Introduction to Attacks on Bitcoin and Cryptos

1. Introduction to
Attacks on Bitcoin

2. What is Bitcoin & how it works
Conclusion
Major attacks on Bitcoin
1
3
2
Contents
References
4

3. What is Bitcoin &
how it works
1

4. What is Bitcoin
● The first realization of cryptocurrencies
● Developed by anonymous Satoshi Nakamoto
● No bank or middle authority to be
responsible for what is going on
● Users interact with the network through
their wallets which use async cryptography
● How to trust it?

5. Bitcoin’s core of trust
● Bitcoin uses the PoW consensus protocol
● PoW defines the mechanics behind how BTC’s miners and nodes work
● Proof of Work was developed back in 1993 by Moni Naor and Cynthia Dowrk
● The consensus protocol in a crypto network is basically what nominates
miners to mine new blocks
The distribution of BTC nodes

6. Bitcoin in Summary
● A decentralized cryptocurrency
● Uses PoW as the consensus protocol
● Based on a “chain” of blocks that store transactions
● Has nodes and miners keep the network live and dynamically available
● Each block is cryptographically proven to proceed the previous one; provable
from the genesis block onwards
● Miners compete to find new blocks matching difficulty constraints
● Miners gather unprocessed transactions in new blocks for a reward and nodes
add them to their stored blockchain
● The whole decentralized model works based on the longest chain rule

7. Major attacks on Bitcoin
2
51% Attack
2.1
Eclipse Attack
2.2
Quantum Attacks
2.3
Block Delay Attack
2.4

8. 51% Attack
2.1

9. The Warning
P2P
Secure via hash
Warning about
51% attack
Electronic payment
system
No double
spending
Longest
chain

10. 51% Attack
Honest miners are adding
blocks to the public
blockchain.
The malicious miner is adding
blocks to a private blockchain
without disclosing to the
public blockchain.

11. 51% Attack: Double-Spending
Honest miners join the
malicious miner on his chain.
The malicious miner
broadcasts his longer version
of the chain to the other
miners.
-100
BTC
-0
BTC

12. 51% Attack Consequences
● Steal coins from others?
● Suppress transactions?
○ From the blockchain
○ From the p2p network
● Change the block reward?
● Destroy confidence in bitcoin?

13. Eclipse Attack
2.2

14. In an eclipse attack, a malicious actor isolates
a specific user or node within a peer-to-peer
(P2P) network. Nodes within the network
are unable to connect with all other nodes
and can connect with a limited number of
neighboring nodes.
Eclipse Attack

15. Eclipse Attack
Isolated In an eclipse attack, a malicious actor isolates
a specific user or node within a peer-to-peer
(P2P) network. Nodes within the network
are unable to connect with all other nodes
and can connect with a limited number of
neighboring nodes.

16. Eclipse Attack
Victim Node Attacker Node
In an eclipse attack, the attacker node is directly connected to the victim
node and prevents the victim from learning about the rest of the network.

17. Eclipse Attack
Consequences:
● Double Spending
● 51% attack with less mining power

18. Eclipse Attack
Victim Node
Attacker Node
Consequences: Double Spending
30% mining power 70% mining power

19. Eclipse Attack
Victim Node
Attacker Node
Consequences: Double Spending
30% mining power 70% mining power
longest chain!

20. Eclipse Attack
Attacker Node
Consequences: 51% attack with less mining power
30% mining power 30% mining power
40% mining power

21. Eclipse Attack
Attacker Node
Consequences: 51% attack with less mining power
30% mining power 30% mining power
40% mining power
longest chain!

22. Quantum Attacks
2.3

23. Quantum Attacks
Quantum attacks on PoW are based on the the advantages quantum
computers have over classical ones.
● By 2050: 1 QC’s hashing power > BTC’s total network hashing power
● Algorithms already developed with the potential to beat PoW hard
● Even before 2050, it’s easy to perform 51% attacks given enough qubits
● ECDLP (the underlying basis of Secp256k1 ECDSA) can be solved in
polynomial time given enough qubits
● Bitcoin’s public addresses/keys can easily leak private keys at enough
qubits
● Double spending attacks with QCs’ hashing power increasing significantly

