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The JP Morgan Chase of Bitcoin could also become the single largest target of technical and crypto attacks that the technology industry has ever seen. Ever. A

The JP Morgan Chase of Bitcoin could also become the single largest target of technical and crypto attacks that the technology industry has ever seen. Ever. Advances in cryptography which once were targeted to breaking encrypted messages could be focused on breaking the entire world economy in one fell swoop (provided Bitcoin gets real market traction)

patio11 13y ago
It's highly unlikely that high-profile Bitcoin busts will require meaningful advances in cryptography: they're far, far more likely to be appsec work -- perhaps inspired appsec work -- of the kind routinely conducted by intermediate programmers with weeks of specialized training. Let me put some round numbers on the cost of various attacks: Major result in cryptography: $X0 million to $X00 million+ (nation-state adversary) Subtle bug in the Satoshi client C code: $100,000 (trivially within the reach of organized crime or a single highly motivated attacker) Bust any Bitcoin-using Ruby on Rails (&tc) application: $20k probably, upper bounded by $100k where you'd produce (as an industrial biproduct) a RCE on any arbitrary Rails site Compromise the security of a non-trivial number of Bitcoin users via spearphishing / targeted malware / etc: $1,000 If you're a thief who doesn't have access to any computer skills or the above sums of money, have no fear, it is likely that the Bitcoin economy still has multiple options for you to get in on the ground floor of exciting new ways to steal things. [P.S. I'm routinely pessimistic about Bitcoins for a lot of reasons, but the software security angle keeps coming back to me because it's so easy to explain. If you think I'm overly pessimistic, consider the track record on HN of "people who know what the threat environment banks operate in looks like" versus "Bitcoin advocates" has been in predicting observable future outcomes of e.g. Bitcoin bucket shops in advance.]
- wslh 13y ago
  Sorry, I don't understand your reasoning. What is the difference of running a bitcoin app to, say, a forex site in terms of security? and what do you mean with major result in cryptography? Other cryptographic protocols can be broken too. What makes bitcoin special?
  - ISL 13y ago
    SHA256 underpins Bitcoin. Break SHA256, and you win.
    - nadaviv 13y ago
      Break SHA256, and you can cause hash collisions that allows you to easily mine blocks until 51% of the network switches to a better hashing algorithm (which should happen pretty quick, because it'll be obvious that someone broke it). To steal users money, you'd have to break ECDSA. Edit: I wasn't 100% exact. It gives you more [1] than easily mining blocks, but still not that much power so that I would call it "Winning". [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_...
      - tptacek 13y ago
        And you're more confident in ECDSA why?
      - betterunix 13y ago
        Compute hashes faster than the rest of the network and you win. The "51% attack" is a polynomial time attack, which is not an acceptable security margin in cryptography.
        reedlaw 13y ago
        It seems the "51% attack" can be mitigated simply by waiting for 6 or more confirmations before sending off merchandise or in the case of an exchange, allowing withdrawal of funds. Those who can't wait that long can rely on 3rd parties who attempt to take on fraud in exchange for transaction fees, similar to the current credit card system.
        betterunix 13y ago
        That is not true. The attack works regardless of how many confirmations you wait for.
- mrb 13y ago
  "If you're a thief who doesn't have access to any computer skills or the above sums of money, have no fear, it is likely that the Bitcoin economy still has multiple options for you to get in on the ground floor of exciting new ways to steal things." Exactly. Low-tech ways of stealing bitcoins is precisely what we are seeing the most in the community right now. Thieves who merely sweet-talk people on the forum and convince them to invest in their "businesses" (ponzi schemes, fake ASIC preorders, etc), then receiving the money, and running away. Cost for the thief: at most $100 (setting up a website to advertise the fake business). For example just 2 months ago, a fraudster advertised his company selling Bitcoin ASIC mining hardware (www.labsnovo.com, now taken down) by posting a comment to my blog... This is very sad to see because every freaking time, some people fall for it. You may have 4 out of 5 posts on the forums reporting one of these scheme as a "LIKELY FRAUD" in all caps, yet there are always a few people who ignore these warnings and just try to invest anyway. sigh
  - rsync 13y ago
    Is it illegal to steal bitcoins ? If so, why ? And how is it different (at least in the eyes of the law) than stealing a wand from someone in Ultima Online ? In fact, let me go further - does not a "real" currency issuer have a vested interest in not judging bitcoin theft to be illegal ? If it's illegal, that bestows a certain legitimacy ...
    - conover 13y ago
      Wouldn't if be the difference between fraud and a violation of a game's terms of service?
    - Egregore 13y ago
      Recently I've read an article that Belorusian police investigated stealing of a virtual tank from "World of Tanks", found it and returned it to the original owner.
