Knowledge Base

Admin System

The admin system is a subsystem of the user system, where registered admins can manage the whitelisting applications of users, aggreagate data about the rewards and get data about the registered miners.


Air Gap

An air gapped computer is a common standard of security for a device containing sensitive information related to cryptocurrency wallets.

This typically involves making sure a computer is disconnected from a network until ready to transmit transaction information for a short period of time. More extensive methods may include placing a computer with wireless communication abilities inside a Faraday Cage.


Wikipedia Entry

Air gap (networking)

An air gap, air wall or air gapping[1] is a network security measure employed on one or more computers to ensure that a secure computer network is physically isolated from unsecured networks, such as the public Internet or an unsecured local area network.[2] It means a computer or network has no network interfaces connected to other networks,[3][4] with a physical or conceptual air gap, analogous to the air gap used in plumbing to maintain water quality.

Use in classified settings

An "air-gapped" computer or network is one that has no network interfaces, either wired or wireless, connected to outside networks.[3][4] Many computers, even when they are not plugged into a wired network, have a wireless network interface controller (WiFi) and are connected to nearby wireless networks to access the Internet and update software. This represents a security vulnerability, so air-gapped computers either have their wireless interface controller permanently disabled or physically removed. To move data between the outside world and the air-gapped system, it is necessary to write data to a physical medium such as a thumbdrive, and physically move it between computers. Physical access is easier to control than an electronic network interface, which can be attacked at any time from the exterior insecure system, and if malware infects the secure system can be used to export secure data.

In environments where networks or devices are rated to handle different levels of classified information, the two disconnected devices or networks are referred to as "low side" and "high side", "low" being unclassified and "high" referring to classified, or classified at a higher level. This is also occasionally referred to as "red" (classified) and "black" (unclassified). Access policies are often based on the Bell–LaPadula confidentiality model, where data can be moved low-to-high with minimal security measures, while high-to-low requires much more stringent procedures to ensure protection of the data at a higher level of classification.

The concept represents nearly the maximum protection one network can have from another (save turning the device off). The only way to transfer data between the outside world and the air-gapped system is to copy data on a removable storage medium such as a removable disk or USB flash drive and physically carry the storage to the other system. This access can be more easily controlled. The upside to this is that such a network can generally be regarded as a closed system (in terms of information, signals, and emissions security), unable to be accessed from the outside world. The downside is that transferring information (from the outside world) to be analyzed by computers on the secure network is extraordinarily labor-intensive, often involving human security analysis of prospective programs or data to be entered onto air-gapped networks and possibly even human manual re-entry of the data following security analysis.[5]

Sophisticated computer viruses for use in cyberwarfare, such as Stuxnet[6] and agent.btz have been designed to infect air-gapped systems by exploiting security holes related to the handling of removable media. The possibility of using acoustic communication has also been demonstrated by researchers.[7] Researchers have also demonstrated the feasibility of data exfiltration using FM frequency signals.[8][9]

Examples

Examples of the types of networks or systems that may be air gapped include:

Many of these systems have since added features that connect them to the public internet, and are no longer effectively air gapped, including thermostats with internet connections and automobiles, with Bluetooth, Wi-Fi and cellular phone connectivity.

Limitations

Limitations imposed on devices used in these environments may include a ban on wireless connections to or from the secure network, or similar restrictions on EM leakage from the secure network through the use of TEMPEST or a Faraday cage.

Further, scientists in 2013 demonstrated the viability of air gap malware designed to defeat air gap isolation using acoustic signaling.[14] Shortly after that, network security researcher Dragos Ruiu's BadBIOS received press attention.[15]

In 2014, researchers introduced "AirHopper", a bifurcated attack pattern showing the feasibility of data exfiltration from an isolated computer to a nearby mobile phone, using FM frequency signals.[8][9]

In 2015, BitWhisper, a covert signaling channel between air-gapped computers using thermal manipulations was introduced. BitWhisper supports bidirectional communication and requires no additional dedicated peripheral hardware.[16][17]

Later in 2015, researchers introduced GSMem, a method for exfiltrating data from air-gapped computers over cellular frequencies. The transmission - generated by a standard internal bus - renders the computer into a small cellular transmitter antenna.[18][19]

ProjectSauron malware discovered in 2016 demonstrates how an infected USB device can be used to remotely leak data off of an air-gapped computer. The malware remained undetected for 5 years and relied on hidden partitions on a USB drive not visible to Windows as a transport channel between the air-gapped computer and a computer connected to the internet, presumably as a way to share files between the two systems.[20]

NFCdrip was the name given to the discovery of stealthy data exfiltration through NFC (Near-field communication) radio abuse and signal detection in 2018. Although NFC enables devices to establish effective communication by bringing them within a few centimeters of each other,[21] researchers showed that it can be abused to transmit information at a much longer range than expected - up to 100 meters.[22]

In general, malware can exploit various hardware combinations to leak sensitive information from air-gapped systems using "air-gap covert channels".[23] These hardware combinations use a number of different mediums to bridge the air-gap, including: acoustic, light, seismic, magnetic, thermal, and radio-frequency.[24][25]

