8 ms·

Bitcoin Exchanges Under ‘Massive and Concerted Attack’

291 points by qwerty69 13y ago

JohnTHaller 13y ago
Didn't coindesk just report yesterday that the 'transaction malleability problem' that MtGox was worried about was already known and a non-issue?
- Shank 13y ago
  This report is simply noting that there is a persistent attack attempting to cause problems in exchanges (like Bitstamp and MtGox) that are using transaction IDs as verification of a transaction.
- pixelcloud 13y ago
  Their backend software is probably able to deal with it, but not a massive DDOS brute force attack to try to find holes in the exchanges. This is an information gather exercise by some organized hackers.
- o_nate 13y ago
  It turns out that "non-issue" might have been a slight exaggeration. I can understand where the Bitcoin developers are coming from. I mean no one likes to admit there's a bug in their code. Just read through Microsoft support archives. How many times will you find that some bizarre, head-scratching, counter-intuitive behavior of some API or other is "by design"? Does that mean they won't eventually (quietly) patch it? Of course not.
  - zAy0LfpBZLC8mAC 13y ago
    The bitcoin developers "admitted" long ago that that behaviour is not quite optimal, and they are actually working on fixing it, albeit not quietly, because that would risk breaking bitcoin, as would doing so fast. It's a non-issue in so far as it does not prevent bitcoin from working as it should if you do implement things as the original client does it, it's only an issue because it's something you might easily get wrong when implementing a new client (which apparently happened to some other developers), and it would have been avoidable - but changing the behaviour now has to be done very carefully, coordinating with all implementors of bitcoin clients, in order to make sure the fix does not cause a blockchain split, so that is what is happening.
    - yetfeo 13y ago
      > It's a non-issue in so far as it does not prevent bitcoin from working as it should if you do implement things as the original client does it This is not correct. The original client gets one edge case wrong and it is this that is causing the issue with most of the exchanges that use it: http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_active_malleable_transaction_relayers_it/ http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_activ...
      - maaku 13y ago
        Yes, but the bitcoind reference client fails safely: the child transactions are orphaned and no funds are lost. It's behavior alone is not exploitable.
        yetfeo 13y ago
        Unfortunately it does not fail completely safely. The change transaction seems to still be available for coin selection and causes sends to fail. The getbalance command shows an incorrect balance due to counting the change address twice - once in the double spend and once in the accepted. The accounts system also has balances messed up which some merchant sites rely on. It is not "lose money" exploitable (unless combined with social engineering) but is definitely "lose time, lose effort" exploitable.
- deleted 13y ago
  [deleted]
fredsted 13y ago
This will make them only stronger. Bitcoin is not going anywhere.
- d0ugie 13y ago
  Hmm, I see. Makes me wonder where bitcoin would be trading were its history not riddled with political/legal/fraudulent/technical/reputation snafus.
  - zanny 13y ago
    It wouldn't be trading at all, because it is paving new ground. If it wasn't, it would have no reason to exist, because a predecessor coin would exist and it would be unlikely that btc would have enough differing features to justify the risk transitioning to it. The drama isn't because of bitcoin, it is because it is the first cryptocoin breaching new markets consistently. So as it treads new ground there will always be resistance.
- d0ugie 13y ago
  Hmm, I see. Makes me wonder where bitcoin would be trading were its history not riddled with political/legal/fraudulent/technical/reputation snafus.
- Sheepshow 13y ago
  To the mooooooon!
nwh 13y ago
It's interesting to watch actually, submit a transaction to the network at the moment and there's a rogue node that will mess with the padding of the signatures and rebroadcast it faster than the original. It confuses the reference client into duplicate display, which is what Gox is relying on for the failed/success display. That they're winning races over the normal related transactions isn't that unnatural as the transaction processing stuff has a 100ms sleep() in the middle of it.
- ayanb 13y ago
  Also worth noting is the fact that the Bitcoin Price Index has been massively resilient to all the bad "news" thats been pouring in this month. It has been consistently hovering around the 670-700 mark.
  - glomph 13y ago
    Wasn't it 800 at the start of the month?
    - deweerdt 13y ago
      http://bitcoincharts.com/charts/bitstampUSD#rg60ztgSzm1g10zm2g25zv http://bitcoincharts.com/charts/bitstampUSD#rg60ztgSzm1g10zm...
  - eterm 13y ago