    - jebeng 13y ago
      If you were to hack into someones account and take it, I would think that is illegal. Obviously if you were to steal it ingame that would not be illegal. It's almost certainly illegal to steal bitcoins. I guess I'm referring to US law here, but I would expect it to be illegal in any country that has computer crime laws. And sure it is in the currency issuer's interest to do do that, if think in strict terms of maximising the value of the issued currency. But that doesn't mean the currency issuer will take every action available to do so. The bigger picture is much more complicated than that.
- derefr 13y ago
  > the software security angle keeps coming back to me because it's so easy to explain Or, to rephrase the standard pitch for Bitcoin: a bitcoin is as easy to steal as a credit card number, and as untraceable when it disappears as cash. ;)
  - nadaviv 13y ago
    Not quite. Credit card numbers can be (and mostly are) stolen from websites that accepts them. That's not true for Bitcoin - you have to gain access to the customers computers that stores the private keys. In that regard, Bitcoin is actually much more secure. Edit: I just want to add that I think its really silly that most of the online transactions are still done by a series of numbers that can be easily copied and re-used by whoever gets them. We should have much better solutions by now.
    - tptacek 13y ago
      The financial system bears much of the cost of fraud, and avoids externalizing the cost of poor security. That's not true of Bitcoin, where losses are for the most part irrevocable. Bitcoin might be more "secure" in some fiddly sense, but the credit card system is much safer for normal people.
      - sillysaurus 13y ago
        Bitcoin might be more "secure" in some fiddly sense, but the credit card system is much safer for normal people. A chargeback system is a protocol requiring centralized trust. A company will no doubt implement this. Centralized trust is of course necessary. One could argue that it defeats the point of bitcoin. Yet that's not true, if you think of bitcoin as being a currency (rather than a "secure" currency, or any other label). If it's a currency, then a chargeback protocol is simply a company waiting to happen. And the company would necessarily have to be large, because it has to bear the cost of fraud. Luckily, PayPal has already done a lot of the homework necessary to pull off such an endeavor. Lastly, it doesn't matter what normal people use. It matters what will become convenient for normal people to use. That's a subtle distinction, because it means as soon as infrastructure is built then people may start using it by default.
- awt 13y ago
  What is a better way to maintain a distributed ledger? Also, is it even theoretically possible to get bitcoin security right in your opinion? Is it practical?
  - tptacek 13y ago
    This first question comes up all the time in security threads and you should know the answer is "it doesn't matter". If the threat/concern/flaw/whatever is valid, the person who raises it doesn't need to have a better alternative.
    - awt 13y ago
      His points are valid not only against Bitcoin, but against a large set of existing e-commerce sites and technologies. I think he would be more convincing if he could come up with some attacks that were unique to Bitcoin and would justify the undercurrent of his comment -- that Bitcoin is bound to fail, and fail badly enough that it will be of no use to anyone except scammers.
      - patio11 13y ago
        I think he would be more convincing if he could come up with some attacks that were unique to Bitcoin "Find any combination of inputs (say, of the executable script that Bitcoin runs by design) which gives you an RCE on one instance of the satoshi client, fan out the attacker-chosen code to the entire network, root (a large percentage of) the network at once." is my usual example of a hypothetical attack. People keep telling me that this can't happen. Your call on whether you find them or me more credible. I have no particular dog in that fight -- no change in the Bitcoin price affects my net worth. (If Bitcoin imploding would cause me to be impoverished, I might buy a pair of the rose-tinted lenses that some folks seem to be wearing.)
        tptacek 13y ago
        This is obviously just one example of a link in Bitcoin that is weaker than SHA2. An even weaker link would be the appsec quality of the largest Bitcoin transacting sites.
drumdance 13y ago
Well, that's part of the risk-reward calculation, right? In Founders at Work Max Levchin talks at length about how Paypal essentially had to become a fraud detection company disguised as a payment processing company. Best of luck to Brian & Coinbase in cracking a very tough nut. Would love to see them succeed. Edit: This also fits Anderson's quasi-thesis around investing in laughable ideas.
dsaber 13y ago
You can argue, even without Bitcoin, the motivation still equally exists for breaking cryto algorithms. Break SHA256 for example, and now the attacker can potentially break into many high-profile systems. So, bitcoin doesn't really change the potential risk that much. Unless, one can suddenly solve NP-complete problems, I don't think that's gonna happen.
piggity 13y ago
Monocultures are "bad" (plenty of other issues too!)

