7 ms·

“Alister Maclin” can break Bitcoin on command

53 points by davidgerard 11y ago

api 11y ago
Seems like a pretty easy attack, so I expect to see it executed by others for profit.
- davidgerard 11y ago
  Is there much profit to be made? To me the recent "stress tests" look very like disgruntled hodlers messing around for shits and giggles, and demonstrating that it costs only a few thousand dollars in bitcoins to break transaction processing. (Love the crackier theories that /r/buttcoin are banker shills. If only banks could get hold of a few thousand dollars somewhere ...)
  - kbar13 11y ago
    surely if you have a large short position on bitcoin, you may profit as people lose confidence?
    - pjc50 11y ago
      It's not as easy to take out a short position as it sounds.
      - nosuchthing 11y ago
        With all the bitcoin fanatics who are convinced bitcoins are inherently rare and thus destined to increase in value, there are certainly opportunities for short options.
        deleted 11y ago
        [deleted]
      - aianus 11y ago
        That's not true, it's pretty simple to short at Bitfinex (https://www.bitfinex.com https://www.bitfinex.com).
    - davidgerard 11y ago
      Shorting relies on a fairly complicated and trustworthy financial system. It isn't some easy thing, it's quite a complicated thing to set up to work well enough to serve as a financial product. This does not actually exist for Bitcoin. Shorting requires trusting an exchange, and statistically trusting a Bitcoin exchange is historically a terrible idea. So no, you can't just short Bitcoin and expect to make money.
      - eru 11y ago
        You can sell bitcoin futures. That's equivalent to a short. Ie you and the counterparty agree on a price today to sell them bitcoins a fixed time later. If both of you keep honouring any margin calls you agree on, the risk is fairly low. No third party necessary. But yes, it is a more complicated transaction than the spot market.
        davidgerard 11y ago
        Is this hypothetical, or are there a few working examples, or are there a lot of working examples, enough that one could casually talk about shorting Bitcoin? How big is this market for Bitcoin shorts and futures, what sort of volume are we talking about at the present time? The only shorting I knew of was on exchanges of questionable trustworthiness.
        eru 11y ago
        Sorry, purely hypothetical. But, it might be worthwhile to make this work. If you implement the margin calls right, there's almost no risk for any party involved. Stand by, while I talk to my bitcoin obsesses friends about a startup idea.
        aianus 11y ago
        https://www.bitfinex.com/ https://www.bitfinex.com/ Large, relatively trustworthy exchange. Costs roughly 3.3% APR to borrow $1m worth of BTC for shorting right now: https://www.bitfinex.com/credit/index/btc https://www.bitfinex.com/credit/index/btc Edit: corrected the interest rate
    - klodolph 11y ago
      There's really no such thing as a short position in currency, because you are just exchanging it for other currency, which makes it a long position in the other currency.
      - eru 11y ago
        Currency or commodity.
      - bduerst 11y ago
        Only if you're being literal. They didn't say short the currency, and there are several ways to short bitcoin: http://www.investopedia.com/articles/investing/092214/no-faith-bitcoin-profit-shorting-it.asp http://www.investopedia.com/articles/investing/092214/no-fai...
troncheadle 11y ago
I'm interested to hear more about his claims that bitcoin uses more energy than other forms of currency. Can anyone speak to that?
- wlesieutre 11y ago
  From earlier this year: > A more fundamental worry is that digital-currency mining, like other sorts of mining, has environmental costs: all that number-crunching uses a lot of electricity, and not all of it comes from renewable sources, as it does in Boden. The rapid development of the ASICs chips has made the machines more efficient, but even if all mining worldwide were carried out in modern facilities like Boden’s, the combined electricity consumption would be 1.46 terawatt-hours per year—the consumption of about 135,000 average American homes. http://www.economist.com/news/business/21638124-minting-digital-currency-has-become-big-ruthlessly-competitive-business-magic http://www.economist.com/news/business/21638124-minting-digi... The whole consensus network of Bitcoin is based around burning so much energy/space/infrastructure on hashing that a single actor wouldn't be able to invest a bunch of money and take a controlling majority. I can't speak to how much energy we burn with ACH systems, paper money, etc., but those are much bigger than Bitcoin in terms of usage. If you add up the total energy consumed by every bank and mint in the world, you might get a higher absolute number. In terms of energy used per amount of value transferred, the traditional currencies almost certainly win.
