Permacoin repurposing bitcoin work for data preservation alliance
Authors in  presents a taxonomy of routing attacks and their impact on Bitcoin, considering both small-scale attacks, targeting individual nodes, and large-scale attacks, targeting the network as a whole. By isolating parts of the network or delaying block propagation, adversaries could cause significant amount of mining power to be wasted, leading to revenue losses and exposing the network to a wide range of exploits such as double spending.
The use of an unstructured P2P network in Bitcoin enables the required rapid distribution of information in every part of the network. The security of Bitcoin heavily depends on the global consistent state of blockchain which relies on the efficiency of its PoW based consensus protocol.
The variations in the propagation mechanisms could adversely affect the consensus protocol. The presence of inconsistent blockchain states, if exploited correctly could lead to a successful double spending. To this end, it is essential that the Bitcoin network should remains scalable in terms of network bandwidth, network size, and storage requirements because this will facilitate the increase in number of honest miners in the network, which will strengthen the consensus protocol.
In Bitcoin, full nodes download and verify all blocks starting from the genesis block because it is the most secure way. Full nodes participate in the P2P network and help to propagate information, although its not mandatory to do so. Alternatively, the thin clients use the simplified payment verification SPV to perform Bitcoin transactions.
The SPV is a method used by Bitcoin thin client for verifying if particular transactions are included in a block without downloading the entire block. However, the use of SPV costs the thin clients because it introduces weaknesses such as Denial of Service DoS and privacy leakage for the thin client.
In particular, the general scalability issues of unstructured overlays combined with the issues induced by the Bitcoin protocol itself remains in the system. Many of the results suggest that scalability remains an open problem  and it is hard to keep the fully decentralized network in future  . Benefits and Challenges Same as any other emerging technology, use of Bitcoin comes with certain benefits and challenges, and various types of risks are associated with its use.
It is believed3 that Bitcoin has the following benefits and challenges. No central authority can manipulate or seize the currency since every currency transfer happens peer-to-peer just like hard cash.
In particular, bitcoins are yours and only yours, and the central authority cant take your cryptocurrency, because it does not print it, own it, and control it correspondingly.
Unless Bitcoin users publicize their wallet addresses publicly, it is extremely hard to trace transactions back to them. However, even if the wallet addresses was publicized, a new wallet address can be easily generated. This greatly increases privacy when compared to traditional currency systems, where third parties potentially have access to personal financial data.
Moreover, this high anonymity is achieved without sacrificing the system transparency as all the bitcoin transactions are documented in a public ledger. Due to its decentralized nature and user anonymity, there is no viable way to implement a Bitcoin taxation system. In the past, Bitcoin provided instant transactions at nearly no cost. Even now, Bitcoin has lower transaction costs than a credit card, Paypal, and bank transfers.
However, the lower transaction fee is only beneficial in situations where the user performs a large value international transactions. This is because the average transaction fee becomes higher for very small value transfers or purchases such as paying for regular household commodities. Stealing of bitcoins is not possible until the adversary have the private keys usually kept offline that are associated with the user wallet.
In particular, Bitcoin provides security by design, for instance, unlike with credit cards you dont expose your secret private key whenever you make a transaction. Moreover, bitcoins are free from Charge-backs, i. Since the ownership address of the sent bitcoins will be changed to the new owner, and it is impossible to revert. This ensures that there is no risk involved when receiving bitcoins. Although, the use of PoW makes the mining process more resistant to various security threats such as sybil and double spending, it consumes a ridiculous amount of energy and computing resources .
In particular, processing a bitcoin transaction consumes more than times as much energy as using a Visa credit card, hence innovative technologies that reduce this energy consumption are required to ensure a sustainable future for Bitcoin.
Furthermore, due to the continuous increase in network load and energy consumption, the time required for transaction processing is increasing. Wallets can be lost: Since there is no trusted third party if a uses lost the private key associated with her wallet due to a hard drive crash or a virus corrupts data or lost the device carrying the key, all the bitcoins in the wallet has been considered lost for forever.
There is nothing that can be done to recover the bitcoins, and these will be forever orphaned in the system. This can bankrupt a wealthy Bitcoin investor within seconds. The considerable amount of anonymity provided by the Bitcoin system helps the would-be cyber criminals to perform various illicit activities such as ransomware , tax evasion, underground market, and money laundering.
According to , the risk is the exposure to the level of danger associated with Bitcoin technology; in fact, the same can be applied to any such digital cryptocurrency. The major risks that threaten the wide usability of the Bitcoin payment systems are as follow. Bitcoin technology opposes rules and regulations, and hence it finds opposition from the government.
This risk also includes law enforcement towards handling financial, operational, customer protection and security breaches that arise due to Bitcoin system. Participants argue that the greatest barrier to the usage of bitcoins is the lack of support by higher authorities i.
Participants felt that bitcoins must be accepted as legitimate and reputable currency. Additionally, the participants expressed that the system must provide support towards transacting fearlessly without criminal exploitation.
Furthermore, the Bitcoin is mainly dependent on the socio-technical actors, and the impact of their opinion on the public. Few among participants have suggested that the blockchain construction is the major cause of disruption due to its tendency to get manipulated by adversaries. In , it was stated that many Bitcoin users already lost their money due to poor usability of key management and security breaches, such as malicious exchanges and wallets.
