In this talk, the speaker will survey the security attacks on blockchain and compartmentalise attacks that are generic to IT systems, singling out real attacks specific to blockchain and their countermeasures.

1. Real Attacks on Blockchain
Systems & Countermeasures
Ng Kok Leong
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2. “51% Attack on blockchain is Real”
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https://www.investopedia.com/news/bitcoin-gold-hack-shows-51-attack-real/

3. Real Attacks on Blockchain
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4. List of Attacks on Blockchain
(grouped by security domains)
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Attack Year Category Exploit Value Root Cause (1) Blockchain
Vulnerability
(2) System
Vulnerability
(3) Software
Vulnerability
(4) Network
Vulnerability
Unknown
Mt. Gox 2011 C1 Several thousand BTC Deficiencies in network protocols 1
Bitfloor 2012 C2 24,000 BTC ($250K) Bitfloor’s server was hacked to leak an unencrypted backup of the wallet keys 1
Instawallet 2013 C4 35,000 BTC Instawallet was hacked 1
Bitcoin Foundation 2013 C6 A generation bug with old pseudo random number 1
Sheep Marketplace 2013 C4 5400 BTC One site vendor exploited a vulnerability 1
Mt. Gox 2014 C4 650,000 BTC ($450M) A bug in software to allow users to modify transaction IDs 1
Dell SecureWorks 2014 C1 $83,000 BGP hijack 0.5 0.5
DAO 2016 C4 $50M Code weakness: subtle game‐theoretic weaknesses 1 1
Bitfinex 2016 C2 & C4 119,756 BTC ($65M) Hackers stole BTC. 1
Ethereum network 2016 C1 & C4 DDoS attack: calling EXTCODESIZE opcode roughly 50,000 times per block 1
Gold HKG 2017 C4 A bug with contract code that read “=+” instead of “+=” 1
Parity Wallet 2017 C4 $30M Addresses were comprised (Delegate call+exposed self‐destruct) 1
SmartBillions 2017 C4 400 ETH ($120,000) Broke into smart contract Broken caching mechanism 1
Parity Wallet 2017 C4 $300M An undiscovered bug of not proper initialization (Delegate call+unspecified modifier) 1
Cryptojacking 2017 – 2018 C2 & C4 ‐ Hacked and inserted cryptomining script or cryptojacking code 1
PoWH 2018 C4 888 ETH a bug on Integer overflow 1
Spankchain 2018 C4 165.38 ETH Reentrancy attack 1
Bitcoin Gold (BTG) 2017 July $18m 51% attack 1
IOTA 2019 C2 $3.9M A phishing attack to collect the users' privacy keys 1
IOTA 2020 C4 Custom‐made hash‐function was broken 1
Cashaa 2020 C2 More than 336 BTC Suspect a piece of malware was installed onto the system 1
2gether 2020 C2 $1.3M 2gether's servers was hacked 1
Bitcoin Gold (BTG) 2020 Jan $70k 51% attack 1
Ethereum Classic (ETC) 2020 July $5.6m 51% attack 1
Bitcoin SV (BSV) 2021 Aug 51% attack 1

5. Attacks specific to Blockchain Vulnerability
• 51% attack – cryptocurrency
• Reentrancy attack – smart contract
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6. 51% Attack
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7. Case: Attacker stole 807k ETC ($5.6 million) in
Ethereum Classic 51% Attack, 31/Jul/2020
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Image - https://medium.com/hackernoon/ethereum-classic-
attacked-how-does-the-51-attack-occur-a5f3fa5d852e

8. Double Spending
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9. Definition: Double-spending
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Source - https://www.investopedia.com/terms/d/doublespending.asp

10. Definition: Double-spending
> Double-spending problem
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Double-spending is a potential flaw
in a digital cash scheme in which
the same single digital token can
be spent more than once. This is
possible because a digital token
consists of a digital file that can be
duplicated or falsified.
Source - https://en.bitcoinwiki.org/wiki/Double-spending

11. Definition: Double-spending
> Two Necessary Properties of Cryptocurrency
1. Unforgeability – achieved using digital signature
2. No double spending – achieved using blockchain (as public ledger,
anyone can see the spending)
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12. Blockchain
> The Block
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13. Bitcoin utilizes blockchain to achieve no double
spending
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Image - https://www.gemini.com/cryptopedia/what-is-bitcoin-
and-how-does-it-work#section-understanding-bitcoin

