Online and offline storage of digital currency present conflicting risks for a Bitcoin exchange. While bitcoins stored on online devices are continually vulnerable to malware and other network-based attacks, offline reserves are endangered on access, as transferring bitcoins requires the exposure of otherwise encrypted and secured private keys. In particular, fluctuations in customer demand for deposited bitcoin require exchanges to periodically refill online storage systems with bitcoins held offline. This raises the natural question of what upper limit on online reserves minimizes losses due to theft over time. In this article, we investigate this optimization problem, developing a model that predicts the optimal ceiling on online reserves, given average rates of deposits, withdrawals, and theft. We evaluate our theory with an event-driven simulation of the setup, and find that our equation yields a numerical value for the threshold that differs by less than 2% from experimental results. We conclude by considering open questions regarding more complex storage architectures.
Blockchain technology rapidly gained popularity based on its open and decentralized operation. Consensus protocol is the core mechanism of a blockchain network that securely maintains the distributed ledger from possible attacks from adversaries. Proof-of-work (PoW) is a commonly used consensus protocol that requires a significant amount of computation to find a new valid block. As the application-specific integrated circuits (ASICs) that are specially designed for PoW computation begin to dominate blockchain consensus operation, the decentralized nature of blockchain networks is being threatened. Many PoW mechanisms are being proposed to disincentivize the use of ASICs in the consensus operation. Employing multiple hash functions in the PoW computation (i.e., multi-hash PoW) is one of the commonly adopted approaches to achieve such ASIC-resistance. In this paper, we experimentally evaluate the level of ASIC-resistance of the multi-hash PoW mechanisms. We assess the level of ASIC-resistance based on the performance gap between ASICs and general-purpose computing platforms. Contrary to the expectation of the multi-hash PoW mechanisms, our results reveal that ASIC-resistance of these PoW mechanisms is not strong enough to prevent ASIC-based mining. Most of them show similar levels of ASIC-resistance as those of PoW mechanisms that are already defeated by ASIC-based systems.
Eli Ben‐Sasson, Iddo Bentov, Yinon Horesh, Michael Riabzev
The family of Reed-Solomon (RS) codes plays a prominent role in the construction of quasilinear probabilistically checkable proofs (PCPs) and interactive oracle proofs (IOPs) with perfect zero knowledge and polylogarithmic verifiers. The large concrete computational complexity required to prove membership in RS codes is one of the biggest obstacles to deploying such PCP/IOP systems in practice. To advance on this problem we present a new interactive oracle proof of proximity (IOPP) for RS codes; we call it the Fast RS IOPP (FRI) because (i) it resembles the ubiquitous Fast Fourier Transform (FFT) and (ii) the arithmetic complexity of its prover is strictly linear and that of the verifier is strictly logarithmic (in comparison, FFT arithmetic complexity is quasi-linear but not strictly linear). Prior RS IOPPs and PCPs of proximity (PCPPs) required super-linear proving time even for polynomially large query complexity. For codes of block-length N, the arithmetic complexity of the (interactive) FRI prover is less than 6 * N, while the (interactive) FRI verifier has arithmetic complexity <= 21 * log N, query complexity 2 * log N and constant soundness - words that are delta-far from the code are rejected with probability min{delta * (1-o(1)),delta_0} where delta_0 is a positive constant that depends mainly on the code rate. The particular combination of query complexity and soundness obtained by FRI is better than that of the quasilinear PCPP of [Ben-Sasson and Sudan, SICOMP 2008], even with the tighter soundness analysis of [Ben-Sasson et al., STOC 2013; ECCC 2016]; consequently, FRI is likely to facilitate better concretely efficient zero knowledge proof and argument systems. Previous concretely efficient PCPPs and IOPPs suffered a constant multiplicative factor loss in soundness with each round of "proof composition" and thus used at most O(log log N) rounds. We show that when delta is smaller than the unique decoding radius of the code, FRI suffers only a negligible additive loss in soundness. This observation allows us to increase the number of "proof composition" rounds to Theta(log N) and thereby reduce prover and verifier running time for fixed soundness.
