Works Cited

Alesia, Noura. A Comparison of the 3DES and AES Encryption Standards. 3DES and AES are
two encryption methods. DES was created in 1973, and using a 3 stage algorithm it
encrypts text in 64-bit blocks with a 56-bit key. 3DES was create recently to counter
more advanced attacks, and does what DES does with 3 keys. However, this cannot
survive multiple attacks. AES uses three key lengths, 128, 192, and 256 bits, whereas
3DES uses only 56 bits. AES has overcome the problems that 3DES presents.
This gives a general background on 3DES and AES and their functions. This is used in
basic cryptography to secure information, so I can use this as a building block for other
research.
"Analysis of Bitcoin Transaction Flows to Reveal Usage and Geographic Patterns."
http://www.nicolascourtois.com/. This is a summary of a previous study made on Bitcoin
transactions. Virtual currencies such as Bitcoin have been gaining popularity in ifferent
countries. Since the currency is global, it is important to map international transactions.
The study randomly collected transactions as a sample for all Bitcoin transactions for IP
address information. They then used this to find countries. The study then used excel and
graph visualizer (programs and codes) to analyze the data and make visual
representations.

This applied to my research because I can use the tools used to visualize data collected
from bitcoin. This allows me to make complex relationships between nodes to further
monitor transactions.

BIPARTITE GRAPH(GRAPH THEORY-7). YouTube. Summary: This video describes bipartite

graphs. a bipartite graph is a set of vertices that can be partitioned into two sets, such as
X and Y. Every "edge" is between a vertex in X and a vertex in Y. However, edges are not
connecting between the different points in X and the points within the Y. This allows
"parties" and different buyer/seller groups to form. An example is finally given that
summarizes this information.
Application to research: This method of relation will be crucial in determining parties in
bitcoin, where there are buyers and sellers is the market. Analysis of data in bipartite
graphs will be the first step in scrutinizing transactions for illicit activity.
"The Bitcoin and Blockchain Technology Explained." YouTube, 23 June 20151,
www.youtube.com/watch?v=oSP-taqLWPQ. Today, currency is meant to regulate trade.
This exchange is kept in check by third parties such as governments and banks , and
private users keep their accounts private a ledger. Bitcoin is a digital currency in which a
network of computers maintain a collection of transactions between users via the internet.
Instead of the accounts being private, the digital ledgers are public and distributed
throughout the network. This is called the blockchain. Here, details of transactions are
logged with a time stamp. The different nodes in the chain need to all agree with the
current state of the transactions, which is verified by by a "miner." If a person attempts to
mar a transaction, the other nodes will disagree. and stop the transaction from happening.
The blockchain can be trusted because there is a shared, single source of truth. A bitcoin
can be divided into 100,000,000 parts, each programmed with a different set of
instruction, providing a digital contract.

This is a good background source for my understanding of digital currencies. The

blockchain structure gives a solid base, but there are still security issues to look into.
"Bitcoin: Proof of Work." Khan Academy, uploaded by Zulfikar Ramzan. Proof of work
implementation relies on proof of network protocol, something that proves that one has
been part of a transaction. It requires a requester to solve a complex computational
problem. For example, spam email determination is based off a proof of work protocol,
where the system measures the amount of emails sent. If millions of emails were sent
from one account, chances are it is spam. The amount of work is determined relative to a
challenge string, and the requester must come up with a corresponding proof to this
challenge string. Prover will make a response string that helps authenticate this. If you
apply a set hash function to concatenated challenge and proof string, the output of the
function of the property where the first large number of bits are zero

Proof of work protocol allows a decentralized system to work, since there is no human
eye looking to verify data. Proof of work is also a crucial part of Bitcoin because it
allows better detection of malpractice.
Bitcoin Virtual Currency: Unique Features Present Distinct Challenges for Deterring Illicit
Activity.. This is a report by the FBI that discusses the current issues in its method to find
and control illicit bitcoin transactions. It has already established that Bitcoin and Bitcoinlike currencies will be used heavily by criminals to conduct illegal transactions. There is
alsoan issue where malware on an individual's computer can be used to gain access to a

node's private key, giving a user access to their bitcoins. Other branches such as the
Counterterrorism Division are looking into Bitcoin. They are devising methods to find a
user's IP address.