See also

References

  1. ^ Whatis.com: Air gapping
  2. ^ RFC 4949
  3. ^ a b Zetter, Kim (8 December 2014). "Hacker Lexicon: What is an air gap?". Wired magazine website. Conde Nast. Retrieved 21 January 2019.
  4. ^ a b Bryant, William D. (2015). International Conflict and Cyberspace Superiority: Theory and Practice. Routledge. p. 107. ISBN 1317420381.
  5. ^ Lemos, Robert (2001-02-01). "NSA attempting to design crack-proof computer". ZDNet News. CBS Interactive, Inc. Retrieved 2012-10-12. For example, top-secret data might be kept on a different computer than data classified merely as sensitive material. Sometimes, for a worker to access information, up to six different computers can be on a single desk. That type of security is called, in typical intelligence community jargon, an air gap.
  6. ^ "Stuxnet delivered to Iranian nuclear plant on thumb drive". CNET. 12 April 2012.
  7. ^ Hanspach, Michael; Goetz, Michael (November 2013). "On Covert Acoustical Mesh Networks in Air". Journal of Communications. Engineering and Technology Publishing. 8 (11): 758–767. arXiv:1406.1213. doi:10.12720/jcm.8.11.758-767. Retrieved 22 November 2013.
  8. ^ a b Guri, Mordechai; Kedma, Gabi; Kachlon, Assaf; Elovici, Yuval (November 2014). "AirHopper: Bridging the Air-Gap between Isolated Networks and Mobile Phones using Radio Frequencies". arXiv:1411.0237.
  9. ^ a b Guri, Mordechai; Kedma, Gabi; Kachlon, Assaf; Elovici, Yuval (November 2014). "How to leak sensitive data from an isolated computer (air-gap) to a near by mobile phone - AirHopper". BGU Cyber Security Labs.
  10. ^ Rist, Oliver (2006-05-29). "Hack Tales: Air-gap networking for the price of a pair of sneakers". Infoworld. IDG Network. Retrieved 2009-01-16. In high-security situations, various forms of data often must be kept off production networks, due to possible contamination from nonsecure resources — such as, say, the Internet. So IT admins must build enclosed systems to house that data — stand-alone servers, for example, or small networks of servers that aren't connected to anything but one another. There's nothing but air between these and other networks, hence the term air gap, and transferring data between them is done the old-fashioned way: moving disks back and forth by hand, via 'sneakernet'.
  11. ^ "Weber vs SEC" (PDF). insurancenewsnet.com. 2012-11-15. p. 35. Stock exchange internal network computer systems are so sensitive that they are “air gapped” and not attached to the internet, in order to protect them from attack, intrusion, or other malicious acts by third party adversaries.
  12. ^ "Weber vs SEC". Industrial internal network computer systems are so sensitive that they are “air gapped” and neither attached to the internet nor insecurely connects to the corporate network, in order to protect them from attack, intrusion, or other malicious acts by third party adversaries.
  13. ^ Zetter, Kim (2008-01-04). "FAA: Boeing's New 787 May Be Vulnerable to Hacker Attack". Wired Magazine. CondéNet, Inc. Archived from the original on 23 December 2008. Retrieved 2009-01-16. (...Boeing...) wouldn't go into detail about how (...it...) is tackling the issue but says it is employing a combination of solutions that involves some physical separation of the networks, known as air gaps, and software firewalls.
  14. ^ Hanspach, Michael; Goetz, Michael (November 2013). "On Covert Acoustical Mesh Networks in Air". Journal of Communications. 8: 758–767. arXiv:1406.1213. doi:10.12720/jcm.8.11.758-767.
  15. ^ Leyden, John (5 Dec 2013). "Hear that? It's the sound of BadBIOS wannabe chatting over air gaps". Retrieved 30 December 2014.
  16. ^ Guri, Mordechai; Monitz, Matan; Mirski, Yisroel; Elovici, Yuval (April 2015). "BitWhisper: Covert Signaling Channel between Air-Gapped Computers using Thermal Manipulations". arXiv:1503.07919.
  17. ^ Guri, Mordechai; Monitz, Matan; Mirski, Yisroel; Elovici, Yuval (March 2015). "BitWhisper: The Heat is on the Air-Gap". BGU Cyber Security Labs.
  18. ^ Guri, Mordechai; Kachlon, Assaf; Hasson, Ofer; Kedma, Gabi; Mirsky, Yisroel; Elovici, Yuval (August 2015). "GSMem: Data Exfiltration from Air-Gapped Computers over GSM Frequencies". 24th USENIX Security Symposium (USENIX Security 15).
  19. ^ Guri, Mordechai; Kachlon, Assaf; Hasson, Ofer; Kedma, Gabi; Mirsky, Yisroel; Monitz, Matan; Elovici, Yuval (July 2015). "GSMem Breaking The Air-Gap". Cyber Security Labs @ Ben Gurion University.
  20. ^ Chris Baraniuk (2016-08-09). "'Project Sauron' malware hidden for five years". BBC.
  21. ^ Cameron Faulkner. "What is NFC? Everything you need to know". Techradar.com. Retrieved 30 November 2015.
  22. ^ "NFCdrip: NFC Data Exfiltration Research". Checkmarx. Retrieved 19 December 2018.
  23. ^ Carrara, Brent (September 2016). “Air-Gap Covert Channels.” Ph. D. Thesis. University of Ottawa.
  24. ^ Carrara, Brent; Adams, Carlisle (2016-01-01). "A Survey and Taxonomy Aimed at the Detection and Measurement of Covert Channels". Proceedings of the 4th ACM Workshop on Information Hiding and Multimedia Security. IH&MMSec '16. New York, NY, USA: ACM: 115–126. doi:10.1145/2909827.2930800. ISBN 9781450342902.
  25. ^ Carrara, Brent; Adams, Carlisle (2016-06-01). "Out-of-Band Covert Channels—A Survey". ACM Comput. Surv. 49 (2): 23:1–23:36. doi:10.1145/2938370. ISSN 0360-0300.

Blockchain

Wikipedia Entry

Blockchain

Blockchain formation. The main chain (black) consists of the longest series of blocks from the genesis block (green) to the current block. Orphan blocks (purple) exist outside of the main chain.

