Papers tagged as Bitcoin
  1. Trust Is Risk: A Decentralized Financial Trust Platform 2017 Bitcoin Blockchains FinancialCryptography fc17.ifca.ai
    Orfeas Stefanos, Thyfronitis Litos, Dionysis Zindros

    Centralized reputation systems use stars and reviews and thus require algorithm secrecy to avoid manipulation. In autonomous open source decentralized systems this luxury is not available. We create a reputation network for decentralized marketplaces where the trust each user gives to the other users is quantifiable and expressed in monetary terms. We introduce a new model for bitcoin wallets in which user coins are split among trusted associates. Direct trust is defined using shared bitcoin accounts via bitcoin’s 1-of-2 multisig. Indirect trust is subsequently defined transitively. This enables formal game theoretic arguments pertaining to risk analysis. We prove that risk and maximum flows are equivalent in our model and that our system is Sybil-resilient. Our system allows for concrete financial decisions on the subjective monetary amount a pseudonymous party can be trusted with. Risk remains invariant under a direct trust redistribution operation followed by a purchase.

  2. Escrow protocols for cryptocurrencies: How to buy physical goods using Bitcoin 2017 Bitcoin Blockchains FinancialCryptography fc17.ifca.ai
    Steven Goldfeder, Joseph Bonneau, Rosario Gennaro, Arvind Narayanan

    We consider the problem of buying physical goods with cryptocurrencies. There is an inherent circular dependency: should be the buyer trust the seller and pay before receiving the goods or should the seller trust the buyer and ship the goods before receiving payment? This dilemma is addressed in practice using a third party escrow service. However, we show that naive escrow protocols introduce both privacy and security issues. We formalize the escrow problem and present a suite of schemes with improved security and privacy properties. Our schemes are compatible with Bitcoin and similar blockchain-based cryptocurrencies.

  3. Biased Nonce Sense: Lattice Attacks against Weak ECDSA Signatures in Cryptocurrencies 2019 Bitcoin FinancialCryptography Signatures eprint.iacr.org
    Joachim Breitner and Nadia Heninger

    In this paper, we compute hundreds of Bitcoin private keys and dozens of Ethereum, Ripple, SSH, and HTTPS private keys by carrying out cryptanalytic attacks against digital signatures contained in public blockchains and Internet-wide scans. The ECDSA signature algorithm requires the generation of a per-message secret nonce. If this nonce is not generated uniformly at random, an attacker can potentially exploit this bias to compute the long-term signing key. We use a lattice-based algorithm for solving the hidden number problem to efficiently compute private ECDSA keys that were used with biased signature nonces due to multiple apparent implementation vulnerabilities.

  4. Erlay: Efficient Transaction Relay for Bitcoin 2019 Bitcoin CCS ece.ubc.ca
    Gleb Naumenko, Gregory Maxwell, Pieter Wuille, Alexandra Fedorova, and Ivan Beschastnikh

    Bitcoin is a top-ranked cryptocurrency that has experienced huge growth and survived numerous attacks. The protocols making up Bitcoin must therefore accommodate the growth of the network and ensure security.


    Security of the Bitcoin network depends on connectivity between the nodes. Higher connectivity yields better security. In this paper we make two observations: (1) current connectivity in the Bitcoin network is too low for optimal security; (2) at the same time, increasing connectivity will substantially increase the bandwidth used by the transaction dissemination protocol, making it prohibitively expensive to operate a Bitcoin node. Half of the total bandwidth needed to operate a Bitcoin node is currently used to just announce transactions. Unlike block relay, transaction dissemination has received little attention in prior work.


    We propose a new transaction dissemination protocol, Erlay, that not only reduces the bandwidth consumption by 40% assuming current connectivity, but also keeps the bandwidth use almost constant as the connectivity increases. In contrast, the existing protocol increases the bandwidth consumption linearly with the number of connections. By allowing more connections at a small cost, Erlay improves the security of the Bitcoin network. And, as we demonstrate, Erlay also hardens the network against attacks that attempt to learn the origin node of a transaction. Erlay is currently being investigated by the Bitcoin community for future use with the Bitcoin protocol.

