With the development of the Internet, 5G and artificial intelligence technologies, the digital economy has brought a huge boost to development. As the "soul" of digital economy, the form of money has changed. In 2009, Satoshi Nakamoto will block chain technology applied in Bitcoin, through mathematical algorithms to achieve the fixed amount of money, with encryption algorithm to ensure the security of the transaction, with distributed accounting to ensure the authenticity of the ledger. Digital currencies such as Monero, Zero, Ethereum and Litecoin have followed bitcoin's lead. Compared with traditional currency, digital currency has low cost and high efficiency. It is an inevitable choice for digital currency to replace existing credit currency such as paper money and coins. In February 2019, Venezuela launched legal digital currency. Due to the rapid economic development and technological innovation, the global monetary and financial system is in a stage of major changes.
In 2019, Libra, a global digital cryptocurrency under Facebook, triggered global discussions on stablecoins, with central banks in many countries exploring the institutional design and technical application of digital currency. According to the survey results of 66 global central banks conducted by the Bank for International Settlements at the beginning of 2020, 80% of the central banks are studying digital currency, and 10% of the central banks are about to issue digital currency. The application of blockchain technology is highly possible. In 2016, the Bank of Scotland of the United Kingdom was the first to carry out the research on the central bank digital currency based on block chain. In February 2020, Sweden's central bank started the experiment of central bank digital currency based on block chain; The Bank of Japan recently reported that it is considering incorporating blockchain into the central bank's digital currency program. At present, China's central bank does not specify the only technology in the research of digital currency, but will combine with the blockchain technology.
Blockchain technology, as the underlying technology of digital currency, has the advantages of data privacy protection, decentralization and immutability, which has attracted the focus of researchers all over the world. Abroad, Omar Ali pointed out that the use of blockchain technology to develop digital currencies is a disruptive innovation in the field of capital payments. Peer-to-peer networks, encryption technologies, and layered infrastructures can facilitate distributed, autonomous organizations by providing complete and true transaction disclosure to reduce uncertainty and insecurity in transactions. Due to the distributed block chain architecture, the design, development and use of different service platforms is a difficult problem in the application of block chain technology. Bringas, PG et al discussed the block chain platform in financial services and matched the typical financial service categories to the best supporting platform. In China, Chen Huiwen et al. analyzed the network topology characteristics of block transaction data from the perspective of complex network, and found that the transaction data has an obvious hierarchical nested structure, which ensures the privacy and security of the data. Encryption hash function and public key encryption are the elements to ensure the security of blockchain. The key generation system based on block chain proposed by Sun Yue ensures the lightweight and security of transaction by generating the key in the form of smart contract. In the field of capital payment, Liang Xi et al. explored the advantages of block chain technology in solving international payment, such as time-consuming, high cost and high risk. Fan Huoying analyzed the impact of blockchain technology on the payment and settlement system of commercial banks, including the benefit of improving payment efficiency, reducing payment costs, monitoring illegal payment calculation activities, etc. Blockchain-based digital currency is also facing a series of risks, including legal risks, implied illegal fund-raising risks and network security risks. Therefore, it is necessary to synchronously improve the financial supervision system. As a part of the financial regulatory system, the regulatory sandbox is an important measure to reduce the financial risk of blockchain.
As trade friction between China and the United States escalates, the confrontation between China and the United States has shifted from trade to technology and finance. The huge impact of the global epidemic and the global stock market has been shut down, making the monetary and financial environment increasingly severe. Based on the method of bibliometrics, this paper conducts a trend study on the application of blockchain technology in digital currency, analyzes and summarizes the development status and research topics, and discusses the challenges faced by its development.
1. Research Methods
Based on the published high-quality journal papers and conference papers, this paper was searched in the SCI, SSCI and CPCI databases of Krakiva Web of Science Core Collection Platform using "Blockchain", "digital currency" and extension terms as subject terms. As the blockchain technology originated from the Bitcoin designed by Satoshi Nakamoto in 2008, the final retrieval strategy was determined as follows: TS=(" blockchain "or" block chian "or" chain of block ") and TS=(" digital currency "or finance or financial or bank*) and PY=(2008-2020), a total of 1301 related literatures were retrieved on October 28, 2020.
