Re: [Bitcoin-development] Double-Spending Fast Payments in Bitcoin due to Client versions 0.8.1

[Arthur Gervais <arthur.gervais@inf.ethz.ch>]

On 6/27/13 1:04 PM, Gregory Maxwell wrote:
> On Thu, Jun 27, 2013 at 3:23 AM, Arthur Gervais
> <arthur.gervais@inf.ethz.ch> wrote:
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>> Dear Bitcoin developers,
>>
>> We would like to report a vulnerability which might lead, under some
>> assumptions, to a double-spending attack in a fast payment scenario.
>> The vulnerability has been introduced due to signature encoding
>> incompatibilities between versions 0.8.2 (or 0.8.3) and earlier
>> Bitcoin versions.
>>
>> Please find at the following link a detailed description of this
>> vulnerability:
>> ftp://ftp.inf.ethz.ch/pub/publications/tech-reports/7xx/789.pdf
> 
> It would be kind if your paper cited the one of the prior discussions
> of this transaction pattern:
> 
> E.g. https://bitcointalk.org/index.php?topic=196990.msg2048297#msg2048297
> (I think there are a couple others)
> 
> The family of transaction patterns you describe is one of the ones I
> specifically cite as an example of why taking non-reversible actions
> on unconfirmed transactions is unsafe (and why most of the Bitcoin
> community resources) council the same.  You can get similar patterns
> absent changes in the IsStandard rule through a number of other means.
>  One obvious one is through concurrent announcement: You announce
> conflicting transactions at the same time to many nodes and one
> excludes another.  By performing this many times and using chains of
> unconfirmed transactions and seeing which family your victim observes
> you can create input mixes that are only accepted by very specific
> subsets of the network.
> 

Thank you for the reference! This is indeed a very interesting issue,
affecting the same Bitcoin version. However we think it is
complementary, since our reported problem has nothing to do with fees,
dust, nor is it necessary to send the two double-spending transaction at
the same time. In our setting, double-spending still works if the second
transaction is sent after minutes (and the first transaction has not yet
been included into a block).

Clearly, we have outlined the limits of the security of
zero-confirmation payments in an earlier work.

Our only intention is to raise the awareness for merchants who have to
accept zero-confirmation transactions. They should be aware of the
signature encoding difference between Bitcoin versions and the possible
consequences.