Double-spending unconfirmed transactions is a lot easier than most people realise
8 messages, 22 to 24 Apr 2014. Started by Peter Todd.
Tom Harding (2), Peter Todd, Matt Whitlock, Jeff Garzik, Jan Møller, Mark Friedenbach, Simon Barber
You may have seen my reddit post of the same title a few days ago:
http://www.reddit.com/r/Bitcoin/comments/239bj1/doublespending_unconfirmed_transactions_is_a_lot/
I've done some more experiments since, with good results. For instance here's a real-world double-spend of the gambling service Lucky Bit:
Original: 7801c3b996716025dbac946ca7a123b7c1c5429341738e8a6286a389de51bd20
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
Double-spend: f4e8e930bdfa3666b4a46c67544e356876a72ec70060130b2c7078c4ce88582a
01000000012a14c8e6ce1e625513847b2ff271b3e6a1849f2a634c601b7f383ef710483f79000000006a473044022074f0c6912b482c6b51f1a91fb2bdca3f3dde3a3aed4fc54bd5ed563390011c2d02202719fe49578591edfbdd4b79ceeaa7f9550e4323748b3dbdd4135f38e70c476d012103a11c09c09874833eedc58a031d01d161ab4d2eba3874959537c5609ef5d5401fffffffff01d9c90f00000000001976a914d5245b64fcf8e873a9d1c0bfe2d258492bec6cc888ac00000000
The double-spend was mined by Eligius and made use of the fact that Eligius blacklists transactions to a number of addresses considered to be "spam" by the pool operators; affected transactions are not added to the Eligus mempool at all. Lucky Bit has a real-time display of bets as they are accepted; I simply watched that display to determine whether or not I had lost. With Eligius at 8% and the house edge at 1.75% the attack is profitable when automated. My replace-by-fee patch(1) was used, although as there are only a handful of such nodes running - none connected directly to Eligius from what I can determine - I submitted the double-spend transactions to Eligius directly via their pushtxn webform.(2)
Of course, this is an especially difficult case, as you must send the double-spend after the original transaction - normally just sending a non-standard tx to Eligius first would suffice. Note how this defeats Andresen's double-spend-relay patch(3) as proposed since the double-spend is a non-standard transaction.
In discussion with Lucky Bit they have added case-specific code to reject transactions with known blacklisted outputs; the above double-spend I preformed is no longer possible. Of course, if the (reused) Lucky Bit addresses are added to that blacklist, that approach isn't viable - I suggest they switch to a scheme where addresses are not reused. (per-customer? rotated?) They also have added code to keep track of double-spend occurances and trigger human intervention prior to unacceptable losses. Longer term as with most services (e.g. Just-Dice) they intend to move to off-chain transactions. They are also considering implementing replace-by-fee scorched earth(4) - in their case a single pool, such as Eligius, implementing it would be enough to make the attack unprofitable. It may also be enough security to allow users to use their deposits prior to the first confirmation in a Just-Dice style off-chain implementation.
1) https://github.com/petertodd/bitcoin/tree/replace-by-fee-v0.9.1
2) http://eligius.st/~wizkid057/newstats/pushtxn.php
3) https://github.com/bitcoin/bitcoin/pull/3354 and https://github.com/bitcoin/bitcoin/pull/3883
4) https://bitcointalk.org/index.php?topic=251233.msg2669189#msg2669189
On Tuesday, 22 April 2014, at 8:45 pm, Tom Harding wrote:
Quoted text (5 lines)
> A network where transaction submitters consider their (final) > transactions to be unchangeable the moment they are transmitted, and > where the network's goal is to confirm only transactions all of whose > UTXO's have not yet been seen in a final transaction's input, has a > chance to be such a network.
Respectfully, this is not the goal of miners. The goal of miners is to maximize profits. Always will be. If they can do that by enabling replace-by-fee (and they can), then they will. Altruism does not factor into business.
A lot of these "should the network..." questions depend on business rules and business models.
Even if a 0-conf double spend is possible in a given business situation, the incentives quite often are aligned to avoid double-spend attempts in any case. Any physical good being shipped can "accept" the transaction, and then wait for confirmations before shipping. Digital goods might be accepted for 0-conf payment from users who have a good history with the merchant. The 0-conf attacker will tend to /not/ be a regular user, and also have many other typical markers of a fraudster.
The subset of (a) double-spend attackers making a one-time or short-term attack on (b) a naive merchant with mistuned business rules will tend to be very small.