The literature keywords were standardized to remove the commonly used stop words and meaningless words that appeared too many times, and the morphological restoration was carried out to improve the accuracy of the analysis results. OpenRefine, Google's open source software, was used to clean the keyword data and turn it into a table of words that subsequent analysis software could recognize. The existing literature research and manual indexing were combined to analyze the development status, including the development trend, the analysis of countries/regions and institutions. The VosViewer visual scientific knowledge graph software was used to cluster the keywords after cleaning. Finally, the challenges faced by blockchain-based digital currencies are discussed. The process is shown in Figure 1.
2. Development status analysis
2.1 Annual trend
The annual trend analysis can grasp the heat change of this technology from the macro level. In this paper, 1301 papers were counted according to the publication time, and the global publication trend of blockchain-based digital currency papers was obtained. As can be seen from Figure 2, since the application of blockchain technology in Bitcoin in 2009, the development has been very slow until 2015, which is in the embryonic stage of technological development. Among them, the research related to blockchain and digital currency was basically non-productive before 2013, which coincidentally coincidences with the application of smart contracts in blockchain. The theory of "smart contracts", a series of promises and agreements specified in digital form, was first put forward in 1996 by computer scientist and cryptographer Nick Szabo. But smart contracts have not been integrated into the Bitcoin blockchain network until the emergence of Ethereum in 2013, when the value of smart contracts was realized. In 2017, there was a rapid increase in the number of papers, with 128 published, and in 2019, the number of papers reached 480. Announced in June 2019, Libra, the white paper, pratt &whitney creating a global financial system with digital currency grand plans, driving the development of the digital currency boom, but exist without digital currency in circulation mechanism of the currency, not according to market needs, the main responsibility of the issue, the price is not stable, it is also an important factor of restricting its development.
2.2 Distribution of countries/regions and institutions
Through this analysis, the origin and development of technology in different countries/regions are comprehensively understood, and the technological activity in different countries/regions in different periods is compared, so as to analyze the global distribution of the technology.
The US leads the world with 279 papers, with major research institutions including the University of California, Massachusetts Institute of Technology, Duke University, IBM, Stevenson Institute of Technology and the University of Florida. 2018 saw an explosion of research in this field. Since Libra's launch, on July 30, 2019, Congress, the US legislative body, held a hearing on "Examine the Regulatory Framework for Digital Currency and Blockchain", waived listing applications or issued letters of no objection for a number of projects, indicating that blockchain-based digital currency regulation in the US has entered a new era. According to the survey by Ottobock Consulting, unclear regulations and guidelines regarding digital assets and blockchain business operations in the US are the major obstacles to its development in the US market. Therefore, in 2019, the United States issued the Token Classification Act of 2019, the Digital Classification Act of 2019 and the Blockchain Promotion Act, which set up a unified framework for the market regulation and technology regulation of digital assets in the United States.
China (including Hong Kong, Macao and Taiwan) produced 232 articles, ranking second in the world. The major research institutions include Beijing University of Posts and Telecommunications, Beijing University of Aeronautics and Astronautics, Peking University and Jiangsu University. In October 2016, the Ministry of Industry and Information Technology issued the White Paper on the Development of Blockchain Technology and Application in China (2016), which for the first time proposed a standard roadmap for the development of blockchain technology in China. In December of the same year, blockchain technology was included in the "13th Five-Year" national information planning, marking the beginning of China's efforts to promote the development of blockchain technology and application. Comrade Xi Jinping emphasized in October 2019 that blockchain should be regarded as an important breakthrough in independent innovation of core technologies, and vigorously supported the application of blockchain technology in digital finance and digital asset trading. In addition to actively promoting the application and innovation of blockchain technology, China continues to strengthen the supervision of the financial market. As of December 2019, the national level has issued a total of more than 40 blockchain-related guidance policies, among which, the State Council and the Office of Office have issued 13 blockchain-related guidance policies, and a total of 32 provinces/municipalities/autonomous regions/special administrative regions have issued blockchain-related policy documents.