  - josu 11y ago
    >The whole consensus network of Bitcoin is based around burning so much energy/space/infrastructure on hashing that a single actor wouldn't be able to invest a bunch of money and take a controlling majority. If you have the time and you don't mind, could you elaborate on that? It just doesn't sound right to me. What is the mechanism that discourages big investments? As far as I can tell, there seem to be some economies of scale, that's why there are mining farms. From the bitcoin wiki "Attacker has a lot of computing power": "Since this attack doesn't permit all that much power over the network, it is expected that no one will attempt it. A profit-seeking person will always gain more by just following the rules, and even someone trying to destroy the system will probably find other attacks more attractive. However, if this attack is successfully executed, it will be difficult or impossible to "untangle" the mess created -- any changes the attacker makes might become permanent." [1] https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_...
ceocoder 11y ago
Somewhat unrelated - for those who don't know Alistair MacLean[1] was a novelist, mostly war thrillers, adventures. My grandpa - a voracious reader and a retired judge spent most of his retirement reading and walking, he turned me on to Alistair MacLean by describing his experience of reading Ice Station Zebra (based on the north pole) as if "you feel the chill in your bones as you read it". So I read that, and ever sing book Alistair MacLean has authored. These were the first novels I read in English. After going through entire works of Alistair MacLean, I went through pretty much any other book I can get my hands on. And the _best_ part was finishing something, going downstairs to grandpa's room and telling him, his response was almost always - "oh yes, I read that in 19XX, love the character X doing something with Y". Reading the title of the post was a pang of nostalgia, I can still remember him telling me about Ice Station Zebra, Night Without End, Where Eagles Dare, Guns of Navarone, Force 10 from Navarone. I miss him. [1] https://en.wikipedia.org/wiki/Alistair_MacLean https://en.wikipedia.org/wiki/Alistair_MacLean
ForHackernews 11y ago
Is there source code for the attack script anywhere? It would be interesting to see if a decentralized currency can stand up to a decentralized attack.
Uptrenda 11y ago
I've never seen a more FUD headline than that. Got to love the journalistic sensationalism at play here. To clear this up: the technique in the article is literally what we use in unit tests to check that our TX-based event code won't break under malleability. It's something that Bitcoin developers have been writing code around forever (and warning about just as long.) So truly: if there's anyone out there still writing code that assumes static TXIDs they really do deserve what's coming to them. As I see it: the attack reaches critical mayhem in a similar way to accepting zero-conf transactions in that what you have is a consensus problem. The specific fix for TX malleability is to watch transactions based on their meaning, not their TXID (in this case "meaning" is looking at the inputs, outputs, version, timelock, etc to produce equivalent transactions.) And of course: don't accept zero-confirmation transactions. Here's some of my ultra-1337 Python code for producing the "attack" just for laughs: def mutate_tx(tx_hex): """ Mutates a raw transaction using TX malleability in the scriptSig (specifically, the OP codes.) This function shouldn't be used beyond testing as it uses an ugly eval() hack. https://en.bitcoin.it/wiki/Transaction_Malleability """ tx = CTransaction.deserialize(binascii.unhexlify(tx_hex)) script_sig = repr(tx.vin[0].scriptSig)[9:] script_sig = eval("CScript([OP_1, OP_DROP, " + script_sig) tx.vin[0].scriptSig = script_sig return b2x(tx.serialize()) As you can see, there's nothing to it. Just a clueless attention whore claiming to an even more clueless journalist that he can break Bitcoin.
- phpnode 11y ago
  I think the article is confusing two different issues, the malleability attacks and the dust attacks. Amaclin seems to be behind the dust attack, which is a cheap way to DoS the blockchain by causing blocks to reach the maximum number of SIGOPS with dust transactions, preventing real transactions from going through. More details here: https://bitcointalk.org/index.php?topic=1166928.0 https://bitcointalk.org/index.php?topic=1166928.0