    I can't find the article now, but there have been several good articles explaining the lack of gravity on bitcoin in general. Basically, the price goes up quickly when new people are attracted to bitcoin and rush to buy. When the price dips however, because so much is bought for long term speculation, the price doesn't really dip much, as no one is incentivised to sell and hold out for when it gets better. At some point the nerve of those holding out may crack, but if you read silly saurus2's post, its quite clear that many will hold out indefinitely on the belief or hope it will one day recover. So in this manner the bubble can deflate slowly. (If you call 10% in a day slow). There are no settlement dates or ways to easily move money out (especially now) so a crash is prevented. If a crash happens it'll probably happen before people realise it, but suddenly there just won't be anyone wanting to buy coins anymore. But even that might not happen as people already invested into bitcoin use how wealthy they feel to buy bitcoins from each other. That can cycle for a long time before people realise there isn't new money in bitcoin. If you had bought coins at 800-1000, why would you sell now? No one likes to cement a loss. Those with the most reason to sell right now are the early adopters, but it's not actually clear how many of those coins are actually reachable.
rtpg 13y ago
In another thread, there's a comment that kinda explains what is happening exactly, in a nice analogy https://news.ycombinator.com/item?id=7219266 https://news.ycombinator.com/item?id=7219266
zacinbusiness 13y ago
I've not bought in to Bitcoin yet. It just seems like a massive, world-wide scam to me. I'm not saying that it is a scam, I'm just saying that Bitcoin is something that I don't really understand, and so I don't entirely trust it. That said, this event is extremely encouraging. Not only is the security and the viability of the currency being tested. But more importantly, the communication and cooperation between the major players in the Bitcoin ecosystem is being tested. And so far, the community is kicking ass. To me that signals that perhaps Bitcoin really is a viable currency for the long term, and that it may really be a great way to think about money and value exchange.
- bitexploder 13y ago
  It is a non issue, honestly. This issue was known about as early as 2011. You can only modify non-essential pieces of the transaction, but it does change the overall transaction hash. These poorly coded exchanges were looking for an exact hash match to pop up on the block chain, instead of looking for the deposit/address. The actual security of the system is not really impacted at all, and the core Bitcoin clients cope fine with this. The exchanges may have put themselves at risk, but that is on them.
  - wtbob 13y ago
    > You can only modify non-essential pieces of the transaction, but it does change the overall transaction hash. That's the thing I don't get. If one is going to allow non-essential changes, shouldn't one _not_ include those data in the hash? Alternatively, should one simply not allow changes, period? I've not read the Bitcoin paper, just summaries (been too busy, and it's outside my area); perhaps there's a good reason for it.
    - bitexploder 13y ago
      I think you are mostly correct. That is why some people call it an "issue", while others refer to it as a "vulnerability". I personally don't think it is a real vulnerability, more like a quirk.
    - 13y ago
arasmussen 13y ago
I think a lot of people are viewing this as a bad thing, hence the BTC price sliding. If BTC is going to become a global currency then exchanges and banks better be prepared for this kind of stuff. After fixing this issue, I doubt many companies will make the same mistake in the future. Better to get these bugs out of the way now than in two years when market cap is much greater.
plg 13y ago
Is the real goal of these attacks perhaps to drive down the price temporarily, so that the attackers can purchase at a discount, and then sell shortly afterwards when the price goes back up?
- smtddr 13y ago
  As much as I don't condone this kind of abuse, that's exactly what I'm preparing for. If BTC drops below $500, I'm buying more.
  - RRRA 13y ago
    If BTC drops, below 500 or less, why exactly 500? Why not wait for 400? I'm new to this but maybe we need to make it easier to move money from wallet to wallet, from wallet to "hard" currencies and back, etc. Right now it's practically impossible to get verified on an exchange, get money out, paying anywhere with it, etc. You are lucky if you have a bitcoin ATM where the rate is probably not that good but at least you can get some coins without sending your passport to an unknown exchange half across the world. Without Bitcoin reaching in the real world faster, I'm not sure what strategy to employ to give it any value in the long run, making it more volatile too... Though I profited strangely last Saturday when ponzi.io screwed up and gave me a ~96x payback, Ponzi/Casino/etc schemes which may in a way help market BTC through ensuing media frenzy, are still mostly detrimental while they are the majority of the currency's activity. So, maybe we need to simplify software and make them all more compatible, through exported private-keys, etc. Why do I have to pay a fee by paying myself to move my money from my computer to my cell phone, for example... How can any store expect to be paid in Bitcoin? Does he have to wait 6 verifications before letting the client go? Should we pay when we arrive and trust the store for the change? Maybe then we can have an Escrow service, 3 key involved, to vouch for those short term transaction but then aren't we back to the banking problem? Is anyone working on a wallet that is compatible with import/export and that grandma can use? :)
    - lockes5hadow 13y ago
