Daily Archives: December 29, 2011

Bitcoin – An Analysis

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Kay Hamacher and Stefan Katzenbeisser presented their analysis of Bitcoin at 28C3. Besides the usual cryptographic analysis, they pointed out some important aspects of the system:

Bitcoin doesn’t scale well, and no update mechanism has been designed!

Bitcoin was created as a total decentralized system. There is also no central authority or update mechanism, that could alter the system. As soon as Bitcoin hits it’s boundaries, all Bitcoin users need to agree on a change of the system and integrate it. Because every user of Bitcoin needs to keep a full log of all transactions, that have ever been executed on the Bitcoin network, it is clear that Bitcoin will hit it’s scaleability boundaries rather soon, if it gets more popular.

Bitcoins can bet lost and the number of Bitcoins that can be generated is fixed!

Bitcoins are a digital currency, that are stored on the current owners computer. If for example the harddisk crashes, or it is encrypted an the password is lost, these Bitcoins cannot be spend anymore. They still exist in the network, and also cannot be regenerated. One could also say, these Bitcoins are lost. Also, the total amount of Bitcoins, that can ever be generated is fixed. So we need to expect, that the total amount of Bitcoins will start to decline, as soon as all Bitcoins have been generated. Just assume, that 1% of all Bitcoins are lost per year, then after \log_{0.99} (0.5) \approx 69  years, only 50% of the Bitcoins will still be there.

Bitcoin is not untraceable and anonymous!

Because Bitcoin keeps a log of all transactions, and this log is available to the public, one can trace which address has received how much money, and where it went. Bitcoin allows a user to have more than one identity, but as soon as money from more than one address is used in a single transaction, one can assume that these addresses belong to the same user. One can for example see, who spend money to Wikileaks, and where Wikileaks transferred that money. Also if you assume, that a person ears money only from Bitcoin, you know his total income. You also know when he transfers money on Bitcoin and when not, so you might find out when he sleeps and in which time zone he lives in.

What has not been found…

As mentioned at the beginning of the post, there is no central update mechanism. So if somebody would find a bug in the design of the system, that allows him to steal money from it, it cannot easily be fixed. So far, no attack one the basics of the bitcoin system has been found and bitcoin is running and getting more and more popular.

Time is on my Side – Exploiting Timing Side Channel Vulnerabilities on the Web

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Sebastian Schinzel gave an interesting talk today at 28C3, about timing side channel attacks against web applications. (Timing-) Side channel attacks are known in the cryptography world for a long time, and many algorithms like RSA or AES have been successfully attacked. In a nutshell, an attacker measures the time a device needs to process a request (usually an encryption or decryption), and can draw conclusions from that to the values of secret input parameters (a plaintext or a secret key).

(cc)Sebastian showed, that this can be used against none cryptography web applications as well. Instead of just presenting his attacks, he presented general methods how to do timing measurements against web applications first. For example, a web application could perform the following sequence of checks during a user login:

  1. Does the account exist?
  2. Is the account of the user locked?
  3. Has the account expired?
  4. Is the password correct?

If one of these checks fails, the procedure is aborted and an error page is send to the user. Of course, each of these steps requires some time, and from the time it takes from the request to the generation of the error message, one might guess, which of these steps went wrong.

The second attack presented in this talk was a timing attack on an implementation of the XML encryption standard using a PKCS#1.5 padding. Here, the server needs a longer time to process a request, depending on the padding inside the encrypted payload.

For me, my personal highlight was the extension of timing based side channel attacks to none cartographic web applications. I assume, if one would check some famous web applications, many of such timing leaks could be found, because web developers usually don’t care about timing side channels. The timing difference could also be used to assist blind SQL injection attacks, where the timing difference could be the only channel back to the attacker.

Unfortunately, the slides are not (yet) available, but a previous paper describing the methods can be found at http://sebastian-schinzel.de/_download/cosade-2011-extended-abstract.pdf.