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Formalizing Bitcoin Crashes with Universally Composable Security

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Part of the book series: Lecture Notes in Computer Science ((LNSC,volume 12472))

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Abstract

Bitcoin has introduced an open and decentralized consensus mechanism which in combination with an append-only ledger allows building so-called blockchain systems, often instantiated as permissionless cryptocurrencies. Bitcoin is surprisingly successful and its market capitalization has reached about 168 billion USD as of July 2020. Due to its high economic value, it became a lucrative attack target and the growing community has discovered various flaws, proposed promising improvements, and introduced contingency plans for handling catastrophic failures. Nonetheless, existing analysis and contingency plans are not formalized and are tailored only to handle a small subset of specific attacks, and as such, they cannot resist unexpected emergency cases and it is hard to reason about their effectiveness and impact on the system. In this work, we provide a formalized framework to help evaluate a variety of attacks and their mitigations. The framework is based upon the universal composability (UC) paradigm to describe the attacker’s power and the system’s security goals. We propose the system in the context of Bitcoin and to the best of our knowledge, no similar work has been proposed previously. Besides, we demonstrate and evaluate our model with case study from the real world. Finally, we signal remaining challenges for the contingency plans and their formalization.

J. Ke—This work has been done while at SUTD.

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Notes

  1. 1.

    The extended version of this paper will be publicly available as a preprint.

  2. 2.

    It is essentially assuming a synchronous network.

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Acknowledgment

This project is supported by the Ministry of Education, Singapore, under its MOE AcRF Tier 2 grant (MOE2018-T2-1-111), National Natural Science Foundation of China (Grant No. 61632020), and the Major Innovation Project of Science and Technology of Shandong Province under Grant 2018CXGC0702.

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Authors and Affiliations

  1. School of Software, Shandong University, Jinan, China

    Junming Ke & Qiuliang Xu

  2. Singapore University of Technology and Design, Singapore, Singapore

    Pawel Szalachowski & Jianying Zhou

Authors
  1. Junming Ke
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  2. Pawel Szalachowski
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  3. Jianying Zhou
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  4. Qiuliang Xu
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Corresponding author

Correspondence to Qiuliang Xu .

Editor information

Editors and Affiliations

  1. Institute of Cybersecurity and Cryptology, University of Wollongong, Wollongong, NSW, Australia

    Willy Susilo

  2. Singapore Management University, Singapore, Singapore

    Robert H. Deng

  3. Institute of Cybersecurity and Cryptology, University of Wollongong, Wollongong, NSW, Australia

    Fuchun Guo

  4. Institute of Cybersecurity and Cryptology, University of Wollongong, Wollongong, NSW, Australia

    Yannan Li

  5. Informatics, Petra Christian University, Surabaya, Indonesia

    Rolly Intan

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Ke, J., Szalachowski, P., Zhou, J., Xu, Q. (2020). Formalizing Bitcoin Crashes with Universally Composable Security. In: Susilo, W., Deng, R.H., Guo, F., Li, Y., Intan, R. (eds) Information Security. ISC 2020. Lecture Notes in Computer Science(), vol 12472. Springer, Cham. https://doi.org/10.1007/978-3-030-62974-8_19

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  • DOI: https://doi.org/10.1007/978-3-030-62974-8_19

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