Managed Blockchain Based Cryptocurrencies with Consensus Enforced Rules and Transparency
Peter M. Mell
Blockchain based cryptocurrencies are usually unmanaged, distributed, consensus-based systems in which no single entity has control. Managed cryptocurrencies can be implemented using private blockchains but are fundamentally different as the owners have complete control to do arbitrary activity without transparency (since they control the mining). In this work we explore a hybrid approach where a managed cryptocurrency is maintained through distributed consensus based methods. The currency administrator can perform ongoing management functions while the consensus methods enforce the rules of the cryptocurrency and provide transparency for all management actions. This enables the introduction of money management features common in fiat currencies but where the managing entity cannot perform arbitrary actions and transparency is enforced. We demonstrate how to implement our approach through modest modifications to the implicit Bitcoin specification, however, our approach can be applied to most any blockchain based cryptocurrency using a variety of consensus methods.
The 17th IEEE International Conference On Trust, Security And Privacy In Computing And Communications