24. Quantum Attacks
Grover’s Quantum Algorithm
Shor’s Quantum Algorithm
Quantum algorithms are growing fast and are already on their way to pose
Bitcoin’s backbone cryptography to many problems.
Grover’s Algorithm aims to solve the problem of searching unstructured
and/or very rare x given f and v where f(x) = v. It’s complexity is O( √ N).
Shor’s Algorithm is capable of solving the Integer Factorization Problem in
O((log N)^2 . (log log N) . (log log log N)) –- polynomial time.
● Any classical computer would require Ω(N) steps for the same computation
● Can be applied to break BTC’s SHA256 hashes in O(2^128)
● Second preimage attacks at only ϴ(2^64) steps
● QCs running in parallel could be even much more powerful
● The major algorithm underlying many modern developments in QCs
● At enough qubits, can be easily be applied to break BTC’s ECDSA
● Non-reusable addresses: PKs revealed and broken when spending BTCs
● Processed transactions: double spending attacks hard to do
● Unprocessed (pooled) transactions: In risk of being modified

25. Quantum Resistance
● Use larger key sizes (128 and 256 bits not enough)
● Use quantum-resistant algorithms:
○ Encryption: CRYSTALS-Kybers
○ Digital Signature: CRYSTALS-Dilithium, FALCON, and SPHINCS+
● Use post-quantum cryptography
○ Lattice-based cryptography
○ Multivariate cryptography
○ Hash-based cryptography
○ Code-based cryptography
○ Supersingular elliptic curve isogeny cryptography
○ Symmetric key quantum resistance
● Requires forks on the BTC network (probably a/several hard forks)

26. Block delay attack
2.4

27. Block delay attack
● One of Network-plane attacks
● History
○ Eclipse attack
○ BGP hijacking attack
● Original block delay attack(proposed by Gervais)
● TendrilStaller

28. Original block delay attack
Advertisement based block propagation
inv getdata block B
Node A
Node N

29. Original block delay attack
Attack strategy
inv getdata block B
Attacker A
Victim V
delay the response

30. TendrilStaller attack
New model of block propagation
● Block headers as announcement of new block
● Compact block relay
● High Bandwidth (HB) mode neighbor
● Shorter block download timeout

31. TendrilStaller attack
New model of block propagation
Non-HB neighbor A
headers
getdata
blocktxn
Node A
Node N
compact
block
getblocktxn

32. TendrilStaller attack
New model of block propagation
HB neighbor A
blocktxn
Node A
Node N
compact
block
getblocktxn

33. TendrilStaller attack
Impact on original attack
headers
getdata
Attacker A
Victim V
delay the response
HB neighbor N
compact block
Victim gets the new block

34. TendrilStaller attack
Attack algorithm - phase 1
initiate
connections
a1
a2
a3
victim
IP x
IP y
IP z
HBN list
send block b+1
a1
a2
a3
victim
IP a1
IP a2
IP a3
HBN list
start of phase 1 end of phase 1

35. TendrilStaller attack
Attack algorithm - phase 2
getdata
a1
a2
a3
victim
IP a1
IP a2
IP a3
HBN list
attack in phase 2

36. TendrilStaller attack
Light weight attack nodes
● Mode 1
○ Not participating in attack
○ As a proxy for full attack nodes
● Mode 2
○ Participating in attack
○ Relaying requests/responses between full attack node and victim

37. TendrilStaller attack
countermeasures
● Partially-random selection of HB neighbors
● HB neighbor on outgoing connections
● Shorter block download timeout

38. Conclusion
● Bitcoin is a distributed cryptocurrency which implements a highly
available, public, and decentralized ledger
● Although it has so many benefits, it suffer from some attacks. Some of
which are :
○ 51% attack (the most important one)
○ Double spending attack
○ Eclipse attack
○ Quantum attack
○ Block delay attack
● We covered all attacks above and also we mentioned some
countermeasures to defeat them

39. ● Introduction to Cryptocurrency, Master’s Course, Prof. B. Bahrak & Prof. H. Shariatpanahi
● https://bitcoin.org/bitcoin.pdf
● https://medium.com/pirl/pirlguard-innovative-solution-against-51-attacks-87dd45aa1109
● https://engineering.cmu.edu/cmkm/_files/documents/tendrilstaller-block-delay-attack-in-
bitcoin.pdf
● https://hub.packtpub.com/what-can-blockchain-developers-learn-from-eclipse-attacks-in-a-
bitcoin-network-koshik-raj/
● Aggarwal, Divesh, Gavin K. Brennen, Troy Lee, Miklos Santha, and Marco Tomamichel.
"Quantum attacks on Bitcoin, and how to protect against them." arXiv preprint
arXiv:1710.10377 (2017).
● Stewart, Iain, Daniel Ilie, Alexei Zamyatin, Sam Werner, M. F. Torshizi, and William J.
Knottenbelt. "Committing to quantum resistance: A slow defence for Bitcoin against a fast
quantum computing attack." Royal Society open science 5, no. 6 (2018): 180410.
References

40. Thank you!