The following are the United Kingdom, India, Australia, etc. The main institutions are Anna University in India, University of Edinburgh in the United Kingdom, and University of Technology Sydney in Australia. In 2016, the UK government published a white paper titled "Distributed Ledger Technology: Beyond Blockchain", affirming the value of blockchain. In 2018, the UK Treasury, the Financial Conduct Authority and the Bank of England jointly set up the "Cryptoasset Task Force" and published a series of regulatory measures on the blockchain industry. Although the RBI issued a ban on the crypto industry in 2018, in 2019 the RBI began to implement a financial sandbox policy and published its regulatory sandbox clauses in support of blockchain innovation testing. The Australian government in 2017 identified the transformative role of blockchain technology in driving and supporting the digital economy and infrastructure of the future. In March 2019, the National Blocklink Graph Strategy was announced to enhance Australia's leadership in the blockchain industry.
Through the above analysis, it is found that the distribution of countries/regions and institutions studied in the paper on digital currency based on blockchain technology is closely related to the policies related to digital currency formulated by the governments of various countries.
3. Theme clustering
Clustering analysis is a multivariate statistical method for automatic classification of research objects according to certain characteristics. In this paper, subject cluster analysis is used to understand the research difficulties and solutions of block chain technology in the application of digital currency. Before using keywords for topic clustering, data preprocessing is needed. According to the low-frequency word boundary formula of high-frequency words proposed by Donohue J.C. in 1973, that is:
Where I is the number of keywords, and T is the lowest frequency of high-frequency keywords.
High-frequency keywords were sorted out by precise calculation, and the OpenRefine software was used to clean and derepeat the keywords, and a total of 300 keywords were obtained. The threshold of high word frequency was about 24, that is, the high-frequency keywords that appeared above 24 times were high-frequency keywords. The VosViewer visualization software was used to obtain the clustering topic and high-frequency keyword frequency, as shown in Table 1. The clustering topics correspond to the data layer and network layer, consensus layer, incentive layer, contract layer and application layer of blockchain technology in turn.
Topic 1 Security and Privacy of Digital Currency
Security and privacy is an important part of the development of digital currency. Blockchain is an important technology to promote data security and privacy. It has completely changed the digital currency space through Bitcoin's pioneering cryptocurrency platform. As the total value of digital currencies increases, security and user privacy of crypto wallets are becoming increasingly important. Once the encryption method is cracked, the data security of the blockchain will be seriously challenged and the imtamperability will no longer exist. For example, in February 2014, Mt.Gox, the largest bitcoin exchange platform in the world, suffered from malleable attack, and the loss was estimated to be about 470 million, leading to the bankruptcy of Mt.Gov. In 2018, Coincheck, one of Japan's largest virtual currency exchanges, was hit by a server attack that cost up to $530 million, making it the largest virtual currency compensation case in history. For blockchain itself, the biggest threat is 51% attack. Due to the high cost of attack, the blockchain itself is not vulnerable to attack, but hackers can take advantage of vulnerabilities such as smart contracts, digital wallets or human error.
Researchers use asymmetric encryption algorithms for key information transfer, digital signature and authentication of symmetric encryption to enhance the security and privacy of digital currency, which can be classified into three categories: large integer decomposition, discrete logarithm and elliptic curve. At present, the security research of blockchain-based digital currency mainly focuses on elliptic curve. Goldfeder et al. proposed a solution using the Elliptic Curve Digital Sigsignature Algorithm (ECDSA), a threshold signature compatible with Bitcoin signatures, which provides a secure policy for wallet sharing control where each player can only get one share. Considering the importance of player priority/priority, Dikshit et al assigned one or more shared keys to each player based on the player's weight/priority. However, this scheme has the disadvantage of having many keys managed and handled by each player. The author made it possible for all participants to share shares and meet the requirements of the concept of weight, so as to realize an effective weighting threshold ECDSA scheme and extend it. The Internet of Things has realized the interconnection of everything, ensured the efficient utilization of resources, minimized manpower and saved time. However, the storage of massive data, coordination between different subjects, security and privacy are the major challenges faced by the Internet of Things, especially in payment transactions. In order to reduce transaction risk, Lundqvist et al. proposed a secure blockchain lightweight wallet based on TrustZone to protect simple payment verification. Whether Rich OS is malware or not, it also protects private keys and wallet addresses from attackers. At the same time, it protects the validation process by validating transactions in a secure execution environment and directly prevents the local block from reading data from the Rich OS through encryption. Therefore, the effective combination of blockchain architecture and cryptographic algorithms is an important means to guarantee the security and privacy of digital currency.
