Blockchain Technology and Application

The concept of open banking has been a powerful trigger for the revolution in the financial services industry. When financial institutions disclose application programming interfaces (APIs) to third-party providers (TPPs), the biggest system risks concern issues such as malicious attack, data leakage and tampering, privacy disclosure and more. API is a new communication path for information systems, but it could be misused and tampered. To address this, we conceptualize a blockchain-based data sharing scheme for open banking named OBBC, in which the API’s information can be saved in a blockchain, that no one can dominate it. We propose an API consensus mechanism aims to ensures that the open API can’t be maliciously tampered. Moreover, zero knowledge proof and Merkel tree structure are used to realize that users’ privacy protection. In particular, we give the framework of our scheme and compare with existing data sharing schemes. We further implement a software prototype on fabric framework with real-world dataset. Experiment results show the feasibility, usability and scalability of our proposed open banking system.

This paper proposes a decentralized, reliable and intelligent system - FutureOTC for China’s over-the-counter (OTC) option market based on Consortium Blockchain. Firstly, FutureOTC combines robust Byzantine Fault Tolerance (RBFT) with electronic Identity (EID) and electronic Business License (EBL) to provide solutions for personal and institutional authentication. Secondly, we apply smart contracts to bring OTC option trading more intelligent and reliable, which includes online enquiry, E-contract creation, E-contract signing, reporting and clearing. Last but not the least, we introduce penetrating supervision by setting administrative institution as a node on Consortium Blockchain. Regulators can conduct 7 * 24 h remote supervision based on blockchain address, which reduces institutions’ workloads to report daily and ensures the authenticity of OTC option market data.

Public Key Infrastructure (PKI) technology is a widely used identity authentication technology. This paper uses blockchain technology to improve it and implements decentralized PKI authentication, which resolves the issues in the traditional PKI such as single point of failure and certificate transparency. However, most of the current research uses the method of traversing the blockchain to query the certificate (identity, public key) to realize identity authentication, which is inefficient. And as the size of blockchain continues to grow, storage overhead is growing. In this paper, we combine the blockchain and the dynamic accumulator to construct a blockchain PKI model that can batch update certificates, which improves the efficiency of identity authentication. The model can effectively add, revoke and update user certificates. Meanwhile, this paper builds a one-stop PKI authentication service model based on blockchain, Through the certificate blockchain, we can provide one-stop user authentication service to third-party service providers. Finally, we verify the security and effectiveness of the scheme.

In the context of the Internet, whether it is daily business or social networking, the penetration of electronic data is ubiquitous. Internet companies, financial institutions, government agencies and many other fields, more and more documents, notices, contracts, transaction vouchers, technology and trade secrets are stored in the form of electronic data. However, the existing traditional electronic data storage and proof systems are often encountered with third-party trust crisis and potential data security risks. To cope with these challenges, a distributed electronic data storage and proof system is designed, making use of the core features of the blockchain’s decentralization and non-tampering to effectively solve the tampering and security problems of electronic data storage and proof. The system encodes and fragments information using Reed-Solomon code. And this system provides users with data uploading, downloading, querying, comparing and authorizing services. By using the system interaction, smart contracts are compiled to anchor key data information on the main chain, ensuring the non-tampering of electronic data. In the meantime, the access rights of different users to electronic data are restricted accordingly. Finally, based on an improved RFM model, the distributed storage nodes are determined to achieve load balancing of storage nodes. It also increases the high availability of the system.

An audit confirmation letter is an inquiry that an auditor sends to a third party to verify the contents of accounting records of the entity that is being audited. Traditional process for delivering the paper confirmation is unnecessarily inefficient, relying much on manual processes and other outdated technologies, making it also vulnerable to fraudulent activities. In this paper, we adopt blockchain technology to address the low-efficiency and fraud risk in conventional bank confirmation process. Our solution involves two processes: Authorization Process and Data Acquisition Process. We integrate smart contract into these processes for automated authorization and automated data acquisition. We implemented our solution based on the open source FISCO-BCOS platform and used simulation of auditing process to prove its feasibility. Our evaluation benchmarks include latency and storage efficiency. The result shows that our system can support long-term stable operation.