In Bitcoin financial system, a user’s privacy is supposed to be protected by means of anonymity. However, the anonymity makes illegal trades possible because nobody is able to reveal the real identities of the illegal users. In this paper, we propose a regulation scheme based on the ciphertext-policy hierarchical attribute-based encryption (CP-HABE). In the scheme, users’ identities are encrypted by using access policy and are contained in their transaction. A type of user is defined as the dependable regulation node, which is responsible for the regulation of transactions and encrypted identities. A new signature algorithm instead of the elliptic curve signature is adopted to generate wallet key pairs, this establishes a connection between wallet addresses and encrypted identities. When a transaction is doubted to involve illegal activities, the authorized regulation nodes are capable of revealing the users’ real identities and add the illegal identities to a public blacklist. Our system is based on a new CP-HABE scheme which is proved to be secure against chosen-plaintext attack in the standard model under the Bilinear Diffie–Hellman Exponent assumption. Finally, we give a performance analysis of our system. The proposed regulation system can reveal criminals’ identities undertaking illegal activities.
Cryptography is used to protect data and communications. \nThe basic tools are cryptographic primitives, whose security and efficiency are widely studied. \nBut in real-life applications these primitives are not used individually, but combined inside complex protocols. \nThe aim of this thesis is to analyse various cryptographic protocols and assess their security in a formal way. \nIn chapter 1 the concept of formal proofs of security is introduced and the main categorisation of attack scenarios and types of adversary are presented, and the protocols analysed in the thesis are briefly introduced with some motivation. \nIn chapter 2 are presented the security assumptions used in the proofs of the following chapters, distinguishing between the hardness of algebraic problems and the strength of cryptographic primitives. \nOnce that the bases are given, the first protocols are analysed in chapter 3, where two Attribute Based Encryption schemes are proven secure. \nFirst context and motivation are introduced, presenting settings of cloud encryption, alongside the tools used to build ABE schemes. \nThen the first scheme, that introduces multiple authorities in order to improve privacy, is explained in detail and proven secure. \nFinally the second scheme is presented as a variation of the first one, with the aim of improving the efficiency performing a round of collaboration between the authorities. \n \nThe next protocol analysed is a tokenization algorithm for the protection of credit cards. \nIn chapter 4 the advantages of tokenization and the regulations required by the banking industry are presented, and a practical algorithm is proposed, and proven secure and compliant with the standard. \nIn chapter 5 the focus is on the BIX Protocol, that builds a chain of certificates in order to decentralize the role of certificate authorities. \nFirst the protocol and the structure of the certificates are introduced, then two attack scenarios are presented and the protocol is proven secure in these settings. \nFinally a viable attack vector is analysed, and a mitigation approach is discussed. \nIn chapter 6 is presented an original approach on building a public ledger with end-to-end encryption and a one-time-access property, that make it suitable to store sensitive data. \nIts security is studied in a variety of attack scenarios, giving proofs based on standard algebraic assumptions. \nThe last protocol presented in chapter 7 uses a proof-of-stake system to maintain the consistency of subchains built on top of the Bitcoin blockchain, using only standard Bitcoin transactions. \nParticular emphasis is given to the analysis of the refund policies employed, proving that the naive approach is always ineffective whereas the chosen policy discourages attackers whose stake falls below a threshold, that may be adjusted varying the protocol parameters.
Thach Ngoc Nguyen, Christian Servín, Владик Крейнович
Nowadays, most financial transactions are based on a centralized system, when all the transaction records are stored in a central location. This centralization makes the financial system vulnerable to cyber-attacks. A natural way to make the financial system more robust and less vulnerable is to switch to decentralized currencies. Such a transition will also make financial system more transparent. Historically first currency of this type -- bitcoin -- use a large amount of electric energy to mine new coins and is, thus, not scalable to the level of financial system as a whole. A more realistic and less energy-consuming scheme is provided by proof-of-stake currencies, where the right to mint a new coin is assigned to a randomly selected user, with probability depending of the user's stake (e.g., his/her number of coins). What probabilities should we choose? In this paper, we find the probability selection that provides the optimal result -- optimal in the sense that it is the least inductive to cheating.
