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81  Bitcoin / Project Development / Re: SSL logs as proof of money transfer for p2p exchanges on: April 10, 2014, 05:59:29 PM
A short update of the project status: we have managed to tackle the MITM problem by splitting the MS/keyblock generation process between the auditor and the auditee, as it turns out, the RFC 2246 TLS standard effectively allows the splitting in the definition of the MS generation function:

PRF(secret, label, seed) = P_MD5(S2, label + seed) XOR P_SHA-1(S1, label + seed),

where S1 and S2 are the first and second half of the 48 bytes PMS, respectively.



The basic procedure is a modification from that posted by dansmith: https://bitcointalk.org/index.php?topic=173220.msg4998488#msg4998488.

1. The auditee connects to the bank's server and starts a TLS handshake.
  
2. The auditee gives the auditor the bank's public key, client_random and server_random.

3. Both auditee and auditor independently generate 24 bytes of random data, called S1 and S2 respectively per the definition of the RFC2246 standard.

4. Both parties then cooperate to generate the encrypted PMS with the bank's public key, using the homomorphic property of RSA encryption:


RSA(2^(k_p)*P+2^(k_1)*S1+1)*RSA(2^(k_2)*S2+1) mod n=RSA(2^(k_p+k_2)*P*S2 + 2^(k_p)*P+2^(k_1+k_2)*S1*S2+2^(k_1)*S1+2^(k_2)*S2+1),

where P is a factor used in construction of the PKCS RSA padding. As can be seen from the result of the above equation, the cleartext PMS that is to be used by the bank can be splitted clearly into parts which can be generated separately by an auditor/auditee, as long as k_1 > k_2+k_s, where k_s is the number of digits of S2.

5. The auditee calculates P_SHA-1(S1, label+seed), generating 48 bytes - H_1 = H_11||H_12, where H_11 and H_12 are of equal length of 24 bytes.

6. The auditor calculates P_MD5(S2, label+seed), generating 48 bytes - H_2 = H_21||H_22, where H_21 and H_22 are of equal length of 24 bytes.

7. The auditor gives to the auditee H_21.

8. The auditee gives to the auditor H_12.

9. The auditee constructs M_1 = H_21 XOR H_11 (the first half of the master secret).

10. The auditor constructs M_2 = H_12 XOR H_22 (the second half of the master secret).

11. The auditee now calculates X=P_SHA-1(M_1, label+seed).

12. The auditor now calculates Y=P_MD5(M_2, label+seed).

13.The auditor and auditee share those bytes of each of X,Y which allow the other party (using XOR again) to generate the required secret data: for the auditor, the server mac secret, and for the auditee, the client and server encryption keys. During the whole process, neither the auditor nor the aduitee has access to the full PMS/MS/keyblock, which prevents both the MITM attack from being carried out, and the forgery on auditee's part. The finished handshake message can be generated similarly as it uses the same PRF function.

Known problems:

Padding the secret is a bit tricky, as it needs to meet certain specified format, however we are already able to generate valid PMS at a high probability(about 90% of the time).

The entropies of both S1 and S2 are a bit too small, with that of S2 being as small as 10 bytes, however any brute-force attack can only be conducted in real-time as the PMS will not be reused, so even 2^80 possibilities pose a formidable challenge to any known potential attacker.

The above procedure will only work for TLS 1.0/1.1, as the TLS 1.2 changes the PRF to use a single SHA-256 function, yet given the slow pace of IT infrastructure upgrade it would take many years before the TLS 1.0/1.1 are phased out.

Implementation:

All of the modifications are already implemented, live trials have been conducted successfully as well, right now dansmith is working on polishing the NSS patch.

As always, questions are welcomed, especially attacks against the security.
82  Bitcoin / Development & Technical Discussion / Re: Rapid decrease in mining power? on: March 17, 2014, 12:44:31 PM
Yes, a power shortage, natural disaster, or government disaster could cause a sudden and permanent 92% reduction in hashrate and that would be bad. Wait, what?
By "government disaster", I meant "government caused disaster". For example, all of the EU bans mining. >50% permanent reduction in mining

Mining could be completely anonymous with TOR. The ONLY practical way for government to ban mining is to shutdown the internet. Who care bitcoin when the internet is already shut down?
True, but when you can raid the house of anyone who uses more than enough electricity for a few light bulbs under the guise of the "war on drugs", you can shut down miners over a few Mhash/s pretty quickly

Internet connection uses more than enough electricity for a few light bulbs.

In comparision, USB ASICMiners use much less than that.

