Bitcoin and Blockchain Security - Bitcoin and Blockchain Security -

Preface BOOK STRUCTURE Background on Digital Payments PAYMENT SYSTEMS ARCHITECTURE SECURITY AND PRIVACY IN PAYMENTS Security Privacy Combining Security and Privacy SECURITY IN PAYMENT SYSTEMS PRIOR TO BITCOIN Common Payment System Characteristics Liveliness of the Interaction with the Banks Mediator-Based Services Support for Micropayments Privacy-preserving Payments Due to the Research Community Digital Cash Credit Card-Based Payment Protocols Micropayments Other Privacy-Preserving Payments Deployed Payment Systems Zero-Knowledge Systems PayPal IBM Micropayments Peppercoin M-Pesa SUMMARY References Bitcoin Protocol Specification OVERVIEW OF BITCOIN BUILDING BLOCKS AND CRYPTOGRAPHIC TOOLS Cryptographic Hash Functions Merkle Trees ECDSA BITCOIN DATA TYPES Scripts Addresses Transactions Supported Transaction Types Script Execution Transaction Change and Fees Locktime Blocks Blockchain Proof-of-Work BITCOIN ARCHITECTURE Node Types Miner Full Node Lightweight Clients Peer-to-Peer Overlay Network Peer Discovery Peer Connection Block Synchronisation Dedicated Relay Networks Alert Mechanism SCALABILITY MEASURES IN BITCOIN Request Management System Static Time-outs Recording Transaction Advertisements Internal Reputation Management System References Security of Transactions in Bitcoin SECURITY OF CONFIRMED TRANSACTIONS Transaction Verification Eclipse Attacks in Bitcoin Implications Countermeasures Denying the Delivery of Transactions Possible Countermeasures Transaction Confirmation Selfish Mining Transaction Confirmation Time SECURITY OF ZERO-CONFIRMATION TRANSACTIONS (In-)Security of Zero-Confirmation Transactions Finney Attack Possible Countermeasures Adopting a Listening Period Inserting Observers in the Network Refusing Incoming Connections Increasing the Number of Neighbors Inflicting Penalties on Misbehaving Nodes Not Advertising TRy Forward First Double-Spend Attempt BITCOIN FORKS Exploiting Forks to Double-Spend Fork Resolution References Privacy in Bitcoin USER PRIVACY IN BITCOIN Protocol-Based Privacy Quantification in Bitcoin Exploiting Existing Bitcoin Client Implementations Summing Up: Behavior-Based Analysis Coin Tainting Risks of Holding Tainted Bitcoins NETWORK-LAYER ATTACKS Refresher on Bitcoin P2P Network Setup Privacy Leakage over the Bitcoin Network ENHANCING PRIVACY IN BITCOIN Mixing Services CoinJoin Privacy-Preserving Bitcoin Protocol Enhancements Model Cryptographic primitives ZeroCoin Extending ZeroCoin: EZC and ZeroCash Extended ZeroCoin ZeroCash SUMMARY References Security and Privacy of Lightweight Clients SIMPLE PAYMENT VERIFICATION Overview Specification of SPV Mode Security Provisions of SPV mode PRIVACY PROVISIONS OF LIGHTWEIGHT CLIENTS Bloom Filters Privacy Provisions Leakage Due to the Network Layer Leakage Due to the Insertion of Both Public Keys and Addresses in the Bloom filter Countermeasure Leakage under a Single Bloom Filter Poorly-populated Bloom Filters Leakage under Multiple Bloom Filters Two Bloom Filters Bi and B2 Belong to Different Users B1 and B2 Belong to the Same User Multiple Bloom Filters Summary Countermeasure of Gervais et al.References Bitcoin’s Ecosystem PAYMENT PROCESSORS BITCOIN EXCHANGES BITCOIN WALLETS Securing Bitcoin Wallets Security of Online Wallets Security of Hardware Wallets Security of Paper Wallets Multisig Transactions Trusted Computing Multicloud Storage MINING POOLS Impact of Mining Pools on De-centralization BETTING PLATFORMS PROTOCOL MAINTENANCE AND MODIFICATIONS Bitcoin Improvement Proposals The Need for Transparent Decision Making CONCLUDING REMARKS References Applications and Extensions of Bitcoin EXTENSIONS OF BITCOIN Litecoin Dogecoin Namecoin Digital Assets APPLICATIONS OF BITCOIN’S BLOCKCHAIN Robust Decentralized Storage Authenticated Storage Permacoin Decentralized Identity Management Time-Dependent Source of Randomness Smart Contracts Making a Deposit Dispute Mediation Managing Multiuser Funds Using Smart Contracts for Crime CONCLUDING REMARKS References Blockchain Beyond Bitcoin SIDECHAINS ETHEREUM Accounts Transactions and Messages State and Transaction Execution Blocks Mining and Blockchain OPEN BLOCKCHAIN Membership Services Consensus Mechanism Confidentiality of Transactions Auditing Capabilities Possible Extensions RIPPLE Consensus and Validating Servers COMPARISON BETWEEN BITCOIN, RIPPLE, ETHEREUM, AND OPEN BLOCKCHAIN Consensus Speed Privacy and Anonymity Clients, Protocol Update, and Maintenance Decentralized Deployment References Concluding Remarks SUMMARY OUTLOOK