Cold Wallet Research Articles

Enhancement of digital signature algorithm in bitcoin wallet

Bitcoin is a peer-to-peer electronic cash system largely used for online financial transactions. It gained popularity due to its anonymity, privacy, and comparatively low transaction cost. Its wallet heavily relies on Elliptic Curve Digital Signature Algorithm (ECDSA). Weaknesses in such algorithms can significantly affect the safety and the security of bitcoin wallets. In this paper, a secure key management wallet was designed based on several changes in the wallet parts. In the cold wallet, we employed an image-based passphrase to achieve a strong entropy source of master seed. The hot wallet, the proposed key_ Gen algorithm is modifying to the key generation step of the ECDSA that it is to generate a fresh key pair at each transaction. The final part ensures recovering all keys on both hot and cold wallets without daily backups in case of losing the wallet. The findings prove that the proposed cold wallet is resisting against a dictionary attack and overcoming the memorizing problem. The proposed hot wallet model acquires good anonymity and privacy for bitcoin users by eliminating transaction likability without additional cost. The execution time for signing a transaction of the proposed model is~70 millisecond, which is then important in the bitcoin domain.

BLWN: Blockchain-Based Lightweight Simplified Payment Verification in IoT-Assisted e-Healthcare

Recent advancement of Bitcoin revolution has propelled unlimited opportunities for futuristic digital ecosystem design. Transactions belonging to Bitcoin are being fully supported, realized, and disseminated by a set of innovative hot and cold wallet technologies within the blockchain framework. While deploying smart applications under the niche of Internet of Things (IoT) plethora, such Bitcoin transactions aroused the issue of unsupported resource-constrained tool sets and demanded for a novel architecture. To cater this challenge, this article proposes a novel Bitcoin lightweight IoT node-based system model while incorporating the improved simplified payment verification (SPV) process for e-healthcare application. This article, first formulates necessary models of background arts utilized in the work that include inhomogeneous Poisson point process, block header structure formulation, depth and height relationship, bloom filter mechanism, pay-to-public key hash (P2PKH) base stack process, and transaction management. Second, developed models are deployed through several key algorithms and associated procedures. Finally, analysis and discussions are made that encompass the block confirmation time, appropriateness of the byzantine fault tolerance, smart contract policy, and SPV response in the proposed scenario.

Regulating Bitcoin Exchanges: A Risk-Based Approach

Bitcoin, the decentralised peer-to-peer payment system equips us with a new revolutionary financial tool to send codified value across the globe. As a peer-to-peer payment network, however, bitcoin’s decentralised characteristics make it significantly challenging for regulators to influence bitcoin governance. With legacy regulation insufficiently commanding control over the bitcoin network, regulatory debate has shifted towards finding appropriate regulatory solutions for mitigating bitcoin risk crystallisation. Stark academic regulatory analysis on bitcoin exchange risk has created a profound gap in the literature and sets a logical starting point for this thesis. Using a technical risk-based methodology, I analyse bitcoin exchange risk under three broad headings: consumer protection, financial stability, and anti-money laundering and terrorist financing. Assessing objective empirical evidence, I argue that contrary to mainstream regulatory opinion, the most salient bitcoin exchange risk pertains to consumer protection. From theft, fraud, embezzlement, hacking, and various other scandals, the bitcoin exchange marketplace, for the most part, constitutes as a 'wild west' environment. Inadequate wallet storage mechanisms, insecure cyber security, and deficient capital adequacy requirements, to name but a few, consistently engender risk and harm consumers. As a result, I argue that the slow response from European regulators to address these issues calls for a reevaluation of risk appraisal and a need for a more robust consumer oriented regulatory structure. In that manner, I posit for a 'consumer by design' regulatory framework that inter alia emphasises cold wallet infrastructure, holistic cyber security measures, and capital adequacy requirements. The focal point of this approach centers on changing predominantly malevolent and negligent bitcoin exchange behaviors to that of a prudentially minded entity. Hard targeted risk-based rules fabricate this change, which coincides with post 2008 crises consensus for more financial regulation and the proposition that markets benefit from effective regulatory architecture.