Inside Blockchain, Bitcoin, and Cryptocurrencies: 1st Edition (e-Book) book cover

Inside Blockchain, Bitcoin, and Cryptocurrencies

1st Edition

By Niaz Chowdhury

Auerbach Publications

362 pages

Purchasing Options:$ = USD
Hardback: 9781138618152
pub: 2019-09-04
SAVE ~$11.99
$59.95
$47.96
x
eBook (VitalSource) : 9780429325533
pub: 2019-08-16
from $29.98


FREE Standard Shipping!

Description

This book covers blockchain from the underlying principles to how it enables applications to survive and surf on its shoulder. Having covered the fundamentals of blockchain, the book turns to cryptocurrency. It thoroughly examines Bitcoin before presenting six other major currencies in a rounded discussion. The book then bridges between technology and finance, concentrating on how blockchain-based applications, including cryptocurrencies, have pushed hard against mainstream industries in a bid to cement their positions permanent. It discusses blockchain as underlying banking technology, crypto mining and offering, cryptocurrency as investment instruments, crypto regulations, and markets.

Table of Contents

Contents

List of Figures…………………………………………………………………………………..xix

List of Tables……………………………………………………………………………………xxv

Section I □BLOCKCHAIN AND BIT COIN

1 Introduction to Blockchain……………………………………………………………3

1.1 The Birth of Bitcoin………………………………………………………………….3

1.1.1 A Mysterious Scientist……………………………………………………4

1.1.2 What is Bitcoin?……………………………………………………………4

1.1.3 Double-Spending Problem……………………………………………..5

1.1.4 Nakamotos Solution……………………………………………………..6

1.2 Blockchain………………………………………………………………………………7

1.2.1 Motivation…………………………………………………………………..7

1.2.2 Definition of Blockchain………………………………………………..8

1.2.3 Distributed Ledger………………………………………………………..8

1.2.4 Key Properties………………………………………………………………9

1.3 Architectural Overview…………………………………………………………..10

1.3.1 Centralised vs Decentralised Architecture………………………10

1.3.2 Peer-to-Peer Network…………………………………………………..11

1.3.3 Characteristics……………………………………………………………13

1.4 Block……………………………………………………………………………………14

1.4.1 Structure……………………………………………………………………14

1.4.2 Block Identifier and Height…………………………………………..15

1.4.3 Genesis Block……………………………………………………………..16

1.5 Mining…………………………………………………………………………………16

1.5.1 What is Mining?…………………………………………………………16

1.5.2 Consensus………………………………………………………………….16

1.5.3 Incentivisation……………………………………………………………17

1.6 Forks……………………………………………………………………………………17

1.6.1 When Does a Fork Occur?……………………………………………17

1.6.2 Types of Forks…………………………………………………………….18

1.7 Consensus Mechanisms…………………………………………………………..18

1.7.1 Proof of Work (PoW)…………………………………………………..18

1.7.2 Alternative Consensus Algorithms…………………………………19

1.7.3 Comparison……………………………………………………………….20

1.8 Types of Blockchains………………………………………………………………21

1.8.1 Public and Private Blockchains……………………………………..21

1.8.2 Consortium, Shared Ledger, Sidechain…………………………..21

1.8.3 Hybrid Blockchains…………………………………………………….22

1.8.4 Comparison……………………………………………………………….22

1.9 Applications…………………………………………………………………………..23

1.10 Revisiting the Double-Spending Problem…………………………………..26

1.11 Summary………………………………………………………………………………26

2 Immutability of Blockchain…………………………………………………………27

2.1 Cryptography………………………………………………………………………..27

2.1.1 What is Cryptography and Cryptanalysis?………………………28

2.1.2 Background……………………………………………………………….28

2.1.3 Basic Concepts……………………………………………………………29

2.2 Modern Cryptography…………………………………………………………….30

2.2.1 Symmetric-Key Cryptography………………………………………31

2.2.2 Public-Key Cryptography…………………………………………….33

2.3 Cryptographic Applications……………………………………………………..36

2.3.1 TLS and SSL………………………………………………………………36

2.3.2 Cryptographic Hash Function………………………………………37

