Digital Currency System Research Articles

Improvements in the randomness and security of digital currency using the photon sponge hash function through Maiorana–McFarland S-box replacement

Abstract There is a demand for a digital currency that facilitates remote trading over the Internet and strives to reduce external control, ensuring that transactions are conducted only between authorized persons or parties involved in the transfer. The financial sector has been significantly impacted by cryptocurrency, or digital currency, which brings new potential and challenges. The concept of digital currency is thoroughly examined, as are its complicated implications on various aspects of the economy. Trading digital currencies via the Internet may be vulnerable to theft and forgery due to the development of hacker programs. Therefore, we proposed to design a new digital currency and then built a 16 × 16 structure and filled the matrix with random numbers within GF(251). We used the random algorithm (Chun–Hui He’s iteration), then generated four directions, and used polynomial equations for the purpose of distributing powers between the parties in our future complete system. The original matrix was encoded with the photon sponge hash function after updating the S box by integrating the algorithms (Chun–Hui He’s iteration, Mariorana–McFarland method), and the results were good security measures (correlation coefficient, bijective property, balanced criteria, completeness criteria, and strict avalanche criteria) as well as the encryption and decryption time became faster (0.0005202). The major objective is to design a new digital currency system toward achieving security, scalability, and comprehensive adoption, looking into how it might improve security, promote financial inclusion, and change the present payment systems.

BitTrace

Bitcoin is a digital currency system built on the foundation of fairness. However, some malicious miners, driven by their own interests, employ unfair tactics such as selfish mining to compete, which disregard the legitimate miners' investments in computational power and energy consumption. In order to assess the efficiency of the Bitcoin system in real-time and promptly detect malicious miners in the network, this paper proposes a data collection framework called BitTrace, which addresses the issues of low efficiency, lack of timeliness, and data loss in traditional data collection frameworks. BitTrace enables real-time collection and analysis of the blockchain formation process, storing it as structured data. Furthermore, the paper discusses factors that influence the efficiency of data collection and proposes a topological control scheme based on the DPC algorithm to enhance the integrity and efficiency of data collection. Researchers can explore various research areas and applications, such as selfish mining detection and legitimate mining strategy research.

Application of Artificial Intelligence Technology in the Field of Digital Currency Security

This paper explores the application of artificial intelligence technology in ensuring the security of digital currencies. With the increasing popularity of digital currencies, ensuring their security has become a crucial concern. AI techniques, such as machine learning and deep learning, can be employed to identify and prevent security threats in digital currency systems. Additionally, it investigates how AI enhances security measures and risk control on digital currency trading platforms, offering insights into real-time risk alert systems. Therefore, through empirical research in four distinct sections, this paper continuously refines and revises the theoretical model proposed in this project. The ultimate goal is to provide new theoretical tools for the management of financial stability in the process of Digital Currency replacing M0. this project gives the research content of the four parts, which include public perception, delivery path, underlying technology and virtual currency bubble, we hope that this research can offer valuable insights to relevant field managers.

Adaptation of Marxian Economic Theory in Digital Currency System Based on Blockchain Technology

Abstract This paper analyzes the current status of digital currency trading in terms of volume, price, and quantity in circulation and compares the statistical descriptions of Bitcoin, Dogecoin, and Ether to illustrate whether cryptocurrencies have the potential to be Marxist world currencies by observing the price volatility and the size of the trading volume. Introducing Bitcoin as a commodity, the relationship between risk volatility, capital control, capital flight, and the Bitcoin premium is mechanistically portrayed. The existence of bitcoin-channeled capital flight is argued based on typical facts and empirical evidence. The results show that as of November 25, 2023, Bitcoin’s single-day volume is about $64 trillion, the highest market share among more than 2,000 currencies in the world. Its single price is volatile, with a high of about $4,500 and a low of about $7. The price of Dogecoin and Ether can fluctuate between 56% and 489%. The Marxist definition of a world currency excludes digital currencies. BTC doesn’t fully align with ECNY, there’s a possibility of a Bitcoin premium, and there’s also a risk of capital flight. Therefore, an adaptive analysis of digital currencies based on blockchain technology based on Marxian monetary and economic theories can provide a clear understanding of the nature of money and monetary functions.