      You can still instantly verify a transaction as valid, which works for the retail store. You don't have to wait for 6 verifications, the money will arrive in your wallet once you have a copy of the verified transaction and you send that to the network. It might have a different transaction id or more 0000's prepended to the number, but you will get the money.
mark_l_watson 13y ago
I have no proof what so ever, this is just a conjecture: there are powerful government and private entities who profit from manipulating the current monetary system. I have to ask: is it unreasonable that state actors would try to crash Bitcoin out of self interest?
- untog 13y ago
  is it unreasonable that state actors would try to crash Bitcoin out of self interest? Is it unreasonable? No. Is there any evidence to suggest it? No.
  - pjc50 13y ago
    There was an article going around just the other day alleging that GCHQ were DDOSing the QuakeNet and Freenet IRC systems. Not the same, but a similar kind of thing.
- sixothree 13y ago
  I can think of a few entities who have an interest in its failure.
- mcintyre1994 13y ago
  One issue with this is do we even have any evidence somebody can reliably short Bitcoin at the level a government would want to? It seems hard to believe a government could do more damage to Bitcoin than just declaring that it's banned in their country, anybody using it gets {significant penalty in their country}.
  - smrtinsert 13y ago
    Governments don't have to short it. Pulling money from digital currencies back into government controlled ones seems like benefit enough.
    - mcintyre1994 13y ago
      So the claim is they'd be doing something like these attacks? I just struggle to believe that's the most effective way for them to deal with the problem, when the US Government coming out with "Bitcoin is illegal due to {plausible sounding terrorism story}, possession is a felony" would utterly tank it overnight.
iblaine 13y ago
Didnt this same thing happen in April 2013? Somehow a DDOS attack drove the price from $250 to $75. Then it went back up. My guess is the same thing happens here. Two years ago people used to bitch when the price dipping below $15. Here it is at $650. A week is not complete unless someone claims to be witnessing the demise of bitcoin.
- ihsw 13y ago
  That was lag. Although this issue is lag-related, it cannot be mitigated with DDOS protection.
keyme 13y ago
Setting up a rogue node that messes with all transactions is the best way of hurrying a proper fix to the protocol that will also be deployed ASAP and accepted by everyone!
gesman 13y ago
TheWayTheyFightBack
ChuckMcM 13y ago
Marks another interesting step toward maturity of the concepts of crypto currency. It is interesting to watch this in the context of other technologies (like air travel) which went from novelty to everyday thing, albeit through a series of 'events' which at times seemed likely to doom the idea.
cordite 13y ago
It seems like the whole bitcoin community is immature.
- BlackDeath3 13y ago
  By definition, yes.
snake_plissken 13y ago
What was the intent of including something like transaction malleability in the Sotahsi client?
- Scaevolus 13y ago
  It's a bug. Signatures have multiple equivalent forms, and the clients don't require that representations are canonical. >The first form of malleability is in the signatures themselves. Each signature has exactly one DER-encoded ASN.1 octet representation, but openssl does not enforce this, and as long as a signature isn't horribly malformed, it will be accepted. In addition for every ECDSA signature (r,s), the signature (r, -s (mod N)) is a valid signature of the same message. https://en.bitcoin.it/wiki/Transaction_Malleability https://en.bitcoin.it/wiki/Transaction_Malleability
  - scintill76 13y ago
    I don't think it should be called a bug. Peter Todd (well-known Bitcoin developer), said[1]: > [...]I'm a bit hesitant to bake in assumptions about malleability when we have no solid idea if ECC signatures are or are not malleable on a fundemental level; if "whack-a-mole" anti-malleability is all we've got it could be ugly if a break is found. I understand this to mean, there may be unknown ways to transform signatures, like the s sign flip you quoted. In that case there would be no way to know which representation is "canonical." Thus, malleability is either a fundamental, fatal flaw in Bitcoin, or just something Bitcoin developers need to work around. Now, it seems even the reference implementation isn't perfect about malleability, and perhaps people could have been better about making the issue known. So there is work to be done, but it is not a "bug" that can be "fixed", at least not without upgrading the entire network, and/or risking it popping up in the future when someone applies more ECDSA signature mutation tricks. The real solution, if you want to safely fingerprint transactions, is to make your own transaction hash that is immune to malleability, like [2]. [1] http://sourceforge.net/mailarchive/message.php?msg_id=31954652 http://sourceforge.net/mailarchive/message.php?msg_id=319546... [2] https://github.com/sipa/bitcoin/commit/e7853a91cf646a6a4701158d148f036924575a97 https://github.com/sipa/bitcoin/commit/e7853a91cf646a6a47011...
mschuster91 13y ago
Funny: everyone said "oh, gox is stupid, no one else is affected"... one and a half days later, all those are proven wrong. Not to be an excuse for the consistent problems with MtGox, but everyone who is affected by the current DDoS attacks should just shut the f..k up.
kbar13 13y ago