Topic 2 Consensus algorithms for blockchain technology
Consensus mechanism is a key technology of blockchain, which can ensure that all nodes follow the same accounting rules in a decentralized scenario and achieve the consistency of distributed data, which directly affects the transaction speed, scalability and resource consumption of the blockchain system. Consensus algorithms ensure interoperability between different blockchains. It can realize the advantages of multi-token trading, cross-chain exchange of information, the use of multiple currencies at once, and easy execution of smart contracts.
At present, common consensus algorithms include POW, POS, PBFT, DPOS, FBA, POAU, POET, POAC, POB and POC, which can be divided into proof class, election class, random class, alliance class and mixed class. In the proof class, the PoW algorithm can be scaled to a large number of users, but the transaction rate may not be appropriate for some use cases. PoS algorithm is an alternative to PoW algorithm, which can improve the transaction rate of blockchain, reduce the energy consumption and the possibility of being attacked by 51%. It is suitable for public blockchain where the verifier is unknown and untrusted, or for private business where the verifier forms a known trusted entity. In FBA algorithm, participants rely on a small number of verifiers to improve efficiency. Block generation using the POAU algorithm requires granting special permissions to one or more members to make changes in the blockchain, suitable for governance bodies, regulators, utilities in the energy sector. POB algorithm aims to duplicate PoW cost for verification by charging verifier node, which pays coins to gain the privilege of verification block, which leads to unnecessary waste of resources but reduces the risk of using hardware devices. The POC algorithm saves a lot of energy and does not have to rely on expensive ASIC hardware for investment. In the election category, DPOS algorithm uses distributed voting to elect representatives and witnesses to participate in the verification process. This algorithm has a wide application prospect and aims to achieve high transaction rate and low energy consumption. In random classes, the POET algorithm can scale to thousands of nodes and can be energy efficient. The algorithm aims to replicate a fair and random block generation process without expending valuable resources. Its disadvantage is that authorization is still required for a single node. In the federation category, the PBFT algorithm is key to most modern blockchain systems, where transactions are individually verified and signed by known verifier nodes, making the algorithm more suitable for trusted or semi-trusted environments. In the hybrid class, POAC combines the advantages and disadvantages of POW algorithm and POS algorithm. Various consensus algorithms have their own advantages and disadvantages in the application of blockchain-based technology. With the increase of block structures in the blockchain, which algorithm is more appropriate needs to be further discussed.
Topic 3 Energy Consumption of Blockchain during Mining
With the proposed global carbon neutral target, carbon emissions have always been the focus of attention of all countries, and increasing energy consumption is the most effective way to reduce carbon emissions. The competitive process of adding blocks to the blockchain requires a lot of hardware infrastructure and computation, along with a lot of energy input. Krause et al. calculated the minimum power requirements for Bitcoin, Ethereum, Litecoin, and Monero cryptocurrency networks and the methods for generating the energy required to generate a one-dollar (USD) worth of digital assets. In comparison, conventional aluminum, copper, gold, platinum, and rare earth oxides mining consume 122, 4, 5, 7, and 9 MJ of energy, respectively, and mining for several cryptocurrencies averages 17, 7, 7, and 14 MJ, respectively, suggesting that (with the exception of aluminum) crypto mining consumes more energy than minerals. Therefore, the large-scale application of blockchain technology in digital currency needs to consider the energy consumption during the mining process, and then evaluate the impact on sustainable energy.
Topic 4 Transaction Security Based on Ethereum Smart Contracts
Trading is how digital currency realizes its value. A smart contract is a computerized protocol that automatically enforces the terms of the contract on the blockchain once predefined conditions are met. The combination with Ethereum can guarantee the immutability of the content of the smart contract and the records of each survey, realize the credibility and traceability of the decentralized transaction of blockchain, and bring convenience to automatic transaction. Smart contracts, though, are designed to reduce the risks that may exist. However, there are still flaws in the design, and since the contract content is visible to all members of the blockchain, this increases the probability that the contract security vulnerabilities will be fully exposed. Security risks of smart contracts can be divided into four categories: malware transmission, consensus mechanism defects, smart contract vulnerabilities and user fraud. K-ARY malware divides itself into separate blocks and takes advantage of the propagation properties of the blockchain to evade normal malware detection. In order to deal with contract vulnerability, researchers adopt SafeMath function and transfer() transfer function. When data overflow occurs, abnormal interrupts are used to organize transactions to prevent recursive calls generated by reentrant. In short address vulnerability, front-end control is used to input account address. Therefore, the research on smart contracts is also an important part of guaranteeing the security and privacy of digital currency transactions.