83  Bitcoin / Development & Technical Discussion / What if a large number of nodes decide to relay large blocks before small ones? on: March 11, 2014, 11:18:39 PM
E.g., when a small-sized block arrives, delay it for 3-5 seconds, and only rebroadcast it when no new valid, larger block is received during this period. Would it encourage mining pools to increase their blocksize,  or does this behaviour have any bad effect on the network?
84  Bitcoin / Press / Re: [2014-03-07] Wash. Post: Bitcoin refuses to flip: Virtual currency stays strong on: March 09, 2014, 11:40:39 AM
Without all these heists, accidents, frauds, Joe-Sixpacks probably would never realize that Bitcoin is idependent of any individual/organization.
85  Bitcoin / Development & Technical Discussion / Re: How would a node detect a reorganization/orphan of the blockchain? on: March 08, 2014, 12:31:17 PM
A full node should be able to see every blockchain, sans the possibility of some MITM attacks.

What if the node is more like a 9/10ths node?

If you don't download the full copy of the blockchain you're not considered a full node. In that case(you download just the block headers) you're susceptible to sybil attack by some entities controlling more than 50% of the hashpower feeding you the wrong chain.
86  Bitcoin / Development & Technical Discussion / Re: How would a node detect a reorganization/orphan of the blockchain? on: March 08, 2014, 11:32:41 AM
A full node should be able to see every blockchain, sans the possibility of some MITM attacks.
87  Bitcoin / Bitcoin Discussion / Re: Leah McGrath Goodman offers more details on conversation with Dorian S. Nakamoto on: March 08, 2014, 10:58:14 AM
So he was doing a contract for FAA, if he has never heard about "Bitcoin", he might mistook the pronunciation for "Boeing".
88  Bitcoin / Bitcoin Discussion / Re: Leah McGrath Goodman offers more details on conversation with Dorian S. Nakamoto on: March 07, 2014, 08:43:34 PM
It makes no sense for Satoshi to be honest with her and then turn around to deny it, especially considering he had many days to prepare for such an encounter.
89  Bitcoin / Bitcoin Discussion / Re: Satoshi Nakamoto's P2P foundation profile makes a reply on: March 07, 2014, 11:15:31 AM
what if dorian nakamoto, who is the real satoshi nakamoto, posted 'i am not dorian' to troll that reporter for shits and giggles?

i actually think this is correct.

Why would anyone assume that reporters was important enough to be trolled then?
90  Bitcoin / Development & Technical Discussion / Re: A rolling root to solve Bitcoin's scalability problem? on: March 06, 2014, 04:16:36 PM
People insist on retaining a full copy of blockchain locally, supposedly for the purpose of protecting the interest of every Bitcoin user, nevertheless, if the anonymization of coins through Coinjoin/CoinSwap/Stealth payment...becomes widespread in the future, those who participate in such txs will have absolutely no interest in you keeping a record of them and couldn't appreciate you more for pruning them.

Those anonymizing techniques are interesting specifically because the records of transfer are not kept on-chain.

I meant even the remaining tx info they wouldn't care to have removed.
91  Bitcoin / Bitcoin Discussion / Re: **Breaking news** Satoshi Nakamotos identity revealed on: March 06, 2014, 01:29:28 PM
The best lesson for such a journalist maybe for herself to have no privacy.
92  Bitcoin / Development & Technical Discussion / Re: A rolling root to solve Bitcoin's scalability problem? on: March 06, 2014, 12:47:43 PM
People insist on retaining a full copy of blockchain locally, supposedly for the purpose of protecting the interest of every Bitcoin user, nevertheless, if the anonymization of coins through Coinjoin/CoinSwap/Stealth payment...becomes widespread in the future, those who participate in such txs will have absolutely no interest in you keeping a record of them and couldn't appreciate you more for pruning them.
93  Bitcoin / Development & Technical Discussion / Re: CoinSwap: Transaction graph disjoint trustless trading on: March 06, 2014, 11:34:15 AM
Would it be possible to extend this idea into a Tor-like mix-cascade payment network? Both Alice and Bob would choose their own CoinSwap 'circuit' to a rendezvous intermediary, each escrow tx is hash-locked to that of the next intermediary, so that Eva would have to compromise at least three intermediaries to know Alice has paid Bob.
94  Bitcoin / Development & Technical Discussion / Re: Corrupt OS defeats air gap. on: March 05, 2014, 05:32:00 PM
If you want to get down to the bottom of it, no code that you don't personally authored can be trusted. http://cm.bell-labs.com/who/ken/trust.html
95  Bitcoin / Bitcoin Technical Support / Re: Strange Transaction - Bitcoins lost on: March 05, 2014, 05:29:07 PM
Hello,

I am not talking about my bitcoins but about someone else's bitcoins. I know several reasons how a hacker can steal your bitcoins, but I can't explain this. He secured his systems with kaspersky, used multibit and encrypted his wallet with a password. He also didn't open some appendix of a mail.

