SoK:Communication across distributed ledgers

Since the inception of Bitcoin, a plethora of distributed ledgers differing in design and purpose has been created. While by design, blockchains provide no means to securely communicate with external systems, numerous attempts towards trustless cross-chain communication have been proposed over the years. Today, cross-chain communication (CCC) plays a fundamental role in cryptocurrency exchanges, scalability efforts via sharding, extension of existing systems through sidechains, and bootstrapping of new blockchains. Unfortunately, existing proposals are designed ad-hoc for specific use-cases, making it hard to gain confidence in their correctness and composability. We provide the first systematic exposition of cross-chain communication protocols. We formalize the underlying research problem and show that CCC is impossible without a trusted third party, contrary to common beliefs in the blockchain community. With this result in mind, we develop a framework to design new and evaluate existing CCC protocols, focusing on the inherent trust assumptions thereof, and derive a classification covering the field of cross-chain communication to date. We conclude by discussing open challenges for CCC research and the implications of interoperability on the security and privacy of blockchains

Trustless communication across distributed ledgers: impossibility and practical solutions

Since the advent of Bitcoin as the first decentralized digital currency in 2008, a plethora of distributed ledgers has been created, differing in design and purpose. Considering the heterogeneous nature of these systems, it is safe to say there shall not be ``one coin to rule them all". However, despite the growing and thriving ecosystem, blockchains continue to operate almost exclusively in complete isolation from one another: by design, blockchain protocols provide no means by which to communicate or exchange data with external systems. To this date, centralized providers hence remain the preferred route to exchange assets and information across blockchains~-- undermining the very nature of decentralized currencies. The contribution of this thesis is threefold. First, we critically evaluate the (im)possibilty, requirements, and challenges of cross-chain communication by contributing the first systematization of this field. We formalize the problem of Cross-Chain Communication (CCC) and show it is impossible without a trusted third party by relating CCC to the Fair Exchange problem. With this impossibility result in mind, we develop a framework to design new and evaluate existing CCC protocols, focusing on the inherent trust assumptions thereof, and derive a classification covering the field of cross-chain communication to date. We then present XCLAIM, the first generic framework for transferring assets and information across permissionless distributed ledgers without relying on a centralized third party. XCLAIM leverages so-called cryptocurrency-backed assets, blockchain-based assets one-to-one backed by other cryptocurrencies, such as Bitcoin-backed tokens on Ethereum. Through the secure issuance, transfer, and redemption of these assets, users can perform cross-chain exchanges in a financially trustless and non-interactive manner, overcoming the limitations of existing solutions. To ensure the security of user funds, XCLAIM relies on collateralization of intermediaries and a proof-or-punishment approach, enforced via smart contracts equipped with cross-chain light clients, so-called chain relays. XCLAIM has been adopted in practice, among others by the Polkadot blockchain, as a bridge to Bitcoin and other cryptocurrencies. Finally, we contribute to advancing the state of the art in cross-chain light clients. We develop TxChain, a novel mechanism to significantly reduce storage and bandwidth costs of modern blockchain light clients using contingent transaction aggregation, and apply our scheme to Bitcoin and Ethereum individually, as well as in the cross-chain setting.Open Acces

A P2P Optimistic Fair Exchange (OFE) Scheme For Personal Health Records Using Blockchain Technology

In today’s digital world, it is common to exchange sensitive data between different parties. There are many examples of sensitive data or documents that require a digital exchange, such as banking information, insurance data, health records. In many cases, the exchange exists between unknown and untrusted parties. Therefore, it is essential to execute the data exchange over a fair non-repudiation protocol. In digital communication, non-repudiation is undeniable evidence of one’s responsibility regarding the validity of any data he shares/receives. Usually, this is achieved by the use of a cryptographic digital signature. In this case, the parties cannot deny the authenticity of their digital signature. The protocol satisfies the fairness property if and only if it does not give the sender any advantages over the receiver or vice versa, at any step during the exchange process. Combining fair exchange and non-repudiation for digital exchange is critical in many applications and can be acquired with or without the involvement of any trusted third party (TTP). However, without the involvement of TTP, fairness becomes probabilistic, and the involvement of TTP can cause significant dependency on the third party. Therefore, a peer-to-peer (P2P) (aka offline) fair non-repudiation protocol that does not require a trusted third-party is desirable in many applications. Blockchain is designed in such a way that the network can handle the trustless environment and deliver the correct result. Thus, if the exchanges are done leveraging Blockchain, it will ensure true fairness, and at the same time, none of the participants have to deal with the trust issue. In this thesis we propose a P2P fair non-repudiation data exchange scheme by leveraging Blockchain and distributed ledger technology. The scheme combines on-chain and off-chain communication patterns to enable the exchange of personal health records between patients and healthcare providers. We provide an informal reasoning of the proposed scheme. Moreover, we propose a design and implementation agnostic to existing Blockchain platforms to enable unbiased evaluation of the proposed scheme. Finally, we make a comparative analysis of the result derived from our approach with the existing one

