[Bitcoin-development] Public key and signature malleability

[Pieter Wuille <pieter.wuille@gmail.com>]

Hello all,

as some may be aware, OpenSSL accepts several encodings for the same
public key or the same signature. It even accepts encodings that fail
to conform to the SEC and DER specification by which they are defined.
As it perfectly capable of parsing every standard-compliant encoding,
this is not a problem on itself. However, as near every full Bitcoin
node in existence uses OpenSSL, they will accept such non-standard
encodings in transactions, and even let them into blocks.

In order to make the Bitcoin network rules more well-defined, I'd like
to propose strict rules about what is acceptable, and which do not
depend on OpenSSL's implementation. This would make it easier for
alternative full node implementations, and prevent "malleability
attacks".

For that, I've submitted a pull request some time ago (see
https://github.com/bitcoin/bitcoin/pull/1742). The specific rules are
these:
 * For public keys (SEC compressed or uncompressed EC points)
   * First byte is either 0x02, 0x03 or 0x04
   * If the first byte is 0x02 or 0x03, exactly 32 bytes follow
   * If the first byte is 0x04, exactly 64 bytes follow
 * For signatures (DER encoded integer pairs)
   * Format is 0x30 <total len> 0x02 <len R> <R> 0x02 <len S> <S> <hashtype>
   * R and S are MSB encoded integers, which encode a non-negative
integer without excessive zero bytes in front. This implies they do
not start with a 0x00 unless the next byte has its highest bit set
(>=0x80) or are 0, in which case exactly one 0x00 is required. Their
length is thus between 1 and 33 bytes.
   * <hashtype> is a single byte that is either 0x01, 0x02, 0x03,
0x81, 0x82 or 0x83.

All these are rules that are followed by almost all clients already
(including Armory and Bitcoin-js, which until recently didn't).

Sergio Lerner recently discovered that one can take the
secp256k1-field-size complement of the S value in the signature
without invalidating it. The easiest solution to prevent this, would
be to require that the lowest bit of the S value is always even (as
taking the complement changes this). This would require some
coordination, as no client currently enforces this, but it is easy to
implement.

The reason malleability can be a problem, is that a malicious relayer
can modify transactions in-transit without invalidating them. This
will not cause any loss of coins, but a lot of wallet software
wouldn't deal gracefully with a modified version of their transactions
that gets accepted in a block.

What do you think about these rules? If people want these rules,
nothing would happen for now - just start try to find software that
doesn't produce complying data. In a second step, these could be
enabled as check similar to IsStandard() - making it hard for them to
get into blocks, but still be accepted when they aren't standard.
Finally, when no significant amount of non-standard transactions are
seen anymore, we can write a BIP and start enforcing this as a network
rule.

-- 
Pieter