A blockchain,[1][2][3] originally block chain,[4][5] is a growing list of records, called blocks, that are linked using cryptography.[1][6] Each block contains a cryptographic hash of the previous block,[6] a timestamp, and transaction data (generally represented as a Merkle tree).

By design, a blockchain is resistant to modification of the data. It is "an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way".[7] For use as a distributed ledger, a blockchain is typically managed by a peer-to-peer network collectively adhering to a protocol for inter-node communication and validating new blocks. Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority. Although blockchain records are not unalterable, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance. Decentralized consensus has therefore been claimed with a blockchain.[8]

Blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency bitcoin.[1] The identity of Satoshi Nakamoto is unknown. The invention of the blockchain for bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The bitcoin design has inspired other applications,[1][3] and blockchains that are readable by the public are widely used by cryptocurrencies. Blockchain is considered a type of payment rail.[9] Private blockchains have been proposed for business use. Sources such as Computerworld called the marketing of such blockchains without a proper security model "snake oil".[10]

History

Bitcoin transactions (January 2009 – September 2017)

The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta.[6][11] They wanted to implement a system where document timestamps could not be tampered with. In 1992, Bayer, Haber and Stornetta incorporated Merkle trees to the design, which improved its efficiency by allowing several document certificates to be collected into one block.[6][12]

The first blockchain was conceptualized by a person (or group of people) known as Satoshi Nakamoto in 2008. Nakamoto improved the design in an important way using a Hashcash-like method to add blocks to the chain without requiring them to be signed by a trusted party.[6] The design was implemented the following year by Nakamoto as a core component of the cryptocurrency bitcoin, where it serves as the public ledger for all transactions on the network.[1]

In August 2014, the bitcoin blockchain file size, containing records of all transactions that have occurred on the network, reached 20 GB (gigabytes).[13] In January 2015, the size had grown to almost 30 GB, and from January 2016 to January 2017, the bitcoin blockchain grew from 50 GB to 100 GB in size.

The words block and chain were used separately in Satoshi Nakamoto's original paper, but were eventually popularized as a single word, blockchain, by 2016.

Smart contracts that run on a blockchain, for example ones that "creat[e] invoices that pay themselves when a shipment arrives or share certificates that automatically send their owners dividends if profits reach a certain level."[1] require an off-chain oracle to access any "external data or events based on time or market conditions [that need] to interact with the blockchain."[14]

According to Accenture, an application of the diffusion of innovations theory suggests that blockchains attained a 13.5% adoption rate within financial services in 2016, therefore reaching the early adopters phase.[15] Industry trade groups joined to create the Global Blockchain Forum in 2016, an initiative of the Chamber of Digital Commerce.

In May 2018, Gartner found that only 1% of CIOs indicated any kind of blockchain adoption within their organisations, and only 8% of CIOs were in the short-term 'planning or [looking at] active experimentation with blockchain'.[16]

Structure

A blockchain is a decentralized, distributed and public[inconsistent] digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks.[1][17] This allows the participants to verify and audit transactions independently and relatively inexpensively.[18] A blockchain database is managed autonomously using a peer-to-peer network and a distributed timestamping server. They are authenticated by mass collaboration powered by collective self-interests.[19] Such a design facilitates robust workflow where participants' uncertainty regarding data security is marginal. The use of a blockchain removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending. A blockchain has been described as a value-exchange protocol.[20] A blockchain can maintain title rights because, when properly set up to detail the exchange agreement, it provides a record that compels offer and acceptance.

Blocks

Blocks hold batches of valid transactions that are hashed and encoded into a Merkle tree.[1] Each block includes the cryptographic hash of the prior block in the blockchain, linking the two. The linked blocks form a chain.[1] This iterative process confirms the integrity of the previous block, all the way back to the original genesis block.[21]

Sometimes separate blocks can be produced concurrently, creating a temporary fork. In addition to a secure hash-based history, any blockchain has a specified algorithm for scoring different versions of the history so that one with a higher score can be selected over others. Blocks not selected for inclusion in the chain are called orphan blocks.[21] Peers supporting the database have different versions of the history from time to time. They keep only the highest-scoring version of the database known to them. Whenever a peer receives a higher-scoring version (usually the old version with a single new block added) they extend or overwrite their own database and retransmit the improvement to their peers. There is never an absolute guarantee that any particular entry will remain in the best version of the history forever. Blockchains are typically built to add the score of new blocks onto old blocks and are given incentives to extend with new blocks rather than overwrite old blocks. Therefore, the probability of an entry becoming superseded decreases exponentially[22] as more blocks are built on top of it, eventually becoming very low.[1][23]:ch. 08[24] For example, bitcoin uses a proof-of-work system, where the chain with the most cumulative proof-of-work is considered the valid one by the network. There are a number of methods that can be used to demonstrate a sufficient level of computation. Within a blockchain the computation is carried out redundantly rather than in the traditional segregated and parallel manner.[25]

Block time

The block time is the average time it takes for the network to generate one extra block in the blockchain. Some blockchains create a new block as frequently as every five seconds. By the time of block completion, the included data becomes verifiable. In cryptocurrency, this is practically when the transaction takes place, so a shorter block time means faster transactions. The block time for Ethereum is set to between 14 and 15 seconds, while for bitcoin it is 10 minutes.[citation needed]

Hard forks

A hard fork is a rule change such that the software validating according to the old rules will see the blocks produced according to the new rules as invalid. In case of a hard fork, all nodes meant to work in accordance with the new rules need to upgrade their software.