Also, many participants stated that for a fast flow of bitcoins in the user community, simple and impressive user interface are even more important than security. In addition, participants highlighted that the poor usability and lack of knowledge regarding the Bitcoin usage are the major contributors to the security failures. Since it is a decentralized model with an uncontrollable environment, hackers and thieves find cryptocurrency system an easy way to fraud the transactions.
In this section, we discuss existing security threats and their countermeasures for Bitcoin and its underlying technologies. We provide a detailed discussion of potential vulnerabilities that can be found in the Bitcoin protocols as well as in the Bitcoin network, this will be done by taking a close look at the broad attack vector and their impact on the particular components in the Bitcoin. Apart from double spending, which is and will always be possible in Bitcoin, the attack space includes a range of wallet attacks i.
Tables I and II provides a comprehensive overview of the potential security threats along with their impacts on various entities in Bitcoin and their possible solutions that exist in literature so far. Double Spending A client in the Bitcoin network achieves a double spend i. For instance, a dishonest client Cd creates a transaction TVCd at time t using a set of bitcoins Bc with a recipient address of a vendor V to purchase some product from V. Cd broadcast TVCd in the Bitcoin network.
In the above scenario, the double 4 www. In Bitcoin, the network of miners verify and process all the transactions, and they ensure that only the unspent coins that are specified in previous transaction outputs can be used as input for a follow-up transaction.
This rule is enforced dynamically at run-time to protect against the possible double spending in the network. The distributed time-stamping and PoW-based consensus protocol is used for orderly storage of the transactions in the blockchain. Figure 5 shows the working methodology of a double spending attack depicting the above explanation. Despite the use of strict ordering of transactions in the blockchain, PoW scheme, distributed time-stamping , and consensus protocol  , double spending is still possible in Bitcoin.
To perform a successful double spending attack, following requirements need to be fulfilled: Double Spending Attack lead to blockchain forks in the network, iii the vendor receives the confirmation of transaction TCCdd after accepting the transaction TVCd , thus losses the product, and iv a majority of miners mine on top of the blockchain which contains TCCdd as a valid transaction.
If the aforementioned steps took place in the given order then the dishonest client is able to perform a successful double spend. In the rest of this section, we will discuss the variants of double spending attack that are used in order to realize the aforementioned double spend requirements with varying difficulties and complexities. A form of double spending called Finney attack , here a dishonest client Cd pre-mines i. The mined block is not informed to the network, and the Cd waits until the transaction TVCd is accepted by the V.
On the other hand, V only accept TVCd when it receives a confirmation from miners indicating that TVCd is valid and included in the existing blockchain. Once Cd receives the product from V , the attacker releases the pre-mined block into the network, thus creates a blockchain fork say Bf0 ork of equal length to the existing fork say Bf ork.
Now, if the next mined block in the network extends Bf0 ork blockchain instead of Bf ork , then as per the Bitcoin protocol rules all the miners in the network will build on top of Bf0 ork. As the blockchain Bf0 ork becomes the longest chain in the network, all the miners ignore Bf ork , hence the top block on Bf ork which contains the transaction TVCd becomes invalid.
This makes the transaction TVCd invalid, the client will get back her coins through transaction TCCdd , but resulting the V losing the product. However, with Finney attack an adversary can only perform double spending in the presence of one-confirmation vendors. To avoid the Finney attack, the vendor should wait for multiple confirmations before releasing the product to the client.
The waiting for multiple confirmations will only make the double spend for the attacker harder, but the possibility of the double spend remains. An advancement of the Finney attack is called Brute-force attack  in which a resourceful attacker has control over n nodes in the network, and these nodes collectively work on a private mining scheme with the motive of double spend.
An attacker introduces a double spend transaction in a block as in the previous case, while continuously works on the extension of a private blockchain i. Suppose a vendor waits for x confirmations before accepting a transaction, and it sends the product to the client once it receives the x confirmations. Later, the attacker is able to mine the x number of blocks ahead i.
This causes the same after effects as Finney attack, thus causing a successful double spending attack. Another attack that uses the privately mined block to perform a new form of double spending attack on Bitcoin exchange networks is popularly known as Vector 76 attack .
A Bitcoin exchange is a digital marketplace where traders can buy, sell or exchange bitcoins for other assets, such as fiat currencies or altcoins. In this, a dishonest client Cd withholds a pre-mined block which consists of a transaction that implements a specific deposit i.
The attacker Cd waits for the next block announcement and quickly sends the pre-mined block along with the recently mined block directly to the Bitcoin exchange or towards its nearby peers with hope that the exchange and probably some of the nearby miners will consider the blockchain containing the pre-mined block i.. The attacker quickly sends another transaction that requests a withdrawal from the exchange of the same coins that was deposited by the attacker in its previous transaction.
At this point of time, if the other fork i. Recently, authors in  proposes a new attack against the PoW-based consensus mechanism in Bitcoin called the Balance attack. The attack consists of delaying network communications between multiple subgroups of miners with balanced hash power. The theoretical analysis provides the precise trade-off between the Bitcoin network communication delay and the mining power of the attacker s needed to double spend in Ethereum  with high probability.
