bitcoin challenges
549362
SoK: Research Perspectives and Challenges for Bitcoin and Cryptocurrencies
Bit coin has emerged as the most successful cryptographic currency in history. Within two years of its quiet launch in 2009, Bit coin grew to comprise billions of dollars of economic value despite only cursory analysis of the system's design. Since then a growing literature has identified hidden but important properties of the system, discovered attacks, proposed promising alternatives, and singled out difficult future challenges. Meanwhile a large and vibrant open source community has proposed and deployed numerous modifications and extensions. We provide the first systematic exposition Bit coin and the many related crypto currencies or 'altcoins. Drawing from a scattered body of knowledge, we identify three key components of Bit coin's design that can be decoupled. This enables a more insightful analysis of Bit coin's properties and future stability. We map the design space for numerous proposed modifications, providing comparative analyses for alternative consensus mechanisms, currency allocation mechanisms, computational puzzles, and key management tools. We survey anonymity issues in Bit coin and provide an evaluation framework for analyzing a variety of privacy enhancing proposals. Finally we provide new insights on what we term disinter mediation protocols, which absolve the need for trusted intermediaries in an interesting set of applications. We identify three general disinter mediation strategies and provide a detailed comparison.
2015 IEEE Symposium on Security and Privacy
Joseph Bonneau Andrew K Miller Jeremy Clark Arvind Narayanan Joshua A Kroll Edward W Felten
9155549
Bitcoin NG: A Scalable Blockchain Protocol
Cryptocurrencies, based on and led by Bitcoin, have shown promise as infrastructure for pseudonymous online payments, cheap remittance, trustless digital asset exchange, and smart contracts. However, Bitcoin derived blockchain protocols have inherent scalability limits that trade off between throughput and latency and withhold the realization of this potential. This paper presents Bitcoin NG, a new blockchain protocol designed to scale. Based on Bitcoin's blockchain protocol, Bitcoin NG is Byzantine fault tolerant, is robust to extreme churn, and shares the same trust model obviating qualitative changes to the ecosystem. In addition to Bitcoin NG, we introduce several novel metrics of interest in quantifying the security and efficiency of Bitcoin like blockchain protocols. We implement Bitcoin NG and perform large scale experiments at 15% the size of the operational Bitcoin system, using unchanged clients of both protocols. These experiments demonstrate that Bitcoin NG scales optimally, with bandwidth limited only by the capacity of the individual nodes and latency limited only by the propagation time of the network.
NSDI
Ittay Eyal Adem Efe Gencer Emin Gun Sirer Robbert van Renesse
13007988
Secure High Rate Transaction Processing in Bitcoin
Bitcoin is a disruptive new crypto currency based on a decentralized open source protocol which has been gradually gaining momentum. Perhaps the most important question that will affect Bitcoin's success, is whether or not it will be able to scale to support the high volume of transactions required from a global currency system. We investigate the implications of having a higher transaction throughput on Bitcoin's security against double spend attacks. We show that at high throughput, substantially weaker attackers are able to reverse payments they have made, even well after they were considered accepted by recipients. We address this security concern through the GHOST rule, a modification to the way Bitcoin nodes construct and re organize the block chain, Bitcoin's core distributed data structure. GHOST has been adopted and a variant of it has been implemented as part of the Ethereum project, a second generation distributed applications platform.
Financial Cryptography
Yonatan Sompolinsky Aviv Zohar
154367028
Bitcoin: Economics, Technology, and Governance
Bitcoin is an online communication protocol that facilitates the use of a virtual currency, including electronic payments. Bitcoin's rules were designed by engineers with no apparent influence from lawyers or regulators. Bitcoin is built on a transaction log that is distributed across a network of participating computers. It includes mechanisms to reward honest participation, to bootstrap acceptance by early adopters, and to guard against concentrations of power. Bitcoin's design allows for irreversible transactions, a prescribed path of money creation over time, and a public transaction history. Anyone can create a Bitcoin account, without charge and without any centralized vetting procedure or even a requirement to provide a real name. Collectively, these rules yield a system that is understood to be more flexible, more private, and less amenable to regulatory oversight than other forms of payment though as we discuss, all these benefits face important limits. Bitcoin is of interest to economists as a virtual currency with potential to disrupt existing payment systems and perhaps even monetary systems. This article presents the platform's design principles and properties for a nontechnical audience; reviews its past, present, and future uses; and points out risks and regulatory issues as Bitcoin interacts with the conventional financial system and the real economy.
Rainer Bohme Nicolas Christin Benjamin Edelman Tyler W Moore
1471218
Eclipse Attacks on Bitcoin's Peer to Peer Network
We present eclipse attacks on bitcoin's peer to peer network. Our attack allows an adversary controlling a sufficient number of IP addresses to monopolize all connections to and from a victim bitcoin node. The attacker can then exploit the victim for attacks on bitcoin's mining and consensus system, including N confirmation double spending, selfish mining, and adversarial forks in the blockchain. We take a detailed look at bitcoin's peer to peer network, and quantify the resources involved in our attack via probabilistic analysis, Monte Carlo simulations, measurements and experiments with live bitcoin nodes. Finally, we present countermeasures, inspired by botnet architectures, that are designed to raise the bar for eclipse attacks while preserving the openness and decentralization of bitcoin's current network architecture.
