Bitcoin Cash Two-Block Double Spend - Revision history

Azoundria at 19:19, 1 May 2023

2023-05-01T19:19:17Z

← Older revision		Revision as of 13:19, 1 May 2023
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	{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/bitcoincashtwoblockdoublespend.php}}		{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/bitcoincashtwoblockdoublespend.php}}
	{{Unattributed ~~Citations~~}}		{{Unattributed Sources}}

	[[File:Bitcoincash.jpg\|thumb\|Bitcoin Cash]]There was a 2-block reorganization of the Bitcoin Cash blockchain on May 15th, 2019 during a chain upgrade. The incident does not appear to have resulted in the loss of any funds.		[[File:Bitcoincash.jpg\|thumb\|Bitcoin Cash]]There was a 2-block reorganization of the Bitcoin Cash blockchain on May 15th, 2019 during a chain upgrade. The incident does not appear to have resulted in the loss of any funds.

	This is a global/international case not involving a specific country.		This is a global/international case not involving a specific country.<ref name="cointelegraph-4222" /><ref name="bitcoincash-4223" /><ref name="bitmexblog-4224" />
	<ref name="cointelegraph-4222" /><ref name="bitcoincash-4223" /><ref name="bitmexblog-4224" />

	== About Bitcoin Cash ==		== About Bitcoin Cash ==
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	!Description		!Description
	\|-		\|-
	\|May 15th, 2019 ~~12:00:00 AM~~		\|May 15th, 2019
	\|Main Event		\|Main Event
	\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.		\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
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	\|		\|
	\|}		\|}

			== Technical Details ==
			This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

	== Total Amount Lost ==		== Total Amount Lost ==
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	== Ongoing Developments ==		== Ongoing Developments ==
	What parts of this case are still remaining to be concluded?		What parts of this case are still remaining to be concluded?
			== Individual Prevention Policies ==
			{{Prevention:Individuals:Placeholder}}

			{{Prevention:Individuals:End}}

			== Platform Prevention Policies ==
			{{Prevention:Platforms:Placeholder}}

			{{Prevention:Platforms:End}}

			== Regulatory Prevention Policies ==
			{{Prevention:Regulators:Placeholder}}

	== Prevention ~~Policies ==~~		{{Prevention:Regulators:End}}
	~~Which policies could have prevented this event from happening?~~

	== References ==		== References ==
	<references><ref name="cointelegraph-4222">[https://cointelegraph.com/news/bch-may-have-sustained-13-million-double-spend-bitmex-research BCH May Have Sustained $1.3 Million+ Double Spend: BitMex Research] (Oct 15, 2021)</ref>		<references><ref name="cointelegraph-4222">[https://cointelegraph.com/news/bch-may-have-sustained-13-million-double-spend-bitmex-research BCH May Have Sustained $1.3 Million+ Double Spend: BitMex Research] (Oct 16, 2021)</ref>

	<ref name="bitcoincash-4223">[https://bitcoincash.org/ Bitcoin Cash - Peer-to-Peer Electronic Cash] (Oct 17, 2021)</ref>		<ref name="bitcoincash-4223">[https://bitcoincash.org/ Bitcoin Cash - Peer-to-Peer Electronic Cash] (Oct 18, 2021)</ref>

	<ref name="bitmexblog-4224">[https://blog.bitmex.com/the-bitcoin-cash-hardfork-three-interrelated-incidents/ https://blog.bitmex.com/the-bitcoin-cash-hardfork-three-interrelated-incidents/] (Dec 4, 2021)</ref></references>		<ref name="bitmexblog-4224">[https://blog.bitmex.com/the-bitcoin-cash-hardfork-three-interrelated-incidents/ https://blog.bitmex.com/the-bitcoin-cash-hardfork-three-interrelated-incidents/] (Dec 5, 2021)</ref></references>

