Topic: MTGOX hits $570 "A bug in the bitcoin software makes it possible for someone to" (Read 3499 times)

LOL! It's vulnerable. I can change the transaction ID in the block still and if you are using the transaction ID to track the payment it'll appear gone to you. Your client will notice the new tx as it gets broadcasted to it but it won't "know" that its actually the other tx.

Of course the client does not "lose" the BTC, no client that I know of does that when the txid is changed in transit.

Oficiall bitcoin-QT will correctly identify spent coins even if tx id is modified by third party.
You can download from here: https://bitcoin.org/en/download
You can send 1 BTC to 1ZePhramiDqjYJzqiyUFaY5qhz5k4unRC
 

Oficiall bitcoin-QT will correctly identify spent coins even if tx id is modified by third party.
You can download from here: https://bitcoin.org/en/download
You can send 1 BTC to 1ZePhramiDqjYJzqiyUFaY5qhz5k4unRC
 

Not that Bitcoin-QT handles Malleability fantastically – but because it tracks inputs it will still detect the mutant transactions. An interesting point which I haven’t pointed out elsewhere is that for the question of basic funds safety in re-issuing a transaction malleablity is basically irrelevant.

Say you pay someone and it doesn’t go through (or it does and you don’t see it because its been mutated and your software can’t detect that), and they ask you to reissue…. if you reissue without double-spending any of the original inputs you are at risk of getting robbed. This is true with or without malleability. Without the double-spend of at least one input the original transaction could just go through in addition to your reissue.

Say that you do make sure to double spend at least one input – then the result is funds safe safe, regardless of if a mutation happened.

Say you want to support _canceling_ a payment (send me the goat instead!) rather than reissue you still must double-spend the attempted payment to cancel it, since it still might go through if you don’t. And the double spend works to protect this case regardless of if the transaction was mutated.

For support and accounting purposes you absolutely do need tools to identify mutated transactions, so long as mutation exists… so we ought to provide some better tools there. But I can’t think a case where mutation handling is necessary or sufficient for cancellation security, but – rather – input tracking appears to be both necessary and sufficient in all cancellation cases.

This helps explain why Bitcoin-QT – whose mutation handling kinda stinks – doesn’t ever end up in a really bad situation with mutants: it tracks inputs pretty well.

Nope wrong. There are none. If you can find one thats available right now I'll pay you 1BTC. I'm putting my money where my mouth is.

no one knows how much was stolen. It's quite difficult to noticed 10BTC missing out of hundreds of thousands. You could easily write that off as a mistake. That could be extra transaction fees that accumulated.

Can they not just go back to such conversations with people that claimed this, and then figure out who was scamming them? Is there some sort of plausible deniability here for the scammer in this method that I'm missing, or not?

...

I then tell MtGox staff that transaction A didn't confirm. They check it and they see transaction A was rejected and will never confirm but what they don't realize is it was just changed to transaction B by me, so they resend the transaction.



Profit.

Your misunderstanding here is how it works

I deposit money into gox and withdraw it

mtgox sends it to my address and it get transaction ID A

I mine a block and include the transaction in my block, but as the miner I can CHANGE THE TRANSACTION ID TO B.

I then tell MtGox staff that transaction A didn't confirm. They check it and they see transaction A was rejected and will never confirm but what they don't realize is it was just changed to transaction B by me, so they resend the transaction.



Profit.

It's not their fault bitcoin is broke... 

Your misunderstanding here is how it works

I deposit money into gox and withdraw it

mtgox sends it to my address and it get transaction ID A

I mine a block and include the transaction in my block, but as the miner I can CHANGE THE TRANSACTION ID TO B.

I then tell MtGox staff that transaction A didn't confirm. They check it and they see transaction A was rejected and will never confirm but what they don't realize is it was just changed to transaction B by me, so they resend the transaction.



Profit.

And no one knows how long it took for them to notice that numbers don't quite line up in their balance sheet...

