New Sec-Coins Thwart Hackers & Rogue Servers on p2p Exchange
More details here:
https://bitcointalk.org/index.php?topic=209269.0If you are reading this or printing this out then you might want to re-read or re-print this thread. I have made changes to the configuration and security practices. Most of the changes are from the Disposable Wallet Section on.
ALT-COIN SECURITY
USE WORTHLESS ALT COINS TO DO TRANSACTION VERIFICATION BETWEEN NODES.
All of these new alt coins being created everyday are not necessarily a bad thing. Crypto-coins and their corresponding blockchains can be used for other things besides money. Like securing transactions between P2P nodes. You can use worthless alt coins as transaction verifiers throughout the entire p2p network; and its more secure than using CA certs, pre-shared keys, or other more complicated security setups.
For high security, don't use other alt coins. Make your own customized alt coin for the same purpose. You don't have to worry about double spend attacks because you are only using it for the purpose of securing transactions for the p2p network and you are the only one with access to the coin. Make a coin that is fast and can be mined easily. Afterward, pre-mine it with enough coins to support the entire network. You wont have to worry about it retaining a monetary value because its pre-mined. Don't give any coins out to anyone except server admins. It shows the users on the exchange that a server admin is validated because no one should have the coins except for server admins.
The good thing about alt-coin security is that no one will have your coin except you. As long as none of the admins don't send their coins to other people. If they do you can find out by doing an blockchain analysis. If no one has your coins except for you then that makes it much harder for a hacker to compromise the p2p network integrity.
Security-Coin Validation
Use the blockchain to verify where the security-coins came from. If a server node sent you security-coins from a wallet address of ABCDEFG1234567 to validate a specific transaction you can verify the where the security-coins came from by doing a blockchain analysis. The analysis will show where the security-coins came from. If the security-coins came from an address that you do not know or is not listed in the security list you know not to perform the said transaction. It that simple. No ACLs, no certs, no keys, just alt-security-coins.
High Level Security-Coins
For sensitive servers such as high level wallet-bots use a different security-coin than that which is used by the rest of the network. Only give it out to server admins that are high level. This provides an additional layer of security within the p2p network.
Keep Track Of Every Coin
The head of the p2p network can disburse security-coins to the server admins for transaction verifications and tolls on the network. As the security-coins travel from the server admins to other nodes, you can make nodes to collect the security-coins and bring them back to you. A security-coin audit can show if any security-coins were lost and where they went and who lost them. This provides better security than other methods; in addition, if a server admin and his nodes are booted or fired from the p2p network you can blacklist his wallet address or refuse to give him more security-coins to perform transactions and pay tolls on the network.
Transaction Tolls
Transaction Tolls provide a way to control and maintain the p2p network. Certain nodes require certain security-coins and a specific amount. For example, a high level transaction involving a large sum of money might require a larger amount of security-coins before the transaction will take place. Only admins with that amount of security-coins will be able to perform the said transaction.
Security-Coin Dual Wallet Application
I recommend coding a dual-wallet application for the wallet-bots. Code the wallet application so that the Bitcoin/Litecoin wallet will not send cryptocurrency to anyone unless there is a sufficient amount of security-coins to perform the said transaction. You can hard code the security-coin amounts based on how much cryptocurrency is sent. This would make it much harder for a hacker to get the bot to send coins to an illegal wallet address.
Append the Sec-Coin Wallet Address To The Name Of The Node
Name the sever nodes on the network with their corresponding sec-coin wallet address appended so that users and end-user clients can view the sec-coin blockchain to verify that the server performing the transaction actually has sec-coins and enough of them to perform the task. If a rogue server-node spoofs a sec-coin wallet address and attempts to perform a transaction on the p2p network, the transaction will be denied because the rogue node doesn't have any or enough sec-coins to complete the transaction. Verify the transaction afterward by examining the sec-coin blockchain to see if the balance has changed. If the balance is still the same then you know a rouge server was spoofing a valid servers wallet address. When the transaction confirmation comes back to you, deny the confirmation. If you know that a sec-coin transaction costs five sec-coins and the balance has changed by four; again, deny the transaction confirmation when it arrives.
(I AM GOING TO TAKE A BREAK... BE BACK LATER)
Use a Proof Of Stake Alt-Coin
As much as I do not like "Proof of Stake" coins, I have to admit that they are better to use for sec-coins. The reason for this is because sec-coins are purposely pre-mined. What that means is that the pre-miner should be the largest stake holder.
Being a "Proof of Stake" sec-coin, any attack against the sec-coin will be far more expensive for the attacker as opposed to using a "Proof of Work" sec-coin.
Keep The Sec-Coin Secret
Once you download the open source version of this p2p software (when it is made) and are going to customize and use your sec-coin; do not release the newly customized alt-coin that you are going to use as a sec-coin. Do not release the customized source code. Do not release the software clients binaries after you have compiled them. What I am saying is, keep the sec-coin secret and confidential. This is going to be the foundation of your p2p network security. Do not announce pre-mining operations to anyone. You don't want anyone else mining your sec-coins while your pre-mining operation is going on.
*I am not saying that I will develop this p2p software that I am designing, but I imagine the developer of the software will release the code as open source (as per my request at the beginning of this thread).
Set a Hard Limit on each Sec-Coin you create
Pre-mine each set of sec-coins to the hard limit. If you set a hard limit on each set of sec-coins that you pre-mine and you mine it to the hard limit; no more coins can be made after your pre-mine operation is over. If you pre-mine one million sec-coins then make sure no more can be made afterward. Pre-mine multiple sets of sec-coins for different purposes and security levels.
Keep Track of the Sec-Coins You Pre-Mine
Keep count of the sec-coins that you have pre-mined. Since you pre-mined the sec-coins to the hard limit, you now are obligated to keep count of the coins. If you lose any sec-coins that you have pre-mined, they can potentially be used against you if a hacker gets his hands on them.
Wholly Abandon Any Set of Sec-Coins If Some Of The Coins Are Lost or Stolen
If a rogue admin sells some of the sec-coins that you made, or you somehow lost some; then you need to wholly abandon that particular set of the pre-mined coins. If you have pre-mined multiple sets of sec-coins just replace the set with another or pre-mine some more. Whatever you do, I urge you - Do not use any of the sec-coins from the set that was compromised. Dump them on the market (they may have value if your p2p exchange is popular) or throw them away. Once again I tell you: If you lose any sec-coins that you have pre-mined, they can potentially be used against you if a hacker gets his hands on them.
(CHECK BACK TOMORROW FOR MORE UPDATES... THANKS EVERYONE!)
More details here:
https://bitcointalk.org/index.php?topic=209269.0