On Wed, Apr 23, 2014 at 12:45 AM, Tom Harding <tomh@thinlink•com> wrote:
Quoted text (101 lines)
> > Since no complete solution to preventing 0-confirmation respends in the > bitcoin network has been proposed, or is likely to exist, when > evaluating partial solutions let's ask "what kind of network does this > move toward?" > > Does the solution move toward a network with simple rules, where the > certainty that decreases from the many-confirmations state, down to 1 > confirmation, does not immediately disappear just below the time of 1 > confirmation? > > A network where transaction submitters consider their (final) > transactions to be unchangeable the moment they are transmitted, and > where the network's goal is to confirm only transactions all of whose > UTXO's have not yet been seen in a final transaction's input, has a > chance to be such a network. If respend attempts are broadcast widely, > then after a time on the order of transaction propagation time (<< 1 > minute) has passed, participants have a good chance to avoid relying on > a transaction whose funds are spent to someone else. This is both > because after this time the network is unlikely to split on the primacy > of one spend, and because the recipient, able to see a respend attempt, > can withhold delivery of the good or service until confirmation. > > Or, does the solution move toward a network that > - Requires participants to have knowledge of the policies of multiple > entities, like Eligius and whoever maintains the blacklist mentioned below? > - Requires a transaction submitter to intently monitor transactions > and try to climb over the top of attempted respends with > "scorched-earth" triple spends, until a random moment some time between, > let's say, 5 and 15 minutes in the future? > - Punts the problem to off-network solutions? > > > On 4/22/2014 1:31 PM, Peter Todd wrote: >> You may have seen my reddit post of the same title a few days ago: >> >> http://www.reddit.com/r/Bitcoin/comments/239bj1/doublespending_unconfirmed_transactions_is_a_lot/ >> >> I've done some more experiments since, with good results. For instance >> here's a real-world double-spend of the gambling service Lucky Bit: >> >> Original: 7801c3b996716025dbac946ca7a123b7c1c5429341738e8a6286a389de51bd20 >> >> 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 >> >> Double-spend: f4e8e930bdfa3666b4a46c67544e356876a72ec70060130b2c7078c4ce88582a >> >> 01000000012a14c8e6ce1e625513847b2ff271b3e6a1849f2a634c601b7f383ef710483f79000000006a473044022074f0c6912b482c6b51f1a91fb2bdca3f3dde3a3aed4fc54bd5ed563390011c2d02202719fe49578591edfbdd4b79ceeaa7f9550e4323748b3dbdd4135f38e70c476d012103a11c09c09874833eedc58a031d01d161ab4d2eba3874959537c5609ef5d5401fffffffff01d9c90f00000000001976a914d5245b64fcf8e873a9d1c0bfe2d258492bec6cc888ac00000000 >> >> The double-spend was mined by Eligius and made use of the fact that >> Eligius blacklists transactions to a number of addresses considered to >> be "spam" by the pool operators; affected transactions are not added to >> the Eligus mempool at all. Lucky Bit has a real-time display of bets as >> they are accepted; I simply watched that display to determine whether or >> not I had lost. With Eligius at 8% and the house edge at 1.75% the >> attack is profitable when automated. My replace-by-fee patch(1) was >> used, although as there are only a handful of such nodes running - none >> connected directly to Eligius from what I can determine - I submitted >> the double-spend transactions to Eligius directly via their pushtxn >> webform.(2) >> >> Of course, this is an especially difficult case, as you must send the >> double-spend after the original transaction - normally just sending a >> non-standard tx to Eligius first would suffice. Note how this defeats >> Andresen's double-spend-relay patch(3) as proposed since the >> double-spend is a non-standard transaction. >> >> In discussion with Lucky Bit they have added case-specific code to >> reject transactions with known blacklisted outputs; the above >> double-spend I preformed is no longer possible. Of course, if the >> (reused) Lucky Bit addresses are added to that blacklist, that approach >> isn't viable - I suggest they switch to a scheme where addresses are not >> reused. (per-customer? rotated?) They also have added code to keep track >> of double-spend occurances and trigger human intervention prior to >> unacceptable losses. Longer term as with most services (e.g. Just-Dice) >> they intend to move to off-chain transactions. They are also considering >> implementing replace-by-fee scorched earth(4) - in their case a single >> pool, such as Eligius, implementing it would be enough to make the >> attack unprofitable. It may also be enough security to allow users to >> use their deposits prior to the first confirmation in a Just-Dice style >> off-chain implementation. >> >> 1) https://github.com/petertodd/bitcoin/tree/replace-by-fee-v0.9.1 >> >> 2) http://eligius.st/~wizkid057/newstats/pushtxn.php >> >> 3) https://github.com/bitcoin/bitcoin/pull/3354 and >> https://github.com/bitcoin/bitcoin/pull/3883 >> >> 4) https://bitcointalk.org/index.php?topic=251233.msg2669189#msg2669189 > > ------------------------------------------------------------------------------ > Start Your Social Network Today - Download eXo Platform > Build your Enterprise Intranet with eXo Platform Software > Java Based Open Source Intranet - Social, Extensible, Cloud Ready > Get Started Now And Turn Your Intranet Into A Collaboration Platform > http://p.sf.net/sfu/ExoPlatform > _______________________________________________ > Bitcoin-development mailing list > Bitcoin-development@lists•sourceforge•net > https://lists.sourceforge.net/lists/listinfo/bitcoin-development
Quoted text (5 lines)
>Of course, this is an especially difficult case, as you must send the >double-spend after the original transaction - normally just sending a >non-standard tx to Eligius first would suffice. Note how this defeats >Andresen's double-spend-relay patch(3) as proposed since the >double-spend is a non-standard transaction.
