bitcoin-dev

Keyless Anchors Are Vulnerable To Replacement Cycling Attacks

Keyless Anchors Are Vulnerable To Replacement Cycling Attacks

Original Postby Antoine Riard

Posted on: August 27, 2024 19:39 UTC

The discussion revolves around the intricacies and potential vulnerabilities within Bitcoin transactions, specifically focusing on keyless ephemeral anchors and replacement cycling attacks.

An initial point of concern is the lack of early detection by reviewers regarding the nuances of ephemeral anchors. The document highlights a significant advantage for entities like Lightning Service Providers (LSPs) or exchanges that batch transactions regularly. These actors can exploit their position to initiate replacement cycling attacks, leveraging high-fee collaboration transactions as outlined in section 5.2 of the provided write-up, which can be found in the research paper on mempool-research.

The scenario described involves the potential for malicious batching of transactions, specifically through the use of SIGHASH_ANYONECANPAY signatures, allowing a single transaction to replace numerous keyless spending transactions simultaneously. Conversely, SIGHASH_ALL signatures lock in the spent input, preventing third parties from adding higher-fee inputs and thus avoiding conflict. This method, however, might be used in data carriage style transactions to circumvent such issues.

The conversation also touches upon the limitations of altruistic rebroadcasting as a countermeasure against replacement cycling attacks. Due to computational and memory constraints of nodes, managing a hierarchy of caches based on transaction fee rates presents challenges. Attackers could target the highest-priority cache with spam, undermining the network's ability to rebroadcast transactions effectively. Furthermore, it's mentioned that full nodes dedicating resources to process anonymizing traffic could inadvertently expose themselves to Distributed Denial of Service (DDoS) traffic, particularly affecting nodes associated with lightning hubs possessing substantial channel funds. The naivety lies in expecting these nodes to handle additional memory and CPU cycles without being vulnerable to spam and exploitation.

Overall, the exchange underscores the complexity of managing Bitcoin transactions and the persistent threat of sophisticated attacks that exploit system vulnerabilities. The dialogue suggests ongoing discussions and previous communications have delved into these matters, indicating a continued effort to identify and mitigate potential security risks in cryptocurrency transaction handling.