53 points by davidgerard 11y ago

api 11y ago

Seems like a pretty easy attack, so I expect to see it executed by others for profit.

davidgerard 11y ago
Is there much profit to be made? To me the recent "stress tests" look very like disgruntled hodlers messing around for shits and giggles, and demonstrating that it costs only a few thousand dollars in bitcoins to break transaction processing. (Love the crackier theories that /r/buttcoin are banker shills. If only banks could get hold of a few thousand dollars somewhere ...)
- kbar13 11y ago
  surely if you have a large short position on bitcoin, you may profit as people lose confidence?
  - pjc50 11y ago
    It's not as easy to take out a short position as it sounds.
    - nosuchthing 11y ago
      With all the bitcoin fanatics who are convinced bitcoins are inherently rare and thus destined to increase in value, there are certainly opportunities for short options.
      - deleted 11y ago
        [deleted]
    - aianus 11y ago
      That's not true, it's pretty simple to short at Bitfinex (https://www.bitfinex.com https://www.bitfinex.com).
  - davidgerard 11y ago
    Shorting relies on a fairly complicated and trustworthy financial system. It isn't some easy thing, it's quite a complicated thing to set up to work well enough to serve as a financial product. This does not actually exist for Bitcoin. Shorting requires trusting an exchange, and statistically trusting a Bitcoin exchange is historically a terrible idea. So no, you can't just short Bitcoin and expect to make money.
    - eru 11y ago
      You can sell bitcoin futures. That's equivalent to a short. Ie you and the counterparty agree on a price today to sell them bitcoins a fixed time later. If both of you keep honouring any margin calls you agree on, the risk is fairly low. No third party necessary. But yes, it is a more complicated transaction than the spot market.
      - davidgerard 11y ago
        Is this hypothetical, or are there a few working examples, or are there a lot of working examples, enough that one could casually talk about shorting Bitcoin? How big is this market for Bitcoin shorts and futures, what sort of volume are we talking about at the present time? The only shorting I knew of was on exchanges of questionable trustworthiness.
        eru 11y ago
        Sorry, purely hypothetical. But, it might be worthwhile to make this work. If you implement the margin calls right, there's almost no risk for any party involved. Stand by, while I talk to my bitcoin obsesses friends about a startup idea.
        aianus 11y ago
        https://www.bitfinex.com/ https://www.bitfinex.com/ Large, relatively trustworthy exchange. Costs roughly 3.3% APR to borrow $1m worth of BTC for shorting right now: https://www.bitfinex.com/credit/index/btc https://www.bitfinex.com/credit/index/btc Edit: corrected the interest rate
  - klodolph 11y ago
    There's really no such thing as a short position in currency, because you are just exchanging it for other currency, which makes it a long position in the other currency.
    - eru 11y ago
      Currency or commodity.
    - bduerst 11y ago
      Only if you're being literal. They didn't say short the currency, and there are several ways to short bitcoin: http://www.investopedia.com/articles/investing/092214/no-faith-bitcoin-profit-shorting-it.asp http://www.investopedia.com/articles/investing/092214/no-fai...

troncheadle 11y ago

I'm interested to hear more about his claims that bitcoin uses more energy than other forms of currency. Can anyone speak to that?

