Fresh Facts & Numbers :: Bitcoin is vulnerable for targeted double-spending attacks from large ISPs

Audio version of this article can be found here https://soundcloud.com/earl-fox-1/fresh-facts-numbers-bitcoin-is

83 Generating your own mini-version of blockchain to "fake" blockchain for selected group of users.
lenaaa_444
When it comes to fraud, everybody start thinking about hackers, fraudsters, 51% mining pools or unfair exchanges like Mt.Gox. But since I'm working in a telecommunications field I was always bothered with a question - by holding such huge networks, customer base and biggest parks of network & server equipment, Internet Service Providers could be the next threat, if the whole thing would be organized by someone who knows what does it takes to perform such attack.

Maybe huge Internet Service Provider's management won't allow anybody building some "fraud plans" against their customers, but you always have to remember about employees which can have access for the firewall settings and the hardware of ISP, which is enough for performing the types of attacks directed on selected group of ISP customers.

Recently I've opened a thread in Reddit with my own questions about whether ISPs can fake the blockchain of its customers. You can find there some long discussion about threats and in this article I'm trying to describe my conclusion concerning what to expect or whether such kind of attacks even possible.

Yes it is possible. But it will take some huge investment. If you're talking about people who can afford to invest $150,000 just for performing fraud operations, I think there's plenty candidates among those who would be interested in doing so, because those "bad guys" who posses signficant amounts of money may want more money, and $150,000 for the ability of making fake transactions could sound pretty lovely for such people. The whole investment: $150,000 is needed for purchasing the most capable miners available on the market. On the mentioned Reddit thread I've tried to count how much hashing power such a bad guy can acquire for $150,000 and I've come up with a number of 60,000 GHashes or 30 items of "Prospero X-3 (batch 1)" $4899 or 8.7 BTC", that's how much of hashing power you can purchase in July 2014 for $150,000.

Now what attacker can do if he owns 60,000 GHash miners combined? Right, he can produce his own fake Blockchain. But with such relatively weak rate he can only produce 1 block for 14 days.

 hamer2271

You may think that it is too slow, or even won't work, because waiting 14 days with $150,000 equipment is stupid, because blocks are produced every 10 minutes all around the world. But you may not remember that ISP has access for such things as:
1) Monitoring the state of computers of their users by their IPs (whether computer turned off or turned on)
2) Use firewalls on their routing equipment (such as Cisco's,etc) to block access for IP ranges / ports / types of traffic.

What I'm trying to say that combination of such things as having access to routing and having huge hashing powers could give an attacker evil powers needed to perform an attack.

How does it happens technically
 svetlanka7264
Attacker which owns $150,000 equipment or 60,000GHs as I discovered above can mine 1 block during the 14 days.
1) ISP or ISP's representatives (such as sysadmins) can enable the firewall blocking all susceptible traffic from Bitcoin for chosen customers (let's say it will be IP addresses or contracts of people whom ISP already know as Bitcoin users, can be 1000 or 2000 people out of 200,000 customers)
2) Once traffic blocked, Bitcoin won't be able to communicate with external world and blocks will stop updating exactly at the time the attacker will choose. So since attacker chooses the time, he of course knows what is the current Bitcoin block is.
3) Once firewall enabled, attacker immediately starts mining the next block. The mining will be over in 14 days, because that's how much 60,000GHashes/second should work in order to achieve network performance which achieved by the whole world for 10 minutes (10 minutes vs 14 days).
4) So after 14 days attacker who also controls support tickets from the customers will know the customers which complained about their Bitcoin problems and he may not deal with their problems if he has access to behave like that in such a big ISP.
5) Once 14 days is over, attacker creates his small botnet of his Bitcoin clients, which will offer the the fake block as the next one. And also attacker can include any transactions he want into such block. And since many Bitcoin users may even not check or may not count the current blocks, they may think that any transaction occurred is valid, since Bitcoin never lies.

As bottom line, it is hard to deceive Bitcoin client, such attack requires a lots of competence & investment, but the key is that its still possible. What if such attack gonna happen if you're selling your car/house or something else? Of course many people will wait 3 or 6 blocks, but what if attacker invested 3 or 6 times more money? That will mean more chances to succeed to attacker.

On the one hand, when I talk about 3 or 6 times more money, it gets harder to imagine, who's able to spend such amounts of money: maybe someone rich and anonymous ;) 6 * $150,000 = $900,000 (almost $1 million dollars) Are you ready to spend 1 million dollars for the mining equipment if you would have such money? :) If you're ready then there's no problem generating 6 blocks during 14 days which is necessary for confirming 6 block in a row after Internet was restricted by the special person in the city's ISP.
 Swetik134444
On the other hand, if an attacker have $900,000, finding the right technician who will be ready to cooperate in any ISP company of the world won't be a big problem for such a bad guy. And that makes me sad about current level of Bitcoin's security.


Read my other Bitcoin blockchain related posts:
* Destruction of Internet Lines in Worst-Case Scenario & Bitcoin
* Fresh Facts & Numbers :: Exact prediction of Blockchain size depending on the transaction volume.
* Fiat money backed by Bitcoin
* nTimeLock may disappoint you