Based on the above discussion on double spending attack and its variants, one main point that emerges is that if a miner or mining pool is able to mine blocks with a faster rate than the rest of the Bitcoin network, the possibility of a successful double spending attack is high. The rate of mining a block depends upon solving the associated proofof-work, this again depends on the computing power of a miner.
Apart from the computing resources, the success of double spending attack depends on other factors as well which includes network propagation delay, vendor, client, and Bitcoin exchange services connectivity or positioning in the Bitcoin network, and the number of honest miners. Clearly, as the number of confirmations for transaction increases, the possibility that it will become invalid at a later stage decreases, thus decreases the possibility of a double spend.
On the other hand, with the increase in the computing resources of a miner, the probability of the success of a double spend increases. From the above discussion on the different type of double spending attacks, we can safely conclude that one can always perform a double spend or it is not possible to entirely eliminate the risk of double spending in Bitcoin.
However, performing double spending comes with a certain level of risk, for instance, the attacker might lose the reward for the withheld block if it is not included in the final public blockchain. Therefore, it is necessary to set a lower bound on the number of double spend bitcoins, and this number should compensate the risk of unsuccessful attempts of double spend.
Additionally, the double spends could be recognized with the careful analysis and traversing of the blockchain, thus it might lead to blacklisting the detected peer.
In Section IV-A, we will discuss in detail, the existing solutions and their effectiveness for detecting and preventing the double spending attacks. Mining Pool Attacks Mining pools are created in order to increase the computing power which directly affects the verification time of a block, hence it increases the chances of winning the mining reward. For this purpose, in recent years, a large number of mining pools have been created, and the research in the field of miner strategies is also evolved.
Generally, mining pools are governed by pool managers which forwards unsolved work units to pool members i. The miners generate partial proofs-of-work PPoWs and full proofs-of-work FPoWs , and submit them to the manager as shares.
Once a miner discovers a new block, it is submitted to the manager along with the FPoW. The manager broadcasts the block in the Bitcoin network in order to receive the mining reward.
The manager distributes the reward to participating miners based on the fraction of shares contributed when compared with the other miners in the pool. Thus, participants are rewarded based on PPoWs, which have absolutely no value in the Bitcoin system. The Bitcoin network currently consists of solo miners, open pools that allow any miner to join, and closed private pools that require a private relationship to join.
In recent years, the attack vector that exploits the vulnerabilities in pool based mining also increases. For instance, a group of dishonest miners could perform a set of internal and external attacks on a mining pool. Internal attacks are those in which miners act maliciously within the pool to collect more than their fair share of collective reward or disrupt the functionality of the pool to distant it from the successful mining attempts. In external attacks, miners could use their higher hash power to perform attacks such as double spending.
Figure 6 shows the market share till December of the most popular mining pools. In this section, we will discuss a set of popular internal and external attacks on the mining pools. Bitcoin Hashrate Distribution in Present Market In a mining pool, the pool manager determines the amount of work done by individual pool members, by using the number of shares, a member find and submit while trying to discover a new block.
The shares consist of a number of hashes of a block which are low enough to have discovered a block if the difficulty was 1. Assuming correctness of the hash function used, it is impossible to find shares without doing the work required to discover new blocks or to look for blocks without finding shares along the way.
Due to this, the number of shares determined by a miner is proportional, on average, to the number of hashes the miner calculated while attempting to discover a new block for the mining pool. Additionally, in , the author discusses the possibility of using variable block rewards and difficulty shares as reward methods in a pool.
This variability is introduced due to the following reasons; bitcoins generation per block is cut in half every blocks, and the transaction fees vary rapidly based on the currently available transactions in the network. As most of the mining pools allow any miner to join them using a public Internet interface, such pools are susceptible to various security threats.
The adversaries believe that it is profitable to cannibalize pools than mine honestly. If the mining pool is sharing the reward based on the invested HR then the adversary will receive 0. With standard mining strategy, the adversary will gain an additional revenue of 0. By performing pool cannibalizing i. This misbehavior will remain undetectable unless the change in reward is statistically significant.
Selfish Mining In , authors use a game theoretic approach to show that the miners could have a specific sort of subversive mining strategy called selfish mining  or also popularly known as block discarding attack  . In truth, all the miners in the Bitcoin are selfish as they are mining for the reward that is associated with each block, but these miners are also honest and fair with respect to the rest of miners, while the selfish mining here refers to the malicious miners only.
In the selfish mining, the dishonest miner s perform information hiding i. As it can be seen in Figure 7 that by keeping the mined block s , the selfish miners intentionally fork the blockchain. The selfish pool keeps on mining on top of their private chain Bf0 ork , while the honest miners are mining on the public chain Bf ork. If the selfish miners are able to take a greater lead on Bf0 ork and they are able to keep the lead for a longer time period, their chances of gaining more reward coins as well as the wastage of honest miners resources increases.
To avoid any losses, as soon as the Bf ork reaches to the length of Bf0 ork , the selfish miners publish their mined blocks. All the miners need to adopt to Bf0 ork which now becomes Bf ork as per the longest length rule of Bitcoin protocol.
