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Bitcoin over Tor isn't a good idea

arxiv.org

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Re: Bitcoin over Tor isn't a good idea

#31
This reminds me of the recent (~2 months ago) addition of a new, very fast Tor relay (faster than any other relay at the time) that only relayed Bitcoin traffice [0].

Wonder if that has anything to do with this research, or if someone else has independently arrived at the same result?

[0] http://www.reddit.com/r/Bitcoin/comments/2bwds2/what_does_th...

Re: Bitcoin over Tor isn't a good idea

#32
I researched TorCoin. I feel like I know a fair amount about Tor and BitCoin.

What worries me most about Tor is that people do not realize how trivially an exit relay can MITM your traffic. The value proposition of Tor is NOT keeping all your traffic safe. It's anonymizing your traffic from end to end, so that nobody who sees your data knows both where it came from and where it's going. They can still see the data itself.

For all intents and purposes, traffic from Exit -> Internet is plaintext. The relay operator can MITM it. Tor is only safer than a VPN or proxy because the exit relay does not know your identity. It can still access the data you transfer through it. [4]

Anyone can start a Tor exit relay, and setting up a MITM proxy on it is trivial. Siphoning bitcoin transactions is equally trivial. Just listen for the proper traffic patterns.

You should not be transferring any business-critical data over Tor. It's a great tool for protecting your identity, but not your data.

With HTTPS, you're relatively safer, since you'll get an alert if a relay is MITM'ing you and modifying the certificate. But with plain HTTP, you won't even know when you're getting MITM'd.

More Resources:

[1] http://security.stackexchange.com/questions/34804/how-safe-i...

[2] https://blog.torproject.org/category/tags/mitm (includes links to research papers)

[3] https://www.petsymposium.org/2014/papers/Winter.pdf

[4] Emphasis on "for all intents and purposes." Not a true statement universally.

Re: Bitcoin over Tor isn't a good idea

#33

I researched TorCoin. I feel like I know a fair amount about Tor and BitCoin. What worries me most about Tor is that people do not realize how trivially an exit relay can MITM your traffic. The value proposition of Tor is NOT keeping all your traffic safe. It's anonymizing your traffic from end to end, so that nobody who sees your data knows both where it came from and where it's going. They can still see the data it…

Siphoning bitcoin transactions is not trivial.

Transactions need to be signed by the holder of the private key to the inputs. A MITM attacker still does not have access to any keys.

If it was that easy, bitcoin would be worthless.

Re: Bitcoin over Tor isn't a good idea

#34

I researched TorCoin. I feel like I know a fair amount about Tor and BitCoin. What worries me most about Tor is that people do not realize how trivially an exit relay can MITM your traffic. The value proposition of Tor is NOT keeping all your traffic safe. It's anonymizing your traffic from end to end, so that nobody who sees your data knows both where it came from and where it's going. They can still see the data it…

Siphoning bitcoin transactions is not trivial. Transactions need to be signed by the holder of the private key to the inputs. A MITM attacker still does not have access to any keys. If it was that easy, bitcoin would be worthless.

You're right. Let me clarify:

I'm not worried about the transactions themselves, as they appear on the blockchain. What worries me is the "meta transactions", if you will. The Bitcoin ecosystem is full of off-blockchain transactions. For example, mining pools use their own communication mechanisms, which the BGP attack this summer exploited. Also, dozens of exchanges, marketplaces, and services rely on HTTP API's for transacting. Even if the blockchain is not vulnerable, the external transactions that reference it certainly could be.

Imagine how many "send X bitcoin from wallet Y to wallet Z" requests route over HTTP. Quite a few.

So yeah, not "trivial" as I said. But certainly not impossible.

(Welcome to HN! I'm glad my mistake brought you out of the woodwork.)

Re: Bitcoin over Tor isn't a good idea

#35

Earlier quoted context omitted.