  5. CHURP: Dynamic-Committee Proactive Secret Sharing 2019 Bitcoin CCS eprint.iacr.org
    Sai Krishna Deepak Maram, Fan Zhang, Lun Wang, Andrew Low, Yupeng Zhang, Ari Juels and Dawn Song

    We introduce CHURP (CHUrn-Robust Proactive secret sharing). CHURP enables secure secret-sharing in dynamic settings, where the committee of nodes storing a secret changes over time. Designed for blockchains, CHURP has lower communication complexity than previous schemes: O(n) on-chain and O(n2) off-chain in the optimistic case of no node failures.


    CHURP includes several technical innovations: An efficient new proactivization scheme of independent interest, a technique (using asymmetric bivariate polynomials) for efficiently changing secret-sharing thresholds, and a hedge against setup failures in an efficient polynomial commitment scheme. We also introduce a general new technique for inexpensive off-chain communication across the peer-to-peer networks of permissionless blockchains.


    We formally prove the security of CHURP, report on an implementation, and present performance measurements.

  6. Atomic Multi-Channel Updates with Constant Collateral in Bitcoin-Compatible Payment-Channel Networks 2019 Bitcoin CCS PaymentChannels eprint.iacr.org
    Christoph Egger, Pedro Moreno-Sanchez and Matteo Maffei

    Current cryptocurrencies provide a heavily limited transaction throughput that is clearly insufficient to cater their growing adoption. Payment-channel networks (PCNs) have emerged as an interesting solution to the scalability issue and are currently deployed by popular cryptocurrencies such as Bitcoin and Ethereum. While PCNs do increase the transaction throughput by processing payments off-chain and using the blockchain only as a dispute arbitrator, they unfortunately require high collateral (i.e., they lock coins for a non-constant time along the payment path) and are restricted to payments in a path from sender to receiver. These issues have severe consequences in practice. The high collateral enables denial-of-service attacks that hamper the throughput and utility of the PCN. Moreover, the limited functionality hinders the applicability of current PCNs in many important application scenarios. Unfortunately, current proposals do not solve either of these issues, or they require Turing-complete language support, which severely limit their applicability.


    In this work, we present AMCU, the first protocol for atomic multi-channel updates and reduced collateral that is compatible with Bitcoin (and other cryptocurrencies with reduced scripting capabilities). We provide a formal model in the Universal Composability framework and show that AMCU realizes it, thus demonstrating that AMCU achieves atomicity and value privacy. Moreover, the reduced collateral mitigates the consequences of griefing attacks in PCNs while the (multi-payment) atomicity achieved by AMCU opens the door to new applications such as credit rebalancing and crowdfunding that are not possible otherwise. Moreover, our evaluation results demonstrate that AMCU has a performance in line with that of the Lightning Network (the most widely deployed PCN) and thus is ready to be deployed in practice.

  7. FastKitten: Practical Smart Contracts on Bitcoin 2019 Bitcoin SmartContracts Usenix usenix.org
    Poulami Das, Lisa Eckey, Tommaso Frassetto, David Gens, Kristina Hostáková, Patrick Jauernig, Sebastian Faust, and Ahmad-Reza Sadeghi

    Smart contracts are envisioned to be one of the killer applications of decentralized cryptocurrencies. They enable self-enforcing payments between users depending on complex program logic. Unfortunately, Bitcoin – the largest and by far most widely used cryptocurrency – does not offer support for complex smart contracts. Moreover, simple contracts that can be executed on Bitcoin are often cumbersome to design and very costly to execute. In this work we present FastKitten, a practical framework for executing arbitrarily complex smart contracts at low costs over decentralized cryptocurrencies which are designed to only support simple transactions. To this end, FastKitten leverages the power of trusted computing environments (TEEs), in which contracts are run off-chain to enable efficient contract execution at low cost. We formally prove that FastKitten satisfies strong security properties when all but one party are malicious. Finally, we report on a prototype implementation which supports arbitrary contracts through a scripting engine, and evaluate performance through benchmarking a provably fair online poker game. Our implementation illustrates that FastKitten is practical for complex multi-round applications with a very small latency. Combining these features, FastKitten is the first truly practical framework for complex smart contract execution over Bitcoin.

  8. BITE: Bitcoin Lightweight Client Privacy using Trusted Execution 2019 Bitcoin TEE Usenix usenix.org
    Sinisa Matetic, Karl Wüst, Moritz Schneider, Kari Kostiainen, Ghassan Karame, and Srdjan Capkun

    Blockchains offer attractive advantages over traditional payments such as the ability to operate without a trusted authority and increased user privacy. However, the verification of blockchain payments requires the user to download and process the entire chain which can be infeasible for resource-constrained devices like mobile phones. To address this problem, most major blockchain systems support so called lightweight clients that outsource most of the computational and storage burden to full blockchain nodes. However, such verification leaks critical information about clients’ transactions, thus defeating user privacy that is often considered one of the main goals of decentralized cryptocurrencies.


