Bitcoin mining is about to become a lot less profitable.

Imagine being told that your wage was going to be cut in half. Well, that’s what’s soon going to happen to those who make money from Bitcoin mining, the process of earning the online currency Bitcoin. The current expected date for this change is 11 July 2016. Many see this as the day when Bitcoin prices will rocket and when Bitcoin owners could make a great deal of money. Others see it as the start of a Bitcoin crash. At present no one quite knows which way it will go. Bitcoin was created in 2009 by someone known as Satoshi Nakamoto, borrowing from a whole lot of research methods. It is a cryptocurrency, meaning it uses digital encryption techniques to create bitcoins and secure financial transactions. It doesn’t need a central government or organisation to regulate it, nor a broker to manage payments. Conventional currencies usually have a central bank that creates money and controls its supply. Bitcoin is instead created when individuals “mine” for it by using their computers to perform complex calculations through special software. The algorithm behind Bitcoin is designed to limit the number of bitcoins that can ever be created. All Bitcoin transactions are recorded on a public database known as a blockchain. Every time someone mines for Bitcoin, it is recorded with a new block that is transmitted to every Bitcoin app across the network, like a bank updating its online records.

An ethnography of bitcoin: towards a future research agenda

Cryptocurrencies such as Bitcoin are a recent socio-technical innovation that seeks to disrupt the existing monetary system. Through mundane uses of this new digital cash, they provide a social critique of the centralised infrastructures of the banking industry. This paper outlines an ethnographic research agenda that considers how the social uptake and use of cryptocurrencies such as Bitcoin represents alternative views towards value exchange and critiques existing financial structures. We begin by arguing that the use of Bitcoin can be seen as an act of social resistance that is intended to bridge socio-economic inequalities within the context of a digital community. We then outline the disruptive nature of borderless, affordable and instantaneous international transfers in the form of remittances within social practice. Finally, we identify the possible permutations of trust that may be found in the technical affordances of Bitcoin technology and how these relate to user (pseudo)anonymity, cybertheft, cyberfraud, and consumer protection. Bringing together these three key areas, we highlight the importance of understanding the ordinary (rather than extra-ordinary) uses of cryptocurrencies such as Bitcoin. We contend that focusing upon users’ interactions with Bitcoin as a payments system and community culture will shed light upon mundane acts of socio-technical disruption, acts that critique and provide alternative financial exchange practices to the payments and regulatory financial infrastructures of the banking industry.

Branqueamento de capitais e Bitcoin: regulação e o fenómeno da Inovação

O branqueamento de capitais surge em meados dos anos 30, tendo com base as operações realizadas com fundos provenientes de atividades ilícitas, que eram "lavados" e reintegrados no sistema financeiro. Perceber-se-á que, desde essa altura, as praticas utilizadas no branqueamento de capitais têm sofrido varias alterações, tendo evoluído no que á complexidade de operações diz respeito, o que será compreensível se forem analisadas as alterações a que o sistema financeiro tem sido exposto. Muitas vezes, a regulação e o quadro legal não acompanham a evolução de instrumentos dos mercados financeiros, dando oportunidade para o aproveitamento dessas lacunas em atividades menis ilícitas. O ponto de partida para este trabalho foi o de perceber como é que o fenómeno do branqueamento de capitais se comporta quando confrontado com a inovação das moedas virtuais e em especial, da bitcoin, a moeda virtual com maior sucesso atualmente. A dimensão que a moeda bitcoin assumiu no mercado levou a que um cada vez maior numero de investigadores se debruçasse sobre esta moeda procurando entender a sua génese e funcionamento, bem como, perceber quais seriam os eus pontos favoráveis ou desfavoráveis. A bitcoin apresenta-se no mercado como uma moeda virtual de simples utilização, que pode ser transacionada em qualquer parte do mundo. A moeda cresceu, quer em valor e quer em volume de transações, de forma significativa, nos últimos anos. No presente estudo, são abordados ambos os temas com intuito de ser analisada a possibilidade de existir uma relação entre o branqueamento de capitais e as transações realizadas em bitcoin. Após uma revisão bibliográfica sobre ambos os temoas, bem como, da analise de um conjunto de noticias recolhidas, conclui-se a existência de uma ténue linha que divide esta moeda da pratica de branquear capitais e que a associação de ambas é recolhida por varias entidades reguladoras.

Competitive issue of money & abolition of central banks

The aim of this work is to analyze the main characteristics of the current financial system and to investigate the arising of critical voices with respect this system. In particular, we analyze some historical facts that have been important in the creation of this financial order. We analyze the new digital currency, known as Bitcoin, as the basic ingredient in the formation of a new alternative and decentralized international financial system. In 10 years Bitcoin has expanded its influence to many economic activities. We also analyzed briefly the classic liberal theory that criticizes the intervention of governments in the markets. Finally, we consider relevant the arising of a group of countries (BRICS) that may challenge the current system where the position of USA is privileged.

