Blockchain-based Transactions Research Articles

Analysis of Implementation of Anti-Money Laundering Mechanisms in Blockchain-Based Smart Contracts under Indonesian Regulation

One of the most widely adopted forms of information technology application today is electronic trade through the internet network to make transactions. This transaction system was initially centralized, but with the risk of system failure and hacking, distributed systems such as blockchain were developed to improve security and efficiency. Blockchain also gave birth to derivative technologies such as smart contracts, automated blockchain-based digital agreements. Despite offering many advantages, the anonymity and decentralization of smart contracts raise concerns of misuse for illicit activities such as money laundering. Therefore, regulatory updates in Indonesia are needed to regulate the validity of smart contracts and money laundering actions through this technology. This article analyses the validity and regulation of smart contracts and efforts to implement the AML system in blockchain-based transactions in Indonesia.

Socially Governed Energy Hub Trading Enabled by Blockchain-Based Transactions

Socially Governed Energy Hub Trading Enabled by Blockchain-Based Transactions

CryptoAudit: Nature, requirements and challenges of Blockchain transactions audit

CryptoAudit, the process of auditing cryptocurrencies and blockchain-based transactions, is essential in ensuring the accuracy, security, and compliance of activities within the emerging digital asset landscape. This paper explores the unique challenges faced in CryptoAudit, including the absence of a comprehensive regulatory framework, the complexities of blockchain technology, security concerns, valuation difficulties, and the global nature of cryptocurrencies. It also highlights the differences between CryptoAudit and traditional financial audit, emphasizing the need for specialized expertise and adaptability in this evolving field. The study employs a literature review approach and AI-based data analysis to provide insights into existing research and publications related to CryptoAudit. Key findings reveal the importance of staying updated on regulatory developments, collaborating with experts, and developing specialized audit procedures to address these challenges effectively. While CryptoAudit presents significant obstacles, it also offers opportunities for enhancing transparency, efficiency, and trust in the digital financial ecosystem. Auditors play a critical role in ensuring the reliability of cryptocurrency audits, fostering confidence, and facilitating the integration of blockchain technology into accounting and auditing practices. As the cryptocurrency industry continues to evolve, auditors must remain proactive and adaptable to navigate this complex landscape successfully.

A novel blockchain architecture with mutable block and immutable transactions for enhanced scalability

Blockchain is a distributed ledger based technology that stores and processes data without a central point of control. The growing number of blockchain-based transactions has increased the demands for scalability and storage solutions. To address these challenges, we introduce a new modified blockchain approach called mutable block with immutable transaction (MBIT), which quantifies unspent coins by storing user-specific transactions in a block using a trapdoor cryptographic hash function. New transactions are added to the user-specific block without altering the existing transactions, which guarantees transaction immutability, consistency, and security. Experimental results demonstrate that compared with current models, the MBIT blockchain model reduces both verification and confirmation times. Additionally, we analyzed the storage overhead of a node and wallet import time of the proposed model.

Editorial:Blockchain‐based 6Gand industrial internet of things systems for industry 4.0/5.0