wlesieutre 11y ago
From earlier this year: > A more fundamental worry is that digital-currency mining, like other sorts of mining, has environmental costs: all that number-crunching uses a lot of electricity, and not all of it comes from renewable sources, as it does in Boden. The rapid development of the ASICs chips has made the machines more efficient, but even if all mining worldwide were carried out in modern facilities like Boden’s, the combined electricity consumption would be 1.46 terawatt-hours per year—the consumption of about 135,000 average American homes. http://www.economist.com/news/business/21638124-minting-digital-currency-has-become-big-ruthlessly-competitive-business-magic http://www.economist.com/news/business/21638124-minting-digi... The whole consensus network of Bitcoin is based around burning so much energy/space/infrastructure on hashing that a single actor wouldn't be able to invest a bunch of money and take a controlling majority. I can't speak to how much energy we burn with ACH systems, paper money, etc., but those are much bigger than Bitcoin in terms of usage. If you add up the total energy consumed by every bank and mint in the world, you might get a higher absolute number. In terms of energy used per amount of value transferred, the traditional currencies almost certainly win.
- josu 11y ago
  >The whole consensus network of Bitcoin is based around burning so much energy/space/infrastructure on hashing that a single actor wouldn't be able to invest a bunch of money and take a controlling majority. If you have the time and you don't mind, could you elaborate on that? It just doesn't sound right to me. What is the mechanism that discourages big investments? As far as I can tell, there seem to be some economies of scale, that's why there are mining farms. From the bitcoin wiki "Attacker has a lot of computing power": "Since this attack doesn't permit all that much power over the network, it is expected that no one will attempt it. A profit-seeking person will always gain more by just following the rules, and even someone trying to destroy the system will probably find other attacks more attractive. However, if this attack is successfully executed, it will be difficult or impossible to "untangle" the mess created -- any changes the attacker makes might become permanent." [1] https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_computing_power https://en.bitcoin.it/wiki/Weaknesses#Attacker_has_a_lot_of_...

ceocoder 11y ago

Somewhat unrelated - for those who don't know Alistair MacLean[1] was a novelist, mostly war thrillers, adventures. My grandpa - a voracious reader and a retired judge spent most of his retirement reading and walking, he turned me on to Alistair MacLean by describing his experience of reading Ice Station Zebra (based on the north pole) as if "you feel the chill in your bones as you read it". So I read that, and ever sing book Alistair MacLean has authored. These were the first novels I read in English. After going through entire works of Alistair MacLean, I went through pretty much any other book I can get my hands on. And the _best_ part was finishing something, going downstairs to grandpa's room and telling him, his response was almost always - "oh yes, I read that in 19XX, love the character X doing something with Y". Reading the title of the post was a pang of nostalgia, I can still remember him telling me about Ice Station Zebra, Night Without End, Where Eagles Dare, Guns of Navarone, Force 10 from Navarone. I miss him. [1] https://en.wikipedia.org/wiki/Alistair_MacLean https://en.wikipedia.org/wiki/Alistair_MacLean

ForHackernews 11y ago

Is there source code for the attack script anywhere? It would be interesting to see if a decentralized currency can stand up to a decentralized attack.

Uptrenda 11y ago

I've never seen a more FUD headline than that. Got to love the journalistic sensationalism at play here. To clear this up: the technique in the article is literally what we use in unit tests to check that our TX-based event code won't break under malleability. It's something that Bitcoin developers have been writing code around forever (and warning about just as long.) So truly: if there's anyone out there still writing code that assumes static TXIDs they really do deserve what's coming to them. As I see it: the attack reaches critical mayhem in a similar way to accepting zero-conf transactions in that what you have is a consensus problem. The specific fix for TX malleability is to watch transactions based on their meaning, not their TXID (in this case "meaning" is looking at the inputs, outputs, version, timelock, etc to produce equivalent transactions.) And of course: don't accept zero-confirmation transactions. Here's some of my ultra-1337 Python code for producing the "attack" just for laughs: def mutate_tx(tx_hex): """ Mutates a raw transaction using TX malleability in the scriptSig (specifically, the OP codes.) This function shouldn't be used beyond testing as it uses an ugly eval() hack. https://en.bitcoin.it/wiki/Transaction_Malleability """ tx = CTransaction.deserialize(binascii.unhexlify(tx_hex)) script_sig = repr(tx.vin[0].scriptSig)[9:] script_sig = eval("CScript([OP_1, OP_DROP, " + script_sig) tx.vin[0].scriptSig = script_sig return b2x(tx.serialize()) As you can see, there's nothing to it. Just a clueless attention whore claiming to an even more clueless journalist that he can break Bitcoin.

phpnode 11y ago
I think the article is confusing two different issues, the malleability attacks and the dust attacks. Amaclin seems to be behind the dust attack, which is a cheap way to DoS the blockchain by causing blocks to reach the maximum number of SIGOPS with dust transactions, preventing real transactions from going through. More details here: https://bitcointalk.org/index.php?topic=1166928.0 https://bitcointalk.org/index.php?topic=1166928.0