Ecdsa algorithm bitcoin wallet

The picture below illustrates this steps in a non-automated way. One of the early methods to create bitcoin wallets was known as brain wallets. Due to its popularity and easy usage, many Brain wallets were used in the last few years with weak passwords or passphrases, transforming the Blockchain wallet address hashes in password or passphrases representation of your private key.

This weak way of generating your private key allowed attackers to steal your bitcoins just by doing password cracking against the hashes stored in the Blockchain. A proof-of-concept cracker for cryptocurrency brain wallets and other low entropy key algorithms. This paper published the results of evaluating billion passwords against Blockchain hashes and their findings about brain wallets that had funds at a given time, suggesting they might have been drained by active attackers.

The attempt to recover a password just by knowing its encrypted representation can be made mainly using three techniques. Dictionary attacks, which is the fastest method and consists of comparing the dictionary word with the password hash. Another method is the brute force attack, which is the most powerful one but the time it takes to recover the password might render the attack unfeasible. This is of course dependable on the complexity of the password and the chosen algorithm.

This is done in 6 steps:. First step is to bootstrap the blockchain. To perform this, we need to download, install and run the bitcoin software on a system connected to the Internet. The system then becomes a node and part of the peer-to-peer blockchain network. The first task performed by the node is to download the entire database of records i.

As I write this the Blockchain size is The data contains every transaction that has been made in the blockchain since the genesis block was created on the 3rd of January at To download the entire Blockchain, took me more than 72 hours. The image below illustrates the steps needed to perform the download, installation and running the bitcoin software. Then, the picture below illustrates the steps needed to perform the configuration and running the bitcoin software.

You can view the progress by executing the getblockchaininfo command and check the number of blocks that have been already downloaded. After downloading the entire Blockchain we move into the second step. When blockparser performs the parsing, it creates and keeps the index in RAM which means with the current size of the blockchain you need enough RAM to be able to parse it in reasonable amount of time.

The tool can perform various task but for this exercise we are interested in the allBalances command. To perform the parsing, I used a system with 64 GB ram and the process was smooth. I tried it on a system with 32Gb and stopped it due to the heavy swapping that was happening. The allBalances produced a 30Gb text file. The image below exemplifies these steps. Third step is to extract the hash addresses from the allBalances. We are interested in the hash because this field contains the representation of the Bitcoin public key.

Below you can see the output of allBalances. Forth step, we create a bloom filter with the tool hex2blf which is part of the brainflayer toolkit. We also need to create a binary file containing all the hashes sorted in order to be used with the bloom filter. This will reduce the false positives. Fifth step, we launch brainflayer using our favorite dictionary against the bloom filter file we generated in the previous step.

If there is a match you will see the password or passphrase and the corresponding hash. In the output of cracked password you could see C or U in the second column. This is to indicate if the key is Compressed or Uncompressed. In the below image you can see these steps. Sixth step and last step is to create the Elyptic Curve key pair using the known password or passphrase. This can be done using the tool Addressgen created by sarchar.

This utility will allow you to generate the ECDSA key pair which can be used to take over the wallet. Financial gain is a significant incentive to have people performing all kinds of activities in order to attempt to steal your coins. If you are interested in attacks against the Blockchain I would suggest looking at the different papers created by the professor Dr.

Nicolas Courtois and available on his website. On a different note, there are other researchers that are brute forcing the entire bitcoin private key keyspace in order to find private keys for addresses that have funds.

In the previous article , we started implementing transactions. You were also introduced to the impersonal nature of transactions: But there still must be something that identifies you as the owner of transaction outputs i. And this is what Bitcoin addresses are needed for. This part introduces significant code changes, so it makes no sense explaining all of them here.

Please refer to this page to see all the changes since the last article. This is the very first Bitcoin address, which allegedly belongs to Satoshi Nakamoto. Bitcoin addresses are public. If you want to send coins to someone, you need to know their address. In fact, such addresses are a human readable representation of public keys. In Bitcoin, your identity is a pair or pairs of private and public keys stored on your computer or stored in some other place you have access to.

Bitcoin relies on a combination of cryptography algorithms to create these keys, and guarantee that no one else in the world can access your coins without getting physical access to your keys.

Public-key cryptography algorithms use pairs of keys: Public keys are not sensitive and can be disclosed to anyone. You are your private keys in the world of cryptocurrencies, of course. In essence, a Bitcoin wallet is just a pair of such keys. When you install a wallet application or use a Bitcoin client to generate a new address, a pair of keys is generated for you.

The one who controls the private key controls all the coins sent to this key in Bitcoin. Private and public keys are just random sequences of bytes, thus they cannot be printed on the screen and read by a human. Such phrases are used instead of private keys and can be used to generate them. This mechanism is implemented in BIP Ok, we now know what identifies users in Bitcoin. But how does Bitcoin check the ownership of transaction outputs and coins stored on them? By applying a signing algorithm to data i.

Digital signing happens with the usage of a private key, and verification requires a public key. The operation of signing produces a signature, which is stored in transaction inputs. In order to verify a signature, the following is required:.

In simple terms, the verification process can be described as: Digital signatures are not encryption, you cannot reconstruct the data from a signature. This is similar to hashing: The difference between signatures and hashes is key pairs: But key pairs can also be used to encrypt data: Every transaction input in Bitcoin is signed by the one who created the transaction.

Every transaction in Bitcoin must be verified before being put in a block. Verification means besides other procedures:. As described above, public and private keys are sequences of random bytes. Bitcoin uses elliptic curves to generate private keys.

What we need to know is that these curves can be used to generate really big and random numbers. Now we know that this is a human-readable representation of a public key. Bitcoin uses the Base58 algorithm to convert public keys into human readable format.

The algorithm is very similar to famous Base64, but it uses shorter alphabet: Thus, there are no these symbols: Since hashing functions are one way i. But we can check if a public key was used to get the hash by running it thought the save hash functions and comparing the hashes.