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1. Breaking and Fixing Virtual Channels: Domino Attack and Donner

   Aumayr, Lukas ; Moreno-Sanchez, Pedro ; Kate, Aniket ; Maffei, Matteo. ( January 2023 , Network and Distributed System Security (NDSS) Symposium)

   Payment channel networks (PCNs) mitigate the scalability issues of current decentralized cryptocurrencies. They allow for arbitrarily many payments between users connected through a path of intermediate payment channels, while requiring interacting with the blockchain only to open and close the channels. Unfortunately, PCNs are (i) tailored to payments, excluding more complex smart contract functionalities, such as the oracle-enabling Discreet Log Contracts and (ii) their need for active participation from intermediaries may make payments unreliable, slower, expensive, and privacy-invasive. Virtual channels are among the most promising techniques to mitigate these issues, allowing two endpoints of a path to create a direct channel over the intermediaries without any interaction with the blockchain. After such a virtual channel is constructed, (i) the endpoints can use this direct channel for applications other than payments and (ii) the intermediaries are no longer involved in updates. In this work, we first introduce the Domino attack, a new DoS/griefing style attack that leverages virtual channels to destruct the PCN itself and is inherent to the design adopted by the existing Bitcoin-compatible virtual channels. We then demonstrate its severity by a quantitative analysis on a snapshot of the Lightning Network (LN), the most widely deployed PCN at present. We finally discuss other serious drawbacks of existing virtual channel designs, such as the support for only a single intermediary, a latency and blockchain overhead linear in the path length, or a non-constant storage overhead per user. We then present Donner, the first virtual channel construction that overcomes the shortcomings above, by relying on a novel design paradigm. We formally define and prove security and privacy properties in the Universal Composability framework. Our evaluation shows that Donner is efficient, reduces the on-chain number of transactions for disputes from linear in the path length to a single one, which is the key to prevent Domino attacks, and reduces the storage overhead from logarithmic in the path length to constant. Donner is Bitcoin-compatible and can be easily integrated in the LN. 

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2. Anonymous Multi-Hop Locks for Blockchain Scalability and Interoperability

   https://doi.org/10.14722/ndss.2019.23330  

   Malavolta, Giulio ; Moreno-Sanchez, Pedro ; Schneidewind, Clara ; Kate, Aniket ; Maffei, Matteo. ( February 2019 , 26th Annual Network and Distributed System Security Symposium, NDSS 2019)

   Tremendous growth in cryptocurrency usage is exposing the inherent scalability issues with permissionless blockchain technology. Payment-channel networks (PCNs) have emerged as the most widely deployed solution to mitigate the scalability issues, allowing the bulk of payments between two users to be carried out off-chain. Unfortunately, as reported in the literature and further demonstrated in this paper, current PCNs do not provide meaningful security and privacy guarantees [30], [40]. In this work, we study and design secure and privacy-preserving PCNs. We start with a security analysis of existing PCNs, reporting a new attack that applies to all major PCNs, including the Lightning Network, and allows an attacker to steal the fees from honest intermediaries in the same payment path. We then formally define anonymous multi-hop locks (AMHLs), a novel cryptographic primitive that serves as a cornerstone for the design of secure and privacy-preserving PCNs. We present several provably secure cryptographic instantiations that make AMHLs compatible with the vast majority of cryptocurrencies. In particular, we show that (linear) homomorphic one-way functions suffice to construct AMHLs for PCNs supporting a script language (e.g., Ethereum). We also propose a construction based on ECDSA signatures that does not require scripts, thus solving a prominent open problem in the field. AMHLs constitute a generic primitive whose usefulness goes beyond multi-hop payments in a single PCN and we show how to realize atomic swaps and interoperable PCNs from this primitive. Finally, our performance evaluation on a commodity machine finds that AMHL operations can be performed in less than 100 milliseconds and require less than 500 bytes of communication overhead, even in the worst case. In fact, after acknowledging our attack, the Lightning Network developers have implemented our ECDSA-based AMHLs into their PCN. This demonstrates the practicality of our approach and its impact on the security, privacy, interoperability, and scalability of today’s cryptocurrencies. 

