Refund Attacks on Bitcoin’s Payment Protocol

Research output: Contribution to conferencePaper

Author(s)

Department/unit(s)

Conference

ConferenceFinancial Cryptography and Data Security
Abbreviated titleFC2016
CountryBarbados
Conference date(s)22/02/1626/02/16
Internet address

Publication details

DateAccepted/In press - 29 Nov 2015
DatePublished (current) - 17 May 2017
Number of pages19
Original languageEnglish

Abstract

BIP70 is a community-accepted Payment Protocol standard that governs how merchants and customers perform payments in Bitcoin. This standard is supported by most major wallets and the two dominant Payment Processors: Coinbase and BitPay, who collectively provide the infrastructure for accepting Bitcoin as a form of payment to more than 100,000 merchants. In this paper, we present new attacks on the Payment Protocol, which affect all BIP70 merchants. The Silkroad Trader attack highlights an authentication vulnerability in the Payment Protocol while the Marketplace Trader attack exploits the refund policies of existing Payment Processors. Both attacks have been experimentally verified on real-life merchants using a modified Bitcoin wallet. The attacks have been acknowledged by both Coinbase and Bitpay with temporary mitigation measures put in place. However, to fully address the identified issues will require revising the BIP70 standard. We present a concrete proposal to revise BIP70 by providing the merchant with publicly verifiable evidence to prevent both attacks.

    Research areas

  • Cryptography, Bitcoin, Blockchain, security, attack, Payment Security, Payment systems

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