If one group of nodes continues to use the old software while the other nodes use the new software, a split can occur. For example, Ethereum has hard-forked to "make whole" the investors in The DAO, which had been hacked by exploiting a vulnerability in its code. In this case, the fork resulted in a split creating Ethereum and Ethereum Classic chains. In 2014 the Nxt community was asked to consider a hard fork that would have led to a rollback of the blockchain records to mitigate the effects of a theft of 50 million NXT from a major cryptocurrency exchange. The hard fork proposal was rejected, and some of the funds were recovered after negotiations and ransom payment. Alternatively, to prevent a permanent split, a majority of nodes using the new software may return to the old rules, as was the case of bitcoin split on 12 March 2013.[26]

Decentralization

By storing data across its peer-to-peer network, the blockchain eliminates a number of risks that come with data being held centrally.[1] The decentralized blockchain may use ad-hoc message passing and distributed networking.

Peer-to-peer blockchain networks lack centralized points of vulnerability that computer crackers can exploit; likewise, it has no central point of failure. Blockchain security methods include the use of public-key cryptography.[4]:5 A public key (a long, random-looking string of numbers) is an address on the blockchain. Value tokens sent across the network are recorded as belonging to that address. A private key is like a password that gives its owner access to their digital assets or the means to otherwise interact with the various capabilities that blockchains now support. Data stored on the blockchain is generally considered incorruptible.[1]

Every node in a decentralized system has a copy of the blockchain. Data quality is maintained by massive database replication[8] and computational trust. No centralized "official" copy exists and no user is "trusted" more than any other.[4] Transactions are broadcast to the network using software. Messages are delivered on a best-effort basis. Mining nodes validate transactions,[21] add them to the block they are building, and then broadcast the completed block to other nodes.[23]:ch. 08 Blockchains use various time-stamping schemes, such as proof-of-work, to serialize changes.[27] Alternative consensus methods include proof-of-stake.[21] Growth of a decentralized blockchain is accompanied by the risk of centralization because the computer resources required to process larger amounts of data become more expensive.[28]

Openness

Open blockchains are more user-friendly than some traditional ownership records, which, while open to the public, still require physical access to view. Because all early blockchains were permissionless, controversy has arisen over the blockchain definition. An issue in this ongoing debate is whether a private system with verifiers tasked and authorized (permissioned) by a central authority should be considered a blockchain.[29][30][31][32][33] Proponents of permissioned or private chains argue that the term "blockchain" may be applied to any data structure that batches data into time-stamped blocks. These blockchains serve as a distributed version of multiversion concurrency control (MVCC) in databases.[34] Just as MVCC prevents two transactions from concurrently modifying a single object in a database, blockchains prevent two transactions from spending the same single output in a blockchain.[35]:30–31 Opponents say that permissioned systems resemble traditional corporate databases, not supporting decentralized data verification, and that such systems are not hardened against operator tampering and revision.[29][31] Nikolai Hampton of Computerworld said that "many in-house blockchain solutions will be nothing more than cumbersome databases," and "without a clear security model, proprietary blockchains should be eyed with suspicion."[10][36]

Permissionless

The great advantage to an open, permissionless, or public, blockchain network is that guarding against bad actors is not required and no access control is needed.[22] This means that applications can be added to the network without the approval or trust of others, using the blockchain as a transport layer.[22]

Bitcoin and other cryptocurrencies currently secure their blockchain by requiring new entries to include a proof of work. To prolong the blockchain, bitcoin uses Hashcash puzzles. While Hashcash was designed in 1997 by Adam Back, the original idea was first proposed by Cynthia Dwork and Moni Naor and Eli Ponyatovski in their 1992 paper "Pricing via Processing or Combatting Junk Mail".

Financial companies have not prioritised decentralized blockchains.[citation needed]

In 2016, venture capital investment for blockchain-related projects was weakening in the USA but increasing in China.[37] Bitcoin and many other cryptocurrencies use open (public) blockchains. As of April 2018, bitcoin has the highest market capitalization.

Permissioned (private) blockchain

Permissioned blockchains use an access control layer to govern who has access to the network.[38] In contrast to public blockchain networks, validators on private blockchain networks are vetted by the network owner. They do not rely on anonymous nodes to validate transactions nor do they benefit from the network effect.[citation needed] Permissioned blockchains can also go by the name of 'consortium' blockchains.[39][better source needed]

Disadvantages of private blockchain

Nikolai Hampton pointed out in Computerworld that "There is also no need for a '51 percent' attack on a private blockchain, as the private blockchain (most likely) already controls 100 percent of all block creation resources. If you could attack or damage the blockchain creation tools on a private corporate server, you could effectively control 100 percent of their network and alter transactions however you wished."[10] This has a set of particularly profound adverse implications during a financial crisis or debt crisis like the financial crisis of 2007–08, where politically powerful actors may make decisions that favor some groups at the expense of others,[40][41] and "the bitcoin blockchain is protected by the massive group mining effort. It's unlikely that any private blockchain will try to protect records using gigawatts of computing power — it's time consuming and expensive."[10] He also said, "Within a private blockchain there is also no 'race'; there's no incentive to use more power or discover blocks faster than competitors. This means that many in-house blockchain solutions will be nothing more than cumbersome databases."[10]