Nikos Fotiou, Vasilios A. Siris, George C. Polyzos
Despite technological advances, most smart objects in the Internet of Things (IoT) cannot be accessed using technologies designed and developed for interacting with powerful Internet servers. IoT use cases involve devices that not only have limited resources, but also they are not always connected to the Internet and are physically exposed to tampering. In this paper, we describe the design, development, and evaluation of a smart contract-based solution that allows end-users to securely interact with smart devices. Our approach enables access control, Thing authentication, and payments in a fully decentralized setting, taking at the same time into consideration the limitations and constraints imposed by both blockchain technologies and the IoT paradigm. Our prototype implementation is based on existing technologies, i.e., Ethereum smart contracts, which makes it realistic and fundamentally secure.
A treasury system is a community-controlled and decentralized collaborative decision-making mechanism for sustainable funding of blockchain development and maintenance. During each treasury period, project proposals are submitted, discussed, and voted for; top-ranked projects are funded from the treasury. The Dash governance system is a real-world example of such kind of systems. In this work, we, for the first time, provide a rigorous study of the treasury system. We modelled, designed, and implemented a provably secure treasury system that is compatible with most existing blockchain infrastructures, such as Bitcoin, Ethereum, etc. More specifically, the proposed treasury system supports liquid democracy/delegative voting for better collaborative intelligence. Namely, the stake holders can either vote directly on the proposed projects or delegate their votes to experts. Its core component is a distributed universally composable secure end-to-end verifiable voting protocol. The integrity of the treasury voting decisions is guaranteed even when all the voting committee members are corrupted. To further improve efficiency, we proposed the world's first honest verifier zero-knowledge proof for unit vector encryption with logarithmic size communication. This partial result may be of independent interest to other cryptographic protocols. A pilot system is implemented in Scala over the Scorex 2.0 framework, and its benchmark results indicate that the proposed system can support tens of thousands of treasury participants with high efficiency.
Sepideh Avizheh, Reihaneh Safavi–Naini, Siamak F. Shahandashti
BIP70 is the Bitcoin payment protocol for communication between a merchant and a pseudonymous customer. McCorry et al. (FC~2016) showed that BIP70 is prone to refund attacks and proposed a fix that requires the customer to sign their refund request. They argued that this minimal change will provide resistance against refund attacks. In this paper, we point out the drawbacks of McCorry et al.'s fix and propose a new approach for protection against refund attacks using the Bitcoin multi-signature mechanism. Our solution does not rely on merchants storing refund requests, and unlike the previous solution, allows updating refund addresses through email. We discuss the security of our proposed method and compare it with the previous solution. We also propose a novel application of our refund mechanism in providing anonymity for payments between a payer and payee in which merchants act as mixing servers. We finally discuss how to combine the above two mechanisms in a single payment protocol to have an anonymous payment protocol secure against refund attacks.
Stealth address prevents public association of a blockchain transaction's output with a recipient's wallet address and hides the actual destination address of a transaction. While stealth address provides an effective privacy-enhancing technology for a cryptocurrency network, it requires blockchain nodes to actively monitor all the transactions and compute the purported destination addresses, which restricts its application for resource-constrained environments like Internet of Things (IoT). In this paper, we propose DKSAP-IoT, a faster dual-key stealth address protocol for blockchain-based IoT systems. DKSAP-IoT utilizes a technique similar to the TLS session resumption to improve the performance and reduce the transaction size at the same time between two communication peers. Our theoretical analysis as well as the extensive experiments on an embedded computing platform demonstrate that DKSAP-IoT is able to reduce the computational overhead by at least 50% when compared to the state-of-the-art scheme, thereby paving the way for its application to blockchain-based IoT systems.