2.3.3 Digital Signature…………………………………………………………38

2.4 Elliptic Curve Cryptography (ECC)………………………………………….41

2.4.1 Basic Concept…………………………………………………………….41

2.4.2 Public and Private Keys………………………………………………. 42

2.4.3 How Does ECC Compare to RSA?………………………………..43

2.5 Making Blockchain Immutable………………………………………………. 44

2.5.1 Block and Block Header…………………………………………….. 44

2.5.2 Timestamp……………………………………………………………….. 44

2.5.3 Merkle Tree……………………………………………………………….45

2.5.4 Building the Chain……………………………………………………..45

2.6 Summary………………………………………………………………………………48

3 Consensus Mechanisms of Blockchain…………………………………………..49

3.1 Distributed Systems and Consensus………………………………………….49

3.1.1 Distributed Systems…………………………………………………….50

3.1.2 Coordination and Agreement……………………………………….50

3.1.3 Consensus………………………………………………………………….51

3.2 Byzantine Generals Problem…………………………………………………….52

3.2.1 Two Generals Paradox………………………………………………….52

3.2.2 Byzantine Generals Problem…………………………………………53

3.2.3 Byzantine Fault Tolerance…………………………………………….55

3.3 Blockchain’s Consensus Mechanism………………………………………….56

3.3.1 Hashcash Proof of Work………………………………………………56

3.3.2 Proof of Work in Blockchain………………………………………..57

3.3.3 BFT in Blockchain………………………………………………………58

3.4 Solving the Double-Spending Problem………………………………………59

3.5 Summary………………………………………………………………………………60

4 Bitcoin: World’s First Cryptocurrency…………………………………………..61

4.1 What is Bitcoin?…………………………………………………………………….61

4.2 Brief History of Bitcoin…………………………………………………………..63

4.2.1 Before Bitcoin…………………………………………………………….63

4.2.2 Bitcoin Era……………………………………………………………….. 64

4.3 Token: BTC………………………………………………………………………… 64

4.3.1 Bitcoin Mining and Supply…………………………………………..65

4.3.2 Units of Bitcoin…………………………………………………………. 66

4.4 Bitcoin’s Blockchain……………………………………………………………… 66

4.4.1 Block Header……………………………………………………………..67

4.4.2 Timestamp…………………………………………………………………67

4.4.3 Merkle Tree……………………………………………………………….67

4.4.4 Hash Generation…………………………………………………………68

4.4.5 Genesis Block……………………………………………………………..68

4.5 Bitcoin Address………………………………………………………………………69

4.5.1 Formats……………………………………………………………………..71

4.5.2 Hash Generation…………………………………………………………72

4.5.3 Address Structure………………………………………………………..72

4.6 Transactions………………………………………………………………………….73

4.6.1 Input and Output……………………………………………………….74

4.6.2 Redeeming Tokens…………………………………………………….. 77

4.6.3 Multi-Signature………………………………………………………….78

4.6.3.1 Escrow…………………………………………………………78

4.6.3.2 Cold Storage…………………………………………………78

4.6.4 Generation Transaction……………………………………………….79

4.6.5 Storing Data………………………………………………………………79

4.6.6 Contracts…………………………………………………………………..79

4.7 Mining…………………………………………………………………………………80

4.7.1 Method……………………………………………………………………..80

4.7.2 Proof of Work…………………………………………………………….82

4.7.3 Target and Difficulty…………………………………………………..83

4.7.4 Mining Process…………………………………………………………. 84

4.8 Split Coins and Altcoins………………………………………………………….85

4.8.1 Split Coins…………………………………………………………………85

4.8.1.1 Bitcoin Cash…………………………………………………85

4.8.1.2 Bitcoin Gold…………………………………………………85

4.8.1.3 Bitcoin Private……………………………………………….86

4.8.2 Altcoins……………………………………………………………………..86

4.8.2.1 Namecoin…………………………………………………….87

4.8.2.2 Litecoin………………………………………………………..87

4.8.2.3 Peercoin……………………………………………………….88

4.8.2.4 Nxt………………………………………………………………88

4.8.2.5 Dash……………………………………………………………88

4.9 Summary………………………………………………………………………………89

Section II □SMART CONT RACTS

5 Ethereum and Smart Contracts…………………………………………………….93

5.1 Introduction to Smart Contracts………………………………………………93

5.1.1 Vending Machine Analogy…………………………………………..94

5.1.2 Nick Szabo and Bit Gold……………………………………………..95

5.1.3 Turing-Completeness…………………………………………………..96