Is this why I saw a bunch of super small incoming transactions to my coinbase wallets that then promptly disappeared?
drstrangevibes 13y ago
what would you do if you couldnt stop people trading in a currency you dont control?
smrtinsert 13y ago
Someone should pen the next James Bond story around Digital currency manipulation. What a fascinating world.
- MartinCron 13y ago
  That's probably the easiest way to make a James Bond story that feels out-of-touch now and out-of-date tomorrow.
  - smrtinsert 13y ago
    Haha. Not necessarily, the general public is becoming aware of btc as you can now pay regular companies with it. also you could tie it into typical James Bond fare such as funding for terrorist organizations etc.
  - _pmf_ 13y ago
    > That's probably the easiest way to make a James Bond story that feels out-of-touch now and out-of-date tomorrow. I think it would be the first JB movie that has a chance of not being out-of-date tomorrow.
zcarter 13y ago
Given the asymmetry in the difficulty market participants have with selling (and withdrawal in fiat, in a timely manner) or shorting bitcoin, as compared to the effort involved in buying bitcoin, any news is bullish news. This should hold generally and is not specific to publicity about the attack. Assuming equal reach for would-be-sellers and would-be-buyers, more buyers are capable of expressing their opinion in the market than are sellers.
ck2 13y ago
Massive attack requires massive resources. Maybe foreign government? Heck, domestic government?
- patio11 13y ago
  Massive attack requires massive resources. Not, in general, true. You could rent thousands of botted-up consumer-grade PCs located in the United States to run your custom bitcoin client for hundreds of dollars. This particular attack doesn't require any detailed computation -- all you have to do is observe a transaction broadcast from Legitimate Node N1, perform nanoseconds of computation on it, and broadcast the resulting transaction from your Conspiring Nodes N2...N1000 faster than N1 does. Assuming you do, your altered transaction will be the one adopted by the consensus, not the original one. The technical complexity of this attack is substantially below several levels of e.g. the Stripe CTF event, which were designed to be implemented by intermediate programmers in a few hours of play.
smrtinsert 13y ago
The most fascinating thing about this whole process is watching the btc community try to keep it moving. As someone who doesn't know anything about digital currencies, this seems like one of the first major tests of an philosophy of unregulation.
pistle 13y ago
Day one: Slander the biggest exchange and hang your neck out calming the entrenched. "They are amateurs. This is that exchange's problem. $1000 is but days away." Day two: Uhh... "Stay calm. This is just the expression of that non-issue looking like an issue. We know what we're doing." Bitcoin has, generally, intrinsic crash protection right now. The price can't plummet if you can't find trading partners. Nobody really knows the price. The dotcom crash was from lofty to zero. As the price eats through panic sell thresholds, pants are shat. At least with commodities, people can point to the ones that went to 0 and stayed there. Since it hasn't happened with bitcoin, people can still sing the "it always bounces back" tune. I've kicked the dead horse of stability. I've hinted at liquidity issues, but this is a grave lack of liquidity. The only thing left is any belief that there is value. If that starts to deteriorate due to the other issues, poof
- NkVczPkybiXICG 13y ago
  Then put your money where your mouth is. There are bitcoin derivative markets that let you short it. Hell, PM me and I'll personally bet against you on a 6 mo time horizon.
  - pistle 13y ago
    If I had a position, I couldn't be considered objective. Not to mention... the primary exchanges seem to produce that sort of clunky, bug-riddled system that undermines my confidence. A derivatives exchange? So, what the come-latelies are working on? They ain't even no Satoshi.
yetfeo 13y ago
The reason why exchanges and other software are having trouble with malleable transactions is not due to bad software using transaction ids. It's an edge case with the reference bitcoin client. See: http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_active_malleable_transaction_relayers_it/ http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_activ... Basically the reference client allows an edge case where it allows spending an unconfirmed output if that output was generated by the wallet itself as change. This can form a chain of unconfirmed transactions. When the malleable bot modifies the original one they all become invalid. The reference client does not handle this case well, it gets balances wrong, and clogs the wallet up. It's unfortunate that Mt Gox got a lot of heat for calling out the issue from the foundation and core developers saying that malleability was known and wasn't a bit issue. in fact it is an issue due to this edge case in the reference client.
epynonymous 13y ago
is btcchina affected?
shoo 13y ago
concerted massive attack: http://www.youtube.com/watch?v=iKxnCGziUVA http://www.youtube.com/watch?v=iKxnCGziUVA
chris_wot 13y ago
Funny if it was Mount Gox trying to prove a point.
nctalaviya 13y ago
One of the Best Services... Fiver also accepts bitcons... For more read here: http://blog.fiverr.com/fiverr-now-accepting-bitcoins/ http://blog.fiverr.com/fiverr-now-accepting-bitcoins/