Recent work, including ZKBoo, ZKB++, and Ligero, has developed efficient non-interactive zero-knowledge proofs of knowledge (NIZKPoKs) for Boolean circuits based on symmetric-key primitives alone, using the "MPC-in-the-head" paradigm of Ishai et al. We show how to instantiate this paradigm with MPC protocols in the preprocessing model; once optimized, this results in an NIZKPoK with shorter proofs (and comparable computation) as in prior work for circuits containing roughly 300--100,000 AND~gates. In contrast to prior work, our NIZKPoK also supports witness-independent preprocessing, which allows the prover to shift most of its work to an offline phase before the witness is known. We use our NIZKPoK to construct a signature scheme based only on symmetric-key primitives (and hence with "post-quantum" security). The resulting scheme has shorter signatures than the scheme built using ZKB++ (and comparable signing/verification time), and is even competitive with hash-based signature schemes. To further highlight the flexibility and power of our NIZKPoK, we also use it to build efficient ring and group signatures based on symmetric-key primitives alone. To our knowledge, the resulting schemes are the most efficient constructions of these primitives that offer post-quantum security.
Kuo‐Hui Yeh, Chunhua Su, Jia-Li Hou, Wayne Chiu · 5 authors
Recently, the popularity and universality of smart-devices has led to rapid advancement in the development of applications for mobile commerce around the world. Novel mobile payment schemes, such as Apple pay, Android pay, and Samsung pay are becoming an increasingly popular ways to conduct online transactions, no matter what type of smart devices are used. Due to the attendant growth in the importance of security, significant attention has been devoted to the challenge of designing and implementing a robust mobile payment scheme for securing online transactions. In this paper, we demonstrate a robust mobile payment scheme based on sturdy certificateless signatures with bilinear pairing. We elegantly refine the proposed mobile payment scheme to make it suitable for computation-constrained mobile devices. The practicability of the proposed mobile payment scheme is then certified via a rigorous security analysis and thorough performance evaluation using the Raspberry PI as the implementation platform for our proposed scheme. Furthermore, we implement a transaction repository with the aid of smart contract technology. The simulation results, based on Ethereum, demonstrate the feasibility of employing the smart contract technology to secure mobile payments.
Modern retail banking creates a kind of panopticon for consumer behaviour, ultimately promising to implement a mechanism that binds all of the financial activities undertaken by an individual to a single, unitary identity. In the age of Big Data, consumers have legitimate reasons to resist such surveillance, particularly in cases wherein monitoring is carried out without their knowledge and judgments based upon such monitoring are used to disincentivise or punish legitimate activities. The risk to consumers increases with the ever-increasing share of financial transactions that are performed electronically. Cryptocurrencies offer an alternative to traditional methods of electronic value exchange, promising anonymous, cash-like electronic transfers, but in practice they fall short for several key reasons. We consider the false choice between total surveillance, as represented by banking as currently implemented by institutions, and impenetrable lawlessness, as represented by privacy-enhancing cryptocurrencies as currently deployed. We identify a range of alternatives between those two extremes, and we consider two potential compromise approaches that offer both the auditability required for regulators and the anonymity required for users
Patrick Li, Scott D. Nelson, Bradley Malin, You Chen
Background: Access to accurate and complete medication histories across healthcare institutions enables effective patient care. Histories across healthcare institutions currently rely on centralized systems for sharing medication data. However, there is a lack of efficient mechanisms to ensure that medication histories transferred from one institution to another are accurate, secure, and trustworthy. Methods: In this article, we introduce a decentralized medication management system (DMMS) that leverages the advantages of blockchain to manage medication histories. DMMS is realized as a decentralized network under the hyperledger fabric framework. Based on the network, we designed an architecture, within which each prescriber can create prescriptions for each patient and perform queries about historical prescriptions accordingly. Finally, we analyzed the advantages of DMMS over centralized systems in terms of accuracy, security, trustworthiness, and privacy. Results: We developed a proof of concept to showcase DMMS. In this system, a prescriber prescribes medications for a patient and then encrypts the prescriptions via the patient’s public keys. Patients can query their own prescriptions from different histories across healthcare institutions and then decrypt the prescriptions via their private keys. At the same time, a prescriber can query a patient’s prescription records across healthcare institutions after approval from the patient. Analytic results show that DMMS can improve security, trustworthiness, and privacy in medication history sharing and exchanging across healthcare institutions. In addition, we discuss the potential for DMMS in e-prescribing markets. Conclusions: This study shows that a distributed secure ledger can enable reliable, interoperable, and accurate medication history sharing. Keywords: Blockchain Ledger, Decentralized, Hyperledger Fabric Framework, Medication Histories Please see a related Letter to the Editor (https://doi.org/10.30953/bhty.v2.98), and its response (https://doi.org/10.30953/bhty.v2.108)
Recently, Blockchain is considered as one of the main powerful techniques in security and privacy domains. It is considered as the promised security concept for replacing the current third parities trusting solutions. This could be achieved by mixing some cryptography techniques, consensus algorithms alongside with some peer-to-peer communication protocols. In this paper, to meet the requirement of distributed structure in the eHealth Records (EHRs) system, we propose a novel protocol to achieve a perfect privacy preserving for the patient namely Pseudonym Based Encryption with Different Authorities (PBE-DA) by applying the concept of Blockchain on the healthcare communication entities in an e-health platform. Therefore, PBE-DA will be used to help the patient anonymously to access, check or update his sensitive data on EHRs system. Moreover, we analyzed not only the public blockchain tier between the different EHRs cloud provider but also another Blockchain tier between the patient sensors (IoT devices used to do some patient measurements) and the patient system as a gateway for the whole healthcare platform.