The story:
He sended yesterday at the afternoon (MEZ) 0.2381 BTC from an exchange to his wallet. For this he created a new adress: https://blockchain.info/address/17v2YjSNHJkzsExZWgzKCep85d2jwi5NTp
Today in the morning he opened his wallet. Nothing. He controlled several times if the adress was right. It was.

Than he searched blockchain.info. This happened with his transaction:
confirmation at 16:15 yesterday. Bitcoins arrived.
In the night (about 01:00) Bitcoins were send. He didn't send, someone sended.

The transaction out is part of a huge transaction about 31.8 btc which were send from many adresses to one adress. Like someone had all this adresses in a wallet.

When I opened the sending-adresses I found this pattern: all I looked at include only two transactions: one in and one out. Balance is zero. The transaction in happened some days ago.

It seems newly created adresses on multibit-wallets have been manipulated. Can this be true?






Nothing like that happened before? Does he still have any unspent coins in his MultiBit wallet? He did not send anything before receiving the coins right? Also, is his password strong enough?
96  Economy / Speculation / Re: Peter R's theory on the collapse of MtGox and its effect on the price of bitcoin on: March 03, 2014, 12:06:03 PM
Also if there was such a jumbo tx, I am sure it would be very visible on the blockchain.

The million bitcoins sent to MtGox in early June would have been deposited to several unique addresses and over several days, as these coins came form several unique customers.  The thief would have stolen them with several transactions (over a shorter period of time), rather than merging them into a single 1,000,000 BTC TX.
Several...over a shorter period of time...we may as well say over a year. If you put no limit on Mark's incompetence, then sure, anything is possible.

Quote
There is never a need to put the key to a user's deposit address on an online computer, any wallet system which could remotely be considered 'cold', by definition, would not do that.

The just-dice.com deposit addresses are "hot."  I think this is common in fact.  Just-dice uses recent deposits to pay out new withdrawal requests, thereby minimizing transfers to and from cold storage.  If you request a just-dice withdrawal, your coins will almost always come from someone else's deposit address.  [People have reported on the troll box that they've spontaneously received free coins.  This happens when someone erroneously sends just-dice.com coins to the address that sent them a withdrawal.]  Just-dice.com automatically transfers coins to cold-storage when the amount of hot coins crosses a certain threshold.  These coins are transferred manually back to the hot wallet when needed.  

My theory would have MtGox in its early years using a similar system, except automated transfers to the cold wallet were not yet implemented.  Yeah they should have been, but I believe it's plausible that they weren't given how quickly the price (and thus the risk of not doing so) increased.  

Again, if you deposit addresses are hot, there is no way it can be called cold wallet. Also, an exchange is different from a betting site, which does BTC withdrawals much more often(you don't trade and want to collect what you win ASAP, and you certainly don't deposit to gamble in tens of thousands of BTCs!), it would be beyond ridiculous if Gox's deposit addresses are hot.
97  Economy / Speculation / Re: Peter R's theory on the collapse of MtGox and its effect on the price of bitcoin on: March 03, 2014, 12:33:18 AM
Sorry for interrupting the party, but in case anyone is taking it seriously please remember from a technical perspective it's all BS.

Now please carry on.

What's the objection from a technical perspective? It all seemed plausible to me. (I'm genuinely curious)

You raised one of the objections yourself in a previous reply.

There is never a need to put the key to a user's deposit address on an online computer, any wallet system which could remotely be considered 'cold', by definition, would not do that.

Also if there was such a jumbo tx, I am sure it would be very visible on the blockchain.
98  Economy / Speculation / Re: Peter R's theory on the collapse of MtGox and its effect on the price of bitcoin on: March 03, 2014, 12:16:58 AM
Sorry for interrupting the party, but in case anyone is taking it seriously please remember from a technical perspective it's all BS.

Now please carry on.
99  Bitcoin / Bitcoin Discussion / Re: Silk Road: Trail of 11,329.89BTC on: February 27, 2014, 05:54:02 PM
Very unlikely. It's much more likely that's one DPR's addresses.
So, the other only option would be that few hours after my deposit, Mt. Gox used this coins to process a withdrawal that SR requested? There are no other options to explain this, right?

Wonder if it's possible thaty you give us your transaction link? Thanks.
100  Bitcoin / Development & Technical Discussion / Re: Bitcoin needs more full time developers? on: February 14, 2014, 04:10:35 PM
First rule of software engineering: more man months!=better software.
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