High-Speed Fully Homomorphic Encryption Over the Integers

A fully homomorphic encryption (FHE) scheme is envisioned as a key cryptographic tool in building a secure and reliable cloud computing environment, as it allows arbitrary evaluation of a ciphertext without revealing the plaintext. However, existing FHE implementations remain impractical due to very high time and resource costs. To the authors’ knowledge, this paper presents the first hardware implementation of a full encryption primitive for FHE over the integers using FPGA technology. A large-integer multiplier architecture utilising Integer-FFT multiplication is proposed, and a large-integer Barrett modular reduction module is designed incorporating the proposed multiplier. The encryption primitive used in the integer-based FHE scheme is designed employing the proposed multiplier and modular reduction modules. The designs are verified using the Xilinx Virtex-7 FPGA platform. Experimental results show that a speed improvement factor of up to 44 is achievable for the hardware implementation of the FHE encryption scheme when compared to its corresponding software implementation. Moreover, performance analysis shows further speed improvements of the integer-based FHE encryption primitives may still be possible, for example through further optimisations or by targeting an ASIC platform.

Nova et Vetera: Edición 14, Abril 28 - Mayo 4 de 2014

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Internet content regulation, public drug websites and the growth in hidden Internet services

Governments have traditionally censored drug-related information, both in traditional media and, in recent years, in online media. We explore Internet content regulation from a drug-policy perspective by describing the likely impacts of censoring drug websites and the parallel growth in hidden Internet services. Australia proposes a compulsory Internet filtering regime that would block websites that ‘depict, express or otherwise deal with matters of… drug misuse or addiction’ and/or ‘promote, incite or instruct in matters of crime’. In this article, we present findings from a mixed-methods study of online drug discussion. Our research found that websites dealing with drugs, that would likely be blocked by the filter, in fact contributed positively to harm reduction. Such sites helped people access more comprehensive and relevant information than was available elsewhere. Blocking these websites would likely drive drug discussion underground at a time when corporate-controlled ‘walled gardens’ (e.g. Facebook) and proprietary operating systems on mobile devices may also limit open drug discussion. At the same time, hidden Internet services, such as Silk Road, have emerged that are not affected by Internet filtering. The inability for any government to regulate Tor websites and the crypto-currency Bitcoin poses a unique challenge to drug prohibition policies.
Read More: http://informahealthcare.com/doi/full/10.3109/09687637.2012.745828

Verificação da memória longa persistente no mercado de bitcoins : uma análise do expoente de Hurst ao longo do tempo

Um dos principais fatores de estudo do mercado de capitais é a discussão a respeito da teoria de eficiência de mercado, que no caso diverge em relação ao comportamento do preço da maioria dos ativos. Este trabalho tem o intuito de analisar o comportamento do principal índice de preços do mercado de bitcoins (BPI) durante o período de julho de 2010 a setembro de 2014. Inicialmente será testada a hipótese do passeio aleatório para o BPI. Em seguida serão verificadas as correlações de longa data nas séries financeiras temporais utilizando como instrumento de análise o expoente de Hurst (H), que inicialmente foi usado para calcular correlações em fenômenos naturais e posteriormente sua abrangência alcançou a área financeira. O estudo avalia o expoente H através de métodos distintos destacando-se a análise R/S e a DFA. Para o cálculo do expoente ao longo do tempo, utiliza-se uma janela móvel de 90 dias deslocando-se de 10 em 10 dias. Já para o cálculo em diferentes escalas verifica-se, para cada dia, o valor do expoente H nos últimos 360, 180 e 90 dias respectivamente. Os resultados evidenciaram que o índice BPI apresenta memória longa persistente em praticamente todo o período analisado. Além disso, a análise em diferentes escalas indica a possibilidade de previsão de eventos turbulentos no índice neste mesmo período. Finalmente foi possível comprovar a hipótese de mercados fractais para a série histórica de retornos do BPI.

Sistemi di monete virtuali

La tesi descrive come si è arrivati dal baratto ai sistemi di monete virtuali, attraverso l'evoluzione dei sistemi bancari e dell'IT. Inoltre viene mostrata l'implementazione del protocollo Bitcoin.

Les transferts de fonds virtuels – une technologie innovatrice et un moyen potentiel de blanchiment d’argent

Travail dirigé présenté à la Faculté des études supérieures et postdoctorales en vue de l’obtention du grade de Maître ès sciences (M.Sc) en Criminologie – Option sécurité intérieure

Les transferts de fonds virtuels – une technologie innovatrice et un moyen potentiel de blanchiment d’argent

Travail dirigé présenté à la Faculté des études supérieures et postdoctorales en vue de l’obtention du grade de Maître ès sciences (M.Sc) en Criminologie – Option sécurité intérieure

The Meanings of New Money: Social Constructions of Value in the Rise of Digital Currencies

