241 research outputs found

    Minimizing Trust in Hardware Wallets with Two Factor Signatures

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    We introduce the notion of two-factor signatures (2FS), a generalization of a two-out-of-two threshold signature scheme in which one of the parties is a hardware token which can store a high-entropy secret, and the other party is a human who knows a low-entropy password. The security (unforgeability) property of 2FS requires that an external adversary corrupting either party (the token or the computer the human is using) cannot forge a signature. This primitive is useful in contexts like hardware cryptocurrency wallets in which a signature conveys the authorization of a transaction. By the above security property, a hardware wallet implementing a two-factor signature scheme is secure against attacks mounted by a malicious hardware vendor; in contrast, all currently used wallet systems break under such an attack (and as such are not secure under our definition). We construct efficient provably-secure 2FS schemes which produce either Schnorr signature (assuming the DLOG assumption), or EC-DSA signatures (assuming security of EC-DSA and the CDH assumption) in the Random Oracle Model, and evaluate the performance of implementations of them. Our EC-DSA based 2FS scheme can directly replace currently used hardware wallets for Bitcoin and other major cryptocurrencies to enable security against malicious hardware vendors

    SmartOTPs: An Air-Gapped 2-Factor Authentication for Smart-Contract Wallets

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    With the recent rise of cryptocurrencies' popularity, the security and management of crypto-tokens have become critical. We have witnessed many attacks on users and providers, which have resulted in significant financial losses. To remedy these issues, several wallet solutions have been proposed. However, these solutions often lack either essential security features, usability, or do not allow users to customize their spending rules. In this paper, we propose SmartOTPs, a smart-contract wallet framework that gives a flexible, usable, and secure way of managing crypto-tokens in a self-sovereign fashion. The proposed framework consists of four components (i.e., an authenticator, a client, a hardware wallet, and a smart contract), and it provides 2-factor authentication (2FA) performed in two stages of interaction with the blockchain. To the best of our knowledge, our framework is the first one that utilizes one-time passwords (OTPs) in the setting of the public blockchain. In SmartOTPs, the OTPs are aggregated by a Merkle tree and hash chains whereby for each authentication only a short OTP (e.g., 16B-long) is transferred from the authenticator to the client. Such a novel setting enables us to make a fully air-gapped authenticator by utilizing small QR codes or a few mnemonic words, while additionally offering resilience against quantum cryptanalysis. We have made a proof-of-concept based on the Ethereum platform. Our cost analysis shows that the average cost of a transfer operation is comparable to existing 2FA solutions using smart contracts with multi-signatures

    Bringing data minimization to digital wallets at scale with general-purpose zero-knowledge proofs

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    Today, digital identity management for individuals is either inconvenient and error-prone or creates undesirable lock-in effects and violates privacy and security expectations. These shortcomings inhibit the digital transformation in general and seem particularly concerning in the context of novel applications such as access control for decentralized autonomous organizations and identification in the Metaverse. Decentralized or self-sovereign identity (SSI) aims to offer a solution to this dilemma by empowering individuals to manage their digital identity through machine-verifiable attestations stored in a "digital wallet" application on their edge devices. However, when presented to a relying party, these attestations typically reveal more attributes than required and allow tracking end users' activities. Several academic works and practical solutions exist to reduce or avoid such excessive information disclosure, from simple selective disclosure to data-minimizing anonymous credentials based on zero-knowledge proofs (ZKPs). We first demonstrate that the SSI solutions that are currently built with anonymous credentials still lack essential features such as scalable revocation, certificate chaining, and integration with secure elements. We then argue that general-purpose ZKPs in the form of zk-SNARKs can appropriately address these pressing challenges. We describe our implementation and conduct performance tests on different edge devices to illustrate that the performance of zk-SNARK-based anonymous credentials is already practical. We also discuss further advantages that general-purpose ZKPs can easily provide for digital wallets, for instance, to create "designated verifier presentations" that facilitate new design options for digital identity infrastructures that previously were not accessible because of the threat of man-in-the-middle attacks

    Arcula: A Secure Hierarchical Deterministic Wallet for Multi-asset Blockchains

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    This work presents Arcula, a new design for hierarchical deterministic wallets that brings identity-based addresses to the blockchain. Arcula is built on top of provably secure cryptographic primitives. It generates all its cryptographic secrets from a user-provided seed and enables the derivation of new public keys based on the identities of users, without requiring any secret information. Unlike other wallets, it achieves all these properties while being secure against privilege escalation. We formalize the security model of hierarchical deterministic wallets and prove that an attacker compromising an arbitrary number of users within an Arcula wallet cannot escalate his privileges and compromise users higher in the access hierarchy. Our design works out-of-the-box with any blockchain that enables the verification of signatures on arbitrary messages. We evaluate its usage in a real-world scenario on the Bitcoin Cash network

