Related papers: Rational Economic Behaviours in the Bitcoin Lightn…
Bitcoin, Ethereum and other blockchain-based cryptocurrencies, as deployed today, cannot scale for wide-spread use. A leading approach for cryptocurrency scaling is a smart contract mechanism called a payment channel which enables two…
Cryptocurrencies such as Bitcoin are realized using distributed systems and hence critically rely on the performance and security of the interconnecting network. The requirements on these networks and their usage, however can differ…
Resource-constrained devices are unable to maintain a full copy of the Bitcoin Blockchain in memory. This paper proposes a bidirectional payment channel framework for IoT devices. This framework utilizes Bitcoin Lightning-Network-like…
The world economy is experiencing the novel adoption of distributed currencies that are free from the control of central banks. Distributed currencies suffer from extreme volatility, and this can lead to catastrophic implications during…
One of the fundamental applications for a practically useful system of money is remuneration. Information pertaining to the amount of compensation awarded to different individuals is often considered sensitive, commanding a certain degree…
Mining in proof-of-work blockchains has become an expensive affair requiring specialized hardware capable of executing several megahashes per second at huge electricity costs. Miners earn a reward each time they mine a block within the…
We study the real economic activity in the Bitcoin blockchain that involves transactions from/to retail users rather than between organizations such as marketplaces, exchanges, or other services. We first introduce a heuristic method to…
Most permissionless blockchain networks run on peer-to-peer (P2P) networks, which offer flexibility and decentralization at the expense of performance (e.g., network latency). Historically, this tradeoff has not been a bottleneck for most…
We develop a dynamic model of the Bitcoin market where users set fees themselves and miners decide whether to operate and whom to validate based on those fees. Our analysis reveals how, in equilibrium, users adjust their bids in response to…
Payment channels are the most prominent solution to the blockchain scalability problem. We introduce the problem of network design with fees for payment channels from the perspective of a Payment Service Provider (PSP). Given a set of…
Payment channel networks provide a fast and scalable solution to relay funds, acting as a second layer to slower and less scalable blockchain protocols. In this paper, we present an accessible, low-cost attack in which the attacker…
This work is organized as follows. In the first section we review the prior work and we have obtained our data. Next, we will look at address reuse in the Bitcoin network. We show that a great portion of users reuse their addresses which…
Blockchain-based Distributed Ledgers (DLs) promise to transform the existing financial system by making it truly democratic. In the past decade, blockchain technology has seen many novel applications ranging from the banking industry to…
While many studies show that more advanced LLMs excel in tasks such as mathematics and coding, we observe that in cryptocurrency trading, stronger LLMs sometimes underperform compared to weaker ones. To investigate this counterintuitive…
We study a random process over graphs inspired by the way payments are executed in the Lightning Network, the main layer-two solution on top of Bitcoin. We first prove almost tight upper and lower bounds on the time it takes for a payment…
To improve transaction rates, many cryptocurrencies have implemented so-called ''Layer-2'' transaction protocols, where payments are routed across networks of private payment channels. However, for a given transaction, not every network…
Proof-of-work blockchains need to be carefully designed so as to create the proper incentives for miners to faithfully maintain the network in a sustainable way. This paper describes how the economic engineering of the Conflux Network, a…
The dramatic adoption of Bitcoin and other cryptocurrencies in the USA has revolutionized the financial landscape and provided unprecedented investment and transaction efficiency opportunities. The prime objective of this research project…
The possibility to analyze everyday monetary transactions is limited by the scarcity of available data, as this kind of information is usually considered highly sensitive. Present econophysics models are usually employed on presumed random…
Bitcoin is the first implementation of what has become known as a 'public permissionless' blockchain. Guaranteeing security and protocol conformity through its elegant combination of cryptographic assurances and game theoretic economic…