The document discusses Coinpunk, an open-source Bitcoin web wallet that aims to improve security over previous wallets by encrypting private keys in the browser rather than on a central server. It outlines the history of Coinpunk, from an initial version that stored private keys on the server to a new "New Wave" version that generates and encrypts private keys in the browser. The document also covers challenges in implementing strong cryptography in JavaScript and the potential for browser-side encryption to become more commonplace and secure.

1. enemy of the banks
COIN PUNK
Obsoleting the banking industry
with HTML5 and JavaScript
Kyle Drake
Tuesday, October 15, 13

2. What is Coinpunk?
• First open-source Bitcoin web wallet
service
• Designed and intended for power
users and developers
• Funded by a grant from the Bitcoin
Foundation (and others)
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3. Coinpunk “Old School”
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4. Coinpunk “Old School”
• Ruby application
• Bitcoind (official client) JSON RPC
does all heavy lifting
• Implemented in 4 days
• Stored all private keys on server
• Works. But there’s a Serious
security risk.
Tuesday, October 15, 13

5. Major Bitcoin Wallet Thefts
•
July 2011: Bitomat “loses” database. $220,000
USD
•
August 2011: MyBitcoin hacked. $800,000
•
August 2012: Bitcoinica hacked. $460,000
•
March 2012: Linode servers trawled. $250,000
•
Sept 2012: BitFloor hacked. $250,000
•
April 2013: InstaWallet hacked. $4.6 million
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6. We’re starting to think
putting the private keys
on a central server is a
really bad idea. I can’t
imagine why.
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7. But web interfaces are
easy to use. They’re
lightweight. They’re
universal. They make
sense to non-tech
users.
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8. How can we provide a
web interface while
reducing server trust?
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9. The Problem
“Bitcoin wallets” that store
the private keys on the
server are not wallets.
They are Bitcoin accounts.
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10. The Solution
Move the wallet encryption
over to the browser.
Yes, really.
No, seriously!
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11. Fear, Uncertainty and Doubt
“DOOMED”? REALLY?
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12. Tuesday, October 15, 13

13. Counterpoint
http://log.nadim.cc/?p=33
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14. Tuesday, October 15, 13

15. Coinpunk “New Wave”
• HTML5/JS frontend
• Node.js backend
• Redis
• Bitcoind
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16. Coinpunk “New Wave”
Browser generates Bitcoin
private keys, encrypts them,
sends encrypted payload to
server for storage/backup.
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17. Coinpunk “New Wave”
Browser also creates all the
transactions. The server
(and therefore hackers)
cannot spend the user’s
money.
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18. Progress
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19. Browser Crypto Libraries
• CryptoJS
• Stanford JS Crypto Lib (SJCL)
• BigInteger (JSBN)
• BitcoinJS-lib
• RandJS
https://github.com/kyledrake/randjs
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20. RandJS
• Uses
window.crypto.getRandomValues if
exists, otherwise falls back
• Allows you to decide whether you’re
cool with that.
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21. window.crypto.getRandomValues
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22. Observations
• It’s all kindof slow
• SJCL PBKDF2 is (a lot) faster than
CryptoJS
• Can’t go above 4k-5k iterations
• Limited pre-rolled authenticated
encryption options (sjcl.encrypt)
http://tonyarcieri.com/all-the-crypto-code-youve-ever-written-is-probably-broken
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23. I’m not doing
Bitcoin work.
Why should I care?
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24. Browser-side crypto
will become a lot
more
commonplace.
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25. JS crypto libraries
will become secure,
standardized and
fast.
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26. One-way hashing of
the password on
the browser will be
considered “best
practice”.
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27. THANKS!
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