The Problem of Double Costs in Blockchain Systems

To build safe and reliable distributed decentralized systems using blockchain technology, a continuous chain of blocks is created, the unauthorized modification of which is not allowed by the applied cryptographic mechanisms. This is achieved by using unidirectional, collision resistant and search prototypes of cryptographic functions whose hash values from previous blocks are included in subsequent blocks. As a result, an unauthorized change in at least one bit of data in the previous blocks will be immediately detected. However, in the case of distributed storage of information, there is an additional requirement of synchronization of individual chains of blocks that are stored by various nodes. These and other issues are resolved by applying consensus building mechanisms, through which, after a certain sequence of actions, a continuous sequence of blocks (blockchain chain) becomes the same on all nodes of a decentralized network. This work examines one of the main vulnerabilities of blockchain systems built by consensus with probabilistic completion, namely, a double-spend attack. Based on the model of “independent players”, an analytical expression is obtained for calculating the probability of an attacker's successful double-spending attack. The quantitative values of the probability of a successful attack are given for various abilities of an attacker, a different number of generated blocks and a different race duration. Using computer simulation, the calculated values are experimentally verified. All empirical estimates were obtained with high accuracy (relative error not higher than 1%) and reliability (confidence level of at least 99%). To confirm the adequacy of the results obtained, a comparison of empirical results with theoretical calculations is given.

A blockchain database containing files regarding transactions of cryptocurrency is sometime vulnerable to double spending attack. This type of attack pertains to a coin being spent more in more that one transaction in the network. This paper is motivated by a goal to create a blockchain that can withstand double spending attacks. This way, honest miners will be able to safely and securely exchange cryptocurrency. There currently lack valuable prevention methods in the network therefore we designed a novel countermeasure to combat double spending attacks on the blockchain system. We proposed the MSP (Multistage Secure Pool) framework in order to address the vulnerabilities on the blockchain. This was designed to handle both discrete and general issues that affect the overall security of the blockchain. Our evaluation using this application shows that there was a decrease in the amount of attacks propagating through the system based on our system's robustness and capabilities. We also present machine learning capabilities of the system in our study in order to enable a progressive aspect to the design. Providing our application with the ability to analyze data in order to recognize and classify distinct actions will enable for greater comprehension. An application that learns, updates and configures to meet specified defensive standards present key design features which enables for greater understanding and future analysis of the overall blockchain network.

Blockchain technology is being studied in many innovative applications, such as: cryptocurrencies, smart contracts, communication systems, healthcare, Internet of Things, financial systems, software development, electronic voting and many others. Using a transparent and fully distributed peer-to-peer blockchain architecture, applications benefit from a data-only model, in which “transactions” are accepted into the blockchain ledger and, if the system is functioning properly, cannot be modified or deleted. The transparency of blockchain systems makes it possible to store publicly available and irrefutable records. A peer-to-peer blockchain system provides verifiable ledger maintenance without centralized management, which solves the problems of a single point of failure and a single point of trust. The article deals with the issue of the security of application of accounting systems built on decentralized principles using blockchain technology. Particular attention is paid to the problem of the possibility of double spending in such accounting systems. The article exemplifies the reorganization of records in blockchain ledgers, performed by successfully carrying out a 51% attack on consensus algorithms based on proof of work. Given refinement of analytical expressions of 51% attack probability obtained in the works of S. Nakamoto and M. Rosenfeld using a more general model, namely, the model of independent players, where the probability of block formation by attackers and an honest network are independent events. The results of comparing of the success probability of a double-spending attack on the blockchain systems calculated according to different models are presented.

Blockchain-based applications have been recently introduced in communication networks. Different applications require different levels of service whereas existing blockchain-based applications mostly provide a single class of service. In this paper, we propose a multi-class blockchain services (MCBS) framework that prioritizes the processing of time-critical blockchain-based applications in communication networks. We model MCBS as a queueing system and derive the average service times for the different classes. We then formulate a multi-objective optimization problem to simultaneously optimize the average service time and aggregate transactions arrival rate. The numerical results show that existing blockchains may not satisfy the requirements of time-critical applications whereas a high priority queue in MCBS may meet the requirement. In addition, we analyze MCBS under double-spend attacks and show that with maximum attacker hash power, the blockchain system can still be stable if the aggregate transaction arrival rate is lower than half of its maximum achievable value.