USENIX Security Symposium
Ethan Heilman Alison Kendler Aviv Zohar Sharon Goldberg
5115101
Bitcoin and Beyond: A Technical Survey on Decentralized Digital Currencies
Besides attracting a billion dollar economy, Bitcoin revolutionized the field of digital currencies and influenced many adjacent areas. This also induced significant scientific interest. In this survey, we unroll and structure the manyfold results and research directions. We start by introducing the Bitcoin protocol and its building blocks. From there we continue to explore the design space by discussing existing contributions and results. In the process, we deduce the fundamental structures and insights at the core of the Bitcoin protocol and its applications. As we show and discuss, many key ideas are likewise applicable in various other fields, so that their impact reaches far beyond Bitcoin itself.
IEEE Communications Surveys Tutorials
Florian Tschorsch Bjorn Scheuermann
41837070
Privacy in Bitcoin Transactions: New Challenges from Blockchain Scalability Solutions
Bitcoin has emerged as the most successful cryptocurrency since its appearance back in 2009. However, its main drawback to become a truly global payment system is its low capacity in transaction throughput. At present time, some ideas have been proposed to increase the transaction throughput, with different impact on the scalability of the system. Some of these ideas propose to decouple standard transactions from the blockchain core and to manage them through a parallel payment network, relegating the usage of the bitcoin blockchain only to transactions which consolidate multiple of those off chain movements. Such mechanisms generate new actors in the bitcoin payment scenario, the Payment Service Providers, and new privacy issues arise regarding bitcoin users. In this paper, we provide a comprehensive description of the most relevant scalability solutions proposed for the bitcoin network and we outline its impact on users' privacy based on the early stage proposals published so far.
MDAI
Jordi Herrera-Joancomarti Cristina Perez-Sola
1155382
Enhancing Bitcoin Security and Performance with Strong Consistency via Collective Signing
While showing great promise, Bitcoin requires users to wait tens of minutes for transactions to commit, and even then, offering only probabilistic guarantees. This paper introduces ByzCoin, a novel Byzantine consensus protocol that leverages scalable collective signing to commit Bitcoin transactions irreversibly within seconds. ByzCoin achieves Byzantine consensus while preserving Bitcoin's open membership by dynamically forming hash power proportionate consensus groups that represent recently successful block miners. ByzCoin employs communication trees to optimize transaction commitment and verification under normal operation while guaranteeing safety and liveness under Byzantine faults, up to a near optimal tolerance of f faulty group members among 3f 2 total. ByzCoin mitigates double spending and selfish mining attacks by producing collectively signed transaction blocks within one minute of transaction submission. Tree structured communication further reduces this latency to less than 30 seconds. Due to these optimizations, ByzCoin achieves a throughput higher than PayPal currently handles, with a confirmation latency of 15 20 seconds.
USENIX Security Symposium
Eleftherios Kokoris-Kogias Philipp Jovanovic Nicolas Gailly Ismail Khoffi Linus Gasser Bryan Ford
16445179
Towards Bitcoin Payment Networks
Bitcoin as deployed today does not scale. Scalability research has focused on two directions: 1 redesigning the Blockchain protocol, and 2 facilitating 'off chain transactions' and only consulting the Blockchain if an adjudicator is required. In this paper we focus on the latter and provide an overview of Bitcoin payment networks. These consist of two components: payment channels to facilitate off chain transactions between two parties, and the capability to fairly exchange bitcoins across multiple channels. We compare Duplex Micropayment Channels and Lightning Channels, before discussing Hashed Time Locked Contracts which enable Bitcoin based payment networks. Finally, we highlight challenges for route discovery in these networks.
ACISP
Patrick McCorry Malte Moser Siamak Fayyaz Shahandashti Feng Hao
24791246
Design for Trust: An Exploration of the Challenges and Opportunities of Bitcoin Users
Bitcoin is a cryptocurrency which has received increasing interest over the last five years. Built upon a decentralized peer to peer system, it supports transparent, fast, cost effective, and irreversible transactions, without the need for trusting third party financial institutions. We know however little about people's motivation and experience with bitcoin currency. This paper reports on interviews with 20 bitcoin users in Malaysia about their experience and trust challenges. Findings show that bitcoins are used more as store of value for speculative investment or savings' protection. The paper advances the HCI theories on trust by identifying main bitcoin characteristics and their impact on trust, such as decentralization, unregulation, embedded expertise, and reputation, as well as transactions' transparency, low cost, and easiness to complete. We discuss insecure transactions, the risk of dishonest traders and its mitigating strategies. The paper concludes with design implications including support for the transparency of two way transactions, tools for materializing trust, and tools for supporting reversible transactions.
CHI
Corina Sas Irni Eliana Khairuddin