Re: [bitcoin-dev] Improving SPV security with PoW fraud proofs

From: Ethan Heilman <eth3rs@gmail•com>
To: ZmnSCPxj <ZmnSCPxj@protonmail•com>
Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists•linuxfoundation.org>
Subject: Re: [bitcoin-dev] Improving SPV security with PoW fraud proofs
Date: Thu, 18 Apr 2019 21:13:07 -0400	[thread overview]
Message-ID: <CAEM=y+WVQz5x916sjCjWVmeEbRp4NoTyryxSH7uKNTHYz+Sdnw@mail.gmail.com> (raw)
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Hi ZmnSCPxj,

Let's see if I understand what you are saying. In your scenario chain
A consists of honest miners (10% of the hash rate) and chain B  (90%
of the hash rate) consists of dishonest miners who are inflating the
coin supply.

Chain A: S, S+1
Chain B: S, S+1 (invalid), S+2, S+3, S+4, S+5, S+6, S+7, S+8, S+9

Chain B S+1 has a invalid coinbase

>At around height S+9, the minority miners generate an alternate block at height S+1. So SPV nodes download S+9 and S+8 on the longer chain, and see nothing wrong with those blocks.

What I am suggesting is that when the minority miners generate an
alternate block at S+1 (chain A) the SPV node would download blocks
S+1 and S+2 from chain B (the dishonest chain). Since S+1 has the
invalid coinbase the SPV node would learn that chain B is invalid and
abandon it.

Bitcoin is in big trouble if a malicious party controls 90% of the
mining power. The malicious miners can spend +11% of their mining
power ensuring that the honest chain never reaches consensus by
continuously forking it. The malicious miners can then extend their
favored chain using the other 79% of the mining power. This would
produce a scenario in which users are forced to choose between a
stable chain that violates a consensus rule and an unstable honest
chain that is completely unusable and which never pays out mining
rewards. I agree that SPV nodes and many wallets would make this even
worse especially in their current condition where they just trust the
hash rate/wallet provider and there are no fraud proofs.

