A fundamental open question for oracles in blockchain environments is a determination of the amount of trust to be placed in the oracle. Oracles serve as intermediaries between a trusted blockchain... Show More

A fundamental open question for oracles in blockchain environments is a determination of the amount of trust to be placed in the oracle. Oracles serve as intermediaries between a trusted blockchain environment and the untrusted external environment from where the oracles fetch data. As such, it is important to understand the uncertainty introduced by the oracle in the trusted blockchain environment and the implications of this uncertainty on blockchain performance. This paper develops a model for commoditization of trust. The model provides for dynamic trust environments that incorporates oracle selfishness. The work also considers the equilibrium behavior for the demand and supply for trust and introduces elastic incentives for increasing the trust. These results are used to determine optimum size of the network that can be served by an oracle with varying degrees of selfishness. Key consequences and challenges of incorporating oracles in trusted distributed ledger environments are presented.

This paper discusses the problem of double-ending fraud in real estate transactions – a type of transactional fraud wherein agents handling real estate transactions unfairly benefit (e.g., by... Show More

This paper discusses the problem of double-ending fraud in real estate transactions – a type of transactional fraud wherein agents handling real estate transactions unfairly benefit (e.g., by simultaneously representing both the buy and sell side of a real estate transaction in a manner that unfairly boosts the commission they receive, or colluding to increase their commission in a real estate transaction at the expense of the buyer and/or seller of the real property). The paper proposes a unique blockchain solution design that leverages blockchain's properties of transparency and ability to create tamper-resistant audit trails to reduce opportunities for double-ending fraud and increase real estate market participants' trust in the handling of their transactions. The paper discusses the implementation of a prototype of the solution based on hyperledger fabric and sails; it presents the results of an agent-based modelling simulation validating that the inherent transparency of the proposed design offers optimal allocation for both sellers and buyers.

Though the retailer gift card has been an ultra-practical marketing tactic to attract customers to spend more, it, on the contrary, also places a great number of customers in troublesome situations... Show More

Though the retailer gift card has been an ultra-practical marketing tactic to attract customers to spend more, it, on the contrary, also places a great number of customers in troublesome situations due to its current limitations. First, dealing with unwanted gift cards is often time-consuming, costly, or even risky due to the frequent occurrences of gift card resale frauds. Worse still, the issuance and redemption of gift cards happen inside the retailer as in a “black-box,” indicating that a compromised retailer can cheat customers (or even third-party auditors) to deny the issuances of some unredeemed gift cards. This paper proposes a practical middle-layer solution based on blockchain to address the fundamental issues of the existing gift card system, with incurring minimal changes to the current infrastructure.

Blockchains rely on a consensus among participants to achieve decentralization and security. However, reaching consensus in an online, digital world where identities are not tied to physical users... Show More

Blockchains rely on a consensus among participants to achieve decentralization and security. However, reaching consensus in an online, digital world where identities are not tied to physical users is a challenging problem. Proof-of-work provides a solution by linking representation to a valuable, physical resource. While this has worked well, it uses a tremendous amount of specialized hardware and energy, with no utility beyond blockchain security. Here, the authors propose an alternative consensus scheme that directs the computational resources to the optimization of machine learning (ML) models – a task with more general utility. This is achieved by a hybrid consensus scheme relying on three parties: data providers, miners, and a committee. The data provider makes data available and provides payment in return for the best model, miners compete about the payment and access to the committee by producing ML optimized models, and the committee controls the ML competition.