This is another method of fixing the illicit goods traded on Bitcoin. However this method
compromises the original intent of Bitcoin.
"Diffie-hellman key exchange." Khan Academy, uploaded by Brit Cruise. What if two parties
need to agree on a key that two parties can use for encryption, without a third party
knowing? The Diffiie-Hellman key exchange is a simple and simple way to do this. It
uses irreversible modular arithmetic. The two parties agree publicly on a prime modulus
x and a generator g. Each comes up with a secret number n. Each does g^n mod x and
sends the result (a) to the other. They each do a^n mod x to get the secret number. No
matter what each number was, the two parties now have the same two numbers.
The Diffie Hellman exchange is used frequently in cyber security with two parties.
Galenianos, Manolis. A Quantitative Analysis of the Retail Market for Illicit Drugs.. This paper
introduces a theoretical framework to study illicit drugs markets and uses mathematical
models (graph theory) to look at the interactions between buyers and sellers. It takes into
account how buyers experiment with different sellers using bipartite graphs, and how
sellers take quality verse earnings into account. It creates a model using various factors
that influence the buyer's decision. A model like this can be scaled to different
populations.
Application to research: This is a model that allows me to create parameters on a
blockchain simulator that I will be using and manipulating. The situations in this paper

will be modeled with bitcoin transactions, and hopefully, with enough trials, I will be able
to determine a pattern to separate illicit activity occurring on the Bitcoin blockchain.
Garmen, Christina, et al. Rational Zero: Economic Security for Zerocoin with Everlasting
Anonymity. Zerocoin is a bitcoin-based cryptocurrency that is more secure. This is a
second paper regarding zerocoin, making it safer to store information. It also addresses
the problem with the mining incentive, where they make illegally forging a zerocoin
much harder than mining the zerocoins do secure the ledger. Bitcoin uses the hash
function SHA256, and each block takes about ten minutes to solve. New blocks are not
fully trusted until 6 more are added on afterwards, making the blockchain easier to trust.
Zerocoin works by having a user spend a bitcoin and output a zerocoin with a specific
serial number. Using zero knowledge proofs, the origin of the zerocoin cannot be found.
This can reduce theft, making it an extremely low chance for some to steal a serial
number.

This paper further explains the security systemss of zerocoin and its integration into
bitcoin for more security. It will have the same overall effects as Bitcoin.
"How SSL works tutorial - with HTTPS example." Youtube. This video describes SSL/TLS. TLS
is layer 4 security which deals with encryption and identification. Identification allows
the client to to trust the server and vice versa. For encryption, the handshake protocol is
used. First the parties agree on a key, cipher, and hash function to use for encryption. The
client says what it can do, and the server chooses what to do (typically a more secure
method). The server then sends a certificate, with a public key to verify it. Both the server

and the client can start encryption after this.This gies background on layer 4 security uses
in internet protocol. This gives a background for when trying to figure out how other
methods work.
"How to create a self-signed certificate using openssl." YouTube, 19 Oct. 2011. Accessed 10 Oct.
2016. This video explains how to create a cert using OpenSSL. First you have to create a
certificate signing request and a new private/public key pair. Then, define the algorithm
and key used. OpenSSL will then encrypt the private key. The key will then be generated.
OpenSSL will then moderate the onformation going into the certificate. The content in
the directory will now show the certificate.

This relates directly to my research as it shows me the process of creating certificates

used in PKI processes. Therefore they can be applied to Bitcoin exchanges.
Joslyn, Cliff. Transaction Hypergraph Models for Pattern Identification in the Bitcoin
Blockchain.. This source describes how to map out the blockchain using graph theory.
There are three types of graphs involved: transaction graph(transactions modeled as
nodes), Transaction Bipartate Multigraph(common addresses are merged into a distinct
node type), and Transaction Hypergraph (transactions join multiple addresses as inputs
and outputs). While additional structures like user graphs are commonly analyzed, they
depend on additional information. Other methodologies used above can be used to
mathematically model different types of transactions.

This applies to my graph theory-based visual research. These type of graphs will help me
better model my findings in the Bitcoin network.
Kroll, Joshua A., and Ian C. Davey. The Economics of Bitcoin Mining, or Bitcoin in the Presence
of Adversaries. Th bitcoin blockchain consists of miners that decode transactions, and
millions of nodes that confirm the digital ledger. This is what makes bitcoin a
decentralized system. This is good for anonymity and security, but a decentralized
currency system has economic repercussions as well. In order for mining to work
economically, miners have to have consensus on state of the ledge, rules, and value of a
bitcoin. Miners have to decide if they want to mine a block quickly (within a few
seconds) of a block appearing in order to keep the balance between the transactions and
verification of the ledger. Also, if the price of bitcoin goes down, the incentive of mining
also decreases, resulting in the ultimate failing of the bitcoin system.
This paper gives a different viewpoint on bitcoin, dealing with the economics instead of
security issues. This is presents a major con of many people who use bitcoins, but a
possible solution is plausible if Bitcoin can upkeep the incentive to mine.
McCorry, Patrick. Authenticated Key Exchange over Bitcoin. This research paper deals with
maintaining proper security while corresponding on Bitoin. While user anonymity has
gotten a lot of attention with Bitcoin, there hasnt been much done for post-transaction.
These are done to follow up between 2 parties and is normally not secure. PKI/password
based methods cannot be used, instead the ledger will be used to authenticate the parties.
This introduces AKE, or Authenticated Key Exchange, which secures end-to-end
communication between two users.