5.2 What is Ethereum?…………………………………………………………………96

5.3 Token: ETH………………………………………………………………………….97

5.3.1 Pre-Mining………………………………………………………………..97

5.3.2 Price………………………………………………………………………….98

5.3.3 Units…………………………………………………………………………98

5.4 Architecture…………………………………………………………………………..99

5.4.1 Ethereum Virtual Machine (EVM)……………………………….99

5.4.2 Account…………………………………………………………………..100

5.4.3 Address……………………………………………………………………101

5.4.4 Mist………………………………………………………………………..101

5.5 Mining……………………………………………………………………………….102

5.5.1 Mining Process…………………………………………………………102

5.5.2 Block-Generation Rate……………………………………………….103

5.5.3 Rewards…………………………………………………………………..103

5.6 Smart Contracts in Ethereum…………………………………………………103

5.6.1 Transactions……………………………………………………………..103

5.6.2 Gas…………………………………………………………………………104

5.6.3 High-Level Languages……………………………………………….104

5.7 ERC Standards…………………………………………………………………….105

5.7.1 ERC-20……………………………………………………………………105

5.7.2 ERC-223………………………………………………………………….106

5.7.3 ERC-721………………………………………………………………….106

5.7.4 Other Standards……………………………………………………….107

5.8 Comparison to Bitcoin………………………………………………………….107

5.9 Summary…………………………………………………………………………….107

6 NEO ……………………………………………………………………………………..109

6.1 What is NEO?……………………………………………………………………..109

6.2 Token: NEO and GAS…………………………………………………………. 110

6.2.1 Token Generation…………………………………………………….. 110

6.2.2 Token Distribution…………………………………………………… 111

6.3 Architecture………………………………………………………………………… 111

6.3.1 Basic Structure…………………………………………………………. 111

6.3.2 Advanced Features……………………………………………………. 111

6.4 Consensus Mechanism: dBFT………………………………………………..112

6.4.1 Algorithm………………………………………………………………..112

6.4.2 Procedure…………………………………………………………………113

6.4.3 Transaction Validation……………………………………………….113

6.4.4 View Change…………………………………………………………… 114

6.4.5 Fault Tolerance and Transaction Time…………………………. 114

6.5 Smart Contracts………………………………………………………………….. 114

6.6 Summary……………………………………………………………………………. 116

7 EOS ……………………………………………………………………………………..117

7.1 What is EOS?……………………………………………………………………… 117

7.2 Token: EOS………………………………………………………………………… 118

7.2.1 Initial Coin Offering…………………………………………………. 118

7.2.2 Transaction Fees………………………………………………………. 119

7.2.3 Inflation………………………………………………………………….. 119

7.3 Architecture………………………………………………………………………… 119

7.4 Consensus Mechanism: DPoS………………………………………………..120

7.4.1 Algorithm………………………………………………………………..120

7.4.2 Procedure…………………………………………………………………121

7.4.3 Reward……………………………………………………………………122

7.5 Smart Contracts…………………………………………………………………..122

7.6 EOS.IO Operating System…………………………………………………….123

7.6.1 Schema-Defined Actions and Database…………………………123

7.6.2 Separation of Authentication from Applications…………….124

7.6.3 Inter-Blockchain Communication……………………………….124

7.7 Summary…………………………………………………………………………….124

Section III □FINANCIAL NET WORKS

8 Ripple ……………………………………………………………………………………..127

8.1 What is Ripple?……………………………………………………………………127

8.2 Token: XRP…………………………………………………………………………128

8.2.1 Token Generation and Distribution……………………………..128

8.2.2 Bridge Currency………………………………………………………..129

8.2.3 Market Capitalisation………………………………………………..129

8.3 Architecture…………………………………………………………………………129

8.3.1 Hawala…………………………………………………………………….130

8.3.2 XRP Ledger……………………………………………………………..131

8.3.3 Transactions……………………………………………………………..132

8.4 Consensus Mechanism: RPCA……………………………………………….133

8.4.1 Components…………………………………………………………….133

8.4.2 Consensus Process…………………………………………………….134

8.4.3 Correctness………………………………………………………………135

8.5 Codius and Interledger………………………………………………………….136

8.6 Real-Time Gross Settlement System………………………………………..136

8.6.1 RippleNet………………………………………………………………..137