The honest miners will lose their rewards for the blocks that they have mined and added to the previous public chain. The statement still holds in cases where the network found their new block before the adversary could find a new second block. Because in such case the miner will make use of the race to propagate, i.
Additionally, the analysis reveals that the wastage of computing resources and rewards lure honest miners toward the selfish mining pools, hence it further strengthens the attack. Another attack much similar to the selfish mining that could be performed on a mining pool is known as Block withholding BWH  , in which a pool member never publishes a mined block in order to sabotage the pool revenue however, submit shares consists of PPoWs, but not FPoWs.
In the first scenario, the adversary does not gain any bitcoins, but it just makes other pool members lose, while in the second scenario, the adversary performs a complex block concealing attack similar to the one described in the selfish mining attack. Authors in  present a game-theoretic approach to analyzing effects of block withholding attack on mining pools.
The analysis shows that the attack is always well-incentivized in the longrun, but may not be so for a short duration. This implies that existing pool protocols are insecure, and if the attack is conducted systematically, Bitcoin pools could lose millions of dollars worth in just a few months.
To analyze the effects of BWH on mining pools, authors in  presents The Miners Dilemma, which uses an iterative game to model attack decisions. The game is played between two pools, say pool A and pool B, and each iteration of the game is a case of the Prisoners Dilemma, i. If pool A chooses to attack pool A, pool A gains revenue, pool A loses revenue, but pool B can latter retaliate by attacking pool A and gaining more revenue. Thus, attacking is the dominant strategy in each iteration, hence if both pool A and pool B attack each other, they will be at a Nash Equilibrium.
This implies that if both will earn less than they would have if neither of them attacked. However, if none of the other pools attack, a pool can increase its revenue by attacking the others.
Recently, authors in  propose a novel attack called a fork after withholding FAW attack. Furthermore, the miners dilemma may not hold under certain circumstances, e. More importantly, unlike selfish mining, an FAW attack is more practical to execute while using intentional forks.
The Pool Hopping attack presented in   uses the information about the number of submitted shares in the mining pool to perform the selfish mining. In this attack, the adversary performs continuous analysis of the number of shares submitted by fellow miners to the pool manager in order to discover a new block.
The idea is that if already a large number of shares have been submitted and no new block has been found so far, the adversary will be getting a very small share from the reward because it will be distributed based on the shares submitted. Therefore, at some point in time, it might be more profitable for the adversary to switch to another pool or mine independently. Recently, the Bribery attack is described in .
In this, an attacker might obtain the majority of computing resources for a short duration via bribery. Authors discuss three ways to introduce bribery in the network: By having the majority of the hash power, the attacker could launch different attacks such as double spending and Distributed Denial-of-Service DDoS .
The miners that took the bribes will get benefits which will be short-lived, but these short-lived benefits might be undermined by the losses in the long run due to the presence of DDoS and Goldfinger attacks or via an exchange rate crash.
The objective of punitive forking is to censor the Bitcoin addresses owned by certain people, say Alice, and prevent them from spending any of their bitcoins.
The strategy to perform the blacklisting please refer to Figure 8 is as follows: However, there is another strategy to achieve the blacklisting as presented in . This is the adversary forks as per its convenience, she will continue to extend its fork until wins i. Moreover, if the adversary can show that she is determined to block the selected transaction and will perform the retaliatory forking if required, then the rest of the miners will also be motivated to block the blacklisted transactions to avoid the losses, in case, if the attacker retaliates and wins.
If this is the case, an attacker might be able to enforce the selective blacklisting with no real cost because other miners are convinced that the attacker will perform a costly feather forking attack if provoked. An attacker performing feather forking can also use it to blackmail a client by threatening that all her transactions will be put on the blacklist until the client pays the asked ransom coins.
Client-side Security Threats The huge increase in the popularity of bitcoins encouraged a large number of new users to join the network. Each Bitcoin client posses a set of private-public keys in order to access its account or wallet.
Hence, it is desirable to have the key management techniques that are secure, yet usable. This is due to the fact that unlike many other applications of cryptography if the keys of a client are lost or compromised, the client will suffer immediate and irrevocable monetary losses.
To use the bitcoins, a user needs to install a wallet on her desktop or mobile device. The wallet stores the set of private-public keys associated with the owner of the wallet, thus it is essential to take protective actions to secure the wallet. The wallet thefts are mainly performed using mechanisms that include system hacking, installation of buggy software, and incorrect usage of the wallet.
Bitcoin protocol relies heavily on elliptic curve cryptography  for securing the transactions. To generate a signature, the user chooses a per-signature random value. For security reason, this value must be kept secret, and it should be different for every other transaction. Therefore, it is essential for increasing the security of ECDSA to use highly random and distinct per-signature values for every transaction signature.
The inspection of the blockchain for instances, in which the same public key uses the same signature nonces for multiple times has been reported by the authors in . Recently, authors in  present a systematic analysis of the effects of broken primitives on Bitcoin. Authors highlight the fact that in the current Bitcoin system has no migration plans in-place for both the broken hash and the broken signature scheme, i.