This paper investigates the implementation of energy-efficient cryptographic hash functions on Proof of Work (PoW) consensus mechanisms on various block chain - based applications, including Health care and Electronic Health Record (EHR) systems. Traditional PoW systems with hash functions like SHA-25, SHA-512, and SHA-3 require too much energy consumption, which makes them more complex in low-power computational applications like Health care, Electronic Health Record (EHR) systems. A new framework, Hash-based Energy Diminution and Green Efficiency (HEDGE), is introduced with optimized Blake hashing for energy efficiency. Different hashing algorithms such as MD5, SHA-256, SHA-512, SHA -3, Blake and Blake2B were benchmarked with a minimal hardware experimental setup. The results indicate that energy consumption with HEDGE can be reduced by 45-70% compared to other SHA and Blake hashing functions. This framework demonstrates the use of memory–hard functions alongside ASIC resistance and AI– based difficulty adjustment proficiently responsive to the available power on the network, which can dynamically change the load. This research provides a compliant, scalable blockchain infrastructure for health care by integrating energy-responsive hashing with privacy-enabling technologies. HEDGE facilitates the global clean energy goals (SDG 7) and strengthens the health system goals (SDG 3).

Most traditional information systems are built on a centralized hierarchical principle. In such systems, there is a single decision-making center, to which other nodes are subordinate, therefore, they must certainly perceive and follow centralized instructions. In addition, the presence of a decision center causes additional threats, since to disrupt the operation of the entire system it is enough to destroy or compromise the main node. Decentralized systems are more stable and secure, especially in a situation of complete distrust of each other. They are more reliable for storing important information, such as digital assets, registries, inventories and the like. That is why blockchain technologies for building decentralized systems are becoming increasingly popular and widespread. However, when deploying decentralized systems, the task of coordinating the state of various network nodes arises. This is especially true when the nodes operate in a mode of complete distrust of each other, that is, if situations are possible where the proportion of nodes is controlled by intruders. This problem is solved using consensus protocols, that is, such rules and algorithms that, when executed, achieve the same state for most nodes of a decentralized system. This article discusses probabilistic consensus protocols, that is, when the occurrence of a certain state is a random event. Coordination of system states is possible in various ways, including possible false cases that are imposed by attackers. For example, attackers can double their electronic assets by spending them twice. Of course, if most nodes are controlled by intruders, the system will not work properly. But even with a smaller share of resources, attackers can also with a certain probability impose a false state of the system and thus implement a double-spend attack. The article discusses various situations and possible states of the system, analytically deriving formulas for calculating the probability of a successful double spending attack on a blockchain system with a probabilistic consensus protocol. When conducting research, the model of independent players was used, which, unlike the well-known works, takes into account the complete set of elementary events and system states. Based on the results obtained, recommendations are given on the safe functioning of a decentralized system.

Blockchain systems allow for securely keeping shared records of transactions in a decentralised way. This is enabled by algorithms called consensus mechanisms. Proof-of-work is the most prominent consensus mechanism, but environmentally unsustainable. Here, we focus on proof-of-stake, its best-known alternative. Importantly, decentralised decision-making power is not an inherent feature of blockchain systems, but a technological possibility. Numerous security incidents illustrate that decentralised control cannot be taken for granted. We therefore study how key parameters affect the degree of decentralisation in proof-of-stake blockchain systems. Based on a real-world implementation of a proof-of-stake blockchain system, we conduct agent-based simulations to study how a range of parameters impact decentralisation. The results suggest that high numbers of initial potential validator nodes, large transactions, a high number of transactions, and a very high or very low positive validator network growth rate increase decentralisation. We find weak support for an impact of changes in transaction fees and initial stake distributions. Our study highlights how blockchain challenges our understanding of decentralisation in information systems research, and contributes to understanding the governance mechanisms that lead to decentralisation in proof-of-stake blockchain systems as well as to designing proof-of-stake blockchain systems that are prone to decentralisation and therefore more secure.

The impact of communication transmission delay on the original blockchain, has not been well considered and studied since it is primarily designed in stable wired communication environment with high communication capacity. However, in a wireless scenario, due to the scarcity of spectrum resource, a blockchain user may have to compete for wireless channel to broadcast transactions following media access control (MAC) mechanism. As a result, the communication transmission delay may be significant and pose a bottleneck on the blockchain system performance and security. To facilitate blockchain applications in wireless industrial Internet of Things (IIoTs), this article aims to investigate whether the widely used MAC mechanism, carrier sense multiple access/collision avoidance (CSMA/CA), is suitable for wireless blockchain networks or not. Based on tangle, as an example to analyze the system performance in term of confirmation delay, transaction per second and transaction loss probability by considering the impact of queueing and transmission delay caused by CSMA/CA. Next, a stochastic model is proposed to analyze the security issue taking into account the malicious double-spending attack. Simulation results provide valuable insights when running blockchain in wireless network, the performance would be limited by the traditional CSMA/CA protocol. Meanwhile, we demonstrate that the probability of launching a successful double-spending attack would be affected by CSMA/CA as well.