RATS: A regulatory anonymous transaction system based on blockchain

With the rapid development of digital currency such as Bitcoin, the digital currency transaction system with blockchain as the key underlying technology is booming, but the traditional transaction system has the risk of revealing sensitive information such as transaction content and identity. In order to enhance the security, many transactions system with privacy preserving have been proposed, such as Zerocoin, Monero, etc. As there are a decentralized credit entity and strong anonymity in these transaction systems, the authorities can effectively audit and control the participants and transactions in the digital currency system, thus making digital currency a tool for illegal transactions. Recognizing the importance of privacy preserving and regulatory, in this paper, we propose a new regulatory anonymous transaction system based on blockchain—RATS, which can not only protect the privacy of transactions on the blockchain, but also regulate illegal transactions. Firstly, we introduce regulators into the system, and at the same time, we propose a regulatory mechanism that the regulator is allowed to trace the identity of the user without affecting the transaction operation of the system when suspicious transactions are found. In particularly, during the normal transaction, we protect the privacy of users' transaction contents and addresses without affecting the anonymity of the original system. We formalize the system model and security model of RATS. Moreover, the security of the proposed scheme is strictly proved and analyzed.

A Privacy-Preserving Transparent Central Bank Digital Currency System Based on Consortium Blockchain and Unspent Transaction Outputs

There is rising global demand for the deployment of a central bank digital currency (CBDC) system to achieve financial stability. However, striking a balance between privacy, transparency, and auditability in such a system is technically difficult. We propose a CBDC system based on a consortium blockchain that adopts a privacy-preserving, transparent unspent transaction output (UTXO) model. The proposed system satisfies the travel rule of payment, unlike existing cryptocurrencies. Unlike the conventional UTXO approach, users use wallet-linked addresses for transactions rather than their actual wallet addresses. Each transacting address is generated using two keys: a random private key computed by the sender and the recipient's public key. The final private key is known only to the recipient, and it is required to spend the UTXO received using the address. Thus, each user holds only a single authorized public key and address, which eases regulatory compliance in the network without compromising anonymity and privacy. To manage the blockchain, the central bank and several certificate authorities execute the energy-efficient Clique consensus algorithm. Only the central bank supplies money to the network. A prototype of the system was implemented using Python-Flask, and it outperformed the state-of-the-art systems by providing a smaller transaction size (665 B) and lower verification time (9 ms).

Security and privacy protection technologies in securing blockchain applications

As a key technology for building trust networks and implementing value interconnections, blockchain has received extensive attention. There are numerous technical use cases for blockchains in a variety of areas, such as digital currency systems, Internet of Things (IoT), smart grids, supply blockchain and finance. However, the widespread application of blockchain also encounters many security and privacy issues. This article presents an overview and analysis of privacy protection, security supervision and data exchange in blockchain-based applications, providing a comprehensive analysis of the wide application of blockchain. Moreover, blockchain's future research directions and development trends are discussed.

A novel blockchain tumbling scalability framework in a bitcoin network

SummaryBitcoin is a decentralized digital currency system that uses a distributed data structure called blockchain, a log that lists all transaction details accomplished with the currency. The bitcoin network delivers a promising infrastructure for one who makes use of e‐currency in e‐commerce. However, the transaction of bitcoin is highly suffered with some scalability issues that could not be overwhelmed with the prior methodologies. Hence, a novel scalability blockchain tumbling framework is proposed to tackle the scalability issues in which a rake interior blockchain etiquette is designed to increase the number of bitcoin transactions in which peer faction algorithm groups blocks that reduces propagation delay and ravenous algorithm ensure higher credibility of transaction with tamper resistant. However, transaction size of the record is high hence, to manage transaction record a novel batch payment into one transaction approach is utilized to limit the size of the transaction records by initiating a precise block using block summing‐up and chagrin algorithms that collects all trust information about blocks. Thus the proposed framework attains 550 bitcoin transaction within 2 min and latency of proposed model is reduced below 60 s.

Wholesale central bank digital currency vs traditional real-time gross settlement: Benefits beyond a new acronym?

