2) Dark Net and Bitcoins - Benoist · 2) Dark Net and Bitcoins Emmanuel Benoist Fall Term 2019/2020...
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2) Dark Net and Bitcoins Emmanuel Benoist Fall Term 2019/2020 Berner Fachhochschule | Haute ´ ecole sp´ ecialis´ ee bernoise | Berne University of Applied Sciences 1
Transcript of 2) Dark Net and Bitcoins - Benoist · 2) Dark Net and Bitcoins Emmanuel Benoist Fall Term 2019/2020...
2) Dark Net and Bitcoins
Emmanuel BenoistFall Term 2019/2020
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 1
Table of Contents
� Presentation
� Dark NetSpecificities
� BitcoinsA Little Bit of HistoryThe BitcoinThe Block-ChainMining BitcoinsLimitations
� Conclusion
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 2
Presentation
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 3
The Dark web
Sites that are accessible only using TOR (or I2P)Sites have a name in .onion
They do not exist for normal DNS (.onion is not a valid tolevel domain name)It is just a valid name inside TORThe web site is directly linked inside the peer2peer network, noneed for an output node.
AnonymityImpossible to eavesdrop communications
ContentEverything that is illegal elsewhereSince a lot is already legal somewhere, . . .Mainly: drugs, arms, travel documents, Credit card numbers
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 4
Dark web vs. Deep web
Dark Web:The web that is only accessible using Tor or I2P.Only illegal activitiesVery very small
Deep WebAll the web pages that are not accessible for a search engineIntranet, private servers, pages that are password protected,. . .This part is very legal, it is just not accessible for the publicHugePapers pretend it represents 90% of the Internet (against 10%that is visible)To my mind, this is much more than that
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 5
Dark Net
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Dark Net (I)
Overview of Existing MarketsDepp Dot Web.com presents an overview of the existingmarket placeshttps://www.deepdotweb.com/
dark-net-market-comparison-chart/
The list is continuously changing
The two larges ones:1
Alphabay http:
//pwoah7foa6au2pul.onion/register.php?aff=41211
Dream Market http://lchudifyeqm4ldjj.onion/?ai=1675
1Sites visited in March 2016Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 7
Dark Net (II)
Former marketsThe Silk Road was funded in February 2011 by “Dread PirateRoberts” (Ross Ulbricht),Shut down in October 2013 by the FBIIn March 2013, more than 10’000 products for sale, 70% weredrugsBlack Market Reloaded closed by the own teamconsequently to the closure of Silk RoadSilk Road 2.0Agora Launched in 2013, was not affected by OperationOnymous (November 2014) that touched numerous web sites,It was shut down in August 2015 by the own admins, theypretend Tor is not anonym anymore.
New sites migrate to I2PSilk Road 3.0 has moved to I2P
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Specificities
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How to find Hidden SercicesDomain Name Service (DNS)
Used in the IP stack to find IP corresponding to machinnamesmore details were given in the telematics course
Name in .onion are not bound to an IP addressThere is no DNS entry for pwoah7foa6au2pul.onionThe IP address of the machin remains unknownNeed for a
A user Alice wants to connect the Hidden Service ofBob
Bob Choses some introduction points (to which he openscircuits)Introduction points are published in a hidden service Database(asdfasdfbob.onion)Alice contacts one of the Introduction points, a Rendez-Vousis chosen with Bob.Both Alice and Bob build a connection to the Rendez-vouspoint.