8.6.2 xCurrent………………………………………………………………….138

8.6.3 xRapid…………………………………………………………………….139

8.6.4 xVia…………………………………………………………………………139

8.7 Partners………………………………………………………………………………139

8.8 Summary…………………………………………………………………………….141

9 Stellar ……………………………………………………………………………………..143

9.1 What Is Stellar?……………………………………………………………………143

9.2 Token: Lumens (XLM)…………………………………………………………144

9.2.1 Generation and Distribution……………………………………….144

9.2.2 Price and Market Cap………………………………………………..145

9.2.3 Role of XLM in the Protocol………………………………………145

9.3 Architecture…………………………………………………………………………146

9.4 Consensus Mechanism………………………………………………………….146

9.4.1 Quorum and Slices……………………………………………………146

9.4.2 Agreement………………………………………………………………..148

9.5 Applications…………………………………………………………………………148

9.5.1 Anchors……………………………………………………………………148

9.5.2 Distributed Exchange………………………………………………..149

9.5.3 Multi-Currency Transactions………………………………………149

9.6 Partners……………………………………………………………………………… 153

9.7 Summary……………………………………………………………………………. 153

Section IV ADVANCED LEDGERS AND APPLICATION S

10 Purpose-Built Distributed Ledgers……………………………………………..157

10.1 Purpose-Built Ledgers and Blockchains…………………………………… 157

10.2 Internet of Things: IOTA……………………………………………………… 159

10.2.1 Overview………………………………………………………………… 159

10.2.2 Technical Details……………………………………………………… 159

10.2.3 Applications…………………………………………………………….. 161

10.2.4 Alternatives: IBM Watson and Waltonchain…………………. 161

10.3 Supply Chain: OriginTrail……………………………………………………..162

10.3.1 Overview…………………………………………………………………162

10.3.2 Technical Details………………………………………………………163

10.3.3 Applications……………………………………………………………..163

10.3.4 Alternatives: VeChain and OpenChain…………………………163

10.4 Connectivity: Moeco…………………………………………………………….164

10.4.1 Overview…………………………………………………………………164

10.4.2 Technical Details………………………………………………………164

10.4.3 Applications……………………………………………………………..166

10.5 Cybersecurity: Naoris……………………………………………………………166

10.5.1 Overview…………………………………………………………………166

10.5.2 Technical Details………………………………………………………167

10.5.3 Applications……………………………………………………………..168

10.6 Private Network: HydraChain………………………………………………..168

10.6.1 Overview…………………………………………………………………168

10.6.2 Technical Details………………………………………………………168

10.6.3 Applications……………………………………………………………..170

10.7 Framework: Hyperledger……………………………………………………….170

10.7.1 Overview…………………………………………………………………170

10.7.2 Technical Details………………………………………………………171

10.7.3 Application………………………………………………………………173

10.8 Emerging Distributed Ledgers………………………………………………..173

10.8.1 Medical Services: MediChain and MediLedger……………..173

10.8.2 Drug Development: BlockPhrama………………………………. 174

10.8.3 Quality Assurance: Ambrosus…………………………………….. 174

10.8.4 Sharing Economy: Slock.it…………………………………………. 174

10.8.5 Genomic Data Collection: Nebula Genomics……………….. 174

10.9 Summary…………………………………………………………………………….175

11 Applications of Blockchain………………………………………………………..177

11.1 Hype or Hope?…………………………………………………………………….177

11.2 Classification……………………………………………………………………….180

11.2.1 Classifying the Domains…………………………………………….181

11.2.2 Classifying the Categories…………………………………………..181

11.3 Citizen Services……………………………………………………………………182

11.3.1 e-Governance……………………………………………………………182

11.3.2 Healthcare……………………………………………………………….183

11.3.3 Education………………………………………………………………..185

11.4 Business and Financial Services………………………………………………186

11.4.1 Financial Services………………………………………………………186

11.4.2 Smart Property…………………………………………………………187

11.4.3 Exchange and Trading……………………………………………….187

11.5 Online Marketplace………………………………………………………………187

11.5.1 e-Commerce…………………………………………………………….188

11.5.2 Online Betting, Gambling and Gaming……………………….189

