Coinpunk - Enemy of the Banks

enemy of the banks

COIN PUNK

Kyle Drake

Obsoleting the banking industry with HTML5 and JavaScript

Tuesday, October 15, 13

What is Coinpunk?• First open-source Bitcoin web wallet

service

• Designed and intended for power users and developers

• Funded by a grant from the Bitcoin Foundation (and others)


Coinpunk “Old School”


• Ruby application

• Bitcoind (official client) JSON RPC does all heavy lifting

• Implemented in 4 days

• Stored all private keys on server

• Works. But there’s a Serious security risk.

Coinpunk “Old School”


• July 2011: Bitomat “loses” database. $220,000 USD

• August 2011: MyBitcoin hacked. $800,000

• August 2012: Bitcoinica hacked. $460,000

• March 2012: Linode servers trawled. $250,000

• Sept 2012: BitFloor hacked. $250,000

• April 2013: InstaWallet hacked. $4.6 million

Major Bitcoin Wallet Thefts


We’re starting to think putting the private keys on a central server is a really bad idea. I can’t imagine why.


But web interfaces are easy to use. They’re lightweight. They’re universal. They make sense to non-tech users.


How can we provide a web interface while reducing server trust?


“Bitcoin wallets” that store the private keys on the server are not wallets.

They are Bitcoin accounts.

The Problem


The Solution

Move the wallet encryption over to the browser.Yes, really.No, seriously!


Fear, Uncertainty and Doubt

“DOOMED”? REALLY?Tuesday, October 15, 13

Counterpoint

http://log.nadim.cc/?p=33Tuesday, October 15, 13

http://log.nadim.cc/?p=33

http://log.nadim.cc/?p=33

Coinpunk “New Wave”

• HTML5/JS frontend• Node.js backend• Redis• Bitcoind



Browser generates Bitcoin private keys, encrypts them, sends encrypted payload to server for storage/backup.



Browser also creates all the transactions. The server (and therefore hackers) cannot spend the user’s money.


Progress


Browser Crypto Libraries• CryptoJS

• Stanford JS Crypto Lib (SJCL)

• BigInteger (JSBN)

• BitcoinJS-lib

• RandJS

https://github.com/kyledrake/randjs




RandJS• Uses

window.crypto.getRandomValues if exists, otherwise falls back

• Allows you to decide whether you’re cool with that.


window.crypto.getRandomValues


Observations• It’s all kindof slow

• SJCL PBKDF2 is (a lot) faster than CryptoJS

• Can’t go above 4k-5k iterations

• Limited pre-rolled authenticated encryption options (sjcl.encrypt)

http://tonyarcieri.com/all-the-crypto-code-youve-ever-written-is-probably-broken




I’m not doing Bitcoin work.Why should I care?


Browser-side crypto will become a lot more commonplace.


JS crypto libraries will become secure, standardized and fast.


One-way hashing of the password on the browser will be considered “best practice”.


THANKS!


http://binaryjs.com

http://binaryjs.com

Coinpunk - Enemy of the Banks

Economy & Finance

Transcript of Coinpunk - Enemy of the Banks