291 points by qwerty69 13y ago

Didn't coindesk just report yesterday that the 'transaction malleability problem' that MtGox was worried about was already known and a non-issue?

Shank 13y ago
This report is simply noting that there is a persistent attack attempting to cause problems in exchanges (like Bitstamp and MtGox) that are using transaction IDs as verification of a transaction.
pixelcloud 13y ago
Their backend software is probably able to deal with it, but not a massive DDOS brute force attack to try to find holes in the exchanges. This is an information gather exercise by some organized hackers.
o_nate 13y ago
It turns out that "non-issue" might have been a slight exaggeration. I can understand where the Bitcoin developers are coming from. I mean no one likes to admit there's a bug in their code. Just read through Microsoft support archives. How many times will you find that some bizarre, head-scratching, counter-intuitive behavior of some API or other is "by design"? Does that mean they won't eventually (quietly) patch it? Of course not.
- zAy0LfpBZLC8mAC 13y ago
  The bitcoin developers "admitted" long ago that that behaviour is not quite optimal, and they are actually working on fixing it, albeit not quietly, because that would risk breaking bitcoin, as would doing so fast. It's a non-issue in so far as it does not prevent bitcoin from working as it should if you do implement things as the original client does it, it's only an issue because it's something you might easily get wrong when implementing a new client (which apparently happened to some other developers), and it would have been avoidable - but changing the behaviour now has to be done very carefully, coordinating with all implementors of bitcoin clients, in order to make sure the fix does not cause a blockchain split, so that is what is happening.
  - yetfeo 13y ago
    > It's a non-issue in so far as it does not prevent bitcoin from working as it should if you do implement things as the original client does it This is not correct. The original client gets one edge case wrong and it is this that is causing the issue with most of the exchanges that use it: http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_active_malleable_transaction_relayers_it/ http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_activ...
    - maaku 13y ago
      Yes, but the bitcoind reference client fails safely: the child transactions are orphaned and no funds are lost. It's behavior alone is not exploitable.
      - yetfeo 13y ago
        Unfortunately it does not fail completely safely. The change transaction seems to still be available for coin selection and causes sends to fail. The getbalance command shows an incorrect balance due to counting the change address twice - once in the double spend and once in the accepted. The accounts system also has balances messed up which some merchant sites rely on. It is not "lose money" exploitable (unless combined with social engineering) but is definitely "lose time, lose effort" exploitable.
deleted 13y ago
[deleted]

fredsted 13y ago

This will make them only stronger. Bitcoin is not going anywhere.

d0ugie 13y ago
Hmm, I see. Makes me wonder where bitcoin would be trading were its history not riddled with political/legal/fraudulent/technical/reputation snafus.
- zanny 13y ago
  It wouldn't be trading at all, because it is paving new ground. If it wasn't, it would have no reason to exist, because a predecessor coin would exist and it would be unlikely that btc would have enough differing features to justify the risk transitioning to it. The drama isn't because of bitcoin, it is because it is the first cryptocoin breaching new markets consistently. So as it treads new ground there will always be resistance.
d0ugie 13y ago
Hmm, I see. Makes me wonder where bitcoin would be trading were its history not riddled with political/legal/fraudulent/technical/reputation snafus.
Sheepshow 13y ago
To the mooooooon!

nwh 13y ago

It's interesting to watch actually, submit a transaction to the network at the moment and there's a rogue node that will mess with the padding of the signatures and rebroadcast it faster than the original. It confuses the reference client into duplicate display, which is what Gox is relying on for the failed/success display. That they're winning races over the normal related transactions isn't that unnatural as the transaction processing stuff has a 100ms sleep() in the middle of it.

ayanb 13y ago
Also worth noting is the fact that the Bitcoin Price Index has been massively resilient to all the bad "news" thats been pouring in this month. It has been consistently hovering around the 670-700 mark.
- glomph 13y ago
  Wasn't it 800 at the start of the month?
  - deweerdt 13y ago
    http://bitcoincharts.com/charts/bitstampUSD#rg60ztgSzm1g10zm2g25zv http://bitcoincharts.com/charts/bitstampUSD#rg60ztgSzm1g10zm...
- eterm 13y ago
  I can't find the article now, but there have been several good articles explaining the lack of gravity on bitcoin in general. Basically, the price goes up quickly when new people are attracted to bitcoin and rush to buy. When the price dips however, because so much is bought for long term speculation, the price doesn't really dip much, as no one is incentivised to sell and hold out for when it gets better. At some point the nerve of those holding out may crack, but if you read silly saurus2's post, its quite clear that many will hold out indefinitely on the belief or hope it will one day recover. So in this manner the bubble can deflate slowly. (If you call 10% in a day slow). There are no settlement dates or ways to easily move money out (especially now) so a crash is prevented. If a crash happens it'll probably happen before people realise it, but suddenly there just won't be anyone wanting to buy coins anymore. But even that might not happen as people already invested into bitcoin use how wealthy they feel to buy bitcoins from each other. That can cycle for a long time before people realise there isn't new money in bitcoin. If you had bought coins at 800-1000, why would you sell now? No one likes to cement a loss. Those with the most reason to sell right now are the early adopters, but it's not actually clear how many of those coins are actually reachable.