11.5.3 e-Auctions and Online Bidding…………………………………..189

11.6 Supply Chain, Production and Provenance………………………………. 191

11.6.1 Commercial Supply Chain…………………………………………. 191

11.6.2 Food Production………………………………………………………. 191

11.6.3 Drug Manufacturing…………………………………………………192

11.7 Safety and Security……………………………………………………………….193

11.7.1 Cybersecurity……………………………………………………………193

11.7.2 Physical Safety, Security and Tracking………………………….194

11.8 Smart City…………………………………………………………………………..195

11.8.1 Smart Home…………………………………………………………….195

11.8.2 Smart Transportation…………………………………………………196

11.8.3 Smart Grid……………………………………………………………….196

11.8.4 Citizen Engagement…………………………………………………..197

11.8.5 Quality Control………………………………………………………..197

11.9 Summary…………………………………………………………………………….198

Section V CRYPTO CURREN CY

12 Evolution of Money: From Barter to Bitcoin…………………………………201

12.1 Money………………………………………………………………………………..201

12.1.1 Functions of Money…………………………………………………..202

12.1.2 Properties…………………………………………………………………202

12.1.3 Money Supply…………………………………………………………..203

12.1.4 Central Bank………………………………………………………….. 204

12.2 Origin and Early Forms……………………………………………………….. 204

12.2.1 Barter: The Origin of Money?……………………………………. 204

12.2.2 Commodity and Representative Money………………………. 206

12.2.3 Coinage…………………………………………………………………..207

12.2.4 Banknotes………………………………………………………………..209

12.3 Fiat Money………………………………………………………………………….212

12.3.1 Gold Standard………………………………………………………….212

12.3.2 US Dollar Standard…………………………………………………..212

12.3.3 Nixon Shock and Creation of Fiat Money……………………..213

12.4 Digital Money……………………………………………………………………..213

12.4.1 Centralised Digital Money………………………………………….213

12.4.2 Decentralised Digital Money………………………………………214

12.5 Cryptocurrency…………………………………………………………………… 215

12.6 Summary…………………………………………………………………………….217

13 Cryptocurrency Mining…………………………………………………………….219

13.1 Mining………………………………………………………………………………. 219

13.1.1 Evolution of Mining………………………………………………… 220

13.1.2 Mining Process……………………………………………………….. 220

13.1.3 Difficulty…………………………………………………………………221

13.1.4 Rewards…………………………………………………………………..221

13.2 Hash Rate……………………………………………………………………………221

13.2.1 Understanding Hash Rate…………………………………………..221

13.2.2 Calculating Hash Rate……………………………………………… 222

13.2.3 Hash Rate and Profits………………………………………………. 222

13.3 Mining Hardware……………………………………………………………….. 222

13.3.1 Non-Specialised Hardware……………………………………….. 222

13.3.2 Specialised Hardware (ASICs)…………………………………….224

13.3.3 Profitability Factors……………………………………………………225

13.4 Pooled Mining……………………………………………………………………..225

13.4.1 Pooled Mining Basics…………………………………………………225

13.4.2 Mining Pools………………………………………………………….. 226

13.4.3 Reward Sharing………………………………………………………. 228

13.5 Mining Nations………………………………………………………………….. 228

13.6 Criticism of PoW Mining………………………………………………………229

13.7 Summary…………………………………………………………………………….231

14 Cryptocurrency Wallet………………………………………………………………233

14.1 Wallet…………………………………………………………………………………233

14.1.1 Private Key and Address……………………………………………. 234

14.1.2 Transferring Funds………………………………………………….. 234

14.2 Types of Wallets…………………………………………………………………..235

14.2.1 Web Wallet………………………………………………………………236

14.2.2 Software Wallet………………………………………………………..236

14.2.3 External Storage Media………………………………………………238

14.2.4 Paper Wallet……………………………………………………………..238

14.2.5 Hardware Wallet……………………………………………………….239

14.2.6 Brain Wallet……………………………………………………………..240

14.3 Special Wallets…………………………………………………………………….241

14.3.1 Multi-Signature Wallet………………………………………………241

14.3.2 Cold-Storage Wallet…………………………………………………..241

14.3.3 Receive-Only Wallet………………………………………………….242

14.4 Deterministic Wallet…………………………………………………………….242