14. What is the block in blockchain: Bitcoin
transactions are grouped together into “blocks”
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Image - https://www.gemini.com/cryptopedia/what-is-bitcoin-
and-how-does-it-work#section-understanding-bitcoin

15. Blockchain
> Chaining the blocks
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16. What is the chain in blockchain: Each block is
chained onto previous block through hash function
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Image - https://www.ig.com/en/trading-strategies/what-is-blockchain-
technology--200710

17. Cryptographic One-Way Hashing
Hash output is like a fingerprint in digital world
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Image - https://www.freecodecamp.org/news/how-bitcoin-mining-really-works-
38563ec38c87/

18. Blockchain
> Distributed Ledger (database)
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19. Any node in public ledger can create the block
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Image -
https://www.researchgate.net/publication/320127088_Blockchain_Implem
entation_Quality_Challenges_A_Literature_Review/figures?lo=1

20. The first miner to solve the math puzzle get to
create the block and receive bitcoin as reward
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Image - https://forkast.news/proof-of-work-what-is-it-bitcoin-halving/

21. Blockchain
> Resolving Blockchain Conflict
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22. Blockchain Conflict
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In scenario where 2 different miners solve the math puzzle at the same time,
and add their blocks to the last known block in the chain, would result in
blockchain conflict.
The two branches after Block 103 are valid. The next mined block may be
added in either of the branches.
Image - https://www.tutorialspoint.com/blockchain/blockchain_resolving_conflicts.htm

23. Resolving Blockchain Conflict
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Suppose, the miner adds the newly mined block to Block 104-A, the branch
containing Block 104-A will be longer than the branch containing Block
104-B.
In Bitcoin architecture, the longest branch always wins, and the shorter ones
are purged. So Block 104-B has to be purged.
Image - https://www.tutorialspoint.com/blockchain/blockchain_resolving_conflicts.htm

24. How to double spend?
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Alice has $10
Alice > Bob $10
Alice has $0
Alice has $10
Create a fake branch faster than
the authentic branch

25. 51% Attack
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26. Definition: 51% attack
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Source - https://www.thebalance.com/what-is-a-51-attack-5207550

27. Mining Power measured by Hashrate
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Source - https://bitflyer.com/en-eu/s/glossary/hashrate

28. Bitcoin Hashrate
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Image - https://www.bitcoinmarketjournal.com/wp-
content/uploads/2021/06/bitcoin-hashrate-chart.jpg

29. 51% Attack
> Ethereum Classic 51% Attack
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30. Case: Attacker stole 807k ETC ($5.6 million) in
Ethereum Classic 51% Attack, 31/Jul/2020
#ISSLearningFest
Image - https://medium.com/hackernoon/ethereum-classic-
attacked-how-does-the-51-attack-occur-a5f3fa5d852e
• Double-spent 807,260
ETC ($5.6 million)
• Spent 17.5 BTC
($129k) to acquire the
hash power for the
attack.
• Received 13K ETC as
block mining reward

31. 51% Attack
> Countermeasures
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32. Countermeasures 1: Higher Hashrate
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Source: BitInfoCharts

33. Estimate: Cost of 51% attack on Bitcoin is USD
15 billion
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https://www.bitpanda.com/academy/en/lessons/what-is-a-51-attack-and-how-is-
it-prevented/

34. Countermeasures 2: Truly Decentralized Network
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“It’s almost impossible to pull that (51% attack) off in
established blockchains like Bitcoin and Ethereum.
This phenomenon has been experienced by some
small chains that are not really decentralized”
Avinash Shekhar, Co-CEO, ZebPay
Source - https://economictimes.indiatimes.com/markets/cryptocurrency/what-are-51-attacks-in-
cryptocurrencies/articleshow/85802504.cms?from=mdr

35. Global distribution of bitcoin nodes
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Image - https://medium.datadriveninvestor.com/blockchain-getting-
started-what-is-bitcoin-full-node-40460f3acafa

36. Countermeasures 3:
ETC response on countermeasure
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https://coingeek.com/ethereum-classic-rolls-out-51-attack-protection-plan/

37. Give Us Your Feedback
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Day 1 Programme

38. Thank You!
kokleong@nus.edu.sg
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