On Thu, Apr 18, 2019 at 8:25 PM ZmnSCPxj <ZmnSCPxj@protonmail•com> wrote:
>
> Good morning Ethan,
>
>
> Sent with ProtonMail Secure Email.
>
> ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐
> On Friday, April 19, 2019 4:12 AM, Ethan Heilman <eth3rs@gmail•com> wrote:
>
> > I'm probably repeating a point which has been said before.
> >
> > > I suppose a minority miner that wants to disrupt the network could simply create a valid block at block N+1 and deliberately ignore every other valid block at N+1, N+2, N+3 etc. that it did not create itself.
> >
> > If this minority miner has > 10% of network hashrate, then the rule of
> > thumb above would, on average, give it the ability to disrupt the
> > SPV-using network.
> >
> > Proposed rule:
> > Whenever a chainsplit occurs SPV clients should download and validate
> > the "longest chain" up to more than one block greater than the height
> > of the losing chain.
> >
> > Lets say a block split causes chain A and chain B: Chain A is N blocks
> > long, chain B is M blocks long, and N < M. Then the SPV client should
> > download all the block data of N+1 blocks from Chain B to verify
> > availability of chain B. Once the SPV client has verified that chain B
> > is available they can use fraud proofs determine if chain B is valid.
>
> Let us then revert to the original scenario.
> Suppose a supermajority (90%) of miners decide to increase inflation of the currency.
>
> They do this by imposing the rule:
>
> 1.  For 1 block, the coinbase is 21,000,000 times the pre-fork coinbase value.
> 2.  For 9 blocks, the coinbase is the pre-fork value.
> 3.  Repeat this pattern every 10 blocks.
>
> The above is a hardfork.
> However, as they believe that SPV nodes dominate the economy, this mining supermajority believes it can take over the network hashpower and impose its will on the network.
>
> At height S+1, they begin the above rule.
> This implies that at heights S+1, S+11, S+21, s+31... the coinbase violates the pre-hardfork rules.
>
> At around height S+9, the minority miners generate an alternate block at height S+1.
> So SPV nodes download S+9 and S+8 on the longer chain, and see nothing wrong with those blocks.
>
> At around height S+18, the minority miners generate an alternate block at height S+2.
> So SPV nodes download S+18, S+17, S+16 and again see nothing wrong with those blocsk.
>
> This can go on for a good amount of time.
> With a "rare enough" inflation event, miners may even be able to spend some coinbases on SPV nodes that SPV nodes become unwilling to revert to the minority pre-hardfork chain, economically locking in the post-hardfork inflation.
>
> Again: every rule is an opportunity to loophole.
>
> Regards,
> ZmnSCPxj
>
> > An attacker could use this to force SPV clients to download 1 block
> > per block the attacker mines. This is strictly weaker security than
> > provided by a full-node because chain B will only be validated if the
> > client knows chain A exists. If the SPV client's view of the
> > blockchain is eclipsed then the client will never learn that chain A
> > exists and thus never validate chain B's availability nor will the
> > client be able to learn fraud proofs about chain B. A full node in
> > this circumstance would notice that the chain B is invalid and reject
> > it because a full node would not depend on fraud proofs. That being
> > said this rule would provide strictly more security than current SPV
> > clients.
> >
> > On Thu, Apr 18, 2019 at 3:08 PM ZmnSCPxj via bitcoin-dev
> > bitcoin-dev@lists•linuxfoundation.org wrote:
> >
> > > Good morning Ruben,
> > > Sent with ProtonMail Secure Email.
> > > ‐‐‐‐‐‐‐ Original Message ‐‐‐‐‐‐‐
> > > On Thursday, April 18, 2019 9:44 PM, Ruben Somsen via bitcoin-dev bitcoin-dev@lists•linuxfoundation.org wrote:
> > >
> > > > Simplified-Payment-Verification (SPV) is secure under the assumption
> > > > that the chain with the most Proof-of-Work (PoW) is valid. As many
> > > > have pointed out before, and attacks like Segwit2x have shown, this is
> > > > not a safe assumption. What I propose below improves this assumption
> > > > -- invalid blocks will be rejected as long as there are enough honest
> > > > miners to create a block within a reasonable time frame. This still
> > > > doesn’t fully inoculate SPV clients against dishonest miners, but is a
> > > > clear improvement over regular SPV (and compatible with the privacy
> > > > improvements of BIP157[0]).
> > > > The idea is that a fork is an indication of potential misbehavior --
> > > > its block header can serve as a PoW fraud proof. Conversely, the lack
> > > > of a fork is an indication that a block is valid. If a fork is created
> > > > from a block at height N, this means a subset of miners may disagree
> > > > on the validity of block N+1. If SPV clients download and verify this
> > > > block, they can judge for themselves whether or not the chain should
> > > > be rejected. Of course it could simply be a natural fork, in which
> > > > case we continue following the chain with the most PoW.
> > >
> > > I presume you mean a chain split?
> > >
> > > > The way Bitcoin currently works, it is impossible to verify the
> > > > validity of block N+1 without knowing the UTXO set at block N, even if
> > > > you are willing to assume that block N (and everything before it) is
> > > > valid. This would change with the introduction of UTXO set
> > > > commitments, allowing block N+1 to be validated by verifying whether
> > > > its inputs are present in the UTXO set that was committed to in block
> > > > N. An open question is whether a similar result can be achieved
> > > > without a soft fork that commits to the UTXO set[0][1].
> > > > If an invalid block is created and only 10% of the miners are honest,
> > > > on average it would take 100 minutes for a valid block to appear.
> > > > During this time, the SPV client will be following the invalid chain
> > > > and see roughly 9 confirmations before the chain gets rejected. It may
> > > > therefore be prudent to wait for a number of confirmations that
> > > > corresponds to the time it may take for the conservative percentage of
> > > > miners that you think may behave honestly to create a block (including
> > > > variance).
> > >
> > > I suppose a minority miner that wants to disrupt the network could simply create a valid block at block N+1 and deliberately ignore every other valid block at N+1, N+2, N+3 etc. that it did not create itself.
> > > If this minority miner has > 10% of network hashrate, then the rule of thumb above would, on average, give it the ability to disrupt the SPV-using network.
> > >
> > > > 10% of network hashrate to disrupt the SPV-using nodes would be a rather low bar to disruption.
> > > > Consider that SPV-using nodes would be disrupted, without this rule, only by >50% network hashrate.
> > >
> > > It is helpful to consider that every rule you impose is potentially a loophole by which a new attack is possible.
> > > Regards,
> > > ZmnSCPxj
> > >
> > > bitcoin-dev mailing list
> > > bitcoin-dev@lists•linuxfoundation.org
> > > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>
>