Do owners of large addresses protect themselves with bots ?

[Tfs]

This is a newbie question and I may not understand well.

A transaction needs to be confirmed by some nodes, and then miners may include it in a block which they then try to get into the blockchain. If the miners block is chosen, the transation cannot be reversed.

So to me it would make sense that the owners of addresses that have large amounts of bitcoins have set up bots that constantly monitor transactions that arrive for confirmation by nodes, and if they spot someone trying to spend their coins they quickly create another transaction with much larger fee to try to be in the blockchain first.

Does this make sense? If so, is that known to be the case for at least some top 100 addresses?

[OmegaStarScream]

You mean RBF to protect their addresses in the event of someone gaining access? I don't know if this has been done or not before  but it sound like it adds another layer of unnecessary complexity where the private keys or seedphrase must be exposed somewhere else (other than the hardware wallet that's actually holding the funds)

[Cookdata]

So to me it would make sense that the owners of addresses that have large amounts of bitcoins have set up bots that constantly monitor transactions that arrive for confirmation by nodes, and if they spot someone trying to spend their coins they quickly create another transaction with much larger fee to try to be in the blockchain first.

Does this make sense? If so, is that known to be the case for at least some top 100 addresses?

A transaction that is created and sign by a random person and broadcast into the nodes can't be change or modify by anyone since they don't have the private keys. It's only if the mining nodes have the private key of such address can decided to change the outputs(that's the destination address) or change or bump fees.

You must possess the private key or seed phrase to that address to be able to do that, in this case, stealing.

[Tfs]

 Thanks for the replies.

Yes I mean as a protection against theft. I agree that this involves that the bot has access to the private key and so it must be done extremely securely. Isn't there not even one bitcoin user having said that they set up such an anti-theft bot?

[Upgrade00]

Yes I mean as a protection against theft. I agree that this involves that the bot has access to the private key and so it must be done extremely securely. Isn't there not even one bitcoin user having said that they set up such an anti-theft bot?

If you are not confident to securely protect your keys where is the guarantee when you are another extra point of vulnerability which canead to the loss of all your funds?
Your bitcoin address is way easier to keep secure than a 3rd party bot which will likely be expensive to maintain.

I've never heard about such an anti bot theft.

[Cookdata]

Thanks for the replies.

Yes I mean as a protection against theft. I agree that this involves that the bot has access to the private key and so it must be done extremely securely. Isn't there not even one bitcoin user having said that they set up such an anti-theft bot?

First and foremost, private keys and seed phrase are meant to be kept in a private place, the best should be kept offline. If done properly, there is no anyway a person can spend Bitcoin on any of those addresses.

Coming to your bot that protect one against theft, using that alone is a big risk even if you do it securely, you can't use bot without an access to the internet and that means your private keys has to be on the internet which that alone is a threat. What if someone hack your sever and get your private keys? It's not even a good and safe practice.

[OcTradism]

So to me it would make sense that the owners of addresses that have large amounts of bitcoins have set up bots that constantly monitor transactions that arrive for confirmation by nodes, and if they spot someone trying to spend their coins they quickly create another transaction with much larger fee to try to be in the blockchain first.

They can use Replace By Fee as their ace under sleeves in order to bump the fee rate anytime they want and if they see that the initial fee rate is no longer on tip of Bitcoin mempools but they are in hurry for getting a first confirmation in a next Bitcoin block.

They can use some Bitcoin mempool observing websites for getting latest information of mempools, fee rates on tip and choose a proper fee rate.

Bitcoin users with big fund don't mind about transaction fee too much if you know the Bitcoin transaction fee is calculated by transaction size and fee rate. Fee rate can be changed by users, and transaction fee of a transaction with same inputs, same outputs can not be changed. That means Bitcoin users with small  and big transactions in values but have same transaction size and chosen fee rate will have to spend same transaction fee. So a user with bigger fund will feel the transaction fee consumes less percent of the transaction value and feels it cheaper than another user with a smaller fund.
 
https://jochen-hoenicke.de/queue/#BTC%20(default%20mempool),24h,weight
https://mempool.jhoenicke.de/#BTC,24h,weigh
https://mempool.space/
https://whatthefee.io/

Does this make sense? If so, is that known to be the case for at least some top 100 addresses?

It does not make sense and it does not need to be top 100 richest addresses to do that.

Anyone can broadcast their Bitcoin transactions and use very high fee rates in order to put their transactions on tip of Bitcoin mempools.

[Charles-Tim]

What if the hacker also has the bot?

If the coin owner increase the transaction few using replace-by-fee but the hacker is also increasing the transaction fee. Who is going to lose?

