Double-spending prevention for Bitcoin zero-confirmation transactions

Zero-confirmation transactions, i.e. transactions that have been broadcast but are still pending to be included in the blockchain, have gained attention in order to enable fast payments in Bitcoin, shortening the time for performing payments. Fast payments are desirable in certain scenarios, for instance, when buying in vending machines, fast food restaurants, or withdrawing from an ATM. Despite being quickly propagated through the network, zero-confirmation transactions are not protected against double-spending attacks, since the double-spending protection Bitcoin offers relies on the blockchain and, by definition, such transactions are not yet included in it. In this paper, we propose a double-spending prevention mechanism for Bitcoin zero-confirmation transactions. Our proposal is based on exploiting the flexibility of the Bitcoin scripting language together with a well-known vulnerability of the ECDSA signature scheme to discourage attackers from performing such an attack

Centrally Banked Cryptocurrencies

Current cryptocurrencies, starting with Bitcoin, build a decentralized blockchain-based transaction ledger, maintained through proofs-of-work that also generate a monetary supply. Such decentralization has benefits, such as independence from national political control, but also significant limitations in terms of scalability and computational cost. We introduce RSCoin, a cryptocurrency framework in which central banks maintain complete control over the monetary supply, but rely on a distributed set of authorities, or mintettes, to prevent double-spending. While monetary policy is centralized, RSCoin still provides strong transparency and auditability guarantees. We demonstrate, both theoretically and experimentally, the benefits of a modest degree of centralization, such as the elimination of wasteful hashing and a scalable system for avoiding double-spending attacks.Comment: 15 pages, 4 figures, 2 tables in Proceedings of NDSS 201

k-Root-n: An Efficient Algorithm for Avoiding Short Term Double-Spending Alongside Distributed Ledger Technologies such as Blockchain

Blockchains such as the bitcoin blockchain depend on reaching a global consensus on the distributed ledger; therefore, they suffer from well-known scalability problems. This paper proposes an algorithm that avoids double-spending in the short term with just O(√n) messages instead of O(n); each node receiving money off-chain performs the due diligence of consulting k√n random nodes to check if any of them is aware of double-spending. Two nodes receiving double-spent money will in this way consult at least one common node with very high probability, because of the ‘birthday paradox’, and any common honest node consulted will detect the fraud. Since the velocity of money in the real world has coins circulating through at most a few wallets per day, the size of the due diligence communication is small in the short term. This ‘k-root-n’ algorithm is suitable for an environment with synchronous or asynchronous (but with fairly low latency) communication and with Byzantine faults. The presented k-root-n algorithm should be practical to avoid double-spending with arbitrarily high probability, while feasibly coping with the throughput of all world commerce. It is resistant to Sybil attacks even beyond 50% of nodes. In the long term, the k-root-n algorithm is less efficient. Therefore, it should preferably be used as a complement, and not a replacement, to a global distributed ledger technology.</jats:p

Bitcoin Double-Spending Attack Detection using Graph Neural Network

Bitcoin transactions include unspent transaction outputs (UTXOs) as their inputs and generate one or more newly owned UTXOs at specified addresses. Each UTXO can only be used as an input in a transaction once, and using it in two or more different transactions is referred to as a double-spending attack. Ultimately, due to the characteristics of the Bitcoin protocol, double-spending is impossible. However, problems may arise when a transaction is considered final even though its finality has not been fully guaranteed in order to achieve fast payment. In this paper, we propose an approach to detecting Bitcoin double-spending attacks using a graph neural network (GNN). This model predicts whether all nodes in the network contain a given payment transaction in their own memory pool (mempool) using information only obtained from some observer nodes in the network. Our experiment shows that the proposed model can detect double-spending with an accuracy of at least 0.95 when more than about 1% of the entire nodes in the network are observer nodes.Comment: 3 pages, 1 table, Accepted as poster at IEEE ICBC 202

Blockchain: A Graph Primer

Bitcoin and its underlying technology Blockchain have become popular in recent years. Designed to facilitate a secure distributed platform without central authorities, Blockchain is heralded as a paradigm that will be as powerful as Big Data, Cloud Computing and Machine learning. Blockchain incorporates novel ideas from various fields such as public key encryption and distributed systems. As such, a reader often comes across resources that explain the Blockchain technology from a certain perspective only, leaving the reader with more questions than before. We will offer a holistic view on Blockchain. Starting with a brief history, we will give the building blocks of Blockchain, and explain their interactions. As graph mining has become a major part its analysis, we will elaborate on graph theoretical aspects of the Blockchain technology. We also devote a section to the future of Blockchain and explain how extensions like Smart Contracts and De-centralized Autonomous Organizations will function. Without assuming any reader expertise, our aim is to provide a concise but complete description of the Blockchain technology.Comment: 16 pages, 8 figure

Supporting Blockchain-Based Cryptocurrency Mobile Payment With Smart Devices

The smart device owning rate such as smart phone and smart watch is higher than ever before and mobile payment has become one of the major payment methods in many different areas. At the same time, blockchain-based cryptocurrency is becoming a nonnegligible type of currency and the total value of all types of cryptocurrency has reached USD 200 billion. Therefore, it is a natural demand to support cryptocurrency payment on mobile devices. Considering the poor infrastructure and low penetration of financial service in developing countries, this combination is especially attractive. The high storage cost and payment processing latency are the two main obstacles for mobile payment using cryptocurrency. We propose two different schemes for cryptocurrency mobile payment, one involves a centralized bank and the other one does not require any centralized party. We also provide a solution for the bank to meet KYC (know your customer)/AML (antimoney laundering) compliance requirements when it is involved in cryptocurrency mobile payment processing