rtpg 13y ago

In another thread, there's a comment that kinda explains what is happening exactly, in a nice analogy https://news.ycombinator.com/item?id=7219266 https://news.ycombinator.com/item?id=7219266

zacinbusiness 13y ago

I've not bought in to Bitcoin yet. It just seems like a massive, world-wide scam to me. I'm not saying that it is a scam, I'm just saying that Bitcoin is something that I don't really understand, and so I don't entirely trust it. That said, this event is extremely encouraging. Not only is the security and the viability of the currency being tested. But more importantly, the communication and cooperation between the major players in the Bitcoin ecosystem is being tested. And so far, the community is kicking ass. To me that signals that perhaps Bitcoin really is a viable currency for the long term, and that it may really be a great way to think about money and value exchange.

bitexploder 13y ago
It is a non issue, honestly. This issue was known about as early as 2011. You can only modify non-essential pieces of the transaction, but it does change the overall transaction hash. These poorly coded exchanges were looking for an exact hash match to pop up on the block chain, instead of looking for the deposit/address. The actual security of the system is not really impacted at all, and the core Bitcoin clients cope fine with this. The exchanges may have put themselves at risk, but that is on them.
- wtbob 13y ago
  > You can only modify non-essential pieces of the transaction, but it does change the overall transaction hash. That's the thing I don't get. If one is going to allow non-essential changes, shouldn't one _not_ include those data in the hash? Alternatively, should one simply not allow changes, period? I've not read the Bitcoin paper, just summaries (been too busy, and it's outside my area); perhaps there's a good reason for it.
  - bitexploder 13y ago
    I think you are mostly correct. That is why some people call it an "issue", while others refer to it as a "vulnerability". I personally don't think it is a real vulnerability, more like a quirk.
  - 13y ago

arasmussen 13y ago

I think a lot of people are viewing this as a bad thing, hence the BTC price sliding. If BTC is going to become a global currency then exchanges and banks better be prepared for this kind of stuff. After fixing this issue, I doubt many companies will make the same mistake in the future. Better to get these bugs out of the way now than in two years when market cap is much greater.

plg 13y ago

Is the real goal of these attacks perhaps to drive down the price temporarily, so that the attackers can purchase at a discount, and then sell shortly afterwards when the price goes back up?

smtddr 13y ago
As much as I don't condone this kind of abuse, that's exactly what I'm preparing for. If BTC drops below $500, I'm buying more.
- RRRA 13y ago
  If BTC drops, below 500 or less, why exactly 500? Why not wait for 400? I'm new to this but maybe we need to make it easier to move money from wallet to wallet, from wallet to "hard" currencies and back, etc. Right now it's practically impossible to get verified on an exchange, get money out, paying anywhere with it, etc. You are lucky if you have a bitcoin ATM where the rate is probably not that good but at least you can get some coins without sending your passport to an unknown exchange half across the world. Without Bitcoin reaching in the real world faster, I'm not sure what strategy to employ to give it any value in the long run, making it more volatile too... Though I profited strangely last Saturday when ponzi.io screwed up and gave me a ~96x payback, Ponzi/Casino/etc schemes which may in a way help market BTC through ensuing media frenzy, are still mostly detrimental while they are the majority of the currency's activity. So, maybe we need to simplify software and make them all more compatible, through exported private-keys, etc. Why do I have to pay a fee by paying myself to move my money from my computer to my cell phone, for example... How can any store expect to be paid in Bitcoin? Does he have to wait 6 verifications before letting the client go? Should we pay when we arrive and trust the store for the change? Maybe then we can have an Escrow service, 3 key involved, to vouch for those short term transaction but then aren't we back to the banking problem? Is anyone working on a wallet that is compatible with import/export and that grandma can use? :)
  - lockes5hadow 13y ago
    You can still instantly verify a transaction as valid, which works for the retail store. You don't have to wait for 6 verifications, the money will arrive in your wallet once you have a copy of the verified transaction and you send that to the network. It might have a different transaction id or more 0000's prepended to the number, but you will get the money.