The hackers will not care to waste almost all the money on transaction fee.

The best is to protect your seed phrase and private keys.

[Tfs]

Thank you all for the answers.

[Porfirii]

Thanks to you for sharing the idea, Tfs.

Although other members have already pointed out the problems they see in it, I find it quite original and, although perhaps unnecessarily complex, it can be the trigger for other innovative ideas that can be valuable for those who hold a fortune in Bitcoin (but, do they read these lines? or do they enjoy, instead, a perpetual vacation in the Caribbean?).

I coincide especially with OmegaStarScream's and Charles-Tim's drawbacks, but thanks again OP for bringing some innovative thinking to this board

[Zaguru12]

What if the hacker also has the bot?

If the coin owner increase the transaction few using replace-by-fee but the hacker is also increasing the transaction fee. Who is going to lose?

The hackers will not care to waste almost all the money on transaction fee.

The best is to protect your seed phrase and private keys.

There is always a faster bot been built, I can could remember reading some other time that an hacker actually placed a bot on a wallet and the owner was actually expecting an airdrop allocation and in a counter means placed a bot the wallet too again which at the end was able faster than the hackers bot. So there is always a faster one.

The only safety of a wallet is for the private key and seed phrase to be secured and never exposed to any thing online or anyone. That’s why we usually see old wallets only come alive when they are moving out coin to an exchange or another wallet.

Placing a bot on your wallet is nothing other than saving your keys online and placing encryption on it at the end of the day hackers will find way to it, the best means remains it should never known that such keys existed.

[Satofan44]

No, you would be extremely dumb to expose your address to such a risk as you have to expose the private key. You would have to expose it to another software tool and directly or indirectly to the internet as well. This reduces your security, it does not increase it.

Although other members have already pointed out the problems they see in it, I find it quite original and, although perhaps unnecessarily complex, it can be the trigger for other innovative ideas that can be valuable for those who hold a fortune in Bitcoin (but, do they read these lines? or do they enjoy, instead, a perpetual vacation in the Caribbean?).

It is not an innovative trigger for anything, it is just speculative thoughts that are based on a misunderstanding of the basic concepts that relate to security. Anything "automated" is less secure for coins. People should try to learn the basics of security first, then continue up to develop a decent level of knowledge and then you should try to come up with ideas. For most people and most ideas, the reason for which you believe an idea has not been explored is mistaken -- it has been already explored and dismissed by others because it is wrong.

What if the hacker also has the bot?

It depends on who the hacker is. It will be split into two groups, those that are not able to have such tools and those that do. Therefore, if we ignore the vulnerabilities that this idea brings it would actually work against hackers that do not have bots. However, such hackers are unlikely to be specialists or highly successful. Those that have bots for such things are more likely to be those that are doing this on mass scale or for longer periods of time.

If the coin owner increase the transaction few using replace-by-fee but the hacker is also increasing the transaction fee. Who is going to lose?

You assume that they know how to use that.  

The best is to protect your seed phrase and private keys.

This is correct. Instead of inventing unnecessarily complicated and vulnerable ideas, one can simply employ multisignature to increase the security of their own addresses. 2 out of 3 will be sufficient for most users. Large entities are doing much larger setups such as 5 out of 7 or 10. This protects against most attacks quite well.

[BlackHatCoiner]

Usually people with a lot of bitcoin hold it in cold storage. This means that the private keys are not exposed to an Internet connected device, and the coins cannot move unless the seed phrase or the people themselves are compromised.

It is an absolutely horrible idea to install a bot that monitor transactions that may spend from your address, and double-spend in case they do, as this would require the bot to have access to your private keys and undo all the security gained by the cold storage.

And besides that, it wouldn't protect the victim, because the attacker could also triple-spend the coins, and then the bot would have to fourthly-spend the coins etc. etc, until all money go to the miners.

[Mia Chloe]

~snip

For any transaction on the network to be signed and successfully broadcast there must be an access to the keys needed. Instead of going through the process of botting wallets which even pose more security risks it's best you keep your seed and keys as safe as possible .

To do this most big holders use cold wallets since there's no internet connection the risks are lower however if an attacker broadcasts a transaction and you use RBF what makes you think the attacker won't do the same until literally everything is wasted on fees. Trust me in cases like these only the miner eventually wins thieves don't care spending 80% on fees.

[ABCbits]

You mean RBF to protect their addresses in the event of someone gaining access? I don't know if this has been done or not before  but it sound like it adds another layer of unnecessary complexity where the private keys or seedphrase must be exposed somewhere else (other than the hardware wallet that's actually holding the funds)

It also bring additional cost to run the bot/script where it must check all TX on mempool.

