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DSP specification

14 minute read

Layer: p2p
Title: Double Spend Proofs
Author: Tom Zander, @im_uname
Created: 2019-08-07
Last Revised: 2019-08-07
License: CC-BY-SA-4.0

Abstract

This document describes a way to inform participants of attempts of double spending an unconfirmed transaction by providing cryptographic provable evidence that one UTXO entry was spent twice by the owner(s) of the funds.

The ability to get informed of such an event can assist greatly in the confident acceptance of unconfirmed transactions as payment. We expect this will help with countering undetected attempts of double spends.

Summary

A double spend attack can be used, for instance, to redirect payments meant for a specific merchant to a different target and thus defraud the merchant we want to pay to. The basic concept of a double spend is that (at least) one unspent output is spent twice in different transactions which forces miners to pick one of them to mine.

At its most basic we can detect this by finding two signed inputs both spending the same output. In the case of pay-to-public-key-hash (P2PKH) this means two signatures signing the same public key.

Cryptographic signatures in Bitcoin Cash follow the ‘fork-id’ algorithm described here, which explains a change made to the Satoshi designed algorithm, a change after which the containing transaction itself is not signed, but a unique hash of that transaction is being signed. This gives us the opportunity to send only the intermediate hashes instead of the whole transaction while allowing receivers to still validate both signatures of the same public key. And therefore prove that a double spend has taken place.

Limitation and risks

Not all types and all combinations of transactions are supported. Wallets and point-of-sale applications are suggested to give a rating of how secure an unconfirmed transaction is based on various factors.

Transactions that spend all, confirmed, P2PKH outputs with all inputs signed SIGHASH_ALL without ANYONECANPAY, are double-spend-proof’s “protected transactions”.

For more details see “Using Double Spend Alerts: Merchant considerations“ below.

Motivation

The chance of defrauding a merchant by double spending the transaction that is being paid to him is real and the main problem we have today is the fact that without significant infrastructure the merchant won’t find out until the block is confirmed.

The low risk of getting caught will make this a problem as Bitcoin Cash becomes more mainstream.

The double-spend-proof is a means with which network participants that have the infrastructure to detect double spends can share that fact so merchants can receive information on their payment app (typically SPV based) in short enough time that the merchant can refuse to provide service or goods to their customer.

Network specification

A node that finds itself in possession of a correct double-spend-proof shall notify its peers using the INV message, using a ‘type’ field with number 0x94a0. This will be changed to another number as this spec is finalized.

The hash-ID for the double-spend-proof is a double sha256 over the entire serialized content of the proof, as defined next.

In response to an INV any peer can issue a getdata message which will cause a reply with the following message. The name of the message (until this spec is finalized) is dsproof-beta.

Field Size Description Data Type Comments
32 TxInPrevHash sha256 The txid being spent
4 TxInPrevIndex int The output being spent
FirstSpender spender the first sorted spender
DoubleSpender spender the second spender

A double-spend-proof essentially describes two inputs, both spending the same output. As such the prev-hash and prev-index point to the output and the spenders each describe inputs.

The details required to validate one input are provided in the spender field;

Field Size Description Data Type Comments
4 tx-version unsigned int Copy of the transactions version field
4 sequence unsigned int Copy of the sequence field of the input
4 locktime unsigned int Copy of the transactions locktime field
32 hash-prevoutputs sha256 Transaction hash of prevoutputs
32 hash-sequence sha256 Transaction hash of sequences
32 hash-outputs sha256 Transaction hash of outputs
1-9 list-size var-int Number of items in the push-data list
push-data byte-array Raw byte-array of a push-data. For instance a signature

Validation

It is required that nodes validate the proof before using it or forward it to other nodes. Please check against the matching transaction in your mempool for addresses so you can limit sending the proof only to interested nodes that have registered a bloom filter.

