs Storj as an example technology, due to its popularity and market size. Storj is a blockchain enabled system that allows people to rent out their hard drive space …