If the coin owner increase the transaction few using replace-by-fee but the hacker is also increasing the transaction fee. Who is going to lose?

The hackers will not care to waste almost all the money on transaction fee.

Either the owner or hacker will receive small amount of satoshi, that is close to dust limit. So IMO both of them lose, with miner as the only winner.

[Karl_3000]

~snip

For any transaction on the network to be signed and successfully broadcast there must be an access to the keys needed. Instead of going through the process of botting wallets which even pose more security risks it's best you keep your seed and keys as safe as possible .

To do this most big holders use cold wallets since there's no internet connection the risks are lower

Not only cold wallet that keeps your seed phrase safe as possible, the owner of the wallet also has work to do. Some people passphrase the seed phrase with an additional word which is very good, but some people like to go multisig with the cold wallet.

[promise444c5]

Either the owner or hacker will receive small amount of satoshi, that is close to dust limit. So IMO both of them lose, with miner as the only winner.

It’s better not to end up in a situation where your funds is being stolen but it’s still better to have the third party (the miner ) get most of the money than just letting the hacker walk away with it.

Not sure if something like this could work:
What if the owner can just secure the funds by using it  as a fee.. the only problem now would be recovering them , how possible can that be from a pool or miner.. giving the stance of the situation ( it will also be very hard) but I’m also asking if it’s possible?

[PrivacyG]

Not sure if something like this could work:
What if the owner can just secure the funds by using it  as a fee.. the only problem now would be recovering them , how possible can that be from a pool or miner.. giving the stance of the situation ( it will also be very hard) but I’m also asking if it’s possible?

If I get your question right, that would be the dumbest thing they could do.  Protecting their own Bitcoin by handing it over to a Pool or a Miner only so they could try and recover it afterward?  I rather send mine to a 'burn' Address instead, it will probably have similar results!

The main point OP was trying to talk about contradicts this 'strategy' which is really a strategy to screw your self up.  If their Bitcoin is stored right, as in not in Google, not on a piece of paper glued to the computer monitor but for example as simple as punching a Hardware Wallet Seed on some stainless washers and burying it some where Secure, they would pretty much have zero things to be afraid of.  Add Multisig to this and you can sleep knowing your Bitcoin will still be yours tomorrow no matter what may go wrong.

[nakamura12]

Either the owner or hacker will receive small amount of satoshi, that is close to dust limit. So IMO both of them lose, with miner as the only winner.

It’s better not to end up in a situation where your funds is being stolen but it’s still better to have the third party (the miner ) get most of the money than just letting the hacker walk away with it.

Not sure if something like this could work:
What if the owner can just secure the funds by using it  as a fee.. the only problem now would be recovering them , how possible can that be from a pool or miner.. giving the stance of the situation ( it will also be very hard) but I’m also asking if it’s possible?

It's possible. If you haven't know. There is a Bitcoin owner who mistakenly used a very high transaction fee which the mining company refunded the overpaid fee to the sender. It's not just once but more than one time that it happened although it's not the same company and both are high amount of fee like 700k worth of bitcoin. For small amount of Bitcoin?, That's what I don't know if they do the same and they also require confirmation of ownership or proof that you own it.

[promise444c5]

If I get your question right, that would be the dumbest thing they could do.  Protecting their own Bitcoin by handing it over to a Pool or a Miner only so they could try and recover it afterward?  I rather send mine to a 'burn' Address instead, it will probably have similar results!

Sadly, trying to  burn it using a burner address will still result  back to same loop.. at the end miners will still have to get most of it if you’re not willing to give it up early to the hacker.

My thought for asking that question is.. if you could immediately put the output as dust on the RBF after the initial transaction, the hacker is automatically locked out early, which means game over for both of you.

But, if there is actually a way to prove it then it might just be effective..even though I do not know how possible that could be.
If that should be normalized in future , it would have to go through a lot of checks before consideration of allowing people to proof they were attacked in such cases.. I guess.

It's possible. If you haven't know. There is a Bitcoin owner who mistakenly used a very high transaction fee which the mining company refunded the overpaid fee to the sender. It's not just once but more than one time that it happened although it's not the same company and both are high amount of fee like 700k worth of bitcoin. For small amount of Bitcoin?, That's what I don't know if they do the same and they also require confirmation of ownership or proof that you own it.

Yeah.. I think I have heard of some but most were due to an error or mistake that eventually resulted in a high fee, not a deliberate one like the one currently being discussed.