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boundary="_000_AM6PR03MB542597B9DFD8060860BE35F1CC970AM6PR03MB5425eurp_" MIME-Version: 1.0 X-OriginatorOrg: kcl.ac.uk X-MS-Exchange-CrossTenant-Network-Message-Id: a7294ae7-f75b-48d3-555e-08d816be02ac X-MS-Exchange-CrossTenant-originalarrivaltime: 22 Jun 2020 15:07:41.6991 (UTC) X-MS-Exchange-CrossTenant-fromentityheader: Hosted X-MS-Exchange-CrossTenant-id: 8370cf14-16f3-4c16-b83c-724071654356 X-MS-Exchange-CrossTenant-mailboxtype: HOSTED X-MS-Exchange-CrossTenant-userprincipalname: d8lQ3mivqQ9w5x6Lqm6oq1MzdnOTptClUSJUpnQuY8zNOP2iwRJFh/0yWJaHDmw+kXwTMnu3cFMRlqDOiiArJw== X-MS-Exchange-Transport-CrossTenantHeadersStamped: AM6PR03MB4230 X-Mailman-Approved-At: Mon, 22 Jun 2020 20:47:43 +0000 Subject: [bitcoin-dev] Distributed Delegated Pre-Signed Transactions (DDPST) X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.15 Precedence: list List-Id: Bitcoin Protocol Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Mon, 22 Jun 2020 20:41:46 -0000 --_000_AM6PR03MB542597B9DFD8060860BE35F1CC970AM6PR03MB5425eurp_ Content-Type: text/plain; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable I am building a solution for distributed, delegated pre-signed transactions= (DDPST). This post introduces what DDPST are and why I think they are rele= vant for multiple applications. If you are working on application that can = benefit from such a construction and want me to use your application in the= proof of concept code, please reach out. All feedback is welcome on the co= ncept in general. Pre-signed transactions (PSTs) are utilized in numerous off-chain protocols= including Lightning Network, non-custodial trading, Statechains, and custo= dy protocols. PSTs are useful because they enable restricted access to fund= s and their custody can be *delegated* with limited risk. Compare this with= the arbitrary control over funds that comes with access to the private key= s. It is conceivable then that a broad class of applications would benefit = from a mechanism to securely delegate PSTs. A mechanism to *distribute* cus= tody of PSTs across multiple entities can act as a practical countermeasure= for numerous attacks (e.g. denial-of-service, bribery, blackmail, etc.). M= oreover, systems of accountability among the custodians, with proofs of cor= rect and incorrect behaviour, form a foundation for engineering incentive s= tructures that align with the objectives of the application at hand. Finall= y, distributed custody of PSTs could enable new trust models for the privac= y of delegated PSTs using multi-party computation. # Examples Consider first the example of vault-custody protocols [1], where there is a= requirement for a distributed network monitoring and response system to de= tect breeches and trigger a recovery process. It is critical to protect aga= inst denial-of-service (DoS) attacks that seek to compromise a monitoring n= ode in order to force the custody operation into a recovery process. In thi= s attack the adversary broadcasts the recovery transaction and reduces the = accessibility of the wallet owner's funds. A method for distributing custod= y of the recovery transaction offers defence-in-depth, and a method for del= egating custody enables outsourcing the monitor and response service (see W= atchtower implementations currently under development [2,3]). A further imp= rovement for the protection of PSTs, that comes from distributing custody, = is that *proactive* security models can be instanciated such that successfu= l attacks must occur in a limited time-frame [4]. Consider next the example of justice transactions in the current Lightning = Network model. Here, it is critical that justice transactions are broadcast= in a timely manner in response to detecting that either party is attemptin= g to close the channel with a prior state. Attacks rely on disrupting the b= roadcast of the justice transaction through, for example, bribing the watch= tower to wait. The watchtower can broadcast late and claim that it was an h= onest failure due to network issues. The victim has no recourse to punish t= he watchtower nor the malicious channel participant. If instead the justice= transaction was distributed among a set of independent watchtowers, and an= accountability system was in-place for their actions, a more robust incent= ive structure could be engineered. Moreover, distributing custody of the ju= stice transaction can provide a new privacy mechanism for both operational = security of a business but also to mitigate targeted attacks such as briber= y. Best regards, Jacob # References [1] Jacob Swambo, Spencer Hommel, Bob McElrath, and Bryan Bishop. Custody P= rotocols Using Bitcoin Vaults. 2020. https://arxiv.org/abs/2005.11776 [2] The eye of satoshi - lightning watchtower. https://github.com/talaia-la= bs/python-teos [3] Private altruist watchtowers. https://github.com/lightningnetwork/lnd/b= lob/master/docs/watchtower.md [4] Ran Canetti, Rosario Gennaro, and Amir Herzberg. Proactive security: Lo= ng-term protection against break-ins. CryptoBytes, 3:1=968, 1997. --_000_AM6PR03MB542597B9DFD8060860BE35F1CC970AM6PR03MB5425eurp_ Content-Type: text/html; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable

I am building a solution for distributed, delegated = pre-signed transactions (DDPST). This post introduces what DDPST are and wh= y I think they are relevant for multiple applications. If you are working o= n application that can benefit from such a construction and want me to use your application in the proof of co= ncept code, please reach out. All feedback is welcome on the concept in gen= eral.

 

Pre-signed transactions (PSTs) are utilized in numer= ous off-chain protocols including Lightning Network, non-custodial trading,= Statechains, and custody protocols. PSTs are useful because they enable re= stricted access to funds and their custody can be *delegated* with limited risk. Compare this with the arbitr= ary control over funds that comes with access to the private keys. It is co= nceivable then that a broad class of applications would benefit from a mech= anism to securely delegate PSTs. A mechanism to *distribute* custody of PSTs across multiple entities can a= ct as a practical countermeasure for numerous attacks (e.g. denial-of-servi= ce, bribery, blackmail, etc.). Moreover, systems of accountability among th= e custodians, with proofs of correct and incorrect behaviour, form a foundation for engineering incentive struc= tures that align with the objectives of the application at hand. Finally, d= istributed custody of PSTs could enable new trust models for the privacy of= delegated PSTs using multi-party computation. 

 

# Examples

 

Consider first the example of vault-custody protocol= s [1], where there is a requirement for a distributed network monitoring an= d response system to detect breeches and trigger a recovery process. It is = critical to protect against denial-of-service (DoS) attacks that seek to compromise a monitoring node in order to force = the custody operation into a recovery process. In this attack the adversary= broadcasts the recovery transaction and reduces the accessibility of the w= allet owner's funds. A method for distributing custody of the recovery transaction offers defence-in-depth, = and a method for delegating custody enables outsourcing the monitor and res= ponse service (see Watchtower implementations currently under development [= 2,3]). A further improvement for the protection of PSTs, that comes from distributing custody, is that *pro= active* security models can be instanciated such that successful attacks mu= st occur in a limited time-frame [4].

 

Consider next the example of justice transactions in= the current Lightning Network model. Here, it is critical that justice tra= nsactions are broadcast in a timely manner in response to detecting that ei= ther party is attempting to close the channel with a prior state. Attacks rely on disrupting the broadcast o= f the justice transaction through, for example, bribing the watchtower to w= ait. The watchtower can broadcast late and claim that it was an honest fail= ure due to network issues. The victim has no recourse to punish the watchtower nor the malicious channel partici= pant. If instead the justice transaction was distributed among a set of ind= ependent watchtowers, and an accountability system was in-place for their a= ctions, a more robust incentive structure could be engineered. Moreover, distributing custody of the justi= ce transaction can provide a new privacy mechanism for both operational sec= urity of a business but also to mitigate targeted attacks such as bribery.&= nbsp;

 

Best regards,

Jacob

 

# References

 

[1] Jacob Swambo, Spencer Hommel, Bob McElrath, and = Bryan Bishop. Custody Protocols Using Bitcoin Vaults. 2020. https://arxiv.o= rg/abs/2005.11776

 

[2] The eye of satoshi - lightning watchtower. https= ://github.com/talaia-labs/python-teos

 

[3] Private altruist watchtowers. https://github.com= /lightningnetwork/lnd/blob/master/docs/watchtower.md

 

[4] Ran Canetti, Rosario Gennaro, and Amir Herzberg.= Proactive security: Long-term protection against break-ins. CryptoBytes, 3= :1=968, 1997.

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