14.4.1 Type-1 Wallet…………………………………………………………..242

14.4.2 Type-2 Wallet…………………………………………………………..243

14.4.3 HD Wallet……………………………………………………………… 244

14.5 Wallet Providers…………………………………………………………………. 246

14.6 Summary…………………………………………………………………………….247

15 Cryptocurrency Trading and Investment……………………………………..249

15.1 Investment…………………………………………………………………………..249

15.1.1 Financial Instruments………………………………………………..250

15.1.2 Commodities……………………………………………………………251

15.1.3 Currencies………………………………………………………………..251

15.1.4 Derivatives……………………………………………………………….252

15.1.5 Status of Cryptocurrency……………………………………………253

15.2 Portfolio……………………………………………………………………………..253

15.2.1 Funds………………………………………………………………………253

15.2.2 Indices…………………………………………………………………….254

15.2.3 ETFs……………………………………………………………………….256

15.3 Exchanges and Platforms……………………………………………………….257

15.3.1 Cryptocurrency Trading Exchange………………………………258

15.3.2 Derivative Trading Exchanges…………………………………….259

15.3.3 Investment Platforms……………………………………………….. 260

15.4 Investment Strategy………………………………………………………………261

15.4.1 Day Trading……………………………………………………………..261

15.4.2 Buy and Hold…………………………………………………………..262

15.4.3 Value Investment………………………………………………………262

15.5 Investing in Cryptocurrencies…………………………………………………262

15.5.1 Self-Investment…………………………………………………………263

15.5.2 Guided Investment………………………………………………….. 264

15.6 Regulation and Tax Affairs…………………………………………………….265

15.7 Summary…………………………………………………………………………… 266

16 Initial Coin Offerings (ICOs)……………………………………………………..267

16.1 Overview…………………………………………………………………………….267

16.1.1 The Creation of ICOs………………………………………………. 268

16.1.2 How Do ICOs Work?………………………………………………..269

16.2 Token Creation…………………………………………………………………….269

16.2.1 Token………………………………………………………………………269

16.2.2 Platforms………………………………………………………………….270

16.3 Understanding ICOs…………………………………………………………….271

16.3.1 ICOs vs IPOs……………………………………………………………271

16.3.2 Signs of Good and Bad ICOs………………………………………272

16.3.3 Advantages and Disadvantages……………………………………273

16.4 ICOs in Number………………………………………………………………….274

16.4.1 Amount Raised…………………………………………………………274

16.4.2 Breakdown by Industry………………………………………………274

16.4.3 Biggest Winners and Losers………………………………………..275

16.5 Scams and Criticisms……………………………………………………………275

16.6 Summary…………………………………………………………………………….277

Section VI □SOCIO -ECONO MIC LANDSCAPE

17 Economic Outlook of Cryptocurrency…………………………………………281

17.1 Classification……………………………………………………………………….281

17.1.1 Currency………………………………………………………………….282

17.1.2 Commodity……………………………………………………………..283

17.1.3 Stock……………………………………………………………………… 284

17.2 Price of Bitcoin…………………………………………………………………… 284

17.3 Volatility of Bitcoin………………………………………………………………285

17.4 Historic Price Predictions………………………………………………………287

17.5 Price Movement of Major Cryptocurrencies……………………………..287

17.5.1 ETH……………………………………………………………………….288

17.5.2 XRP………………………………………………………………………..288

17.5.3 XLM……………………………………………………………………….289

17.5.4 NEO……………………………………………………………………….289

17.5.5 EOS………………………………………………………………………..289

17.6 Reception……………………………………………………………………………290

17.6.1 Acceptance by Merchants…………………………………………..290

17.6.2 Acceptance by Investors……………………………………………..291

17.6.3 Acceptance by Governments……………………………………….292

17.7 Summary…………………………………………………………………………….293

18 Crime, Criminals and Cryptocurrencies………………………………………295

18.1 Criminal Activities……………………………………………………………….295

18.2 Deep Web……………………………………………………………………………296

18.2.1 Darknet and Dark Web……………………………………………..297

18.2.2 Onion Routing and Tor……………………………………………..297

18.2.3 Bitcoin: The Missing Piece………………………………………….298

18.3 Darknet-Based Crimes………………………………………………………….299

18.3.1 Silk Road…………………………………………………………………299