patio11 13y ago

It's highly unlikely that high-profile Bitcoin busts will require meaningful advances in cryptography: they're far, far more likely to be appsec work -- perhaps inspired appsec work -- of the kind routinely conducted by intermediate programmers with weeks of specialized training. Let me put some round numbers on the cost of various attacks: Major result in cryptography: $X0 million to $X00 million+ (nation-state adversary) Subtle bug in the Satoshi client C code: $100,000 (trivially within the reach of organized crime or a single highly motivated attacker) Bust any Bitcoin-using Ruby on Rails (&tc) application: $20k probably, upper bounded by $100k where you'd produce (as an industrial biproduct) a RCE on any arbitrary Rails site Compromise the security of a non-trivial number of Bitcoin users via spearphishing / targeted malware / etc: $1,000 If you're a thief who doesn't have access to any computer skills or the above sums of money, have no fear, it is likely that the Bitcoin economy still has multiple options for you to get in on the ground floor of exciting new ways to steal things. [P.S. I'm routinely pessimistic about Bitcoins for a lot of reasons, but the software security angle keeps coming back to me because it's so easy to explain. If you think I'm overly pessimistic, consider the track record on HN of "people who know what the threat environment banks operate in looks like" versus "Bitcoin advocates" has been in predicting observable future outcomes of e.g. Bitcoin bucket shops in advance.]