    In this paper, we propose a new approach to protect the privacy of light clients in Bitcoin. Our main idea is to leverage the trusted execution capabilities of commonly available SGX enclaves. We design and implement a system called BITE where enclaves on full nodes serve privacy-preserving requests from light clients. However, as we will show, naive processing of client requests from within SGX enclaves still leaks client’s addresses and transactions. BITE therefore integrates several private information retrieval and side-channel protection techniques at critical parts of the system. We show that BITE provides significantly improved privacy protection for light clients without compromising the performance of the assisting full nodes.

  9. Bitcoin vs. Bitcoin Cash: Coexistence or Downfall of Bitcoin Cash? 2019 Bitcoin Blockchains e-cash Oakland arxiv.org
    Yujin Kwon, Hyoungshick Kim, Jinwoo Shin and Yongdae Kim

    In Aug. 2017, Bitcoin was split into the original Bitcoin (BTC) and Bitcoin Cash (BCH). Since then, miners have had a choice between BTC and BCH mining because they have compatible proof-of-work algorithms. Therefore, they can freely choose which coin to mine for higher profit, where the profitability depends on both the coin price and mining difficulty. Some miners can immediately switch the coin to mine only when mining difficulty changes because the difficulty changes are more predictable than that for the coin price, and we call this behavior fickle mining.
    In this paper, we study the effects of fickle mining by modeling a game between two coins. To do this, we consider both fickle miners and some factions (e.g., BITMAIN for BCH mining) that stick to mining one coin to maintain that chain. In this model, we show that fickle mining leads to a Nash equilibrium in which only a faction sticking to its coin mining remains as a loyal miner to the less valued coin (e.g., BCH), where loyal miners refer to those who conduct mining even after coin mining difficulty increases. This situation would cause severe centralization, weakening the security of the coin system.
    To determine which equilibrium the competing coin systems (e.g., BTC vs. BCH) are moving toward, we traced the historical changes of mining power for BTC and BCH. In addition, we analyze the recent “hash war” between Bitcoin ABC and SV, which confirms our theoretical analysis. Finally, we note that our results can be applied to any competing cryptocurrency systems in which the same hardware (e.g., ASICs or GPUs) can be used for mining. Therefore, our study brings new and important angles in competitive coin markets: a coin can intentionally weaken the security and decentralization level of the other rival coin when mining hardware is shared between them, allowing for automatic mining.

  10. SABRE: Protecting Bitcoin against Routing Attacks 2019 Bitcoin Blockchains NDSS ndss-symposium.org
    Maria Apostolaki and Gian Marti and Jan Müller and Laurent Vanbever

    Nowadays Internet routing attacks remain practi- cally effective as existing countermeasures either fail to provide protection guarantees or are not easily deployable. Blockchain systems are particularly vulnerable to such attacks as they rely on Internet-wide communications to reach consensus. In particular, Bitcoin—the most widely-used cryptocurrency—can be split in half by any AS-level adversary using BGP hijacking.


    In this paper, we present SABRE, a secure and scalable Bitcoin relay network which relays blocks worldwide through a set of connections that are resilient to routing attacks. SABRE runs alongside the existing peer-to-peer network and is easily deployable. As a critical system, SABRE design is highly resilient and can efficiently handle high bandwidth loads, including Denial of Service attacks.


    We built SABRE around two key technical insights. First, we leverage fundamental properties of inter-domain routing (BGP) policies to host relay nodes: (i) in networks that are inherently protected against routing attacks; and (ii) on paths that are economically-preferred by the majority of Bitcoin clients. These properties are generic and can be used to protect other Blockchain-based systems. Second, we leverage the fact that relaying blocks is communication-heavy, not computation-heavy. This enables us to offload most of the relay operations to programmable network hardware (using the P4 programming language). Thanks to this hardware/software co-design, SABRE nodes operate seamlessly under high load while mitigating the effects of malicious clients.


    We present a complete implementation of SABRE together with an extensive evaluation. Our results demonstrate that SABRE is effective at securing Bitcoin against routing attacks, even with deployments of as few as 6 nodes.