A fair protocol for data trading based on Bitcoin transactions

On-line commercial transactions involve an inherent mistrust between participant parties since, sometimes, no previous relation exists between them. Such mistrust may be a deadlock point in a trade transaction where the buyer does not want to perform the payment until the seller sends the goods and the seller does not want to do so until the buyer pays for the purchase. In this paper we present a fair protocol for data trading where the commercial deal, in terms of delivering the data and performing the payment, is atomic, since the seller cannot redeem the payment unless the buyer obtains the data and the buyer cannot obtain the data without performing the payment. The protocol is based on Bitcoin scripting language and the fairness of the protocol can be probabilistically enforced

SoK: Communication Across Distributed Ledgers

Since the inception of Bitcoin, a plethora of distributed ledgers differing in design and purpose has been created. While by design, blockchains provide no means to securely communicate with external systems, numerous attempts towards trustless cross-chain communication have been proposed over the years. Today, cross-chain communication (CCC) plays a fundamental role in cryptocurrency exchanges, scalability efforts via sharding, extension of existing systems through sidechains, and bootstrapping of new blockchains. Unfortunately, existing proposals are designed ad-hoc for specific use-cases, making it hard to gain confidence in their correctness and composability. We provide the first systematic exposition of cross-chain communication protocols. We formalize the underlying research problem and show that CCC is impossible without a trusted third party, contrary to common beliefs in the blockchain community. With this result in mind, we develop a framework to design new and evaluate existing CCC protocols, focusing on the inherent trust assumptions thereof, and derive a classification covering the field of cross-chain communication to date. We conclude by discussing open challenges for CCC research and the implications of interoperability on the security and privacy of blockchains

EARMARKED UTXO FOR ESCROW SERVICES AND TWO-FACTOR AUTHENTICATION ON THE BLOCKCHAIN

The security of accounts on the blockchain relies on securing private keys, but they are often lost or compromised due to loopholes in key management strategies or due to human error. With an increasing number of thefts in the last few years due to compromised wallets, the security of digital currency has become a significant concern, and no matter how sophisticated and secure mechanisms are put in place to avoid the security risks, it is impossible to achieve a 100% human compliance. This project introduces a novel concept of Earmarked Unspent Transaction Outputs (EUTXOs). EUTXOs enable every user on the blockchain to lock their funds to be spendable only to a designated set of users, even if the private key gets compromised. We validate the utility of EUTXOs by using it to implement an Escrow service in the blockchain to overcome the limitations introduced by traditional Escrow services. We also implement decentralized two-factor authentication (2FA) on the blockchain using EUTXOs and discuss the tradeoffs of this design

IoTLogBlock: Recording Off-line Transactions of Low-Power IoT Devices Using a Blockchain

For any distributed system, and especially for the\ua0Internet of Things, recording interactions between devices is\ua0essential. At first glance, blockchains seem to be suitable for\ua0storing these interactions, as they allow multiple parties to share\ua0a distributed ledger. However, at a closer look, blockchains require heavy computations, large memory capacity, and alwayson communication to the cloud; these are three properties that\ua0are challenging for IoT devices with limited resources.In this paper, we present IoTLogBlock to address these challenges. IoTLogBlock connects resource-constrained IoT devices\ua0to the blockchain, and it consists of three building blocks jointly\ua0enabling recording transactions: a lightweight contract signing\ua0protocol, a blockchain network, and a smart contract. The\ua0contract signing protocol allows devices to interact locally to\ua0perform transactions, even if no communication to the cloud\ua0and the blockchain exists at that moment. At a later time, devices\ua0forward the stored transactions to the blockchain, where a smart\ua0contract ultimately verifies the transactions.We evaluate our design on low-power devices and quantify\ua0the performance in terms of memory, computation, and energy\ua0consumption. Our results show that a constrained device can\ua0create and sign a transaction within 3 s on average. Finally, we\ua0expose the devices to network scenarios with edge connections\ua0ranging from 10 s to over 2 h

Enhancing Trust in Devices and Transactions of the Internet of Things

With the rise of the Internet of Things (IoT), billions of smart embedded devices will interact frequently.These interactions will produce billions of transactions.With IoT, users can utilize their phones, home appliances, wearables, or any other wireless embedded device to conduct transactions.For example, a smart car and a parking lot can utilize their sensors to negotiate the fees of a parking spot.The success of IoT applications highly depends on the ability of wireless embedded devices to cope with a large number of transactions.However, these devices face significant constraints in terms of memory, computation, and energy capacity.With our work, we target the challenges of accurately recording IoT transactions from resource-constrained devices. We identify three domain-problems: a) malicious software modification, b) non-repudiation of IoT transactions, and c) inability of IoT transactions to include sensors readings and actuators.The motivation comes from two key factors.First, with Internet connectivity, IoT devices are exposed to cyber-attacks.Internet connectivity makes it possible for malicious users to find ways to connect and modify the software of a device.Second, we need to store transactions from IoT devices that are owned or operated by different stakeholders.The thesis includes three papers. In the first paper, we perform an empirical evaluation of Secure Boot on embedded devices.In the second paper, we propose IoTLogBlock, an architecture to record off-line transactions of IoT devices.In the third paper, we propose TinyEVM, an architecture to execute off-chain smart contracts on IoT devices with an ability to include sensor readings and actuators as part of IoT transactions