The industrial internet of things (IIoT) and Industry 4.0/5.0 enable the integration of machinery, equipment, processes, and humans across a variety of vertical sectors, including manufacturing and logistics supply chains, transportation, and medical care (Yadav et al., 2022). Several types of sensor nodes link these interconnected machines/appliances, sensing and transmitting data to the nodes or the cloud. To manage those links, next-generation networking technologies, such as 6G and Cybertwin, are being introduced. Sixth-generation (6G) communication will be critical in providing complex wireless interconnections, with 6G networks expected to be capable of supporting millions of linked devices and systems while maintaining high data rates and low latency (Kanwal et al., 2022). Blockchain is one emerging technology that can contribute to IIoT stability. Blockchain looks to offer a solution to maintain user privacy while still preserving the capacity for immutable information and replication. A blockchain technology is used to enforce a free distributed ledger to record transactions by peer-to-peer network nodes (P2Ps) and to avoid the need for a central authority through a distributed consensus process. This special issue focuses on six high-quality studies that address real-world issues in IIoT. Sharma et al. (2021) suggested a blockchain-based IoT architecture that uses the identity-based encryption (IBE) algorithm to improve the security of healthcare data. In this case, the smart contract outlines all of the fundamental processes of the healthcare system, which can benefit all stakeholders. Many tests are carried out in order to assess the efficacy of the suggested strategy. The findings reveal that the suggested system outperforms the current well-known strategies. Al-Haija et al. (2022) built a strong classifier for identifying and categorizing various cyberattacks in IoT networks using the AdaBoost machine learning algorithm paired with decision trees and substantial data engineering techniques. We test our system using the TON IoT 2020 datasets, which are a collection of datasets designed particularly for three-layered IoT systems that include physical, network, and application layers. We compare our system's performance to that of existing cutting-edge technologies. Our experimental results show that our framework is capable of offering improved classification accuracy and reduces kinds 1 and 2 mistakes for building more durable IoT infrastructures. Babu et al. (2022) introduced a unique IoT device authentication technique based on IBE and a blockchain network. Blockchain is utilized as a distributed PKG, removing the single point of failure and key escrow issue associated with PKGs. Furthermore, the suggested work is implemented on Hyperledger Fabric, an open-source blockchain platform that effectively handles the adding, updating, and deletion operations required for successful IoT device authentication and communication. Mehbodniya et al. (2022) created a framework for signature creation and verification using a modified Lamport Merkle Digital Signature technique. It employs a central healthcare controller (CHC) to determine the origin of the created signature as well as verification and authentication. To validate the signature, the validation hash public key with create key is necessary. When compared with conventional approaches, this resulted in more efficient, cost-effective, and speedier security. Vigneysh et al. (2022) provided a successful technique for increasing dynamic responsiveness during system uncertainties such as voltage distortions, frequency changes, renewable energy source variations, and the presence of non-linear and unbalanced loads. It also increases the quality of current fed into the grid during uncertainty. The suggested control approach is used to manage both the dc side capacitor voltage and the current loop of a grid-connected inverter. The suggested system is simulated in the MATLAB Simulink environment, and its performance is compared with that of standard controllers to demonstrate the efficacy of the proposed control technique during system anomalies. Patil et al. (2022) developed a two-phased technique for blockchain and IoT federated networks that use a multi-criteria-based approach to connection selection. The dynamic gateway scheduling technique is capable of supporting both blockchain-based transactions and IoT device connectivity. Furthermore, the suggested technique improves the fairness of data transfer for each gateway, resulting in efficient data transmission. Before using the link selection process, machine learning (ML) approaches are used to examine the state of the communication channels. The links are then selected using multi-criteria statistical approaches. Finally, scheduling is carried out in order to identify the best gateway for quickly channelling blockchain data.

A Nuanced perspective on blockchain technology and healthcare

The advantages of blockchain technology are numerous and its applications in healthcare industry are still under-estimated. In a context of increasing number of applications in healthcare sector it is important to adopt this technology in a way that is not at the origin of health issues for human beings. This short article discusses the potential side effects of a blockchain based healthcare industry that could mainly be due to the increasing needs in electricity for validation of all blockchain-based transactions\\records. This note explains how and why this aspect could eventually generate some crypto-damages and ultimately might generate health issues. The aim of this essay is to provide some thoughts on the way blockchain technology could (or could not) be implemented to ensure a real sustainable, ethical and consistent healthcare system.

Resource Selection from Edge-Cloud for IIoT and Blockchain-Based Applications in Industry 4.0/5.0

