publication . Preprint . 2016

Strong Federations: An Interoperable Blockchain Solution to Centralized Third-Party Risks

Dilley, Johnny; Poelstra, Andrew; Wilkins, Jonathan; Piekarska, Marta; Gorlick, Ben; Friedenbach, Mark;
Open Access English
  • Published: 16 Dec 2016
Abstract
Bitcoin, the first peer-to-peer electronic cash system, opened the door to permissionless, private, and trustless transactions. Attempts to repurpose Bitcoin's underlying blockchain technology have run up against fundamental limitations to privacy, faithful execution, and transaction finality. We introduce \emph{Strong Federations}: publicly verifiable, Byzantine-robust transaction networks that facilitate movement of any asset between disparate markets, without requiring third-party trust. \emph{Strong Federations} enable commercial privacy, with support for transactions where asset types and amounts are opaque, while remaining publicly verifiable. As in Bitcoi...
Subjects
free text keywords: Computer Science - Cryptography and Security, Computer Science - Computers and Society
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35 references, page 1 of 3

[1] S. Nakamoto, “Bitcoin: A peer-to-peer electronic cash system,” 2009.

[Online]. Available: http://bitcoin.org/bitcoin.pdf [2] A. Back, “Hashcash - a denial of service counter-measure,” Tech. Rep., 2002.

[3] K. Noyen, D. Volland, D. Wo¨rner, and E. Fleisch, “When money learns to fly: Towards sensing as a service applications using bitcoin,” CoRR, vol. abs/1409.5841, 2014. [Online]. Available: http://arxiv.org/abs/1409.5841 [4] B. Wiki, “Proof of ownership.” [Online]. Available: https://en.bitcoin. [OpenAIRE]

it/wiki/Proof of Ownership [5] E. F. Churchill., “Why should we care about bitcoin?” Interactions, 2015.

[6] W. K. H. Dengke Chen, Shiyi Chen, “Internet finance: Digital currencies and alternative finance liberating the capital markets,” JOURNAL OF GOVERNANCE AND REGULATION, vol. 4, Issue 4, pp. 190-202, 2015.

[7] [Online]. Available: http://webcache.

googleusercontent.com/search?q=cache:-coDmwI95UYJ: community.ebay.com/t5/Archive-Trust-Safety-Safe-Harbor/ Paypal-Chargeback-8-YEARS-after-sale/td-p/16473845+&cd=15&hl= en&ct=clnk&gl=us [8] Federal Trade Comission, “Disputing credit card charges,” Consumer Information, 2016.

[9] --, “Fair credit billing act,” in Public Law 93-495. 93rd Congress - H.R. 11221, 15 USC 1601 July 9, 1986. [Online]. Available: https://www.ftc.gov/sites/default/files/fcb.pdf [10] [Online]. Available: http://www.bloomberg.com/news/articles/ 2013-10-01/lawsky-says-so-be-it-if-transparency-dooms-bitcoin [11] [Online]. Available: http://www.telegraph.co.uk/technology/news/ 11451379/US-auctions-50000-Bitcoins-seized-from-Silk-Road.html S. Meiklejohn, M. Pomarole, G. Jordan, K. Levchenko, D. McCoy, G. M. Voelker, and S. Savage, “A fistful of bitcoins: Characterizing payments among men with no names,” in Proceedings of the 2013 Conference on Internet Measurement Conference, ser. IMC '13. New York, NY, USA: ACM, 2013, pp. 127-140. [Online]. Available: http://doi.acm.org/10.1145/2504730.2504747 A. Zohar, “Bitcoin: Under the hood,” Commun. ACM, vol. 58, no. 9, pp. 104-113, Aug. 2015. [Online]. Available: http://doi.acm.org/10.

1145/2701411 T. Mayer, “Bitgold review,” The Great Credit Contraction, 2014.

H. Karlstrøm, “Do libertarians dream of electric coins? the material embeddedness of bitcoin,” Distinktion: Journal of Social Theory, vol. 15, no. 1, pp. 23-36, 2014. [Online]. Available: http://dx.doi.org/10.1080/1600910X.2013.870083 Unknown, “How digicash blew everything,” Next! Magazine, 1999. [OpenAIRE]

[Online]. Available: http://www.nextmagazine.nl/ecash.htm M. S. Nikabadi and S. M. Mousavi, “The effect of e-money on the non-financial performance of banks: Case study: Bank mellat of iran,” Int. J. Innov. Digit. Econ., vol. 7, no. 1, pp. 12-23, Jan. 2016. [Online].