    Uncovering Impact of Mental Models towards Adoption of Multi-device Crypto-Wallets

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    The ever-increasing cohort of cryptocurrency users saw a sharp increase in different types of crypto-wallets in the past decade. However, different wallets are non-uniformly adopted in the population today; Specifically, emerging multi-device wallets, even with improved security and availability guarantees over their counterparts, are yet to receive proportionate attention and adoption. This work presents a data-driven investigation into the perceptions of cryptocurrency users towards multi-device wallets today, using a survey of255crypto-wallet users. Our results revealed two significant groups within our participants—Newbies and Non-newbies. These two groups statistically significantly differ in their usage of crypto-wallets. However, both of these groups were concerned with the possibility of their keys getting compromised and yet are unfamiliar with the guarantees offered by multi-device wallets. After educating the participants about the more secure multi-device wallets, around 70% of the participants preferred them; However, almost one-third of participants were still not comfortable using them. Our qualitative analysis revealed a gap between the actual security guarantees and mental models for these participants—they were afraid that using multi-device wallets will result in losing control over keys (and in effect funds) due to the distribution of key shares. We also investigated the preferred default settings for crypto-wallets across our participants, since multi-device wallets allow a wide range of key-share distribution settings. In the distributed server settings of the multi-device wallets, the participants preferred a smaller number of reputed servers (as opposed to a large non-reputed pool). Moreover, considerations about the threat model further affected their preferences, signifying a need for contextualizing default settings. We conclude the discussion by identifying concrete, actionable design avenues for future multi-device wallet developers to improve adoption

    Account Abstraction, Analysed

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    Ethereum recently unveiled its upcoming roadmap's \textit{Splurge} phase, highlighting the integration of EIP-\hlhref{https://eips.ethereum.org/EIPS/eip-3074}{4337} as a foundational standard for account abstraction (AA). AA aims to enhance user accessibility and facilitate the expansion of functionalities. Anticipatedly, the deployment of AA is poised to attract a broad spectrum of new users and ignite further innovation in DApps. In this paper, we elucidate the underlying operating mechanisms of this new concept, as well as provide a review of concurrent advancements in accounts, wallets, and standards related to its development. We step further by conducting a preliminary security evaluation to qualitatively assess the extent of security enhancements achieved through AA updates

    Horus: A Security Assessment Framework for Android Crypto Wallets

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    Crypto wallet apps help cryptocurrency users to create, store, and manage keys, sign transactions, and keep track of funds. However, if these apps are not adequately protected, attackers can exploit security vulnerabilities in them to steal the private keys and gain ownership of the users’ wallets. We develop a semi-automated security assessment framework, Horus, specifically designed to analyze crypto wallet Android apps. We perform semi-automated analysis on 311 crypto wallet apps and manually inspect the top 18 most popular wallet apps from the Google Play Store. Our analysis includes capturing runtime behavior, reverse-engineering the apps, and checking for security standards crucial for wallet apps (e.g., random number generation and private key confidentiality). We reveal several severe vulnerabilities, including, for example, storing plaintext key revealing information in 111 apps which can lead to losing wallet ownership, and storing past transaction information in 11 apps which may lead to user deanonymization

    Design and Implementation of a Cloud Based Decentralized Cryptocurrency Transaction Platform

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    Trading in the crypto-currency market has seen rapid growth and adoption, as well as the interest in crypto related technologies like blockchain and smart contracts. Smart contracts have gained popularity in building so called Decentralized Applications (dApps) and Decentralized Finance (DeFi) apps, mainly because they are more secure, trustworthy, and largely distributed (removes centralized control). DeFi applications run on the blockchain technology and are secured by blocks (nodes) connected by cryptographical hash links. DeFi applications have a great potential in the crypto-currency trading domain, providing more secure and reliable means of trading, and performing transactions with crypto-currencies. Only verified transactions are added to the blockchain after being approved by miners through a consensus mechanism and then it is replicated (distributed) among the nodes on the blockchain network. This research paper proposes a DeFi Crypto Exchange by integrating a numerous-signature stamp with a crypto API. A numerous-signature stamp solves the issue of transaction verifiability and authenticity. A crypto API provides the data about each crypto currency with which trades and transactions will be performed. This paper also discusses the technical background of the technology and a few related works. Decentralization of transactions through smart contracts on the blockchain will improve trust, security and reliability of transactions and trades
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