wslh 13y ago
Sorry, I don't understand your reasoning. What is the difference of running a bitcoin app to, say, a forex site in terms of security? and what do you mean with major result in cryptography? Other cryptographic protocols can be broken too. What makes bitcoin special?
- ISL 13y ago
  SHA256 underpins Bitcoin. Break SHA256, and you win.
  - nadaviv 13y ago
    Break SHA256, and you can cause hash collisions that allows you to easily mine blocks until 51% of the network switches to a better hashing algorithm (which should happen pretty quick, because it'll be obvious that someone broke it). To steal users money, you'd have to break ECDSA. Edit: I wasn't 100% exact. It gives you more [1] than easily mining blocks, but still not that much power so that I would call it "Winning". [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_...
    - tptacek 13y ago
      And you're more confident in ECDSA why?
    - betterunix 13y ago
      Compute hashes faster than the rest of the network and you win. The "51% attack" is a polynomial time attack, which is not an acceptable security margin in cryptography.
      - reedlaw 13y ago
        It seems the "51% attack" can be mitigated simply by waiting for 6 or more confirmations before sending off merchandise or in the case of an exchange, allowing withdrawal of funds. Those who can't wait that long can rely on 3rd parties who attempt to take on fraud in exchange for transaction fees, similar to the current credit card system.
        betterunix 13y ago
        That is not true. The attack works regardless of how many confirmations you wait for.
mrb 13y ago
"If you're a thief who doesn't have access to any computer skills or the above sums of money, have no fear, it is likely that the Bitcoin economy still has multiple options for you to get in on the ground floor of exciting new ways to steal things." Exactly. Low-tech ways of stealing bitcoins is precisely what we are seeing the most in the community right now. Thieves who merely sweet-talk people on the forum and convince them to invest in their "businesses" (ponzi schemes, fake ASIC preorders, etc), then receiving the money, and running away. Cost for the thief: at most $100 (setting up a website to advertise the fake business). For example just 2 months ago, a fraudster advertised his company selling Bitcoin ASIC mining hardware (www.labsnovo.com, now taken down) by posting a comment to my blog... This is very sad to see because every freaking time, some people fall for it. You may have 4 out of 5 posts on the forums reporting one of these scheme as a "LIKELY FRAUD" in all caps, yet there are always a few people who ignore these warnings and just try to invest anyway. sigh
- rsync 13y ago
  Is it illegal to steal bitcoins ? If so, why ? And how is it different (at least in the eyes of the law) than stealing a wand from someone in Ultima Online ? In fact, let me go further - does not a "real" currency issuer have a vested interest in not judging bitcoin theft to be illegal ? If it's illegal, that bestows a certain legitimacy ...
  - conover 13y ago
    Wouldn't if be the difference between fraud and a violation of a game's terms of service?
  - Egregore 13y ago
    Recently I've read an article that Belorusian police investigated stealing of a virtual tank from "World of Tanks", found it and returned it to the original owner.
  - jebeng 13y ago
    If you were to hack into someones account and take it, I would think that is illegal. Obviously if you were to steal it ingame that would not be illegal. It's almost certainly illegal to steal bitcoins. I guess I'm referring to US law here, but I would expect it to be illegal in any country that has computer crime laws. And sure it is in the currency issuer's interest to do do that, if think in strict terms of maximising the value of the issued currency. But that doesn't mean the currency issuer will take every action available to do so. The bigger picture is much more complicated than that.
derefr 13y ago
> the software security angle keeps coming back to me because it's so easy to explain Or, to rephrase the standard pitch for Bitcoin: a bitcoin is as easy to steal as a credit card number, and as untraceable when it disappears as cash. ;)
- nadaviv 13y ago
  Not quite. Credit card numbers can be (and mostly are) stolen from websites that accepts them. That's not true for Bitcoin - you have to gain access to the customers computers that stores the private keys. In that regard, Bitcoin is actually much more secure. Edit: I just want to add that I think its really silly that most of the online transactions are still done by a series of numbers that can be easily copied and re-used by whoever gets them. We should have much better solutions by now.
  - tptacek 13y ago
    The financial system bears much of the cost of fraud, and avoids externalizing the cost of poor security. That's not true of Bitcoin, where losses are for the most part irrevocable. Bitcoin might be more "secure" in some fiddly sense, but the credit card system is much safer for normal people.
    - sillysaurus 13y ago
      Bitcoin might be more "secure" in some fiddly sense, but the credit card system is much safer for normal people. A chargeback system is a protocol requiring centralized trust. A company will no doubt implement this. Centralized trust is of course necessary. One could argue that it defeats the point of bitcoin. Yet that's not true, if you think of bitcoin as being a currency (rather than a "secure" currency, or any other label). If it's a currency, then a chargeback protocol is simply a company waiting to happen. And the company would necessarily have to be large, because it has to bear the cost of fraud. Luckily, PayPal has already done a lot of the homework necessary to pull off such an endeavor. Lastly, it doesn't matter what normal people use. It matters what will become convenient for normal people to use. That's a subtle distinction, because it means as soon as infrastructure is built then people may start using it by default.
awt 13y ago
What is a better way to maintain a distributed ledger? Also, is it even theoretically possible to get bitcoin security right in your opinion? Is it practical?
- tptacek 13y ago
  This first question comes up all the time in security threads and you should know the answer is "it doesn't matter". If the threat/concern/flaw/whatever is valid, the person who raises it doesn't need to have a better alternative.
  - awt 13y ago
    His points are valid not only against Bitcoin, but against a large set of existing e-commerce sites and technologies. I think he would be more convincing if he could come up with some attacks that were unique to Bitcoin and would justify the undercurrent of his comment -- that Bitcoin is bound to fail, and fail badly enough that it will be of no use to anyone except scammers.
    - patio11 13y ago
      I think he would be more convincing if he could come up with some attacks that were unique to Bitcoin "Find any combination of inputs (say, of the executable script that Bitcoin runs by design) which gives you an RCE on one instance of the satoshi client, fan out the attacker-chosen code to the entire network, root (a large percentage of) the network at once." is my usual example of a hypothetical attack. People keep telling me that this can't happen. Your call on whether you find them or me more credible. I have no particular dog in that fight -- no change in the Bitcoin price affects my net worth. (If Bitcoin imploding would cause me to be impoverished, I might buy a pair of the rose-tinted lenses that some folks seem to be wearing.)
      - tptacek 13y ago
        This is obviously just one example of a link in Bitcoin that is weaker than SHA2. An even weaker link would be the appsec quality of the largest Bitcoin transacting sites.

drumdance 13y ago

Well, that's part of the risk-reward calculation, right? In Founders at Work Max Levchin talks at length about how Paypal essentially had to become a fraud detection company disguised as a payment processing company. Best of luck to Brian & Coinbase in cracking a very tough nut. Would love to see them succeed. Edit: This also fits Anderson's quasi-thesis around investing in laughable ideas.

dsaber 13y ago

You can argue, even without Bitcoin, the motivation still equally exists for breaking cryto algorithms. Break SHA256 for example, and now the attacker can potentially break into many high-profile systems. So, bitcoin doesn't really change the potential risk that much. Unless, one can suddenly solve NP-complete problems, I don't think that's gonna happen.

piggity 13y ago

Monocultures are "bad" (plenty of other issues too!)