Your misunderstanding here is how it works

I deposit money into gox and withdraw it

mtgox sends it to my address and it get transaction ID A

I mine a block and include the transaction in my block, but as the miner I can CHANGE THE TRANSACTION ID TO B.

I then tell MtGox staff that transaction A didn't confirm. They check it and they see transaction A was rejected on the blockchain but what they don't realize is it was just changed to transaction B by me, so they resend the transaction.



Profit.

You're technically correct on that point. But it's only one exchange, mtgox, that allowed this limitation to grow unchecked into a major problem, you agree? The problem is removed if only sufficiently* confirmed transactions are accepted. (* I'll admit I don't know how deep into the chain they need to be before the risk is neutralized)

Please find me a wallet that prevents the transaction ID from being modified in-transit. Thats all I said. There are none so if your tracking payment by transaction ID's which is something almost everyone does then your vulnerable.

Who wants to keep their wealth on service that doesn't exactly track their funds or audit them regularly?

Any bitcoin-QT since 2012 idiot.

So your saying we should ignore all the bitcoind API documentation which tracks by txid and everyone should be responsible for making their own systems for tracking payments?


Please find me a wallet that prevents the transaction ID from being modified in-transit. Thats all I said. There are none so if your tracking payment by transaction ID's which is something almost everyone does then your vulnerable.

Don't blame on the protocol what can be contained locally.

Reading comprehension isn't your strong side, huh?

Because the attack involves mining your own block, hence requires lots of hash power so is difficult to execute unless you've got stacks of hashpower. It may also be noticed by a smaller exchange when they noticed their balance is much lower than it should be. A couple hundred BTC missing from Mt Gox wouldn't go noticed, it would go noticed from cryptsy.

They will most likely try to execute this attack on other exchanges unless the devs push a fix fast which they are working on right now.

MTgox should be completely ignored...

Have any of you actually looked at this flaw?

It's been a known flaw for a while, here is the fix:
https://gist.github.com/sipa/8907691

Find me one Bitcoin wallet software that has this fixed as of right now and I will pay you 1BTC. HINT: there are none.

Show me why other exchanges do not have this problem with withdrawals but ONLY MTGOX?

Remember MTGOX is using a custom version of the bitcoin software. This is likely the reason they have issues with their exchange platform.

Find me one Bitcoin wallet software that has this fixed as of right now and I will pay you 1BTC. HINT: there are none.

Have any of you actually looked at this flaw?

It's been a known flaw for a while, here is a proposed fix:
https://gist.github.com/sipa/8907691

Find me one Bitcoin wallet software that has this fixed as of right now and I will pay you 1BTC. HINT: there are none.

they have found a bug in the software.  it's possible that the double spent transactions could lead to Mtgox insolvency in bitcoins.  People are selling btc for fiat in mtgox as they have a better chance to sue in court for fiat.

Never support incompetence... So how much funds you have in Mt Gox or how much are you moving in?

After seeing all the butthurt it causes, I have to say that I fully support MtGox.

Gox is willing to damage the reputation of the *entire* Bitcoin ecosystem, so *they* don't have to take the blame for not implementing their wallet software properly.

So how hard is it to verify the transactions from your wallet against the block chain?

Or not notice that you have lot less balance than you should have?

As I said earlier in the wall thread (in similar words):

The ambiguous phrasing of the gox press release wasn't coincidence, of course.

I'm not even talking about a "conspiracy" style explanation that they're trying to manipulate their way out of a shortage of coins by bringing down the price and rebuying coins cheaper (so they can serve their customers). Makes sense, but even I don't think Karpeles would go that low.

No, the real explanation for the phrasing is:

Blame transfer.

Gox is willing to damage the reputation of the *entire* Bitcoin ecosystem, so *they* don't have to take the blame for not implementing their wallet software properly.


Seriously: To anyone still using mtgox -- stop. Withdraw your money (or try it), withdraw your coins (or try it), and let them die off.