Central banks need to modernise their wholesale payment services. This is not to say they must choose between modernising their real-time gross settlement systems or building a new wholesale central bank digital currency system. Rather, as this paper will argue, they must develop a common, standardised hybrid platform for the global financial (wholesale) markets. Indeed, central banks need to provide interoperable cross-border payment services by accepting foreign participants and coordinating their short-term liquidity instruments. This paper argues that if central banks want to serve future wholesale markets, they will need to provide 24/7/365 services with cross-border finality for simple fund transfers, but also for deliveryversus-payment and payment-versus-payment settlements at the transaction level. The paper will discuss how interoperability is a key issue, and requires completely common message and communication standards, but especially common identification and security standards in which distributed ledger technology and transaction-chaining are important elements. Wholesale systems must be highly resilient. As this paper shows, cooperation between central banks is essential if they are to deliver cross-border wholesale payment services for the global financial markets of the future.

Design and implementation of NFT-based system

Blockchain technology is one of the hottest internet techniques by far, and the NFT is a novel digital collection based on blockchain technology. In 2017, two interesting applications emerged on Ethereum, CryptonPunks, and CryptonKitties, As CryptonKitties is an example, each kitty has a unique DNA number, taking on a different appearance and temperament. These two applications have revolutionary significance for the non-fungible token proposal and practical scenario application. In this experiment, We used the Ethereum platform in the Solidity language to implement a set of digital currency systems based on NFT. It’s named CoinCoin.Smart contracts are the way we implement all the functions. Through the smart contract, it can realize its minting, trading, and other functions. The implementation of functions will be simulated on the Remix platform. Mastering NFT’s smart contract could be able to provide a new ecosystem for the encryption industry and have a profound impact on the digital asset across multiple industries, such as games, art, and digital assets. Our system can provide a reference for the implementation of the NFT smart contract and bring experiences for the further deeper research.

Innovating Digital Finance: A Blockchain-Based Model for Instantiated Digital Currency Systems

Innovating Digital Finance: A Blockchain-Based Model for Instantiated Digital Currency Systems

REGULASI PEMERINTAH DALAM KEAMANAN PENYELENGGARAAN PERDAGANGAN CRYPTO ASSET SEBAGAI INSTRUMEN INVESTASI DIGITAL

Abstract Cryptocurrency is a digital currency system where users use digital payments for business activities carried out which function as standard currency. The type of research in this paper is legal research, namely finding the truth of coherence, whether the rule of law is in accordance with legal norms and whether there are norms in the form of orders or prohibitions that are in accordance with legal principles, and whether a person's actions are in accordance with legal norms (not just according to legal rules). or legal principles. Government regulations regarding Crypto Asset are regulated in laws and regulations. In an effort to control and maintain the security of Crypto Asset trading, it is regulated in Bappebti Regulation No. 5 of 2019 and its amendments. To guarantee legal certainty and protection for Cryptocurrency investors, as a form of legal protection for Cryptocurrency investors, all Cryptocurrency marketplaces must fulfill all the requirements set out in Bappebti rules by collecting all requested files, prioritizing the principles of proper business management, such as prioritizing the rights of futures exchange members to obtain open value and ensure that consumers remain protected. Keywords: Crypto Asset, Digital Investment, Regulation, Security, Trading.

The Role of Data Leakage Prevention System in CBDC

centralized database-based Central Bank Digital Currency (CBDC) system's vulnerability to cyberattacks and data leakage is a major concern. Any data leak can lead to large financial losses, irreversible reputational harm, and a decline in user confidence. To protect user information, the Reserve Bank of India has underlined the significance of a strong Data Leakage Prevention (DLP) system. While current incidents have demonstrated that the measures were insufficient to meet the standards, DLP may not be enough to defend CBDCs on its own. Incorporating Zero-Knowledge Proofs (ZKPs) and differential privacy tools into DLP solutions can improve their robustness and effectiveness. There is no one-size-fits-all solution for preventing data leakage, different solutions may be more effective in different scenarios. It's always a good idea to assess an organization's or system's specific needs and requirements before deciding on the best solution. It is also important to remember that there is no such thing as absolute security, and the possibility of zero-day attacks is always there. It is essential to continuously monitor and enhance security measures to stay ahead of new threats. To preserve their Central Bank Digital Currency systems and data, financial institutions and central banks must continue to be proactive and vigilant.