mark_l_watson 13y ago

I have no proof what so ever, this is just a conjecture: there are powerful government and private entities who profit from manipulating the current monetary system. I have to ask: is it unreasonable that state actors would try to crash Bitcoin out of self interest?

untog 13y ago
is it unreasonable that state actors would try to crash Bitcoin out of self interest? Is it unreasonable? No. Is there any evidence to suggest it? No.
- pjc50 13y ago
  There was an article going around just the other day alleging that GCHQ were DDOSing the QuakeNet and Freenet IRC systems. Not the same, but a similar kind of thing.
sixothree 13y ago
I can think of a few entities who have an interest in its failure.
mcintyre1994 13y ago
One issue with this is do we even have any evidence somebody can reliably short Bitcoin at the level a government would want to? It seems hard to believe a government could do more damage to Bitcoin than just declaring that it's banned in their country, anybody using it gets {significant penalty in their country}.
- smrtinsert 13y ago
  Governments don't have to short it. Pulling money from digital currencies back into government controlled ones seems like benefit enough.
  - mcintyre1994 13y ago
    So the claim is they'd be doing something like these attacks? I just struggle to believe that's the most effective way for them to deal with the problem, when the US Government coming out with "Bitcoin is illegal due to {plausible sounding terrorism story}, possession is a felony" would utterly tank it overnight.

iblaine 13y ago

Didnt this same thing happen in April 2013? Somehow a DDOS attack drove the price from $250 to $75. Then it went back up. My guess is the same thing happens here. Two years ago people used to bitch when the price dipping below $15. Here it is at $650. A week is not complete unless someone claims to be witnessing the demise of bitcoin.

ihsw 13y ago
That was lag. Although this issue is lag-related, it cannot be mitigated with DDOS protection.

keyme 13y ago

Setting up a rogue node that messes with all transactions is the best way of hurrying a proper fix to the protocol that will also be deployed ASAP and accepted by everyone!

gesman 13y ago

TheWayTheyFightBack

ChuckMcM 13y ago

Marks another interesting step toward maturity of the concepts of crypto currency. It is interesting to watch this in the context of other technologies (like air travel) which went from novelty to everyday thing, albeit through a series of 'events' which at times seemed likely to doom the idea.

cordite 13y ago

It seems like the whole bitcoin community is immature.

BlackDeath3 13y ago
By definition, yes.

snake_plissken 13y ago

What was the intent of including something like transaction malleability in the Sotahsi client?

Scaevolus 13y ago
It's a bug. Signatures have multiple equivalent forms, and the clients don't require that representations are canonical. >The first form of malleability is in the signatures themselves. Each signature has exactly one DER-encoded ASN.1 octet representation, but openssl does not enforce this, and as long as a signature isn't horribly malformed, it will be accepted. In addition for every ECDSA signature (r,s), the signature (r, -s (mod N)) is a valid signature of the same message. https://en.bitcoin.it/wiki/Transaction_Malleability https://en.bitcoin.it/wiki/Transaction_Malleability
- scintill76 13y ago
  I don't think it should be called a bug. Peter Todd (well-known Bitcoin developer), said[1]: > [...]I'm a bit hesitant to bake in assumptions about malleability when we have no solid idea if ECC signatures are or are not malleable on a fundemental level; if "whack-a-mole" anti-malleability is all we've got it could be ugly if a break is found. I understand this to mean, there may be unknown ways to transform signatures, like the s sign flip you quoted. In that case there would be no way to know which representation is "canonical." Thus, malleability is either a fundamental, fatal flaw in Bitcoin, or just something Bitcoin developers need to work around. Now, it seems even the reference implementation isn't perfect about malleability, and perhaps people could have been better about making the issue known. So there is work to be done, but it is not a "bug" that can be "fixed", at least not without upgrading the entire network, and/or risking it popping up in the future when someone applies more ECDSA signature mutation tricks. The real solution, if you want to safely fingerprint transactions, is to make your own transaction hash that is immune to malleability, like [2]. [1] http://sourceforge.net/mailarchive/message.php?msg_id=31954652 http://sourceforge.net/mailarchive/message.php?msg_id=319546... [2] https://github.com/sipa/bitcoin/commit/e7853a91cf646a6a4701158d148f036924575a97 https://github.com/sipa/bitcoin/commit/e7853a91cf646a6a47011...

mschuster91 13y ago

Funny: everyone said "oh, gox is stupid, no one else is affected"... one and a half days later, all those are proven wrong. Not to be an excuse for the consistent problems with MtGox, but everyone who is affected by the current DDoS attacks should just shut the f..k up.

kbar13 13y ago

Is this why I saw a bunch of super small incoming transactions to my coinbase wallets that then promptly disappeared?

drstrangevibes 13y ago

what would you do if you couldnt stop people trading in a currency you dont control?

smrtinsert 13y ago

Someone should pen the next James Bond story around Digital currency manipulation. What a fascinating world.