Available: http://dx.doi.org/10.4018/IJIDE.2016010102 S. V. Buldyrev, R. Parshani, G. Paul, H. E. Stanley, and S. Havlin, “Catastrophic cascade of failures in interdependent networks,” Nature, vol. 464, no. 7291, pp. 1025-1028, Apr. 2010. [Online]. Available: http://dx.doi.org/10.1038/nature08932 D. Hide, “Exploiting ripple transaction ordering for fun and profit,” Available Imagination, Tech. Rep., 2015.

T. Moore and N. Christin, Beware the Middleman: Empirical Analysis of Bitcoin-Exchange Risk. Berlin, Heidelberg: Springer Berlin Heidelberg, 2013, pp. 25-33. [Online]. Available: http: //dx.doi.org/10.1007/978-3-642-39884-1 3 G. Maxwell, 2015. [Online]. Available: https://people.xiph.org/ greg/ confidential values.txt A. Back, M. Corallo, L. Dashjr, M. Friedenbach, G. Maxwell, A. Miller, A. Poelstra, J. Tim o´n, and P. Wuille, “Enabling blockchain innovations with pegged sidechains,” 2014.

L. Zhang, G. Ding, Q. Wu, Y. Zou, Z. Han, and J. Wang, “Byzantine attack and defense in cognitive radio networks: A survey,” CoRR, vol. abs/1504.01185, 2015. [Online]. Available: http://arxiv.org/abs/1504.01185 R. Mohana, Financial Statement Analysis and Reporting. PHI Learning Pvt. Ltd. [Online]. Available: https://books.google.com/ books?id=97a8SG9hvMgC M. Friedenbach and J. Timo´ n, “Freimarkets: extending bitcoin protocol with user-specified bearer instruments, peer-to-peer exchange, off-chain accounting, auctions, derivatives and transitive transactions.” [Online].

Available: http://freico.in/docs/freimarkets-v0.0.1.pdf [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [24] [25] [26] [28] [29] [30] [31] [23] [Online]. Available: https://en.wiktionary.org/wiki/functionary [27] I. Eyal and E. G. Sirer, Financial Cryptography and Data Security: 18th International Conference, FC 2014, Christ Church, Barbados, March 3-7, 2014, Revised Selected Papers. Berlin, Heidelberg: Springer Berlin Heidelberg, 2014, ch. Majority Is Not Enough: Bitcoin Mining Is Vulnerable, pp. 436-454. [Online]. Available: http://dx.doi.org/10.1007/978-3-662-45472-5 28 R. Perlman, “Routing with byzantine robustness,” Mountain View, CA, USA, Tech. Rep., 2005.

35 references, page 1 of 3
Abstract
Bitcoin, the first peer-to-peer electronic cash system, opened the door to permissionless, private, and trustless transactions. Attempts to repurpose Bitcoin's underlying blockchain technology have run up against fundamental limitations to privacy, faithful execution, and transaction finality. We introduce \emph{Strong Federations}: publicly verifiable, Byzantine-robust transaction networks that facilitate movement of any asset between disparate markets, without requiring third-party trust. \emph{Strong Federations} enable commercial privacy, with support for transactions where asset types and amounts are opaque, while remaining publicly verifiable. As in Bitcoi...
Subjects
free text keywords: Computer Science - Cryptography and Security, Computer Science - Computers and Society
Download from
35 references, page 1 of 3

[1] S. Nakamoto, “Bitcoin: A peer-to-peer electronic cash system,” 2009.

[Online]. Available: http://bitcoin.org/bitcoin.pdf [2] A. Back, “Hashcash - a denial of service counter-measure,” Tech. Rep., 2002.

[3] K. Noyen, D. Volland, D. Wo¨rner, and E. Fleisch, “When money learns to fly: Towards sensing as a service applications using bitcoin,” CoRR, vol. abs/1409.5841, 2014. [Online]. Available: http://arxiv.org/abs/1409.5841 [4] B. Wiki, “Proof of ownership.” [Online]. Available: https://en.bitcoin. [OpenAIRE]

it/wiki/Proof of Ownership [5] E. F. Churchill., “Why should we care about bitcoin?” Interactions, 2015.

[6] W. K. H. Dengke Chen, Shiyi Chen, “Internet finance: Digital currencies and alternative finance liberating the capital markets,” JOURNAL OF GOVERNANCE AND REGULATION, vol. 4, Issue 4, pp. 190-202, 2015.

[7] [Online]. Available: http://webcache.

googleusercontent.com/search?q=cache:-coDmwI95UYJ: community.ebay.com/t5/Archive-Trust-Safety-Safe-Harbor/ Paypal-Chargeback-8-YEARS-after-sale/td-p/16473845+&cd=15&hl= en&ct=clnk&gl=us [8] Federal Trade Comission, “Disputing credit card charges,” Consumer Information, 2016.