Why can't you send a non-standard tx to Eligius first in this scenario? Is it because LuckyBit is connected directly to Eligius, and does Eligius relay (not only mine) non-standard transactions?
Since no complete solution to preventing 0-confirmation respends in the bitcoin network has been proposed, or is likely to exist, when evaluating partial solutions let's ask "what kind of network does this move toward?"
Does the solution move toward a network with simple rules, where the certainty that decreases from the many-confirmations state, down to 1 confirmation, does not immediately disappear just below the time of 1 confirmation?
A network where transaction submitters consider their (final) transactions to be unchangeable the moment they are transmitted, and where the network's goal is to confirm only transactions all of whose UTXO's have not yet been seen in a final transaction's input, has a chance to be such a network. If respend attempts are broadcast widely, then after a time on the order of transaction propagation time (<< 1 minute) has passed, participants have a good chance to avoid relying on a transaction whose funds are spent to someone else. This is both because after this time the network is unlikely to split on the primacy of one spend, and because the recipient, able to see a respend attempt, can withhold delivery of the good or service until confirmation.
Or, does the solution move toward a network that - Requires participants to have knowledge of the policies of multiple entities, like Eligius and whoever maintains the blacklist mentioned below? - Requires a transaction submitter to intently monitor transactions and try to climb over the top of attempted respends with "scorched-earth" triple spends, until a random moment some time between, let's say, 5 and 15 minutes in the future? - Punts the problem to off-network solutions?
On 4/22/2014 1:31 PM, Peter Todd wrote:
Quoted text (56 lines)
> You may have seen my reddit post of the same title a few days ago: > > http://www.reddit.com/r/Bitcoin/comments/239bj1/doublespending_unconfirmed_transactions_is_a_lot/ > > I've done some more experiments since, with good results. For instance > here's a real-world double-spend of the gambling service Lucky Bit: > > Original: 7801c3b996716025dbac946ca7a123b7c1c5429341738e8a6286a389de51bd20 > > 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 > > Double-spend: f4e8e930bdfa3666b4a46c67544e356876a72ec70060130b2c7078c4ce88582a > > 01000000012a14c8e6ce1e625513847b2ff271b3e6a1849f2a634c601b7f383ef710483f79000000006a473044022074f0c6912b482c6b51f1a91fb2bdca3f3dde3a3aed4fc54bd5ed563390011c2d02202719fe49578591edfbdd4b79ceeaa7f9550e4323748b3dbdd4135f38e70c476d012103a11c09c09874833eedc58a031d01d161ab4d2eba3874959537c5609ef5d5401fffffffff01d9c90f00000000001976a914d5245b64fcf8e873a9d1c0bfe2d258492bec6cc888ac00000000 > > The double-spend was mined by Eligius and made use of the fact that > Eligius blacklists transactions to a number of addresses considered to > be "spam" by the pool operators; affected transactions are not added to > the Eligus mempool at all. Lucky Bit has a real-time display of bets as > they are accepted; I simply watched that display to determine whether or > not I had lost. With Eligius at 8% and the house edge at 1.75% the > attack is profitable when automated. My replace-by-fee patch(1) was > used, although as there are only a handful of such nodes running - none > connected directly to Eligius from what I can determine - I submitted > the double-spend transactions to Eligius directly via their pushtxn > webform.(2) > > Of course, this is an especially difficult case, as you must send the > double-spend after the original transaction - normally just sending a > non-standard tx to Eligius first would suffice. Note how this defeats > Andresen's double-spend-relay patch(3) as proposed since the > double-spend is a non-standard transaction. > > In discussion with Lucky Bit they have added case-specific code to > reject transactions with known blacklisted outputs; the above > double-spend I preformed is no longer possible. Of course, if the > (reused) Lucky Bit addresses are added to that blacklist, that approach > isn't viable - I suggest they switch to a scheme where addresses are not > reused. (per-customer? rotated?) They also have added code to keep track > of double-spend occurances and trigger human intervention prior to > unacceptable losses. Longer term as with most services (e.g. Just-Dice) > they intend to move to off-chain transactions. They are also considering > implementing replace-by-fee scorched earth(4) - in their case a single > pool, such as Eligius, implementing it would be enough to make the > attack unprofitable. It may also be enough security to allow users to > use their deposits prior to the first confirmation in a Just-Dice style > off-chain implementation. > > 1) https://github.com/petertodd/bitcoin/tree/replace-by-fee-v0.9.1 > > 2) http://eligius.st/~wizkid057/newstats/pushtxn.php > > 3) https://github.com/bitcoin/bitcoin/pull/3354 and > https://github.com/bitcoin/bitcoin/pull/3883 > > 4) https://bitcointalk.org/index.php?topic=251233.msg2669189#msg2669189