Topic 5 Financial Regulation of Digital Currency
The decentralized nature of blockchain has brought obstacles to financial regulation to some extent. Therefore, many countries in the world, such as the United Kingdom, Russia, Spain, India and Singapore, are actively exploring the regulatory sandbox and looking for innovative regulation of blockchain. Among them, the British sought after by the governments of the "regulatory sand box" mechanism, it is the UK's financial watchdog, the financial mechanism of science and technology to create for the first time, refers to the regulation in can control the scene, make new product can iterate verification in the real market environment, by prior agreement risk compensation mechanism, let the user on the premise of the protected contact with new products. At present, the blockchain technology still lacks legal entity, the existing laws and institutional norms are difficult to apply, and the subject of technical standards and legal responsibility is unclear. Therefore, in the supervision of blockchain-based digital currency, it is necessary to actively explore legislation, implement classified supervision, and respond to the combination of laws and policies.
Topic 6 Application of Machine Learning in Digital Currency
As the popularity of digital currencies has increased, many security issues have become Paramount. Researchers are exploring new threats to the entire blockchain system, introducing new countermeasures and using machine science to predict new security trends. Yin et al. used machine learning methods to make the first estimate of the entity portion of cybercrime in the Bitcoin ecosystem, using three types of Bitcoin transaction clusters: co-expenditure, intelligence-based, and behavior-based, to classify the entities and test 13 supervised learning classifiers. As a means of investment, digital currency has great volatility, attraction and destructive power. In order to accurately predict the rise and fall of its price, the researchers used machine learning to come up with an estimate of the probability that the digital currency would rise with an accuracy of 64 percent. Therefore, the predictive trend of introducing machine learning into blockchain technology can assess the security of digital currencies in advance and develop investment strategies.
4 Conclusions and Prospects
In this paper, the bibliometrics method is used to analyze the paper data of digital currency based on blockchain technology. Its development is closely related to the national policy support for blockchain technology. After the development climax in 2017-2018, countries began to treat it calmly. Major countries include the United States, China, India, the United Kingdom and Australia, and research institutions are mainly universities and research institutes of various countries. Research interests include security and privacy, consensus algorithms, energy consumption in mining, smart contracts, financial regulation and machine learning. In the future, the application of blockchain technology in digital currency will face severe challenges.
1) Research on encryption technology. Blockchains are seen as distributed database systems containing immutable ledgers that are vulnerable to attack by malicious users. While blockchain utilities have been utilized from the original digital currency to today's smart contracts, innovative technologies must rely on cryptography to ensure their security.
2) Research on consensus mechanism. The core problem is the convergence speed and the proportion of fault-tolerant nodes, which directly affects the transaction speed, scalability and resource consumption of the blockchain system. Therefore, consensus algorithms are the key to the stable operation of blockchain.
3) Security development of smart contracts becomes an important topic. The steady adoption of smart contracts on the Ethereum blockchain has led to tens of thousands of contracts holding millions of dollars in digital currency, and small mistakes in the development of smart contracts on the immutable blockchain can cause significant losses, with the risk of future events.
4) Scalability. The scalability of existing blockchain has become an important obstacle to the large-scale application of blockchain. In order to solve the problem of scalability, researchers have proposed efficient consensus algorithm, sharding technology, side chain and other scalable methods, but they need to be further practiced.
5) Financial regulation. All countries take anti-money laundering as the key point in the supervision of digital currency. With the exception of a few countries, such as Russia and New Zealand, countries have generally taken a positive attitude towards the regulation of digital currencies. In the concrete application level, the strength and standard of financial supervision still need to be improved.
Although the application of blockchain technology in the financial field faces major challenges, the blockchain technology reduces the transaction cost of foreign trade, improves efficiency, enhances the trust between associated enterprises, and realizes decentralized or partially decentralized operations. Blockchain is expected to develop rapidly in the financial sector in the next 10 years, driving the development of the digital economy.
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