Today, blockchain technologies are a separate, rapidly developing area. With rapid development, they open up a number of scientific problems. One of these problems is the problem of reliability, which is primarily associated with the use of cryptographic primitives. The threat of the emergence of quantum computers is now widely discussed, in connection with which the direction of post-quantum cryptography is actively developing. Nevertheless, the most popular blockchain platforms (such as Bitcoin and Ethereum) use asymmetric cryptography based on elliptic curves. Here, cryptographic primitives for blockchain systems are divided into four groups according to their functionality: keyless, single-key, dual-key, and hybrid. The main attention in the work is paid to the most significant cryptographic primitives for blockchain systems: keyless and single-key. This manuscript discusses possible scenarios in which, during practical implementation, the mathematical foundations embedded in the algorithms for generating a digital signature and encrypting data using algorithms based on elliptic curves are violated. In this case, vulnerabilities arise that can lead to the compromise of a private key or a substitution of a digital signature. We consider cases of vulnerabilities in a blockchain system due to incorrect use of a cryptographic primitive, describe the problem, formulate the problem statement, and assess its complexity for each case. For each case, strict calculations of the maximum computational costs are given when the conditions of the case under consideration are met. Among other things, we present a new version of the encryption algorithm for data stored in blockchain systems or transmitted between blockchain systems using elliptic curves. This algorithm is not the main blockchain algorithm and is not included in the core of modern blockchain systems. This algorithm allows the use of the same keys that system users have in order to store sensitive user data in an open blockchain database in encrypted form. At the same time, possible vulnerabilities that may arise from incorrect implementation of this algorithm are considered. The scenarios formulated in the article can be used to test the reliability of both newly created blockchain platforms and to study long-existing ones.

Diverse technologies, such as machine learning and big data, have been driving the prosperity of the Internet of Things (IoT) and the ubiquitous proliferation of IoT devices. Consequently, it is natural that IoT becomes the driving force to meet the increasing demand for frictionless transactions. To secure transactions in IoT, blockchain is widely deployed since it can remove the necessity of a trusted central authority. However, the mainstream blockchain-based IoT payment platforms, dominated by Proof-of-Work (PoW) and Proof-of-Stake (PoS) consensus algorithms, face several major security and scalability challenges that result in system failures and financial loss. Among the three leading attacks in this scenario, double-spend attacks and long-range attacks threaten the tokens of blockchain users, while eclipse attacks target Denial of Service. To defeat these attacks, a novel bidirectional-linked blockchain (BLB) using chameleon hash functions is proposed, where bidirectional pointers are constructed between blocks. Furthermore, a new committee members auction (CMA) consensus algorithm is designed to improve the security and attack resistance of BLB while guaranteeing high scalability. In CMA, distributed blockchain nodes elect committee members through a verifiable random function. The smart contract uses Shamir's secret-sharing scheme to distribute the trapdoor keys to committee members. To better investigate BLB's resistance against double-spend attacks, an improved Nakamoto's attack analysis is presented. In addition, a modified entropy metric is devised to measure eclipse attack resistance across different consensus algorithms. Extensive evaluation results show the superior resistance against attacks and demonstrate high scalability of BLB compared with current leading paradigms based on PoS and PoW.

The subject of the research is methods for detecting attacks in networks with the Proof-of-Stake (PoS) consensus mechanism. The purpose of this experimental investigation and analysis is to evaluate the effectiveness of classical machine learning algorithms for detecting malicious nodes in blockchain systems. The tasks include the analysis of blockchain technology vulnerabilities, the creation and use of a specialized dataset for PoS networks, as well as the construction and testing of machine learning models. The main focus is placed on comparing three algorithms – Random Forest, Support Vector Machine, and k-Nearest Neighbors – in order to determine their suitability for monitoring node activity and detecting anomalies. To solve the tasks set, the following methods were implemented: modeling, empirical, and mathematical approaches were applied. Modeling consisted of software implementation of the selected algorithms and subsequent analysis of their performance using accuracy, recall, F1-score metrics, and confusion matrices. Empirical methods were realized through testing the models on a partially synthetic dataset containing more than 10,000 records of blockchain nodes and transactions. Mathematical methods involved the calculation of statistical performance indicators and the analysis of feature importance that characterizes node behavior. The achieved results include the validation of a dataset for PoS blockchains that incorporates key operational parameters of transactions and nodes, the development of recommendations for further use of machine learning models, and the testing of selected models. Conclusions. The study demonstrated that machine learning is an effective tool for identifying anomalies and malicious activity in blockchain systems. The obtained results lay the foundation for further research, which may focus on expanding the feature space, integrating deep neural networks, developing ensemble approaches, and adapting methods to different types of blockchains.