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Connect a Hidden Service (I)2
2Source https://www.torproject.org/docs/hidden-services.html.en
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Connect a Hidden Service (II)
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Connect a Hidden Service (III)
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Connect a Hidden Service (IV)
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Connect a Hidden Service (V)
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Connect a Hidden Service (VI)
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Dark Net Markets
Must be protected against DDOSRegistration necessary for seeing the offersSome sites require recommandation for registeringVery easy to have (by deepdotweb.com for instance)
Do not have JavaScriptFeature deactivated in TorbrowserWould allow a partial deanonymization
Reduced set of featuresMust be attractive, but not at the expense of security (orprivacy)No fancy pages (JavaScript, Flash are prohibited)No fancy description of the items : just plan text + picture(s)
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Very High Security Requirements
Scared of automatic attacksRegistration / login mandatoryCaptcha by registeringSometime Captcha before the login page arrives
What are automatic attacksBrute force on login : change IP, errase Cookies → no existingsession can be recognizedDDOS
Not so easy to generate good captchasBest Captchas3: “select all the pictures containing a road sign”“select all the pictures contining a fruit”Best captchas require JavaScript: not possible to use in thedark webOther text captchas may be read by OCR software (at leastwith a rate of 1 over 10).
3See www.deepdotweb.com with the tor browser for instanceBerner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 18
PaymentBank transfer leave traces
Not possible to transfer money anonymouselyAnonymous Credit Cards exist, but the receiver must be knownSince the bank knows the name of the owner of the account,the police will get it!
Need for anonymous transactionsNo Bank can offer this service (would be forced to cooperateby the police)No Credit Card institution can do it on a large scale
Crypto-currenciesBitcoin BTC (the larges one from far)Ethereum ETH (a Swiss one)Ripple XRPLitecoin LTCDarkcoin DRKMaidSafeCoin MAID. . .
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Bitcoins
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Bitcoin: Electronic Currency
History of currenciesFrom the antiquity to 20th Century: Gold and SilverFrom 1972 : Currency = Trust“Trust in a central bank” or “Trust in an algorithm”?
ProtocolI should not be able to spend money more than once
The Block-ChainSecurity by transparence: everybody knows every transaction
Peer 2 Peer networkHow does the information travel the network
LimitationsCan it replace Visa/Mastercard/Banks in transactions?
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A Little Bit of History
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Currencies in History
Currency: something you can pay and be payed withShould have a value for both partiesShould be possible to save for a later use (you sell a beef nowand by a cow in two months)
Some Currencies in the historySalt to pay the salary of roman legionariesCacao bean in the aztec empireEven see shells were used as currency
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Metal currenciesMetals are needed by our societies
Bronze : for building armsSilver : That is rare and has a metallic reflectionGold: has a lot of very good properties:Can not be oxidizedCan be modeled to almost any formIs researched for its beauty
Metal have the necessary properties of a currencyCan be gathered, and stored for a long timeHave a high value in a small weight (gold at least)Do still have a value in the future (trust) - the capacity to“create” money should be restricted.
Value of metallic currency may vary in timeDiscovery of large silver mines in Spanish-America modifiedthe values in 16th centuryDiscovery of Californian-gold changed the value of gold in thesecond half of the 19th century
The intrinsic value of the metal remains anyhow
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More History
Modern Currencies were linked to Gold and/or SilverIn the 19th century, Sterling was convertible to gold (GoldStandard)20 Francs coins (Switzerland, France, Italy, Belgium, . . . : thelatin union) were in gold.1 to 5 francs coins were in silver.US dollar remained convertibile to Gold until 1971
Nowadays: Currency = TrustDollar is not any more convertible to Gold at a fixed rateValue of a currency = pure Trust in the Central BankNo real asset is linked to value
Value of a currency ?Capacity for a central bank to pay interestsTrust that the central bank will restrain inflationInflation = the value of the paper you own decreasesYou can buy less for your money
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Problem with existing Currencies
Controlled by a stateLibertarians do not trust any stateDrug dealer neither do
States dictate their policy to central banksThe “Fed” in USAThe European Central Bank in EuropeSchweizerische nationale Bank / Banque nationale suisse inSwitzerland
States and Banks can monitor any electronic transactionTransactions occure between banksClients can be spied onBanks collect fees on transactions
If a bank goes bankrupt, money is lostThe client does not have any real control on his/her money
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The Bitcoin
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An electronic currency
The Internet is a new territoryNot bound to one country (or state)Transactions are sometimes pure electronicSoftware, data items, services, . . .
