Bitcoin: Concepts, Practice, and Research Directions

Transcription

1 Bitcoin: Concepts, Practice, and Research Directions Ittay Eyal, Emin Gün Sirer Computer Science, Cornell University DISC Bitcoin Tutorial, October 2014

2 Barter Gold Fiat 2

3 Barter Gold Fiat Bitcoin 2008: The Bitcoin white paper 2009: Reference implementation [Satoshi Nakamoto] 3

4 Barter Gold Fiat Bitcoin Decentralized control Decentralized minting Easy to transfer Novel tech, new applications 4

5 Barter Gold Fiat Bitcoin Banks: criminals, who print money and lend it as debt. taxation is a crime! Bitcoin or oligarchy? Separate church and state? Separate bank and state! 5

6 Great Success! Mt. Gox USD/BTC 1000$ 100$ 10$ 1.00$ 0.10$ Oct 10 Jan 14 [ 6

7 Litecoin Great Success! Mt. Gox USD/BTC Ethereum 1000$ 100$ 10$ Namecoin Dogecoin Worldcoin 1.00$ 0.10$ Oct 10 Jan 14 [ 7

8 Mostly Great Success USD/BTC (Bitstamp) Dec-11 Jul-12 Jan-13 Aug-13 Feb-14 Sep-14 [ 8

9 Acceptance 9

10 Acceptance 10

11 Acceptance 11

12 Acceptance 12

13 Farmers Payment services Investors Start-ups Venture Capital Miners Developers Researchers Many Players 13

14 Roadmap Protocol Security Research Non-technical 14

15 Bitcoin: Concepts, Practice, and Research Directions Part I Protocol Ittay Eyal, Emin Gün Sirer Computer Science, Cornell University DISC Bitcoin Tutorial, October 2014

16 Overview The Blockchain Block propagation Mining Transactions Part 1 Protocol 2

17 Protocol Overview

18 Alice Key Issues Bob 1. Stealing 2. Double-spending Not a local solution 4

19 Global Ledger M A A B B C 5

20 Global Ledger M A A B A C 6

21 Global Ledger M A A B B C 7

22 Addresses and Transactions M A A B txn AB, PK C, sgn SK(B) B C 8

23 Addresses and Transactions Transaction structure (roughly): input 1 output 1, amount 1 input 2 output 2, amount 2 input 3 output 3, amount 3 input 4 Inputs are fully spent. 9

24 Alice Goal 1. No stealing 2. No double-spending Bob 11

25 The Blockchain

26 Global Ledger Global Ledger of all transactions Requirements 1. No central control 2. High availability, security 3. Impossible to manipulate 4. Distributed minting 13

27 Global Ledger Global Ledger of all transactions Requirements 1. No central control 2. High availability, security 3. Impossible to manipulate 4. Distributed minting Sounds like my bank! Doesn t sound like my bank. 14

28 Global Ledger Distributed system Open Consensus (not exactly) Byzantine model 15

29 Ledger The Blockchain Blockchain block 16

30 Ledger The Blockchain Blockchain block 17

31 Ledger The Blockchain Blockchain block 18

32 The Blockchain Clients issue unforgeable transactions. Miners collate transactions and add them to blockchain by solving cryptopuzzles, for which they receive a reward (minted coins). 19

33 Transaction and Block Propagation Nodes propagate legal transactions and blocks. Blocks are difficult to create 20

34 Hash of Previous header Time Txns Merkle Root Nonce target Auto-adjusting difficulty cryptopuzzle: SHA256(SHA256(block-header)) < target 21

35 Forks Longest chain of blocks Tiebreaker: earliest A weak form of consensus 22

36 Fork Resolution Requirement: compute majority is honest Hardest chain of blocks (aggregate difficulty) Or the one you heard of first. 23

37 Fork Resolution Requirement: compute majority is honest Hardest chain of blocks (aggregate difficulty) Or the one you heard of first. Dishonest majority controls blockchain (More on that later) 24