Currently, Solidity is a high-level language for smart contracts that need to run on Ethereum virtual machines, it is being promoted with the widespread use of Ethereum. However, the Solidity has a feature of fallback function, makes it easier for attackers to use fallback function to launch reentrant attack, which may cause huge economic losses about the user. Therefore, a new method based on Solidity and Condition-Orientated programming is proposed to prevent reentrant attack. This method separates conditional branches and major logical state changes, encapsulates the separated conditional branches into multiple modifiers and defines a global state variable, packages the state of the state variable in the modifier, and finally uses the modifier as a precondition for the transfer function in the smart contract. When an attacker reenters the transfer function in the smart contract, the reentrant attack can be prevented by controlling state variable. The experimental results show that this method not only makes the logic of the contract code more reasonable, but also effective.

The consensus algorithm is a key part of blockchains, which significantly influences the performance of security and efficiency. The PoW consensus guarantees the security of decentralized systems by competing to solve a puzzle, while with serious energy waste and low throughout. Follow-up consensus algorithms adopt delegation mechanisms to improve throughput and scalability. However, these delegation mechanisms, which are essentially partly decentralized, have security risks. This paper presents a consensus algorithm based on trust relationship between nodes, called Consensus of Trust (CoT), and introduces real-time credit of nodes into the delegation mechanism of the blockchain system. Firstly, CoT quantifies the trust relationship between nodes based on interactive transactions and generates the corresponding credit graph and matrix. It then uses the iterative algorithm, a variant of PageRank, to calculate the credit value of each node from the trust matrix. The nodes with high credit value are selected as the delegated nodes to participate in the block generation. We finally analyze the security performance that CoT can tolerant more than 33% of nodes to be malicious. We also prove the effectiveness and consistency in CoT.

The payment scheme of Fabric 2.0 alpha is threatened by counterfeit tokens and its users are client apps, not the end consumers. In this paper, a uniform payment system is designed with the following advantages. (1). By limiting the token-minting right to a designated token-minting bank and the design of label, our system prevents the counterfeit token problem. (2). A complete transaction is divided into Bitcoin-level part and Fabric-level part. The Bitcoin-level part constructs inputs and outputs and signs these inputs, outputs and a nonce with a private key. This makes a micro enterprises or an end consumer can enjoy the payment service as the Bitcoin-level operation can be implemented on a mobile phone. The double-spending problem is prevented by the Fabric-level mechanism. (3). The system is easy to expand. When there is a new payment application, only one sub-function is added to the payment contract to implement the payment application, and a call to the sub-function is added. (4). Compared with Bitcoin, the unlockcode of UTXO only needs to be stored once, instead of being stored with each UTXO, thus reducing the sizes of transactions.

As an application, based on the uniform payment system, we design an application of cash-on-delivery without any trusted third party. It provides technology support for any two persons to trade without any trusted third party. Similar to the payment system, a system for asset confirmation, asset transfer and redemption is designed.

To tackle the difficulty of immediate identity revocation in the identity-based cryptography (IBC) authentication system, this paper proposes an identity signature scheme by security mediator (MED), which can revoke entity. Besides, aiming at cross IBC domains authentication under large-scale network architecture, an efficient identity-based cross-domain authentication protocol via public key infrastructure (PKI) environment is presented, combining blockchain. It reduces effectively complexity by consortium blockchain, thus more available for authentication in large-scale network. Through security and performance analysis, the evaluation results show the proposed scheme introduces lower overhead in computation and communication by blockchain, with resisting various attacks and excellent security in the process of authentication, compared with other authentication protocols.

Named Data Networking (NDN) is one of the strong competitors of the next generation network architecture, meeting the needs of today’s users for the network. One problem with NDN is that the content requester does not know if there is any content in the network when it sends out the interest package, and it does not know where the target is. This problem is currently solved by the domain name resolution service, but the existing solution does not apply to the NDN architecture. Because the content in the NDN is identified by a human-readable name, the NDN architecture does not require an additional name resolution system. In this paper, we propose a blockchain-based Content Name Search Mechanism (BCNSM) by binding the content producer and the human-readable content name as the unique identifier of the content, and then using the blockchain as a trusted organization to store content information, and dynamically stores the information through the smart contract, thereby mapping the content name and the storage location to each other. BCNSM provides users with content name search services and name to the content provider resolution services. Then the model was built for the BCNSM using the colored petri net, and the model process is verified by the model simulation to meet the expectations, and the state space analysis proves that the BCNSM has no deadlock. Finally, a prototype of the smart contract was implemented in Ethereum’s testnet, and the storage and Gas overhead of content name registration and content cache address update were tested.

