Re: [Bitcoin-development] Proposal for P2P Wireless (Bluetooth LE) transfer of Payment URI

["MⒶrtin HⒶboⓋštiak" <martin.habovstiak@gmail.com>]

That's exactly what I though when seeing the RedPhone code, but after
I studied the commit protocol I realized it's actually secure and
convenient way to do it. You should do that too. :)

Shortly, how it works:
The initiator of the connection sends commit message containing the
hash of his temporary public ECDH part, second party sends back their
public ECDH part and then initiator sends his public ECDH part in
open. All three messages are hashed together and the first two bytes
are used to select two words from a shared dictionary which are
displayed on the screen of both the initiator and the second party.
The parties communicate those two words and verify they match.

If an attacker wants to do MITM, he has a chance of choosing right
public parts 1:65536. There is no way to brute-force it, since that
would be noticed immediately. If instead of two words based on the
first two bytes, four words from BIP39 wordlist were chosen, it would
provide entropy of 44 bits which I believe should be enough even for
paranoid people.

How this would work in Bitcoin payment scenario: user's phone
broadcasts his name, merchant inputs amount and selects the name from
the list, commit message is sent (and then the remaining two
messages), merchant spells four words he sees on the screen and buyer
confirms transaction after verifying that words match.

2015-02-06 0:46 GMT+01:00 Eric Voskuil <eric@voskuil.org>:
> On 02/05/2015 03:36 PM, MⒶrtin HⒶboⓋštiak wrote:
>>> A BIP-70 signed payment request in the initial broadcast can resolve the
>>> integrity issues, but because of the public nature of the broadcast
>>> coupled with strong public identity, the privacy compromise is much
>>> worse. Now transactions are cryptographically tainted.
>>>
>>> This is also the problem with BIP-70 over the web. TLS and other
>>> security precautions aside, an interloper on the communication, desktop,
>>> datacenter, etc., can capture payment requests and strongly correlate
>>> transactions to identities in an automated manner. The payment request
>>> must be kept private between the parties, and that's hard to do.
>>
>> What about using encryption with forward secrecy? Merchant would
>> generate signed request containing public ECDH part, buyer would send
>> back transaction encrypted with ECDH and his public ECDH part. If
>> receiving address/amount is meant to be private, use commit protocol
>> (see ZRTP/RedPhone) and short authentication phrase (which is hard to
>> spoof thanks to commit protocol - see RedPhone)?
>
> Hi Martin,
>
> The problem is that you need to verify the ownership of the public key.
> A MITM can substitute the key. If you don't have verifiable identity
> associated with the public key (PKI/WoT), you need a shared secret (such
> as a secret phrase). But the problem is then establishing that secret
> over a public channel.
>
> You can bootstrap a private session over the untrusted network using a
> trusted public key (PKI/WoT). But the presumption is that you are
> already doing this over the web (using TLS). That process is subject to
> attack at the CA. WoT is not subject to a CA attack, because it's
> decentralized. But it's also not sufficiently deployed for some scenarios.
>
> e
>