A landmark security property of smart contracts is liquidity: in a non-liquid contract, it may happen that some funds remain frozen. The relevance of this issue is witnessed by a recent liquidity attack to the Ethereum Parity Wallet, which has frozen $${\sim }160M$$ USD within the contract, making this sum unredeemable by any user. We address the problem of verifying liquidity of Bitcoin contracts. Focussing on BitML, a contracts DSL with a computationally sound compiler to Bitcoin, we study various notions of liquidity. Our main result is that liquidity of BitML contracts is decidable, in all the proposed variants. To prove this, we first transform the infinite-state semantics of BitML into a finite-state one, which focusses on the behaviour of any given set of contracts, abstracting the context moves. With respect to the chosen contracts, this abstraction is sound and complete. Our decision procedure for liquidity is then based on model-checking the finite space of states of the abstraction.
Blockchain is a new distributed and decentralized technology, and gradually attracts worldwide attention, but it is vulnerable to quantum attacks that would solve elliptic curve digital logarithm problem, which is mainly used for transaction authentication in blockchain. The key needed for authentication comes from the wallet. To ensure that the size of the wallet is fixed and easy to manage, deterministic wallets are required to be used. But if existing anti-quantum signature schemes, such as lattice-based signature are used directly in blockchain to solve the problem, it would have made the wallet bloat. In this paper, we present a novel anti-quantum transaction authentication scheme in the blockchain. In order to construct lightweight nondeterministic wallets, the key point is that public and private keys are generated from a set of master public and private key(Seed Key). We leverage on Bonsai Trees technology and propose a new authentication method which can extend a lattice space to multiple lattice spaces accompanied by the corresponding key. Every signature of a transaction uses a lattice space so as to ensure the randomness and the security of the master private key. And we give the complete security proof and analysis. This paper provides the theoretical support for the application of blockchain in the post quantum age.
Currently, Internet of Things (IoT) and blockchain technologies are experiencing exponential growth in academia and industry. Generally, IoT is a centralized system whose security and performance mainly rely on centralized servers. Therefore, users have to trust the centralized servers; in addition, it is difficult to coordinate external computing resources to improve the performance of IoT. Fortunately, the blockchain may provide this decentralization, high credibility and high security. Consequently, blockchain-based IoT may become a reasonable choice for the design of a decentralized IoT system. In this paper, we propose a novel blockchain-based threshold IoT service system: BeeKeeper. In the BeeKeeper system, servers can process a user's data by performing homomorphic computations on the data without learning anything from them. Furthermore, any node can become a leader's server if the node and the leader desire so. In this way, BeeKeeper's performance can continually increase by attracting external computing resources to join in it. Moreover, malicious nodes can be scrutinized. In addition, BeeKeeper is fault tolerant since a user's BeeKeeper protocol may work smoothly as long as a threshold number of its servers are active and honest. Finally, we deploy BeeKeeper on the Ethereum blockchain and give the corresponding performance evaluation. In our experiments, servers can generate their response with about 107 ms. Moreover, the performance of BeeKeeper mainly depends on the blockchain platform. For instance, the response time is about 22.5 s since the block interval of Ethereum blockchain is about 15 s. In fact, if we use some other blockchain with short block interval, the response time may be obviously short.
