Detecting brute-force attacks on cryptocurrency wallets

Blockchain is a distributed ledger, which is protected against malicious modifications by means of cryptographic tools, e.g. digital signatures and hash functions. One of the most prominent applications of blockchains is cryptocurrencies, such as Bitcoin. In this work, we consider a particular attack on wallets for collecting assets in a cryptocurrency network based on brute-force search attacks. Using Bitcoin as an example, we demonstrate that if the attack is implemented successfully, a legitimate user is able to prove that fact of this attack with a high probability. We also consider two options for modification of existing cryptocurrency protocols for dealing with this type of attacks. First, we discuss a modification that requires introducing changes in the Bitcoin protocol and allows diminishing the motivation to attack wallets. Second, an alternative option is the construction of special smart-contracts, which reward the users for providing evidence of the brute-force attack. The execution of this smart-contract can work as an automatic alarm that the employed cryptographic mechanisms, and (particularly) hash functions, have an evident vulnerability.Comment: 10 pages, 2 figures; published versio

Trends in crypto-currencies and blockchain technologies: A monetary theory and regulation perspective

The internet era has generated a requirement for low cost, anonymous and rapidly verifiable transactions to be used for online barter, and fast settling money have emerged as a consequence. For the most part, e-money has fulfilled this role, but the last few years have seen two new types of money emerge. Centralised virtual currencies, usually for the purpose of transacting in social and gaming economies, and crypto-currencies, which aim to eliminate the need for financial intermediaries by offering direct peer-to-peer online payments. We describe the historical context which led to the development of these currencies and some modern and recent trends in their uptake, in terms of both usage in the real economy and as investment products. As these currencies are purely digital constructs, with no government or local authority backing, we then discuss them in the context of monetary theory, in order to determine how they may be have value under each. Finally, we provide an overview of the state of regulatory readiness in terms of dealing with transactions in these currencies in various regions of the world

International Legal Positivism and Legal Realism

This chapter, a contribution to a book on International Legal Positivism in a Post-Modern World, gauges the potential for mutually enriching interactions between international legal positivism and legal realism. It first describes the encounter between legal positivism and legal realism in the U.S. legal academy and then proceeds to discuss the rise of a new legal realism in international legal theory. In a concluding section, the chapter assesses the compatibilities and tensions between the new international legal realism and the new international legal positivism.With its forthright embrace of the inescapability of uncertainty in law, the new international legal positivism adopts a sceptical position very similar to legal realism. However, this chapter contends, the new international legal positivism still requires a realist supplement in order to provide a fuller understanding of the way in which legal norms interact with non-legal factors and to help us describe, predict and analyse the behaviour of actors in international affairs. At the same time, new international legal realists can learn from the sceptical attitude towards sources of law that new international legal positivists have developed. The two movements can be symbiotic if brought into closer dialogue. Nonetheless, this chapter concludes with a dose of pessimism about the capacity of any of the currently available theories of international law to fully assimilate the complexities of both postmodern theory and postmodern global society into a comprehensive theory of international law in the postmodern world