Industrial Internet of Things (IIoT) is attempting to integrate the real world into the digital world through smart devices, information technology, and Internet. IIoT is connecting enormous devices in industry 4.0/5.0 which may be heterogeneous in nature. With the evolution of IoT, diverse technologies have been employed to deliver the quality of services to the end users in a seamless manner. Cloud computing has considerably boosted the growth of IIoT by serving the computational and data storage needs of IIoT- and blockchain-based applications in industry 4.0/5.0. However, cloud is providing services to IIoT users, but still, there is a need to improve the latency rate of delivery of services, the transmission rate of end-to-end delivery, and overall throughput of the network channels in industry 4.0 and blockchain-based distributed systems. The cloud servers those are located at remote locations are not capable to offer the quality of services to users who require real-time responses, minimum network latency, and optimum throughput. The advancements in Edge computing are making Edge-Cloud more suitable for end users in blockchain-based transactions and industry 4.0 to serve the requirements of IIoT-based applications. This paper aims at providing the resources of Edge-Cloud to the end users by proposing a soft-computing technique for selecting the most suitable resources from the pool of available resources at Edge-Cloud. This paper is proposing a multicriteria statistical approach for resource selection to exploit the benefits of Edge-Cloud and to suffice the needs of IIoT and blockchain-based applications in industry 4.0. The results obtained from the proposed research assist in enhancing the service providing rate, minimizing the delay in transmission, and optimizing the throughput of Edge-Cloud servers.

Monitoring Blockchain Cryptocurrency Transactions to Improve the Trustworthiness of the Fourth Industrial Revolution (Industry 4.0)

A completely new economic system is required for the era of Industry 4.0. Blockchain technology and blockchain cryptocurrencies are the best means to confront this new trustless economy. Millions of smart devices are able to complete transparent financial transactions via blockchain technology and its related cryptocurrencies. However, via blockchain technology, internet-connected devices may be hacked to mine cryptocurrencies. In this regard, monitoring the network of these blockchain-based transactions can be very useful to detect the abnormal behavior of users of these cryptocurrencies. Therefore, the trustworthiness of the transactions can be assured. In this paper, a novel procedure is proposed to monitor the network of blockchain cryptocurrency transactions. To do so, a hidden Markov multi-linear tensor model (HMTM) is utilized to model the transactions among nodes of the blockchain network. Then, a multivariate exponentially weighted moving average (MEWMA) control chart is applied to the monitoring of the latent effects. Average run length (ARL) is used to evaluate the performance of the MEWMA control chart in detecting blockchain network anomalies. The proposed procedure is applied to a real dataset of Bitcoin transactions.

SOME ASPECTS OF THE USE OF DISTRIBUTED LEDGER TECHNOLOGY (BLOCKCHAIN) IN RELATION TO REAL ESTATE TRANSACTIONS (CONTRACTS, ETC.): THE EXPERIENCE OF RUSSIA AND FOREIGN COUNTRIES

This article is aimed at identifying the approaches of a number of foreign countries that are being implemented to address the issues of using distributed ledger technology (blockchain) in relation to real estate transactions, and some aspects of the situation in Russia. The starting point of the research is the currently observed creeping networking - the establishment of non-market communication, which is beginning to replace purely monetary regulators in the economy, law and other spheres of the life of the society. In this format the article analyzes approaches of foreign countries that create patterns of permissibility and assent of different applications of distributed ledger technology (blockchain) in relation to real estate transactions (sale & purchase contracts, leases, etc.), the potential of such an application and the existing legal (including mentality, tradition, etc.) basis based on analytical reflections on the information gathered from sources and literature from the list of references. The author reveals the dependence of the permissibility (acceptability, acceptance, etc.) of using distributed real estate ledgers in foreign countries on the degree of involvement of the intermediary (Registrar of rights, etc.) in real estate transactions and the notary system in force in the country. The relevance, theoretical and practical significance of such a research is due to the fact that a number of approaches to legislation can be useful in finding answers to similar questions related to the understanding, development and adoption of a similar approach by our country, and the fact that this study serves to fill in the existing gap in the coverage of legal and other approaches of foreign countries in the field under study in the modern period. The author's results are presented among others in the idea that the more types of real estate registration in the countries under study are not required, the better space for implementing blockchain-based transactions will there still be. This prospect, however, is negated by the desire of the parties themselves to register transactions & contracts that according to law does not need any registrations in order to create a legal certainty regime for themselves.