The authors in  found that the main vectors of attack on bitcoins involve collisions on the main hash or attacking the signature scheme, which directly enables coin stealing. However, a break of the address hash has minimal impact, as addresses do not meaningfully protect the privacy of a user. Unlike most of the online payment systems that rely on login details consisting of the password and other confidential details for user authentication, Bitcoin relies on public key cryptography.
This raises the issues of the secure storage and management of the user keys. Over the years, various type of wallet implementations are researched to obtain secure storage of the user keys, it includes software, online or hosted, hardware or offline, paper and brain wallets. Table III shows a number of popular wallets and their main features.
The Copay wallet allows multiple users to be associated with the same wallet, while the Armory wallet works in online as well as in offline mode. The wallet providers have to find an adequate trade-off between usability and security while introducing a new wallet into the market. For instance, an online wallet is more susceptible to thefts compared to hardware wallets  as later are not connected to the Internet, but at the same time hardware wallets lacks usability.
If done right, there exist more advanced and secure ways to store the user keys called paper and brain wallets. As their name indicates, in the paper wallet the keys are written on a document which is stored at some physical location analogizes the cash money storage system, while in brain wallet the keys are stored in the clients mind in the form of a small passphrase. The passphrase if memorized correctly is then used to generate the correct private key.
To avoid the aforementioned risks such as managing cryptographic keys , lost or stolen devices, equipment failure, Bitcoin-specific malware , to name a few, that are associated while storing the bitcoins in a wallet, many users might prefer to keep their coins with online exchanges. However, storing the holdings with an exchange makes the users vulnerable to the exchange systems. For instance, one of the most notorious events in the Bitcoin history is the breakdown and ongoing bankruptcy of the oldest and largest exchange called Mt.
Gox, which lost over millions of dollars. Moreover, a few other exchanges have lost their customers bitcoins and declared bankruptcy due to external or internal theft, or technical mistakes . Although, the vulnerability of an exchange system to the disastrous losses can never be fully avoided or mitigated, therefore the authors in  presents Provisions, which is a privacy-preserving proof of solvency for Bitcoin exchanges.
Provision is a sensible safeguard that requires the periodic demonstrations from the exchanges to show that they control enough bitcoins to settle all of its customers accounts. Bitcoin Network Attacks In this section, we will discuss those attacks in the Bitcoin that exploits the existing vulnerabilities in the implementation and design of the Bitcoin protocols and its peer-to-peer communication networking protocols.
We will start our discussion with the most common networking attack called Distributed Denial-of-Service DDoS which targets Bitcoin currency exchanges, mining pools, eWallets, and other financial services in Bitcoin. Due to the distributed nature of Bitcoin network and its consensus protocol, launching a DoS attack has no or minimal adverse effect on network functionalities, hence attackers have to lunch a powerful DDoS to disturb the networking tasks.
Unlike DoS attack, in which a single attacker carried out the attack, in DDoS, multiple attackers launch the attack simultaneously. DDoS attacks are inexpensive to carry out, yet quite disruptive in nature. Malicious miners can perform a DDoS by having access to a distributed Botnet on competing miners, effectively taking the competing miners out of the network and increasing the malicious miners effective hashrate.
In these attacks, the adversary exhausts the network resources in order to disrupt their access to genuine users. For example, an honest miner is congested with the requests such as fake transactions from a large number of clients acting under the control of an adversary.
In , authors provide a comprehensive empirical analysis of DDoS attacks in the Bitcoin by documenting the following main facts: The paper also states that the majority of DDoS attack targets the exchange services and large mining pools because a successful attack on these will earn huge revenue for the adversary as compared to attacking an individual or small mining pools. In , authors explore the trade-off between the two mining pool related strategies using a series of game-theoretical models.
The first strategy called construction, in which a mining pool invests in increasing its mining capacity in order to increase the likelihood of winning the next race.
While in the second strategy called destruction, in which the mining pool launches a costly DDoS attack to lower the expected success rate of the competing mining pools. The majority of the DDoS attacks target large organizations due to bulk ransom motives. Companies like CoinWallet and BitQuick were forced to shut down only after few months of their launch due to the effects of continuous DDoS attacks. As stated above that DDoS attack take various forms, one of which is to discourage a miner so that it will withdraw itself from the mining process.
For instance, an attacker displays to a colleague miner that it is more powerful, and it can snatch the reward of mining, and it is the obvious winner of the mining process.
An honest miner backoffs since its chances of winning is less. Moreover, in , authors propose network partitioning in Bitcoin, hence isolating the honest nodes from the network by reducing their reputation. Now we discuss the so-called Malleability attacks , which also facilitates the DDoS attacks in Bitcoin. For instance, by using a Malleability attack an adversary clogs the transaction queue .
This queue consists of all the pending transactions which are about to be serviced in the network. Meanwhile, an adversary puts in bogus transactions with the high priority depicting itself to be highest incentive payer for the miners. When the miners try to verify these transactions, they will find that these are the false transaction, and but by this time they have already spent a considerable amount of time in verifying these false transactions.
This attack wastes the time and resources of the miners and the network . Malleability is defined in terms of cryptography by .
In , another form of malleability attack called transaction malleability is introduced. With transaction malleability it is possible to create n another T 0 that is syntactically different i. T 0 also transfers n coins from wallet A to B.
