The Post-Bitcoin Era · 2018-10-23 · The Post-Bitcoin Era, Rainer Böhme, Vienna, 19 October 2018...
Transcript of The Post-Bitcoin Era · 2018-10-23 · The Post-Bitcoin Era, Rainer Böhme, Vienna, 19 October 2018...
The Post-Bitcoin EraCryptocurrencies Are Here to Stay
Rainer Böhme
Agenda
1. Past
2. Present
3. Future
Questions
The Post-Bitcoin Era, Rainer Böhme, Vienna, 19 October 2018 1
Different Adoption Paths
1998 2008
“BLOCKCHAIN,BLOCKCHAIN,BLOCKCHAIN”
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Searching for the Blockchain Killer App
CryptocurrencyCertificate revocation
necessary
sufficient
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Searching for the Blockchain Killer App
CryptocurrencyCertificate revocation
Speculation
Gambling
Darknet markets
Investment fraud
Extortion
necessary
sufficient
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Economic Potential
Number of feasible allocations depending on the development of institutions
“permissionless”
“trustless”
developed economy
cybercriminal ecosystem
blockchain system
Image sources: Bundesrepublik Deutschland, CC-BY-2.0 Chris Potter
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Agenda
1. Past
2. Present
3. Future
Questions
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Bitcoin is the Entry Point to the Post-Bitcoin Universe
CXcryptocurrency
exchange
SEPAcredit cards
darknet markets
token systems, ICOs
???
ransomware
cooperation inlaw enforcement
dataprotection
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Mapping Today’s Talks
CXSEPA
credit cards
darknet markets
token systems, ICOs
???
ransomware
cooperation inlaw enforcement
dataprotection
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Agenda
1. Past
2. Present
3. Future
Questions
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Scalability
Motivation in numbers
Transactions per second Bitcoin Visa
Average 2 000
current (24 h) 3.1
Peak 56 000
1 MB block size 7
90 % of P2P nodes 27
Sources: blockchain.info, 16 October 2018, Visa Tech Matters, 2014, Croman, K., et al. On Scaling Decentralized Blockchains.In Clark, J., et al. 3rd Workshop on Bitcoin and Blockchain Research, LNCS 9604, Springer, Berlin, 2016, 106–125.
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Off-chain Payment Channels
Analogy Turn the blockchain from a global sales check to an archive of court records.
• Transaction partners put money aside and keep local accounts.
• In case of dispute, the last agreed state can be enforced on the blockchain.
“on-chain”t
“off-chain”Tfunding
sAlice
sBob
tAlice
∧tBob
open channel
Tsettlement
sAlice
sBob
tAlice
tBob
close channel
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Generalization to Off-chain Payment Networks
Problem Too many potential payment relations to fund with bilateral channels.
• Connect bilateral channels to a network
• A playground for researchers: routing, fees, topology, atomic end-to-end swaps,security, privacy, . . . , forensics ?
2
1
4 5
3
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1
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2
1
45
4
3
5
Bob
Alice 4
A
1
A
3
B
Decker, C., Wattenhofer, R. A Fast and Scalable Payment Network with Bitcoin Duplex Micropayment Channels. In Pelc, A.,Schwazmann, A., eds., Stabilization, Safety, and Security of Distributed Systems. LNCS 9212, Springer, Berlin, 2015, 3–28.
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Blockchain Forks
Dissent with common history
• Miners split in fractions who continue the public database using different rulesets.
e. g. 1 August 2017
BTC
BCH• (Old) users enjoy a “duplication” of theiry currency units.
• This yields critical mass quickly, in contrast to conventional altcoin launches.
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Timeline of Selected Forks
2016 2017 2018
Bitcoin $112 bnAug 1
Bitcoin Cash$9 bn
Oct 24
Bitcoin Gold
Feb 28 Bitcoin Private
Ethereum Classic$1 bnEthereum
Jul 20$22 bn
Monero OriginalMonero
Apr 8$2 bn
May 5
MoneroV
Last update: 3 Oct 2018
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Summary
• The pace of development and the complexity of the matter render effectiveregulation and law enforcement difficult.
• Bitcoin’s limits have lead to post-Bitcoin cryptocurrencies in two ways:1. cryptocurrencies that make money-flow tracking harder, and2. cryptocurrencies that offer platforms for all kinds of virtual assets.
• Despite undeniable potential, we see very few legitimate applications ofcryptocurrencies widely adopted in practice.
• The lack of legal certainty around cryptocurrencies, combined with excitementand public experiments, has driven consumers into the arms of shady businesses.
• As there is no sign that cryptocurrencies might disappear in their second decade,it is time for regulators to change the trajectory.
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Agenda
1. Past
2. Present
3. Future
Questions
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The Post-Bitcoin EraThank you for your attention.
Rainer Böhme · rainer.boehme @ uibk.ac.at