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3. A Survey of DDOS Attack Detection Techniques for IoT Systems Using BlockChain Technology

   https://doi.org/10.3390/electronics11233892  

   Khan, Zulfiqar Ali ; Namin, Akbar Siami ( December 2022 , Electronics)

   The Internet of Things (IoT) is a network of sensors that helps collect data 24/7 without human intervention. However, the network may suffer from problems such as the low battery, heterogeneity, and connectivity issues due to the lack of standards. Even though these problems can cause several performance hiccups, security issues need immediate attention because hackers access vital personal and financial information and then misuse it. These security issues can allow hackers to hijack IoT devices and then use them to establish a Botnet to launch a Distributed Denial of Service (DDoS) attack. Blockchain technology can provide security to IoT devices by providing secure authentication using public keys. Similarly, Smart Contracts (SCs) can improve the performance of the IoT–blockchain network through automation. However, surveyed work shows that the blockchain and SCs do not provide foolproof security; sometimes, attackers defeat these security mechanisms and initiate DDoS attacks. Thus, developers and security software engineers must be aware of different techniques to detect DDoS attacks. In this survey paper, we highlight different techniques to detect DDoS attacks. The novelty of our work is to classify the DDoS detection techniques according to blockchain technology. As a result, researchers can enhance their systems by using blockchain-based support for detecting threats. In addition, we provide general information about the studied systems and their workings. However, we cannot neglect the recent surveys. To that end, we compare the state-of-the-art DDoS surveys based on their data collection techniques and the discussed DDoS attacks on the IoT subsystems. The study of different IoT subsystems tells us that DDoS attacks also impact other computing systems, such as SCs, networking devices, and power grids. Hence, our work briefly describes DDoS attacks and their impacts on the above subsystems and IoT. For instance, due to DDoS attacks, the targeted computing systems suffer delays which cause tremendous financial and utility losses to the subscribers. Hence, we discuss the impacts of DDoS attacks in the context of associated systems. Finally, we discuss Machine-Learning algorithms, performance metrics, and the underlying technology of IoT systems so that the readers can grasp the detection techniques and the attack vectors. Moreover, associated systems such as Software-Defined Networking (SDN) and Field-Programmable Gate Arrays (FPGA) are a source of good security enhancement for IoT Networks. Thus, we include a detailed discussion of future development encompassing all major IoT subsystems. 

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4. Anomaly Detection based on Traffic Monitoring for Secure Blockchain Networking

   https://doi.org/10.1109/ICBC51069.2021.9461119  

   Kim, Jinoh ; Nakashima, Makiya ; Fan, Wenjun ; Wuthier, Simeon ; Zhou, Xiaobo ; Kim, Ikkyun ; Chang, Sang-Yoon ( May 2021 , IEEE International Conference on Blockchain and Cryptocurrency (ICBC))

   While the blockchain technology provides strong cryptographic protection on the ledger and the system operations, the underlying blockchain networking remains vulnerable due to potential threats such as denial of service (DoS), Eclipse, spoofing, and Sybil attacks. Effectively detecting such malicious events should thus be an essential task for securing blockchain networks and services. Due to its importance, several studies investigated anomaly detection in Bitcoin and blockchain networks, but their analyses mainly focused on the blockchain ledger in the application context (e.g., transactions) and targets specific types of attacks (e.g., double-spending, deanonymization, etc). In this study, we present a security mechanism based on the analysis of blockchain network traffic statistics (rather than ledger data) to detect malicious events, through the functions of data collection and anomaly detection. The data collection engine senses the underlying blockchain traffic and generates multi-dimensional data streams in a periodic manner. The anomaly detection engine then detects anomalies from the created data instances based on semi-supervised learning, which is capable of detecting previously unseen patterns, and we introduce our profiling-based detection engine implemented on top of AutoEncoder (AE). Our experimental results support the effectiveness of the presented security mechanism for accurate, online detection of malicious events from blockchain networking traffic data. We also show further reduction in time complexity (up to 66.8% for training and 85.7% for testing), without any performance degradation using feature prioritization compared to the utilization of the entire features. 

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5. Sprites and State Channels: Payment Networks that Go Faster than Lightning

   Miller, Andrew ; Bentov, Iddo ; Kumaresan, Ranjit ; McCorry, Patrick ( February 2019 , Financial Cryptography and Data Security)

   Bitcoin, Ethereum and other blockchain-based cryptocurrencies, as deployed today, cannot support more than several transactions per second. Off-chain payment channels, a “layer 2” solution, are a leading approach for cryptocurrency scaling. They enable two mutually distrustful parties to rapidly send payments between each other and can be linked together to form a payment network, such that payments between any two parties can be routed through the network along a path that connects them. We propose a novel payment channel protocol, called Sprites. The main advantage of Sprites compared with earlier protocols is a reduced “collateral cost,” meaning the amount of money × time that must be locked up before disputes are settled. In the Lightning Network and Raiden, a payment across a path of ` channels requires locking up collateral for Θ(`∆) time, where ∆ is the time to commit an on-chain transaction; every additional node on the path forces an increase in lock time. The Sprites construction provides a constant lock time, reducing the overall collateral cost to Θ(` + ∆). Our presentation of the Sprites protocol is also modular, making use of a generic state channel abstraction. Finally, Sprites improves on prior payment channel constructions by supporting partial withdrawals and deposits without any on-chain transactions. 

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