Blockchain analysis

The analysis of public blockchains has become increasingly important with the popularity of bitcoin, Ethereum, litecoin and other cryptocurrencies.[42] A blockchain, if it is public, provides anyone who wants access to observe and analyse the chain data, given one has the know-how. The process of understanding and accessing the flow of crypto has been an issue for many cryptocurrencies, crypto-exchanges and banks.[43][44] The reason for this is accusations of blockchain enabled cryptocurrencies enabling illicit dark market trade of drugs, weapons, money laundering etc.[45] A common belief has been that cryptocurrency is private and untraceable, thus leading many actors to use it for illegal purposes. This is changing and now specialised tech-companies provide blockchain tracking services, making crypto exchanges, law-enforcement and banks more aware of what is happening with crypto funds and fiat crypto exchanges. The development, some argue, has led criminals to prioritise use of new cryptos such as Monero.[46][47][48] The question is about public accessibility of blockchain data and the personal privacy of the very same data. It is a key debate in cryptocurrency and ultimately in blockchain.[49]

Uses

Blockchain technology can be integrated into multiple areas. The primary use of blockchains today is as a distributed ledger for cryptocurrencies, most notably bitcoin. There are a few operational products maturing from proof of concept by late 2016.[37] Businesses have been thus far reluctant to place blockchain at the core of the business structure.[50]

Cryptocurrencies

Most cryptocurrencies use blockchain technology to record transactions. For example, the bitcoin network and Ethereum network are both based on blockchain. On 8 May 2018 Facebook confirmed that it is opening a new blockchain group[51] which will be headed by David Marcus who previously was in charge of Messenger. According to The Verge Facebook is planning to launch its own cryptocurrency for facilitating payments on the platform.[52]

Smart contracts

Blockchain-based smart contracts are proposed contracts that could be partially or fully executed or enforced without human interaction.[53] One of the main objectives of a smart contract is automated escrow. An IMF staff discussion reported that smart contracts based on blockchain technology might reduce moral hazards and optimize the use of contracts in general. But "no viable smart contract systems have yet emerged." Due to the lack of widespread use their legal status is unclear.[54][55]

Financial services

Major portions of the financial industry are implementing distributed ledgers for use in banking,[56][57][58] and according to a September 2016 IBM study, this is occurring faster than expected.[59]

Banks are interested in this technology because it has potential to speed up back office settlement systems.[60]

Banks such as UBS are opening new research labs dedicated to blockchain technology in order to explore how blockchain can be used in financial services to increase efficiency and reduce costs.[61][62]

Berenberg, a German bank, believes that blockchain is an "overhyped technology" that has had a large number of "proofs of concept", but still has major challenges, and very few success stories.[63]

Video games

A blockchain game CryptoKitties, launched in November 2017.[64] The game made headlines in December 2017 when a cryptokitty character - an in-game virtual pet - was sold for more than US$100,000.[65]CryptoKitties illustrated scalability problems for games on Ethereum when it created significant congestion on the Ethereum network with about 30% of all Ethereum transactions being for the game.[66]

Cryptokitties also demonstrated how blockchains can be used to catalog game assets (digital assets).[67]

Specific token standards have been created to support the use of blockchain in gaming. These include the ERC-721 standard of CryptoKitties for non-fungible tokens, and the more recent ERC-1155 standard, for the creation of both fungible (e.g. an in-game currency) and non-fungible tokens (e.g. a set of rare armour) on the blockchain.

Use of blockchain in the creation of game assets can provide advantages to gamers. These include true ownership (assets are tied an individual's blockchain address rather than accessed from a centralized game server), transparency (blockchain explorers can be used to confirm total supply of various game assets), and interoperability (by being read from a decentralized public ledger, blockchain assets are open for any developers to integrate into their own game via blockchain if they choose to)[68].

Supply chain

There are a number of efforts and industry organizations working to employ blockchains in supply chain logistics and supply chain management.

The Blockchain in Transport Alliance (BiTA) works to develop open standards for supply chains.[citation needed]

Everledger is one of the inaugural clients of IBM's blockchain-based tracking service.[69]

Walmart and IBM are running a trial to use a blockchain-backed system for supply chain monitoring — all nodes of the blockchain are administered by Walmart and are located on the IBM cloud.[70]

Hyperledger Grid develops open components for blockchain supply chain solutions.[71][72]

Other uses

Blockchain technology can be used to create a permanent, public, transparent ledger system for compiling data on sales, tracking digital use and payments to content creators, such as wireless users[73] or musicians.[74] In 2017, IBM partnered with ASCAP and PRS for Music to adopt blockchain technology in music distribution.[75]Imogen Heap's Mycelia service has also been proposed as blockchain-based alternative "that gives artists more control over how their songs and associated data circulate among fans and other musicians."[76][77]

New distribution methods are available for the insurance industry such as peer-to-peer insurance, parametric insurance and microinsurance following the adoption of blockchain.[78][79] The sharing economy and IoT are also set to benefit from blockchains because they involve many collaborating peers.[80]Online voting is another application of the blockchain.[81][82]

Other designs include:

  • Hyperledger is a cross-industry collaborative effort from the Linux Foundation to support blockchain-based distributed ledgers, with projects under this initiative including Hyperledger Burrow (by Monax) and Hyperledger Fabric (spearheaded by IBM)[83]
  • Quorum – a permissionable private blockchain by JPMorgan Chase with private storage, used for contract applications[84]
  • Tezos, decentralized voting.[35]:94
  • Proof of Existence is an online service that verifies the existence of computer files as of a specific time[85]

Types

Currently, there are at least four types of blockchain networks — public blockchains, private blockchains, consortium blockchains and hybrid blockchains.

Public blockchains

A public blockchain has absolutely no access restrictions. Anyone with an Internet connection can send transactions to it as well as become a validator (i.e., participate in the execution of a consensus protocol).[86][self-published source?] Usually, such networks offer economic incentives for those who secure them and utilize some type of a Proof of Stake or Proof of Work algorithm.

Some of the largest, most known public blockchains are the bitcoin blockchain and the Ethereum blockchain.