Requirements to a new currencyCan not be controlled by a stateHas a stable valueTransactions are free (no fee)Money can not be spend twice (trivial with gold, more complexfor an algorithm)
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The Bitcoin
Invented in 2008 by “Satoshi Nakamoto”Cryptocurrency based on open source software
Bitcoin is based on transparencyClient software is open source (it is also the onlydocumentation of the protocol)All the existing transactions are published in a “Block Chain”that all clients should download.Validation of the transactions is done on-line by volunteers,they compute the “Block Chain”Volunteers receive “new” coins (like gold nuggets) they arecalled “miners”
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 29
A transaction
Money is stored at an “Address”An address is a random number (not so random in fact)To which money is affected
TransactionA transaction is when money is transfered from one address toanother one.
All transactions are stored in a huge “Block Chain”Contains all transactions since the beginning of BitcoinsOne can see the money on each of the addressesIf the transaction is added in the “block chain”, the money isavailable at that new addressEverybody can monitor at any time how much money is in anyaddress!
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An Address (I)
An Address is not random: the hash of a public keyA user generates a key pair (public / private key)The public key is held secretSince money can be stored for a long time at a given address,it would be possible to brute force a public key if it would bepublicThe hash of the public key is made public : It is the Address
To spend moneyThe user publishes the public keyEverybody can verify that the public key corresponds to itshash (i.e. the address).The user signs the transaction using the corresponding privatekey.
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An Address (II)
UsageThe user often spends all the money at once (so the address isnot used anymore)If the user needs less money, the remainder is transfered to anew addressIf the user needs more money, one can group many addressestogether for a transactionTo group many addresses: the user needs ALL the private keys!
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Example: Alice and BobBob sells grass on the dark net
He has a seller account on thedarkweb.onion
The grass is sold for BTC 0.0012 / gramm
Alice wants to buy 10g of grassShe must transfer BTC 0.012 to Bob
Bob communicates an address to Alice: 345abc890Bob generates a new address of can reuse an existing one
Alice transfers money to BobAlice choses an address that contains money (for instance1a78f98ee33)Alice accesses the private key of that addressAlice publies a message to all other members of the network:I transfer BTC 0.012 from address 1a78f98ee33 to address345abc890Alice publishes the public key, which has 1a78f98ee33 for ahash valueAlice signs the transaction with the corresponding private key
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The Block-Chain
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Transactions must be shared
All transactions must be known by everybodyThere is no bank to ask for, to validate a transactionOnly the community can validate
All transaction are communicated to the peer to peernetwork
The protocol transfers the transaction to all nodes of thenetworkAll nodes can know all the transactions
ProblemsA node can not be 100% of the time onlineA node can not see all transactions
Need for a list of all transactionsCan not be a huge monolithic oneMust contain blocks, a chain of blocks, a block chainMust be validated and unique!
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 35
Block-chain
The block chain contains all transactions since thecreation of bitcoin
Its size is 60 GB
Everybody can have a copy of it (and should have)The Satoshi client (standard software) downloads the wholechainIt can check, for each possible address and transaction if thetransaction is valid.It can moreover verify that a transaction is present in theblock-chain
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Mining Bitcoins
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Validation of transactions in theBlock-Chain
Blocks need to be validated by somebodyWhich transactions are accepted, which are rejected?Not possible to have one central authority (= a central bank /clearing agency)
One partner in the network will validate One new blockIt chooses the set of valid transactionsVery big responsibilityThis role needs to be given to anybody randomlyTo avoid any bias.How to give a role randomly if nobody is the “chief”?
The proof of workValidator must generate a nonce and add it to the set oftransactions, and compute a hashhash(Transaction1 +Transaction2 +Transaction3 + ...+nonce)The nonce is valid if the hash starts with X zeros (X shouldvary to prevent that one generates more than one Block in 10minutes).
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Bitcoin Mining
A Miner Alice selects some transactionsInitially: all the transactionsNowadays: only the transactions paying a good fee to beincluded inside the list
The Miner adds another transaction for herselfAlice creates a new Address where a newly created set ofbitcoins is transferedIt is the nugget the miner is rewarded with.
