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February 16, 2014, 09:24:37 PM |
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MtGox left the door "open" when their nodes started writing garbage non-compliant transactions. Prior to v0.8 most of MtGox garbage tx were still relayed by other nodes. With prompt relaying it becomes very difficulty to modify the tx and then win a race. As the number of v0.8+ nodes started increasing, transactions created by MtGox started having a harder and harder time propogating the network.
Like a critical cascading failure this flaw exposed other flaws in MtGox "GOX SPECIAL v0" client they hacked together without basic knowledge of the protocol. Their client would attempt to create tx without sufficient tx fees (despite charging users 10x the min mandatory fee). Their client would attempt to spend immature newly mined coins. Rather than fix issues they simply modified the client to spend older and larger "coins" first.
This really came to a critical level in the last 30 days when the percentage of legit withdraws became massive. By now most of the network was v0.8+ so they were just dropping MtGox tx, the need to continually recreate withdraws over and over not only provided the attacker with "cover", it also exhausted their pool of old, large coins, exposing the the other issues with insufficient fees and spending immature coins. The flaws in their design compounded upon each other to create this massive (at one point >2,800 tx and anecdotally more than 50% failure rate) backlog of broken withdraws.
My guess is someone figured out they could take the garbage tx non-compliant tx, clean it up and get paid faster. From there it was only a small leap in logic to "wait a second, MtGox servers still show the old tx hash. I bet I could tell them I haven't been paid and blend right in with the thousands upon thousands of legit reports of broken transactions".
Of course if the ONLY problems MTGox had were non-canonical signature, spending immature coins, double spending their own payments (race condition?), and paying insufficient fees the attacker STILL couldn't have stolen funds. Like I said this just opened the door. That combined with relying on tx ids and resending payments without investigation after a report on non-payment is what made the attack profitable.
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