This Week in Blockchain Research Issue #34

Issue #34


Issue #34

Paper of the Week:

Paper Title: On Incentive Compatible Role-based Reward Distribution in Algorand.

TLDR:

  1. Algorand has garnered the most attention within the permissionless blockchain and cryptocurrency community, primarily because of its innovative PoS-based consensus or byzantine agreement protocol that is not only computationally (and energy) efficient, but also provides strong security guarantees against forking in a network comprising of faulty and malicious users or nodes.

  2. However, one critical issue has not received much, if any, attention: Does the currently proposed Algorand reward distribution approach promote participation or cooperation, and not defection, among rational users to complete all the required protocol tasks? In other words, is the current Algorand reward distribution approach incentive-compatible?

  3. This paper is the first attempt to formally analyze the Algorand’s reward distribution strategy by employing well-established game-theoretic tools and techniques.

  4. Despite its promise, one relatively under-studied aspect of this protocol has been the incentive compatibility of its reward sharing approach, without which cooperation cannot be guaranteed and the protocol will fail in a practical environment comprising of rational users.

  5. This work models the participation costs and rewards received within a strategic interaction (or game) scenario by empirically showing that even a small number of nodes defecting to participate in the protocol tasks due to insufficiency of the available incentives can result in the Algorand network failing to compute and add new blocks of transactions.

  6. It also shows that this effect, which was observed in simulation experiments, can be formalized by means of a mathematical (game-theoretic) model of interaction in Algorand given its participation costs and the current (or planned) reward distribution/sharing approach envisioned by the Algorand Foundation.

  7. Analyzing this game model this work observed that mutual cooperation under the currently proposed reward sharing approach is not a Nash equilibrium which is a significant result and could threaten the success of an otherwise robust distributed consensus mechanism.

  8. Finally, a novel reward sharing approach for Algorand is proposed and formally showing that it is incentive-compatible, i.e., it can guarantee cooperation within a group of selfish Algorand users.

AuthorsMehdi Fooladgar*, Mohammad Hossein Manshaei*‡, Murtuza Jadliwala†, and Mohammad Ashiqur Rahman‡,

Affiliations: * Isfahan University of Technology, † University of Texas at San Antonio, and ‡ Florida International University.


Security:

1. Paper Title: MatRiCT: Efficient, Scalable and Post-Quantum Blockchain Confidential Transactions Protocol.

Summary: An efficient RingCT protocol for blockchain confidential transactions, whose security is based on “post-quantum” (module) lattice assumptions.

AuthorsMuhammed F. Esgin*, Raymond K. Zhao*, Ron Steinfeld*, Joseph K. Liu*, and Dongxi Liu*,

Affiliations: * Monash University.


Privacy:

1. Paper Title: The coin that never sleeps. The privacy preserving usage of Bitcoin in a longitudinal analysis as a speculative asset.

Summary: Bitcoin market is the largest market of worldwide scale that is uninterruptedly open 24/7 and it is non-correlated with the one of traditional stock markets.

AuthorsEmmanouil Karampinakis*, Michalis Pachilakis*, Panagiotis Papadopoulos*, Antonis Krithinakis*, Evangelos P. Markatos*,

Affiliations: * FORTH-ICS.


Scalability:

1. Paper Title: GRuB: Gas-Efficient Blockchain Storage via Workload-Adaptive Data Replication

Summary: A security protocol and middleware system for Gas-aware data Replication with Blockchains.

AuthorsKai Li*, Yuzhe Tang*, Qi Zhang*, Cheng Xu†, and Jianliang Xu†,

Affiliations: * Syracuse and † Hong Kong Baptist University.


Proofs:

No papers.


Consensus Protocols:

Check out paper of the week!


Tokenomics:

1. Paper Title: Fin vs. Tech: Determinants of Fintech Start-Up Emergence and Innovation in the Financial Services Incumbent Sector.

Summary: This paper investigates the determinants of fintech start-up emergence and fintech innovation by financial services incumbents across 21 OECD countries and 226 regions over the 2007 – 2016 period

AuthorsTheodor Cojoianu*, Gordon L. Clark†, Andreas G. F. Hoepner*, Vladimir Pazitka†, and Dariusz Wojcik†,

Affiliations: * University College Dublin and † Oxford University.

2. Paper Title: To FinTech and Beyond.

Summary: A novel editorial protocol – a Registered Report format – including a competitive program for FinTech-related proposals that drew 156 submissions from scholars around the world.

AuthorsItay Goldstein*, Wei Jiang†, and G. Andrew Karolyi‡,

Affiliations: * University of Pennsylvania, † Columbia University, and ‡ Cornell University.

3. Paper Title: New Tech v. New Deal: Fintech As A Systemic Phenomenon.

Summary: This Article presents an alternative account of fintech as a systemic, as opposed to merely transactional, phenomenon.

AuthorsSaule T. Omarova*,

Affiliations: * Cornell University.

4. Paper Title: Cloud Crypto Land.

Summary: A simple legal argument that seeks to demonstrate the impossibility of a meaningful blockchain-based economic system. It is argued that features present in all major legal systems mean that real assets cannot be traded on blockchain-based systems, unless design choices are made which necessarily remove all advantages the technology offers over existing solutions.

AuthorsEdmund-Philipp Schuster*,

Affiliations: * London School of Economics.


Upcoming Conferences:


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“Significant research in the blockchain space is constantly being achieved by academic researchers. Unfortunately, a lot of this research is overlooked due to the massive numbers of papers being generated and the way they are being promoted and published. We’ve put together a categorized list of academic papers that can guide our subscribers and keep them up to date.”

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