An adversary can perform transaction malleability without even knowing the private key of A. On a high level, transaction malleability refers to a bug in the original Bitcoin protocol which allows the aforementioned behavior in the network possible. In Bitcoin, certainly, the transaction malleability is not desirable, but it does not cause any damage to the system until an adversary exploits its behavior and make someone believe that a transaction has been failed.
However, after a while, the same transaction gets published in the global blockchain. This might lead to a possible double spend, but it is particularly more relevant while targeting the Bitcoin exchanges which holds a significant amount of coins. This is because it allows the users to buy and sell bitcoins in exchange for cash money or altcoins. However, few exchanges use a custom implementation and were apparently vulnerable. Gox a popular exchange issued a statement in the early days of Bitcoin that they were attacked due to transaction malleability, therefore they are forced to halt withdrawals and freezing clients account.
The attack that MtGox claimed to be the victim proceeds as follows: Hence effectively Cd is able to withdraw her coins twice. The whole problem is in the above Step vi , where MtGox should have searched not for the transaction with Txid of T , but for any transaction semantically equivalent to T.
For the first time, authors in  present the impact of routing attacks on Bitcoin network by considering both small and large scale attacks. The paper shows that two key properties of Bitcoin networks which includes, the ease of routing manipulation, and the rapidly increasing centralization of Bitcoin in terms of mining power and routing, makes the routing attacks practical.
More specifically, the key observations suggest that any adversary with few can perform the so-called Refund attacks. In , authors present the successful implementation of the refund attacks on BIP 70 payment protocol. BIP70 is a Bitcoin communityaccepted standard payment protocol that governs how vendors and customers perform payments in Bitcoin. Most of the major wallets use BIP70 for bitcoins exchange, and the two dominant Payment Processors called Coinbase and BitPay, who uses BIP70 and collectively they provide the infrastructure for accepting bitcoins as a form of payment to more than , vendors.
The authors propose two types of refund attacks called Silkroad Trader attack which highlights an authentication vulnerability in the BIP70, and Marketplace Trader attack which exploits the refund policies of existing payment processors.
The brief description of both these refund attacks is as follows. When a customer starts trading with the merchant its address is revealed to the ill trader. The merchant sends the amount to the ill merchant, thus gets cheated without receiving a refund from the other side. During this whole process of refund between the merchant and the ill trader, the customer is not at all aware of the fraud that is happening in her name.
The Marketplace trader attack is a typical case of the man-in-the-middle attack. In this, the adversary setup an attractive webpage where she attracts the customer who falls victim in the later stages. The attacker depicts herself as a trusted party by making payments through trust-able merchants like CeX. When a customer clicks the webpage, accidentally reveals her address among the other identities that are sufficient to perform malpractice by the rogue trader with the false webpage.
When customer purchase products, a payment page is sent which is a legitimate payment exchange merchant. Hence, the legitimate customer will not be aware of the fraud process but the merchant loses his bitcoins . Later, both these attacks have been acknowledged by Coinbase and Bitpay with temporary mitigation measures put in place.
However, the authors claim that to fully address the identified issues will require revising the BIP70 standard. Yet another attack on the Bitcoin networks is called Time jacking attack .
In Bitcoin network, all the participating nodes internally maintain a time counter that represents the network time. However, if the median time differs by more than 70 minutes from the system time, the network time counter reverts to the system time. Since the time value can be skewed by at most 70 minutes, the difference between the nodes time would be minutes . This attack significantly increases the possibility of the following misbehaviors: Eclipse attack Apart from the aforementioned major attacks on Bitcoin protocol and network, there are few other minor attacks that we have summarized below.
A type of attack where attacker installs dummy helper nodes and tries to compromise a part of the Bitcoin network.
A sybil attack  is a collaborative attack performed by a group of compromised nodes. Also, an attacker may change its identity and may launch a collusion attack with the helper nodes. An attacker tries to isolate the user and disconnect the transactions initiated by the user or a user will be made to choose only those blocks that are governed by the attacker.
If no nodes in the network confirm a transaction that input can be used for double spending attack. An intruder with her helper nodes can perform a collaborated timing attack, hence it can hamper a low latency encryption associated with the network. The other version of this attack where the attacker tries to track back the nodes and wallets involved in the transaction is discussed in . In this attack , an adversary manipulates a victim peer, and it force network partition as shown in Figure 9 between the public network and a specific miner victim.
The IP addresses to which the victim user connects are blocked or diverted towards an adversary . In addition, an attacker can hold multiple IP addresses to spoof the victims from the network. The attack could be of two type: In both the cases, an adversary can manipulate the peers in the Bitcoin network. In a Bitcoin network, after mining a block the miners broadcast the information about newly mined blocks. New transactions will be broadcast from time to time in the network.
The network assumes that the messages will reach to the other nodes in the network with a good speed. However, authors in  ground this assumption and proved that the adversary can induce delays in the broadcast packets by introducing congestion in the network or making a victim node busy by sending requests to all its ports. Such type of tampering can become a root cause for other types of attacks in the network.
However, these days the word attack is used a bit more loosely than ever, as the scaling debate has made people believe almost everything is a Bitcoin network invasion.