MartinCron 13y ago
That's probably the easiest way to make a James Bond story that feels out-of-touch now and out-of-date tomorrow.
- smrtinsert 13y ago
  Haha. Not necessarily, the general public is becoming aware of btc as you can now pay regular companies with it. also you could tie it into typical James Bond fare such as funding for terrorist organizations etc.
- _pmf_ 13y ago
  > That's probably the easiest way to make a James Bond story that feels out-of-touch now and out-of-date tomorrow. I think it would be the first JB movie that has a chance of not being out-of-date tomorrow.

zcarter 13y ago

Given the asymmetry in the difficulty market participants have with selling (and withdrawal in fiat, in a timely manner) or shorting bitcoin, as compared to the effort involved in buying bitcoin, any news is bullish news. This should hold generally and is not specific to publicity about the attack. Assuming equal reach for would-be-sellers and would-be-buyers, more buyers are capable of expressing their opinion in the market than are sellers.

ck2 13y ago

Massive attack requires massive resources. Maybe foreign government? Heck, domestic government?

patio11 13y ago
Massive attack requires massive resources. Not, in general, true. You could rent thousands of botted-up consumer-grade PCs located in the United States to run your custom bitcoin client for hundreds of dollars. This particular attack doesn't require any detailed computation -- all you have to do is observe a transaction broadcast from Legitimate Node N1, perform nanoseconds of computation on it, and broadcast the resulting transaction from your Conspiring Nodes N2...N1000 faster than N1 does. Assuming you do, your altered transaction will be the one adopted by the consensus, not the original one. The technical complexity of this attack is substantially below several levels of e.g. the Stripe CTF event, which were designed to be implemented by intermediate programmers in a few hours of play.

smrtinsert 13y ago

The most fascinating thing about this whole process is watching the btc community try to keep it moving. As someone who doesn't know anything about digital currencies, this seems like one of the first major tests of an philosophy of unregulation.

pistle 13y ago

Day one: Slander the biggest exchange and hang your neck out calming the entrenched. "They are amateurs. This is that exchange's problem. $1000 is but days away." Day two: Uhh... "Stay calm. This is just the expression of that non-issue looking like an issue. We know what we're doing." Bitcoin has, generally, intrinsic crash protection right now. The price can't plummet if you can't find trading partners. Nobody really knows the price. The dotcom crash was from lofty to zero. As the price eats through panic sell thresholds, pants are shat. At least with commodities, people can point to the ones that went to 0 and stayed there. Since it hasn't happened with bitcoin, people can still sing the "it always bounces back" tune. I've kicked the dead horse of stability. I've hinted at liquidity issues, but this is a grave lack of liquidity. The only thing left is any belief that there is value. If that starts to deteriorate due to the other issues, poof

NkVczPkybiXICG 13y ago
Then put your money where your mouth is. There are bitcoin derivative markets that let you short it. Hell, PM me and I'll personally bet against you on a 6 mo time horizon.
- pistle 13y ago
  If I had a position, I couldn't be considered objective. Not to mention... the primary exchanges seem to produce that sort of clunky, bug-riddled system that undermines my confidence. A derivatives exchange? So, what the come-latelies are working on? They ain't even no Satoshi.

yetfeo 13y ago

The reason why exchanges and other software are having trouble with malleable transactions is not due to bad software using transaction ids. It's an edge case with the reference bitcoin client. See: http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_active_malleable_transaction_relayers_it/ http://www.reddit.com/r/Bitcoin/comments/1xm49o/due_to_activ... Basically the reference client allows an edge case where it allows spending an unconfirmed output if that output was generated by the wallet itself as change. This can form a chain of unconfirmed transactions. When the malleable bot modifies the original one they all become invalid. The reference client does not handle this case well, it gets balances wrong, and clogs the wallet up. It's unfortunate that Mt Gox got a lot of heat for calling out the issue from the foundation and core developers saying that malleability was known and wasn't a bit issue. in fact it is an issue due to this edge case in the reference client.

epynonymous 13y ago

is btcchina affected?

shoo 13y ago

concerted massive attack: http://www.youtube.com/watch?v=iKxnCGziUVA http://www.youtube.com/watch?v=iKxnCGziUVA

chris_wot 13y ago

Funny if it was Mount Gox trying to prove a point.

nctalaviya 13y ago

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