Data Analytics and Consensus Mechanisms in Blockchains

Doctoral thesis (2020)

Blockchains, and especially Bitcoin have soared in popularity since their inceptions. This thesis furthers our knowledge of blockchains and their uses. First, we analyze transaction linkability in the ... [more ▼]

Blockchains, and especially Bitcoin have soared in popularity since their inceptions. This thesis furthers our knowledge of blockchains and their uses. First, we analyze transaction linkability in the privacy preserving cryptocurrency Zcash, based on the currency minting transactions (mining). Using predictable usage patterns and clustering heuristics on mining transactions, an attacker can link to publicly visible addresses in over 84% of the privacy preserving transactions. Then, we further analyze privacy issues for the privacy-oriented cryptocurrency Zcash. We study privacy preserving transactions and show ways to fingerprint user transactions, including active attacks. We introduce two new attacks, which we call the Danaan-gift attack and the Dust attack. Then, we investigate the generic landscape and hierarchy of miners as exemplified by Ethereum and Zcash. Both chains used application-specific integrated circuit (ASIC) resistant proofs-of-work which favor GPU mining in order to keep mining decentralized. This, however, has changed with the introduction of ASIC miners for these chains. This transition allows us to develop methods that might detect hidden ASIC mining in a chain (if it exists), and to study how the introduction of ASICs affects the decentralization of mining power. Finally, we describe how an attacker might use public blockchain information to invalidate miners' privacy, deducing the mining hardware of individual miners and their mining rewards. Then, we analyze the behavior of cryptocurrency exchanges on the Bitcoin blockchain, and compare the results to the exchange volumes reported by the same exchanges. We show, that in multiple cases these two values are close to each other, which confirms the integrity of their reported volumes. Finally, we present a heuristic to try to classify large clusters of addresses in the blockchain, and whether these clusters are controlled by an exchange. Finally, we describe how to couple reputation systems with distributed consensus protocols to provide a scalable permissionless consensus protocol with a low barrier of entry, while still providing strong resistance against Sybil attacks for large peer-to-peer networks of untrusted validators. We introduce the reputation module ReCon, which can be laid on top of various consensus protocols such as PBFT or HoneyBadger. The protocol takes external reputation ranking as input and then ranks nodes based on the outcomes of consensus rounds run by a small committee, and adaptively selects the committee based on the current reputation. [less ▲]

Privacy Aspects and Subliminal Channels in Zcash

in Proceedings of the 2019 ACM SIGSAC Conference on Computer and Communications Securit (2019, November)

In this paper we analyze two privacy and security issues for the privacy-oriented cryptocurrency Zcash. First we study shielded transactions and show ways to fingerprint user transactions, including ... [more ▼]

In this paper we analyze two privacy and security issues for the privacy-oriented cryptocurrency Zcash. First we study shielded transactions and show ways to fingerprint user transactions, including active attacks.We introduce two new attacks which we call Danaan-gift attack and Dust attack. Following the recent Sapling update of Zcash protocol we study the interaction between the new and the old zk-SNARK protocols and the effects of their interaction on transaction privacy. In the second part of the paper we check for the presence of subliminal channels in the zk-SNARK protocol and in Pedersen Commitments. We show presence of efficient 70-bit channels which could be used for tagging of shielded transactions which would allow the attacker (malicious transaction verifier) to link transactions issued by a maliciously modified zk-SNARK prover, while would be indistinguishable from regular transactions for the honest verifier/user. We discuss countermeasures against both of these privacy issues. [less ▲]

Portrait of a Miner in a Landscape

in IEEE INFOCOM 2019 Workshop Proceedings (2019)

Mining is one of the core elements of the proof-of-work based cryptocurrency economy. In this paper we investigate the generic landscape and hierarchy of miners on the example of Ethereum and Zcash, two ... [more ▼]

Mining is one of the core elements of the proof-of-work based cryptocurrency economy. In this paper we investigate the generic landscape and hierarchy of miners on the example of Ethereum and Zcash, two blockchains that are among the top 5 in terms of USD value of created coins. Both chains used ASIC resistant proofs-of-work which favors GPU mining in order to keep mining decentralized. This however has changed with recent introduction of ASIC miners for these chains. This transition allows us to develop methods that might detect hidden ASIC mining in a chain (if it exists), and to study how the introduction of ASICs effects the decentralization of mining power. Finally, we describe how an attacker might use public blockchain information to invalidate the privacy of miners, deducing the mining hardware of individual miners and their mining rewards. [less ▲]