Private blockchains

A private blockchain is permissioned.[38] One cannot join it unless invited by the network administrators. Participant and validator access is restricted.

Hybrid blockchains

A hybrid blockchain[87] simply explained is a combination between different characteristics both public and private blockchains have by design. It allows the users of the blockchain APIs to determine what information stays private and what information is made public. Further decentralization in relation to primarily centralized private blockchains can then be achieved in various ways. For example, instead of keeping transactions inside a network of community run or private nodes, the hash (with or without payload) can be posted on completely decentralized blockchains such as bitcoin. This can be done automatically or triggered, thus providing a historical transaction using a signed hash. This allows users to operate on different blockchains, where they can selectively share data or business logic. Other blockchains like Wanchain use interoperability mechanisms such as bridges.[88][89] By submitting the hash of a transaction (with or without the sensitive business logic) on public blockchains like bitcoin or Ethereum, some of the privacy and blockchain concerns are resolved, as no personal identifiable information is stored on a public blockchain. Depending on the hybrid blockchain its architecture, multicloud solutions allow to store data in compliance with General Data Protection Regulation and other geographical limitations while also leveraging bitcoin's global hashpower to decentralize transactions.

Academic research

Blockchain panel discussion at the first IEEE Computer Society TechIgnite conference

In October 2014, the MIT Bitcoin Club, with funding from MIT alumni, provided undergraduate students at the Massachusetts Institute of Technology access to $100 of bitcoin. The adoption rates, as studied by Catalini and Tucker (2016), revealed that when people who typically adopt technologies early are given delayed access, they tend to reject the technology.[90]

Energy use of proof-of-work blockchains

External video
Cryptocurrencies: looking beyond the hype, Hyun Song Shin, Bank for International Settlements, 2:48[91]
Blockchains and Cryptocurrencies: Burn It With Fire, Nicholas Weaver, Berkeley School of Information, 49:47, lecture begins at 3:05[92]

The Bank for International Settlements has criticized the public proof-of-work blockchains for high energy consumption.[93][91][94]

Nicholas Weaver, of the International Computer Science Institute at the University of California, Berkeley examines blockchain's online security, and the energy efficiency of proof-of-work public blockchains, and in both cases finds it grossly inadequate.[92][95]

Journals

In September 2015, the first peer-reviewed academic journal dedicated to cryptocurrency and blockchain technology research, Ledger, was announced. The inaugural issue was published in December 2016.[96] The journal covers aspects of mathematics, computer science, engineering, law, economics and philosophy that relate to cryptocurrencies such as bitcoin.[97][98]

The journal encourages authors to digitally sign a file hash of submitted papers, which are then timestamped into the bitcoin blockchain. Authors are also asked to include a personal bitcoin address in the first page of their papers for non-repudiation purposes.[99]

See also

References

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Further reading

  • Crosby, Michael; Nachiappan; Pattanayak, Pradhan; Verma, Sanjeev; Kalyanaraman, Vignesh (16 October 2015). BlockChain Technology: Beyond Bitcoin (PDF) (Report). Sutardja Center for Entrepreneurship & Technology Technical Report. University of California, Berkeley. Retrieved 19 March 2017.
  • Jaikaran, Chris (28 February 2018). Blockchain: Background and Policy Issues. Washington, DC: Congressional Research Service. Retrieved 2 December 2018.
  • Kakavand, Hossein; De Sevres, Nicolette Kost; Chilton, Bart (12 October 2016). The Blockchain Revolution: An Analysis of Regulation and Technology Related to Distributed Ledger Technologies (Report). Luther Systems & DLA Piper. SSRN 2849251.
  • Mazonka, Oleg (29 December 2016). "Blockchain: Simple Explanation" (PDF). Journal of Reference.
  • Tapscott, Don; Tapscott, Alex (2016). Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business and the World. London: Portfolio Penguin. ISBN 978-0-241-23785-4. OCLC 971395169.
  • Saito, Kenji; Yamada, Hiroyuki (June 2016). What's So Different about Blockchain? Blockchain is a Probabilistic State Machine. IEEE 36th International Conference on Distributed Computing Systems Workshops. International Conference on Distributed Computing Systems Workshops (Icdcs). Nara, Nara, Japan: IEEE. pp. 168–75. doi:10.1109/ICDCSW.2016.28. ISBN 978-1-5090-3686-8. ISSN 2332-5666.
  • Raval, Siraj (2016). Decentralized Applications: Harnessing Bitcoin's Blockchain Technology. Oreilly. ISBN 9781491924549.
  • Bashir, Imran (2017). Mastering Blockchain. Packt Publishing, Ltd. ISBN 978-1-78712-544-5. OCLC 967373845.
  • D. Puthal, N. Malik, S. P. Mohanty, E. Kougianos, and G. Das, "Everything you Wanted to Know about the Blockchain", IEEE Consumer Electronics Magazine, Volume 7, Issue 4, July 2018, pp. 06–14.

Coin Hour Bank

A System that stores Coin Hours in an address owned by Skycoin and allows users to transact Coin Hours off-chain without incurring a Coin Hour burn, whereby preventing the congestion of the blockchain.


Coin Hours

Accrued by holding Skycoin, Coin Hours are the payment mechanism for services on the Skycoin platform.


Skycoin, along with other Fiber tokens generate Coin Hours. SKY Hours for Skycoin specifically.


CoinJoin

CoinJoin is a protocol for joining together transactions from different wallets and thereby allows sending CoinHours without sending Skycoin. It can also be used for anonymising transactions.