38 Block Propagation

39 Block Propagation 6.5 Average For blocks larger than 20kB: 1kB +80msec [Decker and Wattenhofer 13] 26

40 Block Propagation Average 12.6 Large miners connected directly with low latency For blocks larger than 20kB: 1kB +80msec [Decker and Wattenhofer 13] 27

41 Block Propagation 6.5 Average For blocks larger than 20kB: 1kB +80msec Header before block? [Decker and Wattenhofer 13] 28

42 Mining

43 Motivation? Prize: Mining: Newly minted coins (today 25, total 21 million at 2140) Transaction fees (up to ~10 4 /1KB). How? Coinbase transaction Transactions fees 30

44 Hash Rate [TH/sec] Difficulty rise: 20,000 2,000 Mining Total Network Hash Rate Mar 13 Jul 13 (More on that later) Jan 14 [Blockchain.info] 31

45 Hash Rate [TH/sec] Difficulty rise: 20,000 2,000 Mining Total Network Hash Rate Mar 13 Jul 13 (More on that later) Jan 14 [Blockchain.info] 32

46 Example: (700 USD/BTC) Mining Pools Avg revenue: 6.71$ / day HW break even: ~1.5 years (w/ free power) Time to block: over 7 years 33

47 Mining Pools Bitcoin Network Pool with power α gets α of blocks Each miner makes the average (- pool fee) 34

48 Mining Pools 35

49 Mining Pools How can they tell? 36

50 Mining Pools hash( ) < pool-target Bitcoin Network 37

51 Mining Pools (More on that later) [Blockchain.info, February 2014] 38

52 Transactions

53 Ledger Transactions Blockchain block 40

54 Transactions 41

55 Transactions input 1 output 1, amount 1 input 2 output 2, amount 2 input 3 42

56 Transactions input 1 output 1, amount 1 input 2 output 2, amount 2 input 3 43

57 output: scriptpubkey Pay-to-PubkeyHash Input: scriptsig 44

58 scriptpubkey: OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG scriptsig: <sig> <pubkey> output: scriptpubkey Pay-to-PubkeyHash Address is the public key hash. Owner signs with matching private key. Input: scriptsig 45

59 Pay-to-PubkeyHash scriptpubkey: OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG scriptsig: <sig> <pubkey> Stack Verification script <sig> <pubkey> OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG 46

60 scriptpubkey: OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG scriptsig: <sig> <pubkey> <sig> Pay-to-PubkeyHash Stack Verification script <pubkey> OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG 47

61 Pay-to-PubkeyHash scriptpubkey: OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG scriptsig: <sig> <pubkey> Stack Verification script <pubkey> <sig> OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG 48

62 Pay-to-PubkeyHash scriptpubkey: OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG scriptsig: <sig> <pubkey> Stack Verification script <pubkey> <pubkey> <sig> OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG 49

63 Pay-to-PubkeyHash scriptpubkey: OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG scriptsig: <sig> <pubkey> Stack Verification script hash160(<pubkey>) <pubkey> <sig> <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG 50

64 scriptpubkey: OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG scriptsig: <sig> <pubkey> <pubkeyhash> Pay-to-PubkeyHash hash160(<pubkey>) <pubkey> <sig> Stack Verification script OP_EQUALVERIFY OP_CHECKSIG 51

65 Pay-to-PubkeyHash scriptpubkey: OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG scriptsig: <sig> <pubkey> Stack Verification script <pubkey> <sig> OP_CHECKSIG 52

66 Pay-to-PubkeyHash scriptpubkey: OP_DUP OP_HASH160 <pubkeyhash> OP_EQUALVERIFY OP_CHECKSIG scriptsig: <sig> <pubkey> Stack Verification script Return true. 53

67 Coinbase No input Other Transaction Types Pay to Script Hash (P2SH) Script in signature (receiver side) Multisig Require k/n signatures 54