Deterministic wallets, particularly those that follow the BIP-32 and BIP-44 protocols, have become widespread in the cryptocurrency ecosystem due to their ability to generate multiple addresses from a single private key. However, despite their convenience and increased security, these wallets are not immune to various attacks. In this article, we will look at the problems associated with mathematically incorrect private keys in Bitcoin wallets and attacks on deterministic wallets.
Deterministic Wallets: BIP-32 and BIP-44
Deterministic wallets, such as those described in the BIP-32 (Hierarchical Deterministic Wallets) and BIP-44 (Advanced Wallet Framework) protocols, allow users to generate multiple addresses from a single master private key. This improves usability and security, as users can receive payments at multiple addresses without having to store multiple private keys.[2][7]
Operating Principle
The BIP-32 protocol allows for a hierarchical key structure, where each child key is generated from the parent key using a specific algorithm. This allows for an infinite number of addresses to be created without having to store all the private keys separately. The BIP-44 protocol extends the capabilities of BIP-32 by adding a standardized structure for wallets, making it easier to interoperate across different applications.[7]
Attacks on Deterministic Wallets
Despite the advantages of deterministic wallets, they are not immune to various attacks. The main problems include:
1. Pseudorandom Number Generator Vulnerabilities
One of the main problems is the vulnerability of pseudo-random number generators used to create private keys. If the generator does not provide sufficient entropy, private keys can become predictable, allowing attackers to gain access to funds[2].
2. Incorrect Private Keys
If private keys are generated with mathematical errors or incorrect algorithms are used, this can lead to vulnerabilities that can be used to attack wallets. For example, if the keys do not meet cryptographic security standards, they can be easily hacked[1].
3. Dust Attacks
While dusting attacks are not aimed directly at stealing cryptocurrency, they can be used to de-anonymize users and then blackmail or phishing them. By sending small amounts of cryptocurrency to multiple addresses, attackers can track transactions and link addresses to real people.[3][4]
Defense Against Attacks
To protect against attacks on deterministic wallets, the following measures can be used:
- Using Secure Pseudorandom Number Generators : Ensuring that pseudorandom number generators are used correctly and provide sufficient entropy to generate secure private keys[2].
- Implementation of BIP-32 and BIP-44 Standards : Adherence to these protocols ensures that wallets generate keys securely and consistently[7].
- Minimizing Outgoing Transactions : Reducing the number of outgoing transactions can reduce the risk of attacks related to variable repetition in signatures[2].
- Using HD Multi-Signature Wallets : These wallets offer an extra layer of security by requiring multiple signatures to confirm transactions[7].
Conclusion
Deterministic wallets following the BIP-32 and BIP-44 protocols offer convenience and increased security, but they are not immune to various attacks. Mathematically incorrect private keys and vulnerabilities in pseudo-random number generators can lead to serious security problems. To protect against these attacks, it is important to use reliable pseudo-random number generators, adhere to cryptographic security standards, and minimize the number of outgoing transactions.
Citations:
[1] https://www.kaspersky.ru/blog/vulnerability-in-hot-cryptowallets-from-2011-2015/36592/
[2] https://habr.com/ru/articles/430240/
[3] https://amlcrypto.io/ru/blog/what_is_a_dust_attack
[4] https://www.binance.com/ru/square/post/405778
[5] https://www.mexc.com/ru-RU/learn/article/17827791515523
[6] https://www.ledger.com/ru/academy/%D0%9A%D0%B0%D0%BA-%D0%BA%D1%80%D0%B0%D0%B4%D1%83%D1%82-%D0%BA%D1%80%D0%B8%D0%BF%D1%82%D0%BE%D0%B2%D 0%B0%D0%BB%D1%8E%D1%82%D1%8B-%D0%B8-%D0%BA%D0%B0%D0%BA-%D1%8D%D1%82 %D0%BE%D0%B3%D0%BE-%D0%B8%D0%B7%D0%B1%D0%B5%D0%B6%D0%B0%D1%82%D1%8C
[7] https://bitnovosti.io/2015/02/11/ierarchicheski-determinirovannye-koshelki/
[8] https://www.coindesk.com/ru/tech/2020/08/18/dust-attacks-make-a-mess-in-bitcoin-wallets-but-there-could-be-a-fix