That's the way a blockchain works though. If there is a bug in the client that 99% of people use then of course you'll have forking blockchains. And all of this matters less anyway, because clients can fallback to blockchain.info if there is a fork detected, and just warn the user that the client may have a bug.

The bitcoin client has a fallback to blockchain.info when it detects a fork? What? I'm not sure I understand what you're saying.

A client, not, The client.

Say you were writing a client in a different language or for another platform.

Re: Bitcoin over Tor isn't a good idea

#36
> [...] control which Bitcoin blocks and transactions are relayed to the user and can delay or discard user’s transactions and blocks.

Bear in mind that we can detect when a node does this, by monitoring it, and measuring whether blocks or transactions are withheld, kind of like in this paper: http://www.cs.kau.se/philwint/spoiled_onions/techreport.pdf

Re: Bitcoin over Tor isn't a good idea

#37

Earlier quoted context omitted.

The bitcoin client has a fallback to blockchain.info when it detects a fork? What? I'm not sure I understand what you're saying.

A client, not, The client. Say you were writing a client in a different language or for another platform.

Saying I was writing a bitcoin client I would never use some 3rd party as a fallback. As soon as a blockchain fork is detected you stop all transactions and wait for it to be solved by the miners. No other way around it.

Re: Bitcoin over Tor isn't a good idea

#38

Earlier quoted context omitted.

Siphoning bitcoin transactions is not trivial. Transactions need to be signed by the holder of the private key to the inputs. A MITM attacker still does not have access to any keys. If it was that easy, bitcoin would be worthless.

You're right. Let me clarify: I'm not worried about the transactions themselves, as they appear on the blockchain. What worries me is the "meta transactions", if you will. The Bitcoin ecosystem is full of off-blockchain transactions. For example, mining pools use their own communication mechanisms, which the BGP attack this summer exploited. Also, dozens of exchanges, marketplaces, and services rely on HTTP API's for…

Thanks. Yes, I somewhat agree with your clarification.

And to further your point, it appears this guy (https://www.reddit.com/r/Bitcoin/comments/2k38ta/my_wallet_w...) just got his coins stolen by using blockchain.info over TOR.

However, I still believe nothing is fundamentally broken. Any important protocol should be using SSL - especially when operating over TOR. Lapses like this are still simply user error.

Re: Bitcoin over Tor isn't a good idea

#39

I researched TorCoin. I feel like I know a fair amount about Tor and BitCoin. What worries me most about Tor is that people do not realize how trivially an exit relay can MITM your traffic. The value proposition of Tor is NOT keeping all your traffic safe. It's anonymizing your traffic from end to end, so that nobody who sees your data knows both where it came from and where it's going. They can still see the data it…

As a side note about "Anyone can start a Tor exit relay, and setting up a MITM proxy on it is trivial".

Tor project has a project that sends out probes to identify rouge nodes, so the trivial and obvious form of MITM that changes data en-route are equally trivial caught and blacklisted. People should still be aware that sending secret data in plaintext on any network is a bad idea tm, but any security analyst need to incorporate the whole picture.

Re: Bitcoin over Tor isn't a good idea

#40

I researched TorCoin. I feel like I know a fair amount about Tor and BitCoin. What worries me most about Tor is that people do not realize how trivially an exit relay can MITM your traffic. The value proposition of Tor is NOT keeping all your traffic safe. It's anonymizing your traffic from end to end, so that nobody who sees your data knows both where it came from and where it's going. They can still see the data it…

I will preface this reply by saying that I am not very familiar with Tor.

Would using a VPN together with Tor be able to provide 'the best of both worlds', so to speak? Would you be able to encrypt your data via a VPN node and use Tor through that encrypted connection?

I assume this would solve the matter of your traffic being visible to whoever is running the Tor relay, but it be possible for the VPN operator to (potentially and hopefully hypothetically) still perform an MITM attack on your traffic?

And lastly, is there a truly practical way to be not only anonymous but also secure (i.e. encryption)?

I hope that made sense.

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