Security firm Trail of Bits posted a report on potential vulnerabilities that can allegedly affect the Bitcoin (BTC) and Ethereum (ETH) blockchain. Called “Are Blockchains Decentralized?”, the report was funded by the U.S. Department of Defense via its Defense Advanced Research Projects Agency (DARPA).
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The report is focused on Bitcoin and Ethereum but approaches other blockchain-based platforms using Proof-of-Work (PoW) and Proof-of-Stake (PoS) and Byzantine Fault Tolerant consensus protocols in general.
The investigation concluded that these networks’ cryptographic components are “robust”, and claims vulnerabilities exist in the blockchain implementation, and consensus protocols. In other words, the security firm believes blockchain can be exploited, but that the cryptography that supports them is strong.
Trail of Bits arrived at the following conclusions during their investigation: Bitcoin, Ethereum, and other blockchains have a “privileged set of entities” with the power to change their transactions, unencrypted traffic, nodes running old “vulnerable” software, and others.
Overall, the report claims blockchain networks are not decentralized, and that they are vulnerable to a series of potential attack vectors and disruption from outside actors. In particular, they pointed out that current blockchain networks lack “Sybil cost” meaning they can be “easily” attacked:
For a blockchain to be optimally distributed, there must be a so-called Sybil cost. There is currently no known way to implement Sybil costs in a permissionless blockchain like Bitcoin or Ethereum without employing a centralized trusted third party (TTP)Until a mechanism for enforcing Sybil costs without a TTP is discovered, it will be almost impossible for permissionless blockchains to achieve satisfactory decentralization.
Needless to say, the crypto…
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