Cold Storage

Bitcoin Wiki Entry

Cold storage

Cold storage in the context of Bitcoin refers to keeping a reserve of Bitcoins offline. This is often a necessary security precaution, especially dealing with large amounts of Bitcoin.

For example, a Bitcoin exchange typically offers an instant withdrawal feature, and might be a steward over hundreds of thousands of Bitcoins. To minimize the possibility that an intruder could steal the entire reserve in a security breach, the operator of the website follows a best practice by keeping the majority of the reserve in cold storage, or in other words, not present on the web server or any other computer. The only amount kept on the server is the amount needed to cover anticipated withdrawals.

Methods of cold storage include keeping bitcoins:

Potential problems with cold storage methods exist but can be mitigated.

There are a number of cases where secret/private keys and/or backup seeds can be lost because of the medium on which they are stored. The the more common mediums of cold storage are listed with some of their weaknesses.

Written on a piece of paper:

  • Anyone who can see it, can steal it
  • Handwriting can be hard to read or completely illegible
  • Human error in transcription can cause errors on end product
  • Paper can rot, be torn, burn, or be smoke damaged

Printed on a piece of paper:

  • Anyone who can see it, can steal it
  • Type of printer - non-laser printers can run if paper gets wet
  • Have to trust printer - some have internet connections, wifi, and memory
  • Paper can rot, be torn, burn, or be smoke damaged

On laminated paper:

  • Anyone who can see it, can steal it
  • Lamination is prone or degradation over time and puncture or cuts that could allow moisture to get trapped in the paper and cause deterioration or rotting in some circumstances - store in cool dry place
  • Can burn or be smoke damaged
  • 'Fireproof' & 'Fire-resistant' boxes can help protect paper in a small house fire but be warned that they can sometimes fall apart in the fire and get wet if the fire is put out with water. * Remember people can just carry out a small safe.

Engraved / etched/ ablated/ stamped on a piece of metal:

  • Anyone who can see it, can steal it
  • Some metals can deteriorate or corrode, choose a good metal; also store your metal away from direct contact other metals. Some metals that are corrosion resistant have low melting points, are extremely expensive, or hard to machine.
  • Metals can still deform or melt from heat, destroying any engraved SK. "Most house fires do not burn hotter than 1,200 degrees Fahrenheit. This temperature is typically associated with the hottest portion of a home, which is in the roof area. Homes that burn for longer than 30 minutes or consist of multiple levels sometimes burn at higher temperatures."
  • You want to pick a metal that won't be destroyed by a fire. So magnesium, tin, and lead are all out as engraving materials.

Silver, gold, copper, brass, bronze, nickel, cobalt, would survive the housefire fire unmelted. Some Aluminium alloys can survive but you have to have the right ones. At around 1500° Steel and Nickel should be okay. Titanium is above the housefire range and so is tungsten, however tungsten rings are known to shatter due to the brittle nature of the very hard metal.

Stored digitally on a computer:

  • Computers can crash, making data recovery expensive
  • Data can still technically be recovered after a system is abandoned by the user. In some cases data can be recovered after multiple overwriting attempts and physical destruction (as long as the attacker can get all or most the pieces) so if you copy files to a new computer and ditch the old one, be careful.
  • Can burn or be smoke damaged
  • A traditional hard disc drive can have data corrupted by powerful magnetic fields and can physically shatter
  • A non-negligible amount of HDDs suffer from factory defects that will cause them to fail unexpectedly during their lifetime
  • Accidents can happen that could result in loss of data
  • Solid state drives (SSDs) will lose data if unpowered, they may last years before this becomes a problem but it is unwise to store long-term data in unpowered SSDs
  • If connected to internet it is another attack vector and the safety is only as good as the encryption used; I don't know what I would recommend but it wouldn't be BitLocker. Someone could be trying to break into the computer constantly. Even with good encryption if the machine or location is compromised the key could be stolen as soon as it is decrypted.
  • There are a lot of ongoing threats with computers, from 0-day exploits to firmware exploits and malicious USB cords
  • External hdds are good for storage for a few years at least if stored properly
  • If not connected to internet, safety is only as good as the physical protection encryption used; could someone break into the location and copy the data without anyone noticing?

Stored digitally on CD, floppy disk, laserdisc, or mini-disc

  • Plastics break down over time and with exposure to heat, humidity, regular light, all sorts of chemicals, even the oxygen in the air. This can lead to the loss of your data when stored on a medium made of plastic or written/printed on plastic.
  • Can burn or be smoke damaged
  • Can be physically damaged, making data recovery expensive or even impossible
  • Magnetic media (tapes, floppy disc) can be damaged by magnets
  • Data can become difficult to recover if the software and/or hardware to decode is old, don't use proprietary formats

Stored digitally on a flash drive

  • Can break and have to be physically repaired before use
  • Rapidly changing magnetic fields (See MRIs) can damage the data stored on flash drives
  • Can burn or be smoke damaged
  • Can become corroded from salt water or some atmospheric conditions
  • If they break apart, some lighting conditions can cause data corruption (you can also put them back together and often still get the data)
  • Different devices are all different, even similar devices from the same production batch can be different. There are large quality differences in drives but I am assuming you aren't using these for anything but storage.
  • There are some fake flash drives that look like they saved the data but you can't get it back later
  • Flash drives are not advised for long term storage; they can be used as one part of a multi-medium-location-format plan.