QHSE: An efficient privacy-preserving scheme for blockchain-based transactions

As bitcoin has drawn a lot of attention, people have developed various cryptocurrencies based on blockchain framework. The decentralization feature of blockchain makes the transaction information public in the cryptocurrency. It is possible to expose the user’s privacy. Therefore, it is necessary to design an efficient and secure scheme to hide transaction information and guarantee that the transaction is carried out normally. In this paper, we propose a quasi-homomorphic symmetric encryption (QHSE) scheme to conceal the transaction amounts in cryptocurrency based on blockchain. For each transaction, transaction participants employ Diffie–Hellman key exchange protocol to generate the specific transaction key as the symmetric key of QHSE. That is, each transaction has a distinct transaction key. Even if the transaction key of one transaction is leaked, other transactions will not reveal any private information, which guarantees the atomicity and stability of the transactions. To achieve the interoperability of different symmetric key, we design a KeyUp algorithm which enables the calculations between different ciphertexts. Combined with KeyUp, we also construct several operation algorithms (Multiplication, Addition, Comparison), so that transactions can be performed and verified normally in the ciphertext state. We prove that the proposed QHSE will not leak any private information to unauthorized parties, and demonstrate the utility and efficiency of QHSE from theoretical and experimental aspects.

Enhancing Financial Transactions using Blockchain Technology

Blockchain technology is evolving in each area. Cryptocurrency is one of the prominent fields in which blockchain technology is used extensively. In conventional bank systems using fiat currencies such as Indian rupee, US dollar etc , there is a centralized authority like a bank which do the processing of transactions. Blockchain with its properties like decentralization, distributed, and immutability stands the way out from other transaction processing mechanisms. Moreover, with decentralization property in blockchain-based transactions makes that there is a peer-to-peer network in which one peer can able to transact with others in the network without relying on third party for validating the transactions. Instead, there are a group of miners who does the work of validation with the use of consensus protocols. The paper shows the use of blockchain technology in financial transactions with the help of tokens. The paper shows the creation of a simulated blockchain network and the transaction processing mechanism with the help of the creation of nodes. This paper shows the implementation of blockchain technology and it also shows the limitations and misconceptions involved in blockchain technology.

An Impossible Trinity in Blockchain-based Transactions: Decentralization, Privacy, and Lower Transaction Costs

Decentralized blockchain-based transactions benefit users through their openness, transparency, and immutability, which may come at the expense of privacy concerns. This paper shows that if there is a dilemma between decentralization and privacy protection, such that a more decentralized system increases the risks of data leakage, allowing additional privacy protection within the blockchain network at a cost, such as hiring mixers, does not resolve the initial dichotomy. However, if non-protected users benefit from positive externalities from the additional protection provided to protected users, such that all users enjoy less privacy concerns with double protection, the dilemma of decentralization and privacy risks can be resolved, despite the higher transaction costs required. Thus, double privacy protection at a cost transforms the problem with a dilemma into one with a trilemma. Given the trilemma, blockchain-based services, such as payment gateways, need to have effective privacy protections for consumers at a sufficiently low cost, which results in a less serious initial effort for stable and large-scale adoption.

'Gatekeepers' Are Vital Participants in Anti-Money-Laundering Laws and Enforcement Regimes As Permission-less Blockchain-Based Transactions Pose Challenges to Current Means to 'Follow the Money'