This links what I have previously learned with Bitcoin. I can use this source to start
integrating PKI protocol and Bitcoin protocol.
Meiklejohn, Sarah. A Fistful of Bitcoins: Characterizing Pay.. Bitcoin is a purely online virtual
currency, unbacked by either physical commodities, instead, it relies on a combination of
cryptographic protection and a peer-to-peer protocol for witnessing settlements.
Consequently, Bitcoin has transactions as anonymous, but the flow of currency is not. To
prevent double spending, it is necessary for each user in the system to be aware of all
such transactions. The study included making bitcoin wallets and studying spending
patterns with different types of parties. A key model to grouping addresses into a single
user is that if 2 addresss are going into a transaction, those addresses belong to the same
user.

This is a good example of a test study that comprises of the same goals as my research. It
will help me further analyze and group/trac the bitcoin transactions.
Miers, Ian, et al. Zerocoin: Anonymous Distributes E-Cash from Bitcoin. This research paper
investigates anonymity and security in blockchain systems such as Bitcoin. It proposes
"Zerocoin" a more secure parallel to Bitcoin. This system is also de-centralized, meaning
that there is no third party involved in transactions. With bitcoin, transactions can be
linked with the different data that each block contains. Therefore, if one person decodes a
block, they cannot find the other transactions before it.
This is a background piece that explains bitcoin security protocols. This introduces me to

some of the flaws and allows me to understand what changes I can investigate in the
bitcoin blockchain.
Mihm, Stephen. "Are Bitcoins the Criminal's Best Friend?" Bloomberg. N.p., 8 Nov. 2013. Web.
11 Nov. 2016. This online article summarizes the use of bitcoin in the Dark Web. The
anonymity of bitcoin can be taken advantage of. For example, the Silk Road was a
popular online emporium that was used for illicit deals. It used bitcoins as a method of
payment. They were getting away with it when the federal government caught them
through other means. Throughout history, illicit transactions have been occurring via
paper money. Banks welcomed the cashing in of this money. The federal government
tried to intervene to limit this and it still is a problem, especially with $100 bills.
Unlike cash, Bitcoin transactions are public, and therefore they arent invisible, but illicit
deals can still occur through anonymous activity.

Application to research: This issue sets up the stage for the continuation of my research
into bitcoin anonymity and security. The illicit activity caused by individuals taking
advantage of the anonymous, de-centralized system can be combated in analyzing
transactions because all the data is public.
Mishra, Debasis. Basic Graph Theory with Applications to Economics.. Pages 27 through 29 of
this paper explains the use of utility to analyze transactions. Utility can be used to
measure the amount of "content" or "use" a user will get out of a transaction. This
number can be quantified based on the amount of money spent on the product and the

amount of money left in the budget. This is a continuous process for a buyer. The utility
for any given moment in the transaction sequence is given by
u(x i ) + (B p x i )

where x is the quantity and and p is price at a given place in the set i. The utility should
be decreasing after every place.

Although this is primarily economics, this gives me the rational side of spending for a
party. In bitcoin, this method of rationalization could be used to analyze transactions for
every node. The different place can represent different blocks in the block chain, where
the amount of datapoints range from D1 to Dn where n is the number of blocks in the
block chain.
Peck, Morgen E. "The Future of the Web Looks a Lot Like Bitcoin." IEEE Spectrum:
Technology, Engineering, and Science News. N.p., 01 July 2015. Web. 14 Sept. 2016.
This web article introduces the bitcoin bock chain and explains how it can be applied to
change the internet as we know it. The blockchain gives us the ability to store secure
information, enabling users to have more trust in the system. Today, the data on the
internet in massive servers, and these third parties monitor our internet usage and verify
our identities. Just as how bitcoin is a decentralized currency system, it introduces us to
the concept of the decentralized internet.
This is a good example of another door that bitcoin opens, beyond just currency. A
possible project can include how internet blockchain users can be give an incentive to
"mine" or compile and secure data