A pre-funded physical bitcoin coin (where the manufacturer generates and installs the secret key)

  • The medium that the key is on is often paper/plastic which can burn or be smoke damaged
  • Trust in the manufacturer themselves, they could copy the key
  • Trust in their key generation procedure
  • Trust in the operational security of the manufacturer, they could be generating the keys on their everyday computer
  • Trust no one is successfully spying on them, electronically, looking through their documents while they are out of town, or with tiny tin foil hat cameras or long range ones
  • Trust that the object was not tampered with in delivery
  • Trust that no one has tampered with the object since you got it

---Deep cold storage refers to keeping a reserve of Bitcoins offline, using a method that makes retrieving coins from storage significantly more difficult than sending them there. This could be done for safety's sake, such as to prevent theft or robbery.

Because Bitcoins can be sent to a wallet by anyone knowing the wallet address, it is trivial to put a wallet in cold storage but to keep a copy of the addresses needed to send funds to it.

A simple example of deep cold storage is opening a safe deposit box and putting a USB stick containing an encrypted wallet file in it. The public (sending) addresses can be used any time to send additional bitcoins to the wallet, but spending the bitcoins would require physical access to the box (in addition to knowledge of the encryption password).

Deep cold storage would typically be used for holding large amounts of bitcoins, or for a trustee holding bitcoins on behalf of others. In such a case, additional precautions should be taken beyond a simple example of a single safe deposit box.

  • The box could be accessed by bank or maintenance personnel, so the contents of the box alone should not be sufficient to access the wallet.
  • The box could be stolen or destroyed in a disaster, or the media could become unreadable, so the box should not contain the only copy of the wallet.
  • The trustee could die or become incapacitated. If access to the wallet or knowledge of its location is lost, or encryption passwords are lost, the bitcoins are gone forever. Provisions should be made so that the box can be accessed by someone else as appropriate, including any encryption passwords.

See also


Cryptocurrency Wallet

Wikipedia Entry

Cryptocurrency wallet

An example paper printable bitcoin wallet consisting of one bitcoin address for receiving and the corresponding private key for spending.

A cryptocurrency wallet is a device,[1] physical medium,[2] program or a service which stores the public and/or private keys and can be used to track ownership, receive or spend cryptocurrencies.[3] The cryptocurrency itself is not in the wallet. In case of bitcoin and cryptocurrencies derived from it, the cryptocurrency is decentrally stored and maintained in a publicly available ledger called the blockchain.[3]

Functionality

A cryptocurrency wallet, comparable to a bank account, contains a pair of public and private cryptographic keys. A public key allows for other wallets to make payments to the wallet's address, whereas a private key enables the spending of cryptocurrency from that address.[4]

Wallet types

Wallets can either be digital apps or be hardware based.[5] They either store the private key with the user, or the private key is stored remotely and transactions are authorized by a third party.

An actual bitcoin transaction from a web based cryptocurrency exchange to a hardware wallet (a Nano S).

Multisignature wallet

Multisignature wallets require multiple parties to sign a transaction for any digital money can be spent.[6] Multisignature wallets are designed to have increased security.[7]

Key derivation

Deterministic wallet

With a deterministic wallet a single key can be used to generate an entire tree of key pairs.[8] This single key serves as the root of the tree. The generated mnemonic sentence or word seed is simply a more human-readable way of expressing the key used as the root, as it can be algorithmically converted into the root private key. Those words, in that order, will always generate exactly the same root key. A word phrase could consist of 24 words like: begin friend black earth beauty praise pride refuse horror believe relief gospel end destroy champion build better awesome. That single root key is not replacing all other private keys, but rather is being used to generate them. All the addresses still have different private keys, but they can all be restored by that single root key. The private keys to every address it has and will ever give out can be recalculated given the root key. That root key, in turn, can be recalculated by feeding in the word seed. The mnemonic sentence is the backup of the wallet. If a wallet supports the same (mnemonic sentence) technique, then the backup can also be restored on another software or hardware wallet.

A mnemonic sentence is considered secure. The BIP-39 standard creates a 512-bit seed from any given mnemonic. The set of possible wallets is 2512. Every passphrase leads to a valid wallet. If the wallet was not previously used it will be empty.[3]:104

Non-deterministic wallet

In a non-deterministic wallet, each key is randomly generated on its own accord, and they are not seeded from a common key. Therefore, any backups of the wallet must store each and every single private key used as an address, as well as a buffer of 100 or so future keys that may have already been given out as addresses but not received payments yet.[3]:94

See also

References

  1. ^ Roberts, Daniel (15 December 2017). "How to send bitcoin to a hardware wallet (url=https://finance.yahoo.com/news/send-bitcoin-hardware-wallet-140141385.html". Yahoo! Finance.
  2. ^ Divine, John (1 February 2019). "What's the Best Bitcoin Wallet?". U.S. News & World Report. Retrieved 12 March 2019.
  3. ^ a b c d Antonopoulos, Andreas (12 July 2017). Mastering Bitcoin: Programming the Open Blockchain. O'Reilly Media, Inc. ISBN 9781491954386. Retrieved 14 September 2017.
  4. ^ "Bitcoin Wallets: What You Need to Know About the Hardware". The Daily Dot. 2018-11-20. Retrieved 2019-03-10.
  5. ^ Newman, Lily Hay (2017-11-05). "How to Keep Your Bitcoin Safe and Secure". Wired. ISSN 1059-1028. Retrieved 2019-03-10.
  6. ^ "Bitcoin Startup Predicts Cryptocurrency Market Will Grow By $100 Billion in 2018". Fortune. Retrieved 2019-02-15.
  7. ^ Graham, Luke (2017-07-20). "$32 million worth of digital currency ether stolen by hackers". www.cnbc.com. Retrieved 2019-02-15.
  8. ^ Gutoski, Gus; Stebila, Douglas. "Hierarchical deterministic Bitcoin wallets that tolerate key leakage" (PDF). iacr.org. International Association for Cryptologic Research. Retrieved 2 November 2018.