Azoundria at 08:06, 17 February 2023

2023-02-17T08:06:41Z

← Older revision		Revision as of 02:06, 17 February 2023
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	{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/bitcoincashtwoblockdoublespend.php}}		{{Imported Case Study\|source=https://www.quadrigainitiative.com/casestudy/bitcoincashtwoblockdoublespend.php}}
			{{Unattributed Citations}}

	[[File:Bitcoincash.jpg\|thumb\|Bitcoin Cash]]There was a 2-block reorganization of the Bitcoin Cash blockchain on May 15th, 2019 during a chain upgrade. The incident does not appear to have resulted in the loss of any funds.		[[File:Bitcoincash.jpg\|thumb\|Bitcoin Cash]]There was a 2-block reorganization of the Bitcoin Cash blockchain on May 15th, 2019 during a chain upgrade. The incident does not appear to have resulted in the loss of any funds.

	This is a global/international case not involving a specific country.		This is a global/international case not involving a specific country.
			<ref name="cointelegraph-4222" /><ref name="bitcoincash-4223" /><ref name="bitmexblog-4224" />

	== About Bitcoin Cash ==		== About Bitcoin Cash ==
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	Don't Include:		Don't Include:

	* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.		* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
	* Anything that wasn't reasonably knowable at the time of the event.		* Anything that wasn't reasonably knowable at the time of the event.
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	\|-		\|-
	\|May 15th, 2019 12:00:00 AM		\|May 15th, 2019 12:00:00 AM
	\|~~First~~ Event		\|Main Event
	\|~~This is an expanded~~ description of what happened and the impact. If multiple lines are necessary, add them here.		\|Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.
	\|-
	\|
	\|
	\|
	\|-		\|-
	\|		\|
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	== Total Amount Lost ==		== Total Amount Lost ==
	The total amount lost ~~is unknown~~.		The total amount lost has been estimated at $1,300,000 USD.

	How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?		How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
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	== Total Amount Recovered ==		== Total Amount Recovered ==
	~~It is unknown how much was~~ recovered.		There do not appear to have been any funds recovered in this case.

	What funds were recovered? What funds were reimbursed for those affected users?		What funds were recovered? What funds were reimbursed for those affected users?
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	== Prevention Policies ==		== Prevention Policies ==
			Which policies could have prevented this event from happening?

	== References ==		== References ==
	[https://cointelegraph.com/news/bch-may-have-sustained-13-million-double-spend-bitmex-research BCH May Have Sustained $1.3 Million+ Double Spend: BitMex Research] (Oct 15)		<references><ref name="cointelegraph-4222">[https://cointelegraph.com/news/bch-may-have-sustained-13-million-double-spend-bitmex-research BCH May Have Sustained $1.3 Million+ Double Spend: BitMex Research] (Oct 15, 2021)</ref>

	[https://bitcoincash.org/ Bitcoin Cash - Peer-to-Peer Electronic Cash] (Oct 17)		<ref name="bitcoincash-4223">[https://bitcoincash.org/ Bitcoin Cash - Peer-to-Peer Electronic Cash] (Oct 17, 2021)</ref>

	[https://blog.bitmex.com/the-bitcoin-cash-hardfork-three-interrelated-incidents/ https://blog.bitmex.com/the-bitcoin-cash-hardfork-three-interrelated-incidents/] (Dec 4)		<ref name="bitmexblog-4224">[https://blog.bitmex.com/the-bitcoin-cash-hardfork-three-interrelated-incidents/ https://blog.bitmex.com/the-bitcoin-cash-hardfork-three-interrelated-incidents/] (Dec 4, 2021)</ref></references>

Azoundria: Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/bitcoincashtwoblockdoublespend.php}} Bitcoin CashThere was a 2-block reorganization of the Bitcoin Cash blockchain on May 15th, 2019 during a chain upgrade. The incident does not appear to have resulted in the loss of any funds. This is a global/international case not involving a specific country. == About Bitcoin Cash == "Following its hard fork on May 15, bitcoin..."