One of the biggest attacks in the history of Bitcoin have targeted Mt. Gox culminated in the loss of , bitcoins. However, the legitimacy of attack was not completely confirmed, but it was enough to make Mt. Gox to shut down and the value of bitcoins to slide to a three-month low. Although transaction malleability is now being addressed by segwit, the loss it caused was far too small with the main issue seemingly being at a human level, rather than protocol level.
In the same year, Sheep Marketplace, one of the leading anonymous websites also announces that they have been hacked by an anonymous vendor EBOOK who stole bitcoins. However, in all the aforementioned, it remains unclear that whether there is any hacked happened or it is just a fraud by the owners to stole the bitcoins. Bitstamp, an alternative to MT Gox, increasing its marketshare while Gox went under were hacked out of around 5 million dollars in The theft seems to have been a sophisticated attack, with phishing emails targeting bitstamps personnel.
However, as the theft was limited to just hot wallets, they were able to fully cover it, leading to no direct customer losses.
Poloniex is one of the biggest altcoin exchange with trading volumes of , BTC or more per day, lost their The hack was executed by just clicking withdrawal more than once. As it can be concluded from the above discussion that the attackers always target the popular exchanges to increase their profit.
Recently, in August , BitFinex, which a popular cryptocurrency exchange suffered a hack due to their wallet vulnerability, and as a result around bitcoins were stolen. From the nature of the aforementioned attacks, it can be concluded that security is a vital concern and biggest weakness for cryptocurrency marketplaces and exchanges. In particular, as the number of bitcoins stored and their value has skyrocketed over the last year, bitcoins digital wallets have increasingly become a target for hackers.
At the social level, what is obvious and does not need mentioning although some, amazingly, dispute it is that individuals who handle our bitcoins should be public figures with their full background on display for otherwise they cannot be held accountable.
Lacking such accountability, hundreds of millions, understandably, is far too tempting as we have often seen. An equally important point is that bitcoin security is very hard.
Exchanges, in particular, require highly experienced developers who are fully familiar with the bitcoin protocol, the many aspects of exchange coding and how to secure hard digital assets for, to truly secure bitcoin, exchanges need layers and layers amounting to metaphorical armed guards defending iron gates with vaults deep underground behind a thousand doors. No more double spending The transaction propagation and mining processes in Bitcoin provide an inherently high level of protection against double spending.
This is achieved by enforcing a simple rule that only unspent outputs from the previous transaction may be used in the input of a next transaction, and the order of transactions is specified by their chronological order in the blockchain which is enforced using strong cryptography techniques. This boils down to a distributed consensus algorithm and timestamping. In particular, the default solution that provides resistance to double spending in Bitcoin is its use of Proofof-work PoW based consensus algorithm, which limits the capabilities of an adversary in terms of, the computational resources available to an adversary and the percentage of honest miners in the network.
More specifically, the purpose of the PoW is to reach consensus in the network regarding the blockchain history, thereby synchronizing the transactions or blocks and making the users secure against double-spending attacks.
Moreover, the concept of PoW protect the network against being vulnerable to sybil attack because a successful sybil attack could sabotage the functionality of consensus algorithm and leads to possible double spending attack.
In general, double spending could be dealt in two possibles ways: Therefore, the latter approach, i. The most effective yet simple way to prevent a double spend is to wait for a multiple numbers of confirmations before delivering goods or services to the payee. In particular, the possibility of a successful double spend decreases with increase in the number of confirmations received.
Of course, the longer back transactions lie in the blockchain, the more blocks need to be caught up until a malicious chain gets accepted in the network.
This limits attacker from possible revise the history of transactions in the chain. For instance, unconfirmed bitcoin transaction zero block transaction has a high risk of double spend, while a transaction with atleast one confirmation has statically zero risks of double spend, and a transaction with six confirmations are commonly considered steady, hence has zero risks of double spend.
In Bitcoin, the classic bitcoin client will show a transaction as not unconfirmed until the transaction is six blocks deep5 in the blockchain. However, waiting of six transactions about one hour might not be suitable for various applications such as fast payment systems, e. There is nothing special about the choice of the default safe confirmation value, i. Authors in  evaluate three techniques that can be used to detect a possible double spending in fast payment systems.
The three techniques are as follow: In the first technique, the vendor associates a listening period with 5 Each new block that will be put on top of a block containing the desired transaction will result in the generation of a confirmation for the desired transaction.
The vendor only delivers the product, if it does not see any attempt of double spending during its listening period. The inserting observers technique naturally extends the first technique based on the adoption of a listening period would be for the vendor to insert a set of nodes i. These observers will directly relay all the transactions to the vendor that they receive from the network.
In this way, with the help of the observers, the vendor is able to see more number of transactions in the network during its listening period, thus increases the chances of detecting a double spend.
The third technique i. With this approach, whenever a peer receives a new transaction, it checks whether the transaction is an attempt to double spend, if so then peer forward the transaction to their neighbors without adding it to their memory pools. Recently, the hash power of a pool called GHash. IO remained honest by transferring a part of its mining power to other pools. However, the incentives that motivate an adversary to create large pools remains in the network, always looking for a chance to wrongful gain and disrupt the network.