Chapter 11 - Applications of blockchain technology for improving security in the internet of things (IoT)

The issue of admissibility of evidence in modern legal doctrine is difficult to overestimate, because it is this category of criminal proceedings that is one of the guarantees of its legality. At the same time, each of the possible types of evidence in criminal proceedings contains a system of its own characteristics and features that are related to its admissibility. This also applies to blockchain systems. It is worth noting that as of today, when martial law is in effect in Ukraine, the situation with the proper conduct of criminal proceedings has become somewhat more complicated. Within the framework of this work, the issue of understanding blockchain systems, their advantages and disadvantages was highlighted. According to the author’s algorithm, a study was conducted and the belonging of blockchain systems to electronic evidence was argued. This algorithm included the isolation of the characteristics of electronic evidence mentioned in the scientific literature and their comparison with the characteristics of blockchain systems. As a result, it was stated that blockchain systems belong to electronic evidence. The following should also be distinguished. In cases where blockchain is involved, the blockchain itself is a source of evidence, and cryptocurrency is actually evidence, because cryptocurrency is a digital asset, exists thanks to blockchain technology, is recorded in the form of transactions in the blockchain, and does not exist outside the corresponding blockchain network. The publication also prepared an overview and a substantive description of the most common investigative actions, as a result of which it is possible to obtain a blockchain system as a source of evidence: inspection (Article 237 of the Code of Criminal Procedure of Ukraine), temporary access to things and documents (Articles 159-166 of the Code of Criminal Procedure of Ukraine), search (Article 234 of the Code of Criminal Procedure of Ukraine), interrogation (Article 224 of the Code of Criminal Procedure of Ukraine), conducting an examination (Article 242 of the Code of Criminal Procedure of Ukraine), removal of information from electronic information systems (Article 263 of the Code of Criminal Procedure of Ukraine), control over the commission of a crime (Article 271 of the Code of Criminal Procedure of Ukraine), audio and video surveillance of a person (Article 260 of the Code of Criminal Procedure of Ukraine). In general, the peculiarity of the admissibility of blockchain systems as a source of evidence during martial law is associated with such objective circumstances as military operations that cause disruptions in the operation of electronic networks, the lack of stable access to the Internet, and the limited ability to attract specialists and experts in the field of digital technologies. This, in turn, complicates the proper recording of blockchain data, verification of their authenticity, and documentation of the evidence collection process. Further scientific research is required on the role and significance of blockchain systems as evidence, as well as the issues of their admissibility in civil, administrative, and commercial proceedings.

SummaryThe block chain is the emerging domain that offers the features like shared, immutable, and decentralized dataset that saves the asset's history. Security and storage are the most challenging aspect. The classical techniques' issues and challenges are an encouragement for developing a fresh block chain‐assisted IPFS model with access control policies. Hence, this research paper introduces an effective access control and authentication based on an interplanetary file system (IPFS)‐based block chain and access control system for attaining secured transactions. The developed method comprises five entities, that is smart contract, data owner, data requester, block chain and IPFS along with eight phases, to be exact setup, user registration, initialization, storage and data encryption, authentication, testing, access control, and decryption phase, to provide better access control and storage capacity. The proposed IPFS‐based block chain and access control system offered effective storage and secure transactions in the block chain network. The highest detection rate (0.870), lowest communication overhead (0.766 MB), and highest privacy rate (0.719) are all achieved by the proposed IPFS‐based block chain and access control system.

Blockchain technology is increasingly being used in situations that call for DECENTRALIZED trustworthiness due to its decentralized, traceable and tamper-proof characteristics. However, existing blockchain systems are power-intensive and low-throughput, and it is challenging to protect against malicious internal node attacks. All these problems limit the application of blockchain in more scenarios. To address these challenges, we propose a blockchain system based on trust management. We design a trust management model for the blockchain system which can evaluate the trustworthiness of nodes and assign dynamic initial values of trust. In order to guarantee system security and transaction efficiency simultaneously, we propose an improved Raft consensus algorithm. The experimental results and analysis show that the trust management model and improved Raft algorithm is helpful to improve safety and efficiency of the blockchain system.