Validation includes a short list of requirements;

  1. The DSP message is well-formed and contains all fields. It is allowed (by nature of Bitcoin Cash) for some hashes to be all-zeros.
  2. The two spenders are different, specifically the signature (push data) has to be different.
  3. The first & double spenders are sorted with two hashes as keys.
    Compare on the hash-outputs, and if those are equal, then compare on hash-prevoutputs. The sorting order is in numerically ascending order of the hash, interpreted as 256-bit little endian integers.
  4. The double spent output is still available in the UTXO database, implying no spending transaction has been mined.
  5. No other valid proof is known.

Further validation can be done by essentially validating the signature that was copied from the inputs of both transactions against the output a node should have in either its memory pool or its UTXO database.

To validate a spender of the proof, a node requires to have;

  • The output being spent (mempool or UTXO)
  • One of the transactions trying to spend the output.
  • The double-spend-proof.

As the forkid specification details, the digest algorithm hashes 10 items in order to receive a sha256 hash, which is then signed.

These 10 items are;

  1. nVersion of the transaction (4-byte little endian)
  2. hashPrevouts (32-byte hash)
  3. hashSequence (32-byte hash)
  4. outpoint (32-byte hash + 4-byte little endian)
  5. scriptCode of the input (serialized as scripts inside CTxOuts)
  6. value of the output spent by this input (8-byte little endian)
  7. nSequence of the input (4-byte little endian)
  8. hashOutputs (32-byte hash)
  9. nLocktime of the transaction (4-byte little endian)
  10. sighash type of the signature (4-byte little endian)

In the double spend message we include items: 1, 2, 3, 4, 7, 8, 9 and 10.

From the output we are trying to spend you can further obtain items: 5 & 6

The full transaction also spending the same output which you found in your mempool, can be used to get the public key which you can use to validate that the signature is actually correct.

When all rules are followed, the proof is valid.

Deployment

There will be an immediate benefit to each extra node on the network creating or propagating these messages.

As the amount of nodes that propagate them reaches around 20% then statistically there is a very good chance of each node having at least one participating peer leaving your node fully informed of all double spends.

Using Double Spend Alerts: Merchant considerations

A merchant node which utilizes double-spend-proofs is advised to follow the following general procedure, when receiving a transaction that pays them whether through network or direct connection (e.g. BIP70):

  1. Evaluate the transaction that pays them. If the transaction does not pay sufficient fee or is otherwise unfit as defined by the merchant independent of the criteria below, apply remedial action either by rejecting transaction or custom negotiations with the customer - fast transaction becomes irrelevant.
  2. If the transaction does not fit any of the following criteria, do not rely on double-spend-proof, and instead either wait for confirmation or apply more stringent risk management:

The transaction must contain all P2PKH.
The transaction must either be spending only from confirmed UTXOs, or all of its ancestors in mempool must also be all-P2PKH transactions (Optional, requires BIP62).
All of the inputs in the relevant transaction, and its mempool ancestor chain (Optional, requires BIP62), must be signed SIGHASH_ALL without ANYONECANPAY.

  1. After affirming that the transaction fits the critera for applying double-spend-proofs, the merchant then waits T seconds, T being a variable adjusted to risk tolerance, for a proof to arrive. If a double-spend-proof corresponding to the paying transaction or any of its ancestors arrive, the merchant shall either decline the payment, or wait for confirmation. If no proof arrives within T seconds, the merchant hands out goods or services.

Note that in the case of an unconfirmed chain, if BIP62 fixes are not implemented in full, transactions can be malleated by third parties to invalidate descendents without triggering double-spend-proof - and any attempt at making proof against this will be vulnerable to false positive attacks. Double-spend-proof against unconfirmed proofs should therefore only be activated after implementation of the full set of BIP62 fixes (https://github.com/bitcoin/bips/blob/master/bip-0062.mediawiki).

References

The ‘forkid’ spec Bitcoin Cash uses to validate signatures in transactions; https://github.com/bitcoincashorg/bitcoincash.org/blob/master/spec/replay-protected-sighash.md