The Impact of Digital Currency on Accounting and Management under the Blockchain Architecture

In recent years, the digital economy has developed vigorously relying on Internet technology, and blockchain technology has played an important role in promoting high-quality information processing. The closely connected digital currency system is still in the rising stage, with defects in all aspects and hidden risks in the market that cannot be ignored. In order to ensure the legitimate rights and interests of investors, this paper deeply analyzes the current global economic development trend, from the development of blockchain technology to digital currency, analyzes the accounting measurement and relevant accounting standards, and puts forward suggestions on improving the overall regulatory efficiency of the government, strengthening the accounting treatment of enterprise entities, strengthening the construction of blockchain networks, etc, It is expected to promote the construction of domestic information technology and better coordinate the development of digital economy and society with digital currency.

The digital asset value and currency supervision under deep learning and blockchain technology

With the rapid development of digital currencies such as Bitcoin, it is difficult to extract the effective information from massive data and quantify the value of digital assets using current methods. As a key underlying technology, blockchain technology can no longer meet most of the needs of digital currency transactions. Based on this, the digital asset is taken as the research object and an analysis model for digital asset value is established with the deep learning technology in this study. Then, the authorization mechanism in the distributed position and orientation system (DPOS) algorithm is extracted and applied to the precise backward error tracking (PBET) algorithm based on the existing consensus algorithm in blockchain technology. Thus, a dynamic delegated practical byzantine fault tolerance (DDPBFT) algorithm that can be applied to the blockchain is proposed. Finally, a supervisable digital currency system is constructed based on the improved blockchain technology. After specific analysis, it is found that the analysis model for digital asset value based on the deep learning proposed in this study shows good stability and accuracy, and can help enterprises to analyze the value of digital assets. Compared with the existing consensus mechanism algorithms, the proposed DDPBFT algorithm shows better results in terms of throughput and delay. Finally, the supervisable digital currency model based on the improved blockchain technology can unite the public chains, alliance chains, and user wallets, and realize the traceability of transaction information. In short, the quantitative analysis of the value of digital assets has been realized and the supervision of digital currency transactions has been achieved by using the improved blockchain technology.

CEV Framework: A Central Bank Digital Currency Evaluation and Verification Framework With a Focus on Consensus Algorithms and Operating Architectures

We propose a Central Bank Digital Currency Evaluation and Verification (CEV) Framework for recommending and verifying technical solutions in the central bank digital currency (CBDC) system. We demonstrate two sub-frameworks: an evaluation sub-framework that provides consensus algorithm and operating architecture solutions and a verification sub-framework that validates the proposed solutions. Our framework offers a universal CBDC solution that is compatible with different national economic and regulatory regimes. The evaluation sub-framework generates customized solutions by splitting the consensus algorithms into several components and analyzing their impacts on CBDC systems. CBDC design involves a trade-off between system features - the consensus algorithm can not achieve all system features simultaneously. However, we also improve the operating architectures to compensate for the weak system features. The verification sub-framework helps verify our proposed solution through empirical experiments and formal proof. Our framework offers CBDC designers the flexibility to iteratively tune the trade-off between CBDC system features for the desired solution. To the best of our knowledge, we are the first to propose a framework to recommend and verify CBDC technical solutions.

Design of a rule based monetary policy in a Central Bank Digital Currency System

Aim: This paper presupposes a purely Central Bank Digital Currency (CBDC) based system. Its aim is to describe how such a system facilitates complete new possibilities to design a suitable monetary policy. More specifically, the purpose is to show that the available monetary tools can be used to design a rule-based monetary policy that guarantees stability of purchasing power and interest rates.
 Research methods: The paper is design oriented. It describes how the monetary system could function The important monetary variables are defined and their relationship is described. To illustrate these variables and their relationship, simulation results of their behavior are added.
 Conclusions: It is shown that it is indeed possible to design a monetary policy that is rule based and guarantees stability of purchasing power and interest rates. Crucial elements in the design are linking the balances of the CBDC-accounts to a proxy of the domestic product and replacing the use of government bonds by allowing the government to borrow from the Central Bank and giving households and businesses the opportunity to open a savings account at the Central Bank.
 Originality: The approach is completely new. It is the result of rethinking the possibilities of a complete transition of bank money to CBDC.
 Implications: The paper shows that a more absolute transition to the use of CBDC makes it possible to establish a clearer and more stable monetary practice, and that it is necessary therefore to revise monetary theory.