We need mtgox removed from the system for Bitcoin to grow further.

It's not their fault bitcoin is broke... 

MTgox should be completely ignored...

Dear MtGox Customers and Bitcoiners,

As you are aware, the MtGox team has been working hard to address an issue with the way that bitcoin withdrawals are processed. By "bitcoin withdrawal" we are referring to transactions from a MtGox bitcoin wallet to an external bitcoin address. Bitcoin transactions to any MtGox bitcoin address, and currency withdrawals (Yen, Euro, etc) are not affected by this issue.

The problem we have identified is not limited to MtGox, and affects all transactions where Bitcoins are being sent to a third party. We believe that the changes required for addressing this issue will be positive over the long term for the whole community. As a result we took the necessary action of suspending bitcoin withdrawals until this technical issue has been resolved.

Addressing Transaction Malleability
MtGox has detected unusual activity on its Bitcoin wallets and performed investigations during the past weeks. This confirmed the presence of transactions which need to be examined more closely.

Non-technical Explanation:
A bug in the bitcoin software makes it possible for someone to use the Bitcoin network to alter transaction details to make it seem like a sending of bitcoins to a bitcoin wallet did not occur when in fact it did occur. Since the transaction appears as if it has not proceeded correctly, the bitcoins may be resent. MtGox is working with the Bitcoin core development team and others to mitigate this issue.

Technical Explanation:
Bitcoin transactions are subject to a design issue that has been largely ignored, while known to at least a part of the Bitcoin core developers and mentioned on the BitcoinTalk forums. This defect, known as "transaction malleability" makes it possible for a third party to alter the hash of any freshly issued transaction without invalidating the signature, hence resulting in a similar transaction under a different hash. Of course only one of the two transactions can be validated. However, if the party who altered the transaction is fast enough, for example with a direct connection to different mining pools, or has even a small amount of mining power, it can easily cause the transaction hash alteration to be committed to the blockchain.

The bitcoin api "sendtoaddress" broadly used to send bitcoins to a given bitcoin address will return a transaction hash as a way to track the transaction's insertion in the blockchain. Most wallet and exchange services will keep a record of this said hash in order to be able to respond to users should they inquire about their transaction. It is likely that these services will assume the transaction was not sent if it doesn't appear in the blockchain with the original hash and have currently no means to recognize the alternative transactions as theirs in an efficient way.

This means that an individual could request bitcoins from an exchange or wallet service, alter the resulting transaction's hash before inclusion in the blockchain, then contact the issuing service while claiming the transaction did not proceed. If the alteration fails, the user can simply send the bitcoins back and try again until successful.

We believe this can be addressed by using a different hash for transaction tracking purposes. While the network will continue to use the current hash for the purpose of inclusion in each block's Merkle Tree, the new hash's purpose will be to track a given transaction and can be computed and indexed by hashing the exact signed string via SHA256 (in the same way transactions are currently hashed).

This new transaction hash will allow signing parties to keep track of any transaction they have signed and can easily be computed, even for past transactions.

We have discussed this solution with the Bitcoin core developers and will allow Bitcoin withdrawals again once it has been approved and standardized.

In the meantime, exchanges and wallet services - and any service sending coins directly to third parties - should be extremely careful with anyone claiming their transaction did not go through.

Note that this will also affect any other crypto-currency using the same transaction scheme as Bitcoin.

Conclusion
To put things in perspective, it's important to remember that Bitcoin is a very new technology and still very much in its early stages. What MtGox and the Bitcoin community have experienced in the past year has been an incredible and exciting challenge, and there is still much to do to further improve.

MtGox will resume bitcoin withdrawals to outside wallets once the issue outlined above has been properly addressed in a manner that will best serve our customers.

More information on the status of this issue will be released as soon as possible.

We thank you for taking the time to read this, and especially for your patience.

Best Regards, MtGox Team