The miner then must generate a “proof of work”The idea is to share “on the long run” the new nuggets withpeople “working” for the network
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 39
Proof of WorkIdea: How to measure the computer power?
Need to compute tons of hashes before getting a good result
Problem: obtaining an output with a given number of0’s
Hash function is seen as a random generatorTo generate more values, change the element to hash:Insert a nonceHashing the value with the nonce = buying a ticket for alotteryThe more hashs are executed, the more chance the miner hasto win.
Example
hash(Transaction1+Transaction2+Transaction3+”AAAAAAAAA”)=AE4529EB90hash(Transaction1+Transaction2+Transaction3+”AAAAAAAAB”)=90A63BB89Chash(Transaction1+Transaction2+Transaction3+”AAAAAAAAC”)=87A01230FF. . .hash(Transaction1+Transaction2+Transaction3+”AAAAABERFP”)=00301230FFHas ten 10 at the beginning (in binary form) Value is OK!!!
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 40
Different Blocks are found (I)
Two miners may find a proof of work simultaneouslyTwo Blocks are competingOn the long run, only the longest Block-Chain is accepted.Miners are incited to work always on the newest blocks chain.But two block-chain can appear simultaneouslyResolution later: only the faster to grow will survive.
Competition between blocksThere is an existing Block-Chain ChainTeam A and Team B find a suitable block : BlockA and BlockBThere are two block chains:Chain + BlockA and Chain + BlockBSome miners receive the first, some other receive the secondNormally only one miner team C finds a good block BlockCWe have two competing block-chains:Chain + BlockA + BlockC and Chain + BlockB but the first islongest: the second is not propagated any more.
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 41
Different Blocks are found (II)
ProblemsSome transactions in BlockB were accepted and are canceled.The seller does not get the money!
A transaction is only valid if the bock it is in, is followedby 2 other blocks.
Berner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 42
Privacy
All the transactions are publicThe block chain can be downloaded by anybodyYou can use https://blockchain.info/ to followtransactionsYou type an address and see the inputs and outputs
Need for anonymizationServices specialized in money tumblering (to hide the money)For instance https://bitlaunder.com
One send money to that server, the money is resent (fromanother address) to any new address you create.The two accounts are not linked anymore.
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Limitations
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Issues regarding BitcoinsThe number of bitcoins is limited
The design of the algorithm limits the number of bitcoinsWith the time, miners get less and less rewardThey now require a small fee to accept a transaction
The size of a block is limited to 1MB4
Problem: the system is designed to accept at most one blockeach 10 minutes (otherwise, the proof of work is made longer).It can only accept 7 transactions per secondsTransactions are rejected and miners accept only the one witha fee.Solution: extend the maximum size of a block
The number of nodes operating the peer to peernetwork is not growing. Source:https://bitnodes.21.co/dashboard/
Originally, miners operated peer2peer nodesMiners are working in teams to increase (and share) thechance to winThe incentive to operate a full node is 0.
4source https://en.bitcoin.it/wiki/ScalabilityBerner Fachhochschule | Haute ecole specialisee bernoise | Berne University of Applied Sciences 45
Conclusion
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Conclusion
Dark NetIs a very fast changing marketBig operators change very fastUses Tor. Reports suggest that anonymity of Tor is not so sure.Can switch to I2P (not yet as efficient as Tor)
BitcoinsThe standard CyptocurrencyTransactions are gathered inside a huge block-chainSecurity is achieved using transparency.Rely on the work of miners
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References
Bachelor Thesis: “Darknet marketplaces”, MatthiasWinzeler, Jan. 2015, Berne University of AppliedSciencesAvailable per mail on request
Project 2, Master: “Unveiling Bitcoin anonymity” ,Patrick Vananti, July 2015, Berne University of AppliedSciencesAvailable per mail on request
List of all bitcoin full nodes https://bitnodes.21.co/
Block Chain explorer: https://blockchain.info
https://www.torproject.org/
https://bitcoin.org
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