Sovereign digital currency system with decentralized infrastructure

In this paper, we consider the concept of a 1-tier national monetary system based on a digital sovereign currency issued by a central bank. In contrast to the approach, based on a centralized technical infrastructure, used in most, if not all, CBDC projects, we suggest to use a decentralized infrastructure. Such an infrastructure can be thought of as a peer-to-peer network consisting of nodes, which are equipotent participants and are equally privileged, each providing a complete set of services required to maintain digital wallets and process transactions with digital currency. Also, unlike most of CBDC projects, two possible formats of digital titles of property are considered: digital accounts with continuously modifiable amount and token-like digital coins with a fixed non-modifiable amount. The suggested model of currency system involves built-in payment mechanisms enabling one to carry out, both online and offline, transfers of digital currency with immediate finality and irrevocability. In this paper, we present an overview of the suggested model of currency system.

Research on Optimizing the Business Model of Cross-border E-commerce Based on Blockchain Technology

Relying on its excellent point-to-point networking technology, blockchain technology has built a brand-new model of cross-border business, saving the cost of grading agency in the process of traditional cross-border e-commerce. Blockchain has a unique traceability. With the support of the digital currency system, a cross-border cargo traceability system is established to ensure the authenticity and quality of the source of goods. Based on this, this paper studies the meaning of blockchain technology and cross-border e-commerce, looks for the problem of the business model of the two blending, and proposes countermeasures.

Цифровые валюты центральных банков: мировой опыт

Received 28.07.2020. The article examines issues related to the introduction of central bank digital currencies (CBDC) for retail payments and wholesale settlements. The study defines and classifies central bank digital currencies, researches the main models of CBDC systems. The article also analyzes the features of various national projects for issuing Central bank digital currencies. The paper uses methods of economic-statistical and functional-structural analysis. The study concludes that CBDC are a new form of central bank money. Digital currencies can be issued in various issuing systems for the purpose of retail payments or wholesale settlements. Among the models of CBDC systems for retail payments (R-CBDC) the direct system model is the most attractive for its simplicity. This model eliminates the dependence of the Central bank on any financial and payment intermediaries. Models of synthetic and hybrid R-CBDC systems are characterized by reliability and speed in processing multiple transactions which makes them the most promising for implementation. Among the models of CBDC systems for wholesale payments (W-CBDC) the model of the system with a universal digital currency (U-W-CBDC) may be the most suitable for eliminating the main disadvantages of modern cross-border payment systems. However, a large number of technological and financial changes as well as the high operating costs of the U-W-CBDC can make such systems difficult to implement for non-developed financial market infrastructure countries. National financial regulators have different motivations for issuing digital currencies. The main advantages of digital currencies for retail payments may consist in providing users with highly liquid, low-risk, universally available means of payment. The main advantages of wholesale digital currencies are that they offer faster, safer, cheaper cross-border payments. The most advanced projects for issuing R-CBDC can be considered DCEP (People’s Bank of China) E-krona (Central Bank of Sweden). The most successful pilot projects for issuing W-CBDC are the projects Jasper (Central Bank of Canada) and Ubin (Monetary Authority of Singapore), which were able to achieve interoperability in conducting cross-border payments. Currently most CBDC are retail based on the use of distributed ledger technology and implemented in the form of DLT-tokens. Countries that develop digital currency systems can be divided into three groups. The first group is countries where the introduction of CBDC can be designed to support the national demand for central bank money (Sweden, Norway, Singapore, etc.). The second group – countries for which the adoption of digital currencies can afford to keep the place of national currencies in international settlements (USA and EU) or expanding the use of national currencies at the international level (China). The third group represents countries for which the introduction of digital currencies may be associated with the control of national monetary circulation and de-dollarization of the financial system (Uruguay, South Africa, Cambodia, etc.).