18.3.2 Post-Silk Road Markets………………………………………………301

18.3.3 Assassination Markets………………………………………………. 304

18.3.4 Cybercrimes……………………………………………………………. 306

18.4 Financial Crimes………………………………………………………………… 308

18.4.1 Money Laundering………………………………………………….. 308

18.4.2 Market Manipulation………………………………………………..310

18.5 Fraudulent Activities……………………………………………………………..310

18.5.1 False Claims…………………………………………………………….. 311

18.5.2 Scams………………………………………………………………………312

18.6 Prevention…………………………………………………………………………..312

18.6.1 Regulation……………………………………………………………….313

18.6.2 Cooperation…………………………………………………………….. 314

18.6.3 Participation……………………………………………………………. 315

18.7 Summary…………………………………………………………………………….316

19 Regulations, Laws and Practices…………………………………………………317

19.1 Legality of Blockchain and Cryptocurrency…………………………….. 317

19.2 Regulatory Issues…………………………………………………………………. 318

19.2.1 Misuse of Pre-Mining and ICOs…………………………………. 319

19.2.2 Crackdowns on Mining and Trading…………………………… 319

19.3 Current Landscape……………………………………………………………….320

19.3.1 Challenges……………………………………………………………….320

19.3.2 Areas……………………………………………………………………….321

19.3.3 Blockchain-Friendly Nations………………………………………322

19.4 Regulations for Blockchain Technology and Cryptocurrency………323

19.4.1 The Americas……………………………………………………………323

19.4.2 Europe…………………………………………………………………….324

19.4.3 Asia…………………………………………………………………………326

19.4.4 Australia and Africa…………………………………………………..327

19.5 Summary…………………………………………………………………………….328

20 Criticism, Scepticism and Support………………………………………………329

20.1 Before It All Started………………………………………………………………329

20.2 Early Days of Bitcoin…………………………………………………………….330

20.3 Bitcoin Grabs Attention…………………………………………………………331

20.4 Beginning of the Bull Run…………………………………………………….332

20.5 Crazy Price Hike………………………………………………………………….334

20.6 To Invest or Not to Invest?…………………………………………………….335

20.7 $10K and Counting………………………………………………………………337

20.8 Nosedive……………………………………………………………………………..338

20.9 Summary…………………………………………………………………………… 344

Bibliography…………………………………………………………………………………….345

Index………………………………………………………………………………………………355

About the Author

Dr. Niaz Chowdhury is a postdoctoral researcher working with blockchain technology in the European Union funded project QualiChain. His research experience spans over a decade across three British and Irish nations in England, Scotland and Ireland. He presently holds a Research Associate position in the Open Blockchain group of Knowledge Media Institute, a small but renowned and well-regarded research lab within the Open University in England. He also completed two more postdocs before joining this position, one in the Department of Computing and Communication in the same university working for the Big Data and Smart City project MK:Smart while another at his current lab in the Data Science group. Dr. Chowdhury obtained his PhD from the School of Computing Science of the University of Glasgow in Scotland, as a recipient of the prestigious Scottish ORS Scholarship. He was also a research scholar at the School of Computer Science in Trinity College Dublin where he received Government of Ireland IRCSET Embark Initiative Scholarship. His earlier academic achievements include a bachelor and a master degree with gold medal distinction in Computer Science and Engineering from East West University, Bangladesh. Dr. Chowdhury published numerous journal articles, conference papers and book chapters on the blockchain technology, the Internet of Things, wireless networks and data science.

Subject Categories

BISAC Subject Codes/Headings:
BUS027000
BUSINESS & ECONOMICS / Finance
COM032000
COMPUTERS / Information Technology
COM083000
COMPUTERS / Security / Cryptography