In Bitcoin, transaction malleability describes the fact that the signatures that prove the ownership of bitcoins being transferred in a transaction do not provide any integrity guarantee for the signatures themselves. This allows an attacker to mount a malleability attack in which it intercepts, modifies, and rebroadcasts a transaction, causing the transaction issuer to believe that the original transaction was not confirmed. In February 2014 MtGox, once the largest Bitcoin exchange, closed and filed for bankruptcy claiming that attackers used malleability attacks to drain its accounts. In this work we use traces of the Bitcoin network for over a year preceding the filing to show that, while the problem is real, there was no widespread use of malleability attacks before the closure of MtGox.
A related class of doublespending attacks, which we shall refer to as classical doublespending, has received far more attention. In this class of attacks the transaction issuer creates two transactions to defraud the receiving party. @cite_3 first studied the problem of arising from fast transactions, i.e., accepting non-confirmed transactions. Rosenfeld @cite_12 showed that the success probability of a doublespending attack can be further increased if coupled with computational resources. @cite_2 later improved the security of accepting fast payments by observing how transactions are propagated in the network.
@cite_12 @cite_3 @cite_2
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Bitcoin is the world's first decentralized digital currency. Its main technical innovation is the use of a blockchain and hash-based proof of work to synchronize transactions and prevent double-spending the currency. While the qualitative nature of this system is well understood, there is widespread confusion about its quantitative aspects and how they relate to attack vectors and their countermeasures. In this paper we take a look at the stochastic processes underlying typical attacks and their resulting probabilities of success. Bitcoin is a decentralized payment system that is based on Proof-of-Work. Bitcoin is currently gaining popularity as a digital currency; several businesses are starting to accept Bitcoin transactions. An example case of the growing use of Bitcoin was recently reported in the media; here, Bitcoins were used as a form of fast payment in a local fast-food restaurant. In this paper, we analyze the security of using Bitcoin for fast payments, where the time between the exchange of currency and goods is short (i.e., in the order of few seconds). We focus on doublespending attacks on fast payments and demonstrate that these attacks can be mounted at low cost on currently deployed versions of Bitcoin. We further show that the measures recommended by Bitcoin developers for the use of Bitcoin in fast transactions are not always effective in resisting double-spending; we show that if those recommendations are integrated in future Bitcoin implementations, double-spending attacks on Bitcoin will still be possible. Finally, we leverage on our findings and propose a lightweight countermeasure that enables the detection of doublespending attacks in fast transactions. Cashless payments are nowadays ubiquitous and decentralized digital currencies like Bitcoin are increasingly used as means of payment. However, due to the delay of the transaction confirmation in Bitcoin, it is not used for payments that rely on quick transaction confirmation. We present a concept that addresses this drawback of Bitcoin and allows it to be used for fast transactions. We evaluate the performance of the concept using double-spending attacks and show that, employing our concept, the success of such attacks diminishes to less than 0.09 . Moreover, we present a real world application: We modified a snack vending machine to accept Bitcoin payments and make use of fast transaction confirmations.