2023-01-25T03:05:07Z

Created page with "{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/bitcoincashtwoblockdoublespend.php}} thumb|Bitcoin CashThere was a 2-block reorganization of the Bitcoin Cash blockchain on May 15th, 2019 during a chain upgrade. The incident does not appear to have resulted in the loss of any funds. This is a global/international case not involving a specific country. == About Bitcoin Cash == "Following its hard fork on May 15, bitcoin..."

New page

{{Imported Case Study|source=https://www.quadrigainitiative.com/casestudy/bitcoincashtwoblockdoublespend.php}}

[[File:Bitcoincash.jpg|thumb|Bitcoin Cash]]There was a 2-block reorganization of the Bitcoin Cash blockchain on May 15th, 2019 during a chain upgrade. The incident does not appear to have resulted in the loss of any funds.

This is a global/international case not involving a specific country.

== About Bitcoin Cash ==
"Following its hard fork on May 15, bitcoin cash (BCH) appears to have experienced a two-block chain reorganization resulting in a 3,392 BCH (about $1.35 million at press time) double spend. The claim was made in a report released by the research arm of cryptocurrency derivatives exchange BitMex on May 24."

"[A]fter its hard fork on May 15, bitcoin cash experienced a 2-block reorganization possibly resulting in a 3,392 BCH (over $1.35 million) double spend."

The empty blocks reportedly resulted in concern among miners who “may have tried to mine on the original non-hardfork chain, causing a consensus chainsplit.”

"The 15 May 2019 Bitcoin Cash hardfork appears to have suffered from three significant interrelated problems. A weakness exploited by an “attack transaction”, which caused miners to produce empty blocks. The uncertainty surrounding the empty blocks may have caused concern among some miners, who may have tried to mine on the original non-hardfork chain, causing a consensus chainsplit. There appears to have been a plan by developers and miners to recover funds accidentally sent to SegWit addresses and the above weakness may have scuppered this plan."

"Bitcoin ABC, an important software implementation for Bitcoin Cash, appears to have had a bug, where the validity conditions for transactions to enter the memory pool may have been less onerous than the consensus validity conditions. This is the opposite to how Bitcoin (and presumably Bitcoin Cash) are expected to operate, consensus validity rules are supposed to be looser than memory pool ones. This is actually quite an important characteristic, since it prevents a malicious spender from creating a transaction which satisfies the conditions to be relayed across the network and get into a merchants memory pools, but fails the conditions necessary to get into valid blocks. This would make 0-confirmation double spend attacks relatively easy to pull off, without one needing to hope their original payment doesn’t make it into the blockchain. In these circumstances, an attacker can be reasonably certain that the maliciously constructed transaction never makes it into the blockchain."

"An attacker appears to have spotted this bug in Bitcoin Cash ABC and then exploited it, just after the hardfork, perhaps in an attempt to cause chaos and confusion. This attack could have been executed at any time. The attacker merely had to broadcast transactions which met the mempool validity conditions but failed the consensus checks. When miners then attempted to produce blocks with these transactions, they failed. Rather than not making any blocks at all, as a fail safe, miners appear to have made empty blocks, at least in most of the cases."

"At the height of the uncertainty surrounding the empty blocks, our pre-hardfork Bitcoin ABC 0.18.2 node received a new block, 582,680. At the time, many were concerned about the empty blocks and it is possible that some miners may have reverted back to a pre-hardfork client, thinking that the longer chain was in trouble and may revert back to before the hardfork. However, this is merely speculation on our part and the empty block bug may have had nothing to do with the chainsplit, which could have just been caused by a miner who was too slow to upgrade."

"The chainsplit did highlight an issue to us with respect to the structure of the hardfork. We tested whether our post hardfork client, ABC 0.19.0, would consider the non-hardfork side of the split as valid. In order for the break to be “clean”, each side of the split should consider the other as invalid."