With the current blockchain-based Public Key Infrastructure (PKI) being in its early stage of R&D, it is suffering from many shortcomings, such as its reliance on the centralized Certificate Authority (CA), the faulty identity registration and verification mechanism, and the difficulty in certificate management. As a result, the existing blockchain based PKI has trouble in adapting to a distributed network. Therefore, we have proposed Dizar: A distributed PKI architecture based on permissoned blockchain. Dizar architecture is designed with a distributed ledger operation system that can verify security. Based on no certificate authentication, electronic certificates with legal identities in the network are registered in a secure and verifiable permissioned blockchain, thus realizing the full-cycle management of the issued electronic certificates. The performance of Dizar is analyzed and compared with previous protocols. The results show that the Dizar architecture has better adaptability to a distributed network.

Blockchain was first proposed in 2009, it is a kind of distributed ledger system with peer-to-peer network, which has drawn wide spread attention because of its characteristics such as decentralization, security and credibility. The consensus algorithm of the blockchain is a mechanism for achieving agreement among the nodes in the blockchain. How to reach consensus quickly and effectively is the core issue of the blockchain. Byzantine nodes are invalid or malicious nodes in the blockchain. This paper considers the actual situation of Byzantine nodes in the blockchain. For the problem that the classical PBFT algorithm has too much communication spending and cannot dynamically follow the change of consensus nodes, an improved PBFT algorithm in this paper is proposed. In the improved Practical Byzantine consensus algorithm (IMP-PBFT), the convergence speed of the consensus process is effectively improved under the condition of the fault tolerance rate. The experiment proves the accuracy and effectiveness of the improved PBFT algorithm.

Bitcoin is the first and seemingly the most successful cryptocurrency based in a peer-to-peer network that uses blockchain technology. Given Bitcoin’s growing real-life deployment and popularity, its security has aroused more and more attention in both financial and information industries. As a body containing a variety of cryptosystems, Bitcoin may also suffer from cryptanalysis attacks. This paper focuses on one of such attacks: the Trojan message attack, and presents in detail how to conduct the attack according to the structure and workflow of the Pay-to-Public-Key-Hash protocol of Bitcoin. The attack aims at forging an upcoming transaction record and results from the fact that all users’ candidate input transactions are open to the attacker. The construction of the attack employs a combination of the Bitcoin transaction structure with standard Merkle–Damgard extension vulnerabilities. The conclusion of the attack shows that both the mathematical structure of the hash function itself and the public information in the blockchain are important to the security of Bitcoin. These factors should be considered in the future for the design of other cryptocurrency and blockchain systems.

Blockchain is a decentralized infrastructure that has attracted more and more attention from financial institutions due to its irreplaceable advantages. We implemented a blockchain solution for interest rate swap based on the Corda platform. Based on Andersen et al. [8], we derive a risk estimation model for blockchain empowered interest rate swap trading. We conjecture that most of problems in today’s derivative markets could potentially be relieved. For example, through our numerical experiment, we find that with blockchain, both the expected risk exposure and dynamic initial margin decrease significantly, which reduces the risk in interest rate swap trading and increases market liquidity. At the same time, we expect the Effective Expected Positive Exposure(EEPE) in the Basel III standard to decrease. Next, we plan to conduct more mathematical and numerical analysis and continue working on improving our blockchain based trading implementation and risk management model.

As an emerging technological field, Blockchain has developed rapidly in recent years. However, its overall development is still at a premature stage. Due to the lack of standards, a series of problems have surfaced, arresting the further development of this industry. Therefore, standardization of Blockchain technology is called for in order to solve these problems. By reviewing the international and domestic status quo of Blockchain standardization, we identify the problems that need to be solved under the current situation, and then we present our Systems Engineering Methodology based approach for standardizing the Blockchain technology.

Compared with mainstream payment systems such as Visa, the biggest obstacles to blockchain based technologies such as Bitcoin and Ethereum becoming mainstream means of payment in human daily life lie in their low transaction rate and slow response time. A potentially promising solution is the state channel architecture. State channels are more general than payment channels, which provide off-chain transaction settlement without much need for expensive on-chain operations. We investigate the routing optimization problem for Photon, a state channel network for Spectrum, which is similar to Raiden being a 2^nd layer state channel network on top of Ethereum. Yet Photon possesses interesting characteristics that Raiden lacks. Extensive simulations show our proposed algorithm can effectively achieve high success rate and throughput with low deposit lockup.