Two phenomena dominate reports about blockchain-based transactions—that they will disrupt and displace legacy banking, securities, and trade intermediaries, and that they present new or greater opportunities for hiding proceeds of crimes or corruption. This essay does not deal with the former topic. Rather, the organizers of the symposium at George Mason University’s Antonin Scalia School of Law asks me to consider the latter question. It proved to be a tough assignment. This essay looks at the separate questions of (1) the degree to which permission-less blockchain transactions will disrupt current anti-money laundering (AML) regimes and enforcement efforts, and (2) what efforts governments that have agreed to pursue goals of deterrence and detection of money laundering may need to initiate as blockchain-based transactions become more common. My thought process has moved through stages and, finally, has focused on three silos of potential concerns about blockchain technologies. In the first silo are blockchain technologies as technologies. I assign to this first silo the lowest level of concerns because of their potential for inclusion, security and integrity. I do not favor regulating technologies; such regulation will be outdated too fast. The second silo contains cryptocurrencies and other crypto-assets or products and services related to them that are offered in compliance with applicable domestic laws where the user of the product or services is domiciled. I assign a low-to-low-middle level of concern to these crypto assets but recognize and discuss below that this “grade” could change. In the third silo, I have bad actors whose products and services are designed for illicit purposes, and opportunists that offer products and services they do not have and that have no intention of delivering products or services or allowing redemption of value delivered to them. This third silo gets a big red flag from me – and this silo will require continued attention from domestic and global law enforcement agencies. Part of the reason that I see a low or low-to-low-middle level of concern for the first two silos is that, for the immediate future at least, that traditional financial services “gatekeepers” in payments, securities, and commodities will continue to play vital roles in deterring and detecting money laundering and terrorism finance efforts here and abroad. The presence of regulated “gatekeepers” may not forestall the need for new legal requirements or enforcement systems forever, but their presence in the marketplaces of today reduce the need for immediate action and allow legislatures and regulators more time to observe crypto innovations and determine their next steps. As a subset of the third silo, for the time being at least, are the new brands of government-backed cryptocurrencies, such as the Petro from Venezuela and those that Russia, China, and other governments, and the special challenges they may pose to AML legal regimes and, separately, to the United States Dollar as the global reserve currency that it has represented since World War II. These government-backed cryptocurrencies also challenge longstanding concepts of sovereigns’ control over “legal tender” inside their own borders and their potential sponsors are designing them to avoid economic sanctions imposed by other governments. The balance of this essay proceeds as follows: Part II provides background on permission-less blockchains and, separately, recent interest by governments in issuing cryptocurrencies themselves. Part III provides background on the three stages of value laundering – (1) initial “placement” of illicit proceeds, (2) “layering” through multiple forms of property or banks or banking systems to obscure its source or ownership, and (3) “integration” or emergence of assets that look legitimate to the outsider. Part IV reviews different challenges to traditional means of detecting value laundering that non-government-issued cryptocurrencies, permission-less blockchains, and government-sponsored cryptocurrencies pose. This Part looks at the vital roles that “gatekeepers” play in AML enforcement in the United States. Part IV also explains how (1) regulators and law enforcement authorities are already using new tools to trace and identify blockchain-based transactions that are in furtherance of illicit activities, and (2) government-issued cryptocurrencies and more private and opaque cryptocurrencies may make detection of money laundering more difficult. Part V explains my view that permission-less blockchains are not our major problem in the global campaigns against money laundering (regardless of the purposes for which money laundering is attempted) but finding someone to regulate in future may be. Part VI briefly evaluates efforts by global authorities, such as the G-20’s Financial Action Task Force (“FATF”) regarding the regulation of cryptocurrencies and the European Parliament’s 5th Anti-Money Laundering Directive (“AMLD5”), some of which goes into effect on January 10, 2020, to re-frame the AML and market-protection regulatory recommendations to cover issues relating to cryptocurrencies and other crypto-assets. Part VII states some conclusions and identifies questions for additional research.

Current Trends in Sustainability of Bitcoins and Related Blockchain Technology

Bitcoin is a digital currency based on a peer-to-peer payment system managed by an open source software and characterized by lower transaction costs, greater security and scalability than fiat money and no need of a central bank. Despite criticisms about illegal uses and social consequences, it is attracting the interest of the scientific community. The purpose of this work is to define and evaluate the current trends of the literature concerned with the sustainability of bitcoin, considering the environmental impacts, social issues and economic aspects. From the analysis it emerges that the transition of the whole monetary system in the new cryptocurrency will result in an unacceptable amount of energy consumed to mine new bitcoins and to maintain the entire virtual monetary system, and probably bitcoin will remain a niche currency. Blockchain, which is the base for a distributed and democratically-sustained public ledger of the transactions, could foster new and challenging opportunities. Sharing the framework of medical data, energy generation and distribution in micro-grids at the citizen level, block-stack and new state-driven cryptocurrencies, may benefit from the wide spread of blockchain-based transactions. Under the perspective of its being a driver of social change, bitcoins and related blockchain technologies may overcome the issues highlighted by numerous detractors.