Thesis (Ph.D.)--University of Washington, 2016-07

Provable Security for Cryptocurrencies

The past several years have seen the surprising and rapid rise of Bitcoin and other “cryptocurrencies.” These are decentralized peer-to-peer networks that allow users to transmit money, tocompose financial instruments, and to enforce contracts between mutually distrusting peers, andthat show great promise as a foundation for financial infrastructure that is more robust, efficientand equitable than ours today. However, it is difficult to reason about the security of cryptocurrencies. Bitcoin is a complex system, comprising many intricate and subtly-interacting protocol layers. At each layer it features design innovations that (prior to our work) have not undergone any rigorous analysis. Compounding the challenge, Bitcoin is but one of hundreds of competing cryptocurrencies in an ecosystem that is constantly evolving. The goal of this thesis is to formally reason about the security of cryptocurrencies, reining in their complexity, and providing well-defined and justified statements of their guarantees. We provide a formal specification and construction for each layer of an abstract cryptocurrency protocol, and prove that our constructions satisfy their specifications. The contributions of this thesis are centered around two new abstractions: “scratch-off puzzles,” and the “blockchain functionality” model. Scratch-off puzzles are a generalization of the Bitcoin “mining” algorithm, its most iconic and novel design feature. We show how to provide secure upgrades to a cryptocurrency by instantiating the protocol with alternative puzzle schemes. We construct secure puzzles that address important and well-known challenges facing Bitcoin today, including wasted energy and dangerous coalitions. The blockchain functionality is a general-purpose model of a cryptocurrency rooted in the “Universal Composability” cryptography theory. We use this model to express a wide range of applications, including transparent “smart contracts” (like those featured in Bitcoin and Ethereum), and also privacy-preserving applications like sealed-bid auctions. We also construct a new protocol compiler, called Hawk, which translates user-provided specifications into privacy-preserving protocols based on zero-knowledge proofs.

'What if you live on top of a bakery and you like cakes?'- Drug use and harm trajectories before, during and after the emergence of Silk Road

BACKGROUND: Cryptomarkets are digital platforms that use anonymising software (e.g. Tor) and cryptocurrencies (e.g. Bitcoin) to facilitate peer-to-peer (P2P) trade of goods and services. Their emergence has facilitated access to a wide range of high-quality psychoactive substances, according to surveys of users. In this paper, we ask the question 'How does changing access to drugs through cryptomarkets affect the drug use and harm trajectories of their users?'

METHODS: We conducted a digital ethnography spanning 2012-2014, a period that included the seizure of the original Silk Road marketplace and forum by law enforcement. Using encrypted online chat, we interviewed 17 people who reported using Silk Road to purchase illicit drugs. The interviews were in-depth and unstructured, and also involved the use of life history timelines to trace trajectories. Transcripts were analysed thematically using NVivo.

RESULTS: For some, Silk Road facilitated initiation into drug use or a return to drug use after cessation. Typically, participants reported experiencing a glut of drug consumption in their first months using Silk Road, described by one participant as akin to 'kids in a candy store'. There was evidence that very high availability reduced the need for drug hoarding which helped some respondents to moderate use and feel more in control of purchases made online. Cryptomarket access also appeared to affect solitary and social drug users differently. Most participants described using other cryptomarkets after the closure of Silk Road, albeit with less confidence.

CONCLUSION: In the context of high levels of drug access, supply and diversity occurring within a community regulated environment online, the impacts of cryptomarkets upon drug use trajectories are complex, often posing new challenges for self-control, yet not always leading to harmful outcomes. A major policy challenge is how to provide support for harm reduction in these highly volatile settings.

La Blockchain: aspetti crittografici e applicazioni

La Blockchain è un deposito di dati distribuito costituito da una lista di record (in continua crescita) resistente a modifiche e revisioni, anche da parte degli operatori dei nodi (computer) su cui risiede. I dati sono sicuri anche in presenza di partecipanti non affidabili o disonesti alla rete. Una copia totale o parziale della blockchain è memorizzata su tutti i nodi. I record contenuti sono di due tipi: le transazioni, che sono i dati veri e propri, e i blocchi, che sono la registrazione di quanto ed in quale ordine le transazioni sono state inserite in modo indelebile nel database. Le transazioni sono create dai partecipanti alla rete nelle loro operazioni (per esempio, trasferimento di valuta ad un altro utente), mentre i blocchi sono generati da partecipanti speciali, i cosiddetti “miners”, che utilizzano software e a volte hardware specializzato per creare i blocchi. L’attività dei miners viene ricompensata con l’assegnazione di “qualcosa”, nel caso della rete Bitcoin di un certo numero di unità di valuta. Spesso negli esempi si fa riferimento alla Blockchain di Bitcoin perché è la catena di blocchi implementata per prima, e l'unica ad avere una dimensione consistente. Le transazioni, una volta create, vengono distribuite sui nodi con un protocollo del tipo “best effort”. La validità di una transazione viene verificata attraverso il consenso dei nodi della rete sulla base di una serie di parametri, che variano secondo l’implementazione specifica dell’architettura. Una volta verificata come valida, la transazione viene inserita nel primo blocco libero disponibile. Per evitare che ci sia una duplicazione delle informazioni l’architettura prevede un sistema di time stamping, che non richiede un server centralizzato.