Peck, Morgan E. "A Blockchain Currency That Beats Bitcoin On Privacy." IEEE Spectrum, Dec.
2016. Summary: This magazine article introduces ZCash, a company that will launch
another blockchain-based cryptocurrency that is similar to Bitcoin. The difference,
however is that ZCash is completely anonymous. Bitcoin saves all the previous
transactions that have taken place and allows every node to have access to them. ZCash
does saves transactions, but leaves sensitive information such as amount spent and
parties, private. The only flaw with an anonymous system is that it will be extremely
difficult for miners to confirm transactions if they've never been done before. This has
been solved using a new zero-knowledge proof called zk-SNARK, which drains less
resources but keeps the anonymity aspect, thus being suitable for anonymity. Even if
there are issues with anonymity, the CEO of ZCash, Zooko Wilcox, feels that it is a right
for people to have.
This relates to what I am doing because it counters it. There is a major difference
between the levels of anonymity between Bitcoin and ZCash, and therefore illicit
transactions in ZCash will be harder to monitor and track.
"PKI: A Primer." IBM. This discusses PKI as a vehicle for communication with keys. The use of
cryptography has emerged in wars in the BCE, and is useful even today. PKI enables two
parties to understand who the other is, usin digital certificates. these are made by a trusted
third party. The two part key is used by the sender and the receiver, th receiver being the
one to use a public key, whereas the first party uses a private key to encrypt it. Certificte
authorities control who gets the certificates and who doesn't when connecting to a server.
This source builds on my knowledge of PKI, and goes more in depth. More advanced
processes can be verified using PKI.

Posey, Brien. "A Beginner's Guide to Public Key Infrastructure." Tech Republic, 15 Sept. 2005,
www.techrepublic.com/article/a-beginners-guide-to-public-key-infrastructure/. Public
Key Infrastructure (PKI) is a mechanism used to encrypt data and/or sign(authenticate) it.
It uses digital certificates to do this. Certificates are identification for computers and
parties taking part in a transaction which are authenticated by a trusted third party. For
example how a government issues a passport for travel. PKI encryption works by
assigning a user a pair of keys, a private key to encrypt data, and a corresponding public
key that an decrypt the file.
This was an informative website that explained PKI simply. It gives me background on
other cybersecurity issues and how I can use PKI in my research.
Ramzan, Zulfikar. "Bitcoin: Cryptographic Hash Functions." Khan Academy. N.p., n.d. Web. 14
Sept. 2016. Hash functions take an input, called a message, and use a mathematical
formula to transform it into an output, or a digest. The digest of a hash function is a fixed
length. For example, MD5 stands for "message digest - 5" and SHA has a digest of 256
bits. Hash functions can be used in digital signatures, message authentication, and
psuedo-random random number generation. A hash function is also deterministic,
meaning that the same input will have the same output. Additionally, there are four
properties that a hash function must have. It needs to be computationally efficient. It
needs to ensure that two different messages don't end up with the same digest. This is
called collision resistance. It needs to hide the information of the message. A hacker
should not be able to infer the message based on the digest. Finally, it needs to appear
that the digests are random.

This gives the background and characteristics of hash functions, a possible issue tha I can
key in on. I could explore that use of hash functions in Bitcoin.
"A (relatively easy to understand) primer on elliptic curve cryptography." Ars Technica. Current
cryptographic method will not work in the future because their span is extremely limited.
The "trapdoor function" is an irreversibe function that is commonly used in ciphers to
make sure that the original message cannot be found. The elliptical curve is based off this
equation:
y2 = x3 + ax + b
This ethod involved using symmetric curves and "dotting" points. Where, two point can
be used to dot a third, and based on the third, the first two points cannot be determined.

Elliptical cyptography is a method that is understood by very few people. A solid

understand of this concept allows me to apply it elsewhere to make networks better.
"Sandia helps federal law enforcement develop a cryptocurrency forensics tool." Sandia
National Laboratories. This article describes how law enforcement needs new tactics to
conduct forensics on cryptocurrency transactions. Currently it takes many resources to
find out the culprits in illicit transactions. The team conducted a systems analysis on
illicit Bitcoin. It set up a research environment to experiment with other algorithms that
can de-anonymize illicit Bitcoin users in a controlled environment. They currently have a
method that may be used by the FBI.

This is an example of another study that is combatting the problem that I am trying to

solve. Their methods are a good basis for my research on the professional. However, my
research is still trying to keep the anonymous part of Bitcoin.
"X509 File Extensions." Microsoft Word file. This document provided by my mentor explains the
differences and uses of the X509 extensions: DER, PEM, CRT, and CER. If a certificate
is labeled correctly, then it will be easier to manipulate. The DER extension is used for
binary DER encoded certificates. The PEM extension is used for files which contain
ACSII base 64 data. These two are encodings which can also be used as extensions. The
CRT extension is used for certificates. CER is an alternate form of CRT used for WS. The
KEY extension is used for the public and private keys.

This document provides me with information for when I am coding in OpenSSL and I
need to manipulate certificates.