Therefore, a method to prevent the formation of large pools called Two phase Proof-of-Work 2P-PoW has been proposed in . The authors propose a second proof-of-work say Y on top of the traditional proof-of-work say X of the block header.
Y signs the produced header with the private key controlling the payout address. Similar to existing hashing procedures this signature must meet a target set by the network, hence the use of Y forces pool managers to distribute their private key to their clients if the manager wants to retain the same level of decentralization.
However, if a manager would naively share its private key, all clients would be authorized to move funds from the payout address to any destination. Pool managers unwilling to share their private key needs to install mining equipment required to solve Y in a timely manner. It is estimated that GHash. Depending on the difficulty of Y 0 s cryptographic puzzle this would only allow a certain number of untrusted individuals to join.
In this way, as GHash. IO is a public pool, severely limit its size. Authors in  propose the use of decentralized nonequivocation contracts, to detect the double spending and penalize the malicious payer. The basic idea of non-equivocation contracts is that the payer locks some bitcoins in a deposit when he initiates a transaction with the payee. If the payer double spends, a cryptographic primitive called accountable assertions can be used to reveal his Bitcoin credentials for the deposit.
Thus, the malicious payer could be penalized by the loss of deposit coins. However, such decentralized nonequivocation contracts are subjected to collusion attacks where the payer colludes with the beneficiary of the deposit and transfers the Bitcoin deposit back to himself when he double spends, resulting in no penalties.
On the other hand, even if the beneficiary behaves honestly, the victim payee cannot get any compensation directly from the deposit in the original design. To prevent such collusion attacks, authors in  design fair deposits for Bitcoin transactions to defend against doublespending.
The fair deposits ensure that the payer will be penalized by the loss of his deposit coins if he double spends and the victim payees loss will be compensated. The proposed protocol uses the assertion scheme from .
In particular, the beneficiary can recover the payers secret key if the payer double spends. However, to ensure that the payees loss can be compensated if the payer double spends, in addition to a signature generated with the payers secret key, a signature generated with the payees secret key is required for the release of the compensation locked in the deposit.
Meanwhile, the incentive for the beneficiary is also guaranteed in the deposit. Another solution to control double spending was proposed in  where all the participating users deposit a safety amount similar to an agreement. If an attacker tries to double spend and it is detected, the deposit amount will be deducted and it is given to the victim who encountered the loss. Due to the punishing attribute of the network, the attack can be controlled. In , authors suggest a countermeasure by prohibiting the merchant to accept incoming connections, thus an adversary cannot directly send a transaction to the merchant.
This forces the adversary to broadcast the transaction over the Bitcoin network, and this ensures that the transaction will end up in the local view of all the miners that forwards it. Later if the adversary tries to double spend the miners will know about it and take primitive actions in future. In block discarding attack, an adversary has control over a set of nodes in the network, called supporters.
The adversary and her supporters purposefully add a delay in the propagation of the legitimately discovered blocks, and the attacker advertises her block selfishly.
The delay becomes worse as the number of supporter increases. The solution for this attack is fixing the punishment for the advertisers or the misbehaving miners. Every node is asked to pay a deposit amount, and the nodes who misbehave are punished by dissolving the deposit amount of the concerned. This amount is distributed among the nodes who informs about the misbehaving node in the network. There does not seem to be a method for doing bulk extract via the API.
The results can be easily inspected parsed processed with automated tools. An oft cited concern though. You see for many developing nations, the extraction export of commodities is an important driver of economic growth.
GitHub gcarq rusty blockparser: Multi threaded Bitcoin Blockchain. Send beautiful emails advertise, connect your e commerce store. Observations on Bitcoin s scaling challenge Random Oracle Permacoin: Repurposing Bitcoin Work for Data Preservation.
That said many came to Counterparty because it is Bitcoin, Leary added so the project anywhere else would be. Stop buying email leads because. Undefined We find that while Bitcoin does not rival the established money and payment systems in their traditional. Bulk Mailers, Email Extractor: Resources, while the bulk is used to proof the good intentions of the individuals. There exists an extractor that, given. If most global financial regulators made Bitcoin illegal, it would become difficult.
Bitcoin community is skeptical of this approach and exchanges are generally expected to be fully solvent at all times. Wallet import CBitcoinAddress rpc bitcoin. The problem was that the. Assuming that your hardware is sufficient to handle far more than 8 GB hour of sustained writes to sDirand to handle reading a similar amount from blobTable to handle whatever other I O your system needs the simplest option would likely to be to spawn a few parallel sessions each of which is.
It allows extraction of various data typesblocks transactions, public keys hashes, scripts balances. Net Universal Paper wallet generator for Bitcoin and. This process is inspired by gold extraction: Our results are derived from theoretical analysis and confirmed by a new Bitcoin mining simulator that may be of independent interest.
Bitcoin bulk extractor 0 bitcoin apple bitcoin mining kaspersky cryptolocker bitcoin multi wallet cryptocurrency all bitcoin addresses with balance. We sell only the highest quality plant extracts. Monopoly rent extraction by payment processors regulations mandatory. E Campaign on OS X. Create your own paper wallet in a few easy steps Generate Print Fold.