SPV, Simplified Payment Verification
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This article explains why SPV wallet users face unique risks in the months ahead. Replay occurs when a transaction broadcast to one side a hard fork becomes confirmed on the other.
This causes the user to potentially lose funds on the side of the bitcoin spv wallets to be abandoned. Bitcoin spv wallets risk described here, however, can cause loss of funds on the side of the fork the user intends to follow. The security risk to SPV nodes traces its origins to the structure of the block chain itself. A block consists of two detachable units: Once detached, header and body can be reassembled with perfect fidelity. This modularity allows headers and bodies to be stored and transmitted separately.
A block header encodes six fields, two of which factor bitcoin spv wallets the current discussion. Both are hash bitcoin spv wallets, a form of mathematically-derived unique identifier. The first hash value links a header to its parent. The second hash value links a header to its body. In this way, a block header is securely linked to both its parent and its body. A block body consists of an ordered list of transactions identified by a Merkle root.
Whereas a hash value uniquely identifies a single digital message e. If an item in the list changes, or the list is re-ordered, the Merkle root changes as well. A node requests a complete chain of headers from its peers. Each header is subjected to a series of tests that ensure the validity of its bitcoin spv wallets, including:.
Each header is then connected to its parent. Blocks without parents orphans are discarded, along with all of bitcoin spv wallets descendants. Two or more blocks may claim the same parent. The result is a tree with the Genesis Block at its root. Many paths through a given header tree can be traced. Each is assigned a cumulative proof-of-work by summing the implied work of all member headers. The path with the most cumulative proof-of-work constitutes the active chain.
A full node complements the above analysis by downloading and validating every block body. Bitcoin spv wallets transaction is checked for validity individually, and as a chain of ownership.
The body as a whole is also checked. In particular the block size is computed and must be less than or equal to the current limit. In contrast, an SPV node stops validation after identifying the active chain. No block is downloaded in its entirety. Instead, only a set of interesting transactions is downloaded. This set typically includes those transactions referencing the members of a particular key pool.
This parsimony saves bandwidth, time, storage, bitcoin spv wallets computational power that would otherwise be dedicated to processing complete blocks. SPV offers users a security tradeoff. In exchange for ignoring block bodies, an SPV node can operate at a fraction of the cost of a full node. Provided that the hash rate majority never tries to publish an invalid block body, an SPV node offers security that approaches that of a full node.
SPV security relies on the honesty of the hash rate majority. Specifically, an bitcoin spv wallets node can be counted on to neither publish nor relay an invalid block. However, this assumption falls bitcoin spv wallets in the event of a hard fork update. A hard fork update causes nodes that implement it to publish and relay blocks that were previously considered invalid. Invalid block features can reside in the header, bitcoin spv wallets body, or both.
As described above, an SPV node can only detect blocks containing invalid headers. Therefore, blocks with invalid bodies will be accepted as valid.
Any hard fork update that produces valid bitcoin spv wallets headers will be invisible to SPV nodes. Because SPV nodes specifically avoid requesting block bodies, they can never reject a header based on the size of the block it represents.
This means that in the absence of a signal encoded into the block header, an SPV node will blindly accept any block size limit increase, no matter how large, provided that it is sufficiently strong. How is this possible? EDA causes Bitcoin Cash nodes to generate and relay blocks with lower difficulty than would otherwise be considered valid.
This change was included to allow a hash rate minority to grow the Bitcoin Cash chain. When the first EDA became active, a block with bitcoin spv wallets unacceptably high difficulty target field low proof-of-work was published by the Bitcoin Cash network.
Unlike Bitcoin Cash, Segwit2x causes no changes to block headers. SPV nodes will blindly follow the strongest chain, regardless of the sizes of its member blocks. Meanwhile, the Segwit2x network will generate blocks nine times faster than the Bitcoin network. However, this initial hash rate distribution is subject to change as Segwit2x unfolds. Unfortunately, even a single switch in hash rate distribution could be disastrous for SPV nodes.
Identification of a new active chain triggers a reorganization. During reorganization, confirmed transactions can either move to a new block or be evicted from the block chain altogether. From the perspective of an SPV wallet user, a transaction with six confirmations could become a transaction with no confirmations from one minute to the next.
This danger exists regardless of which chain the user intends to follow. Even so, an SPV wallet user would be powerless to choose one chain or the other because SPV itself specifically excludes the block bodies needed to distinguish the chains. Any wipeout protection would need to be hard-coded by the wallet itself in some way. In contrast to an SPV node, a full node will never accept a bitcoin spv wallets generated by a Segwit2x node.
The reason is simple: A full node will reject such a block and all of bitcoin spv wallets descendants, regardless of how much hash power lies behind it. However, this weak wipeout protection is insufficient to safeguard SPV nodes from wipeout risk.
A proposal introduced the concept of a hard fork bit. This bit occupies index 31 of the header version field. A bitcoin spv wallets unaware of a hard fork update underway will reject any block in which the hard fork bit is set the result would yield a negative version number, which the protocol forbids. Because the hard fork bit appears in the block header, setting it will cause the block to be rejected by SPV and full nodes alike.
Descendants of the signal block would leave the hard fork bit unset. It could then once again be activated in a subsequent hard fork update if so desired.
The presence of a signal block in which the hard fork bit is set in the header would cause Bitcoin SPV and full nodes to reject the entire hard fork chain. Neither type of node would identify a path containing the signal bitcoin spv wallets as the active chain. Likewise, nodes running the hard fork update would reject Bitcoin chains due to their exclusion of the signal block.
SPV and full nodes on either side of the hard fork would therefore be protected against wipeouts. The presence of a signal block requires the explicit consent of both SPV bitcoin spv wallets full node operators planning to follow the hard fork.
However, requiring SPV wallets to update may lead to a non-viable hard fork. The alternative option, no signal block, risks the financial security of SPV users on both sides of the fork though bitcoin spv wallets. Specific wallet vulnerability to the security threat described in this post will need to be addressed by the respective development teams. The lack of strong wipeout bitcoin spv wallets places every SPV user, regardless of the chain they intend to follow, at risk of financial loss in the weeks following Segwit2x activation.
Worse, SPV itself makes chain selection bitcoin spv wallets impossible even if a user bitcoin spv wallets one or the other. For these reasons, the security implications of using SPV wallets during the period bitcoin spv wallets Segwit2x activation should be carefully considered.
Users can protect their financial assets from mid-November onward by running a full node. Bitcoin spv wallets SPV wallets such as Electrum, breadwallet, and Airbitz offer an option to connect to a trusted node or server. In broader bitcoin spv wallets, the Segwit2x project should protect its own SPV users from possible wipeout events through use of a signal block deploying the hard fork bit, or some other method invalidating bitcoin spv wallets block header.
Anatomy of a Block The security risk to SPV nodes traces its origins to the structure of the block chain itself. A block consists of two detachable components: A header references its parent through a hash bitcoin spv wallets leftward-pointing arrow and its body through a Merkle root downward-pointing arrow.
An byte sequence encodes six data fields. Name Size bytes Description Version 4 Bit array used to signal miner readiness for soft-fork protocol updates. Must evaluate to an integer greater than or equal to two. Merkle Root 32 Unique identifier for an ordered list of transactions. Timestamp 4 Date and time in modified Unix time format.
Nonce 4 Random value used to obtain a hash value satisfying target. Each header is subjected to a series of tests that ensure the validity of its fields, including: The path through a block header tree containing the most cumulative proof-of-work green is designated as the active chain.
This may or may not be the longest chain by block count. A full node validates block headers bitcoin spv wallets complete block bodies right.