Based on the blockchain, homomorphic ElGamal encryption and ring signature, an electronic voting scheme based on blockchain is proposed for large-scale voting, which has the properties of decentralization, self-management, non-interactive and free-receipt, furthermore the one-time ring signature ensures the anonymity of the vote trading in the blockchain. The public verifiable billboards guarantee the voting fair, and the miner nodes provides ciphertext ballot counting service makes large-scale voting feasible. Finally, we analysis the security of the blockchain voting system and present the performance in large-scale nodes.
Open access
Internet Traffic Analysis and Secure E-voting
Cryptography and Data Security
Advanced Steganography and Watermarking Techniques
Krishnendu Chatterjee, Amir Kafshdar Goharshady, Yaron Velner
Smart contracts are computer programs that are executed by a network of mutually distrusting agents, without the need of an external trusted authority. Smart contracts handle and transfer assets of considerable value (in the form of crypto-currency like Bitcoin). Hence, it is crucial that their implementation is bug-free. We identify the utility (or expected payoff) of interacting with such smart contracts as the basic and canonical quantitative property for such contracts. We present a framework for such quantitative analysis of smart contracts. Such a formal framework poses new and novel research challenges in programming languages, as it requires modeling of game-theoretic aspects to analyze incentives for deviation from honest behavior and modeling utilities which are not specified as standard temporal properties such as safety and termination. While game-theoretic incentives have been analyzed in the security community, their analysis has been restricted to the very special case of stateless games. However, to analyze smart contracts, stateful analysis is required as it must account for the different program states of the protocol. Our main contributions are as follows: we present (i)~a simplified programming language for smart contracts; (ii)~an automatic translation of the programs to state-based games; (iii)~an abstraction-refinement approach to solve such games; and (iv)~experimental results on real-world-inspired smart contracts.
Qi Zhang, Petr Novotny, Salman Baset, Donna N. Dillenberger · 6 authors
The rise of crypto-currencies has spawned great interest in their underlying technology, namely, Blockchain. The central component in a Blockchain is a shared distributed ledger. A ledger comprises series of blocks, which in turns contains a series of transactions. An identical copy of the ledger is stored on all nodes in a blockchain network. Maintaining ledger integrity and security is one of the crucial design aspects of any blockchain platform. Thus, there are typically built-in validation mechanisms leveraging cryptography to ensure the validity of incoming blocks before committing them into the ledger. However, a blockchain node may run over an extended period of time, during which the blocks on the disk can may become corrupted due to software or hardware failures, or due to malicious activity. This paper proposes LedgerGuard, a tool to maintain ledger integrity by detecting corrupted blocks and recovering these blocks by synchronizing with rest of the network. The experimental implementation of LedgerGuard is based on Hyperledger Fabric, which is a popular open source permissioned blockchain platform.
Recent attention to Bitcoin and other cryptocurrencies has opened investors and the public to the realm of digital currency. Greater exposure around the world has led to a frenzy of entry into the market and a test into the long-term feasibility of Bitcoin being able to remain a functioning peer-to-peer (P2P), decentralized currency. Its main structure is supported by the Proof-of-Work (PoW) protocol in which users can elect to participate in determining transaction approval and ensuring an honest blockchain. This system relies on elected users to expend computational power and energy to solve puzzles to prove the accuracy of the network’s transactions and create new blocks.\nEach cryptocurrency uses their own method to ensure blockchain accuracy, and this paper will focus on how a Proof-of-Stake (PoS) protocol is a superior algorithm to PoW by assigning mining ability equal to one’s stake within a coin, rather than her energy consumption, among other factors. We will discuss Bitcoin’s PoW as a baseline for our eventual analysis of PoS in terms of advantages and performance metrics. The main factors that can be compared between the two protocols is how each system can prevent itself against a variety of attacks from adversarial users within the network, as well as long-term sustainability.\nFinally, we will use the Cardano (ADA) cryptocurrency by IOHK as a case study for understanding how their Ouroboros Praos PoS protocol works. Our goal is to show how long-term adoption of PoS framework is more realistic from an energy perspective than PoW.