"In order to test the validity of the shorter pre-hardfork chain, from the perspective of the Bitcoin ABC 0.19.0 node, we had to invalidate the first hardfork block since the split. We then observed to see whether the node would follow the chainsplit or remain stuck at the hardfork point. To our surprise, as the below screenshot indicates, the node followed the other side of the split. Therefore the split was not clean, it was asymmetric, potentially providing further opportunities for attackers."

“Based on our calculations, around 3,392 BCH may have been successfully double spent in an orchestrated transaction reversal. However, the only victim with respect to these double spent coins could have been the original ‘thief.’”

"As BitMex Research reports, the above three issues during the hard fork resulted in 25 transactions (moving 3,392 BCH) not being included in the reorganized chain, which constitutes a double spend."

"As the above table shows, the total output value of these 25 double spent transactions is 3,391.7 BCH, an economically significant sum. Therefore, one may conclude that the re-organisation was an orchestrated event, rather than it having occurred by accident. If it occurred by accident, it is possible there would be no mismatch between the transactions on each side of the split. However, assuming coordination and a deliberate re-org is speculation on our part."

"There are many lessons to learn from the events surrounding the Bitcoin Cash hardfork upgrade. A hardfork appears to provide an opportunity for malicious actors to attack and create uncertainty and therefore careful planning and coordination of a hardfork is important. On the other hand, this empty block bug, which may be the root cause of the other 2 incidents, could have occurred at any time and trying to prevent bugs like this is critical whether one is attempting to harfork or not."

"Another key lesson from these events is the need for transparency. During the incidents it was difficult to know what developers were planning, the nature of the bugs, or which chain the miners were supporting. Open communication in public channels about these issues could have been more helpful. In particular, many were unaware of an apparent plan developers and miners had to coordinate and recover lost funds sent to SegWit addresses. It may have been helpful if this plan was debated and discussed in the community more beforehand, as well as during the apparent deliberate and coordinated re-organisation. Assuming of course if there was time to disclose the latter. It may also be helpful if those involved disclose the details about these events after the fact."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

* Known history of when and how the service was started.
* What problems does the company or service claim to solve?
* What marketing materials were used by the firm or business?
* Audits performed, and excerpts that may have been included.
* Business registration documents shown (fake or legitimate).
* How were people recruited to participate?
* Public warnings and announcements prior to the event.

Don't Include:

* Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
* Anything that wasn't reasonably knowable at the time of the event.
There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

== The Reality ==
This sections is included if a case involved deception or information that was unknown at the time. Examples include:

* When the service was actually started (if different than the "official story").
* Who actually ran a service and their own personal history.
* How the service was structured behind the scenes. (For example, there was no "trading bot".)
* Details of what audits reported and how vulnerabilities were missed during auditing.

== What Happened ==
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
{| class="wikitable"
|+Key Event Timeline - Bitcoin Cash Two-Block Double Spend
!Date
!Event
!Description
|-
|May 15th, 2019 12:00:00 AM
|First Event
|This is an expanded description of what happened and the impact. If multiple lines are necessary, add them here.
|-
|
|
|
|-
|
|
|
|}

== Total Amount Lost ==
The total amount lost is unknown.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

== Immediate Reactions ==
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

== Ultimate Outcome ==
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

== Total Amount Recovered ==
It is unknown how much was recovered.

What funds were recovered? What funds were reimbursed for those affected users?

== Ongoing Developments ==
What parts of this case are still remaining to be concluded?

== Prevention Policies ==

== References ==
[https://cointelegraph.com/news/bch-may-have-sustained-13-million-double-spend-bitmex-research BCH May Have Sustained $1.3 Million+ Double Spend: BitMex Research] (Oct 15)

[https://bitcoincash.org/ Bitcoin Cash - Peer-to-Peer Electronic Cash] (Oct 17)

[https://blog.bitmex.com/the-bitcoin-cash-hardfork-three-interrelated-incidents/ https://blog.bitmex.com/the-bitcoin-cash-hardfork-three-interrelated-incidents/] (Dec 4)