On 04/22/2014 09:29 PM, Jan Møller wrote:
Quoted text (10 lines)
>>Of course, this is an especially difficult case, as you must send the >>double-spend after the original transaction - normally just sending a >>non-standard tx to Eligius first would suffice. Note how this defeats >>Andresen's double-spend-relay patch(3) as proposed since the >>double-spend is a non-standard transaction. > > Why can't you send a non-standard tx to Eligius first in this scenario? > Is it because LuckyBit is connected directly to Eligius, and does > Eligius relay (not only mine) non-standard transactions? >
Because you only want to double-spend if you loss the bet. If you tried to double-spend every bet, there'd be no point :)
On 4/22/2014 9:03 PM, Matt Whitlock wrote:
Quoted text (7 lines)
> On Tuesday, 22 April 2014, at 8:45 pm, Tom Harding wrote: >> A network where transaction submitters consider their (final) >> transactions to be unchangeable the moment they are transmitted, and >> where the network's goal is to confirm only transactions all of whose >> UTXO's have not yet been seen in a final transaction's input, has a >> chance to be such a network. > Respectfully, this is not the goal of miners. The goal of miners is to maximize profits. Always will be. If they can do that by enabling replace-by-fee (and they can), then they will. Altruism does not factor into business.
The rational miner works hard digging hashes out of the ether, and wants the reward to be great. How much more valuable would his reward be if he were paid in something that is spendable like cash on a 1-minute network for coffee and other innumerable real-time transactions, versus something that is only spendable on a 15-minute network?
There is a prisoner's dilemma, to be sure, but do the fees from helping people successfully double-spend their coffee supplier really outweigh the increased value to the entire network - including himself - of ensuring that digital cash actually works like cash?
Miners earn bitcoins, and clearly a network where reasonable certainty can be achieved with 0-confirm transactions is more useful, thus will result in those bitcoins being more valuable. One would expect rational miners (or pool operators) to want to collaborate to reduce the possibilities for double spend attacks as much as possible.
Simon
On 4/23/2014 3:29 PM, Tom Harding wrote:
Quoted text (31 lines)
> On 4/22/2014 9:03 PM, Matt Whitlock wrote: >> On Tuesday, 22 April 2014, at 8:45 pm, Tom Harding wrote: >>> A network where transaction submitters consider their (final) >>> transactions to be unchangeable the moment they are transmitted, and >>> where the network's goal is to confirm only transactions all of whose >>> UTXO's have not yet been seen in a final transaction's input, has a >>> chance to be such a network. >> Respectfully, this is not the goal of miners. The goal of miners is to maximize profits. Always will be. If they can do that by enabling replace-by-fee (and they can), then they will. Altruism does not factor into business. > The rational miner works hard digging hashes out of the ether, and wants > the reward to be great. How much more valuable would his reward be if > he were paid in something that is spendable like cash on a 1-minute > network for coffee and other innumerable real-time transactions, versus > something that is only spendable on a 15-minute network? > > There is a prisoner's dilemma, to be sure, but do the fees from helping > people successfully double-spend their coffee supplier really outweigh > the increased value to the entire network - including himself - of > ensuring that digital cash actually works like cash? > > > > ------------------------------------------------------------------------------ > Start Your Social Network Today - Download eXo Platform > Build your Enterprise Intranet with eXo Platform Software > Java Based Open Source Intranet - Social, Extensible, Cloud Ready > Get Started Now And Turn Your Intranet Into A Collaboration Platform > http://p.sf.net/sfu/ExoPlatform > _______________________________________________ > Bitcoin-development mailing list > Bitcoin-development@lists•sourceforge•net > https://lists.sourceforge.net/lists/listinfo/bitcoin-development