[9] --, “Fair credit billing act,” in Public Law 93-495. 93rd Congress - H.R. 11221, 15 USC 1601 July 9, 1986. [Online]. Available: https://www.ftc.gov/sites/default/files/fcb.pdf [10] [Online]. Available: http://www.bloomberg.com/news/articles/ 2013-10-01/lawsky-says-so-be-it-if-transparency-dooms-bitcoin [11] [Online]. Available: http://www.telegraph.co.uk/technology/news/ 11451379/US-auctions-50000-Bitcoins-seized-from-Silk-Road.html S. Meiklejohn, M. Pomarole, G. Jordan, K. Levchenko, D. McCoy, G. M. Voelker, and S. Savage, “A fistful of bitcoins: Characterizing payments among men with no names,” in Proceedings of the 2013 Conference on Internet Measurement Conference, ser. IMC '13. New York, NY, USA: ACM, 2013, pp. 127-140. [Online]. Available: http://doi.acm.org/10.1145/2504730.2504747 A. Zohar, “Bitcoin: Under the hood,” Commun. ACM, vol. 58, no. 9, pp. 104-113, Aug. 2015. [Online]. Available: http://doi.acm.org/10.

1145/2701411 T. Mayer, “Bitgold review,” The Great Credit Contraction, 2014.

H. Karlstrøm, “Do libertarians dream of electric coins? the material embeddedness of bitcoin,” Distinktion: Journal of Social Theory, vol. 15, no. 1, pp. 23-36, 2014. [Online]. Available: http://dx.doi.org/10.1080/1600910X.2013.870083 Unknown, “How digicash blew everything,” Next! Magazine, 1999. [OpenAIRE]

[Online]. Available: http://www.nextmagazine.nl/ecash.htm M. S. Nikabadi and S. M. Mousavi, “The effect of e-money on the non-financial performance of banks: Case study: Bank mellat of iran,” Int. J. Innov. Digit. Econ., vol. 7, no. 1, pp. 12-23, Jan. 2016. [Online].

Available: http://dx.doi.org/10.4018/IJIDE.2016010102 S. V. Buldyrev, R. Parshani, G. Paul, H. E. Stanley, and S. Havlin, “Catastrophic cascade of failures in interdependent networks,” Nature, vol. 464, no. 7291, pp. 1025-1028, Apr. 2010. [Online]. Available: http://dx.doi.org/10.1038/nature08932 D. Hide, “Exploiting ripple transaction ordering for fun and profit,” Available Imagination, Tech. Rep., 2015.

T. Moore and N. Christin, Beware the Middleman: Empirical Analysis of Bitcoin-Exchange Risk. Berlin, Heidelberg: Springer Berlin Heidelberg, 2013, pp. 25-33. [Online]. Available: http: //dx.doi.org/10.1007/978-3-642-39884-1 3 G. Maxwell, 2015. [Online]. Available: https://people.xiph.org/ greg/ confidential values.txt A. Back, M. Corallo, L. Dashjr, M. Friedenbach, G. Maxwell, A. Miller, A. Poelstra, J. Tim o´n, and P. Wuille, “Enabling blockchain innovations with pegged sidechains,” 2014.

L. Zhang, G. Ding, Q. Wu, Y. Zou, Z. Han, and J. Wang, “Byzantine attack and defense in cognitive radio networks: A survey,” CoRR, vol. abs/1504.01185, 2015. [Online]. Available: http://arxiv.org/abs/1504.01185 R. Mohana, Financial Statement Analysis and Reporting. PHI Learning Pvt. Ltd. [Online]. Available: https://books.google.com/ books?id=97a8SG9hvMgC M. Friedenbach and J. Timo´ n, “Freimarkets: extending bitcoin protocol with user-specified bearer instruments, peer-to-peer exchange, off-chain accounting, auctions, derivatives and transitive transactions.” [Online].

Available: http://freico.in/docs/freimarkets-v0.0.1.pdf [13] [14] [15] [16] [17] [18] [19] [20] [21] [22] [24] [25] [26] [28] [29] [30] [31] [23] [Online]. Available: https://en.wiktionary.org/wiki/functionary [27] I. Eyal and E. G. Sirer, Financial Cryptography and Data Security: 18th International Conference, FC 2014, Christ Church, Barbados, March 3-7, 2014, Revised Selected Papers. Berlin, Heidelberg: Springer Berlin Heidelberg, 2014, ch. Majority Is Not Enough: Bitcoin Mining Is Vulnerable, pp. 436-454. [Online]. Available: http://dx.doi.org/10.1007/978-3-662-45472-5 28 R. Perlman, “Routing with byzantine robustness,” Mountain View, CA, USA, Tech. Rep., 2005.

35 references, page 1 of 3
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