I’m glad to see you considered the possibility of a BitCoin client making a payment to itself and have an appropriate description in the transaction log (:
I did this primarily so that I could get a packet capture of the network traffic during a transaction to analyze. Without knowing your packet structure, I only see a bit of cleartext information in the packets, mostly just what is shown in the transaction detail such as name and comments. There are a couple of other strings that show upon the wire such as ‘version’ and ‘reply’, but the rest is pretty cryptic.
While pondering transactions, I realized that there is no identifiable information involved other than an IP address or a BitCoin address. In the case of the IP transaction, the BitCoin client seems to trust that the IP that it has connected to really is the intended recipient of the transaction. It is fairly trivial to launch a man-in-the-middle attack and steal incoming transactions. Consider the scenario where a co-worker and myself have our workstations on the same LAN. Being nefarious, I could be ARP poisoning the local broadcast domain and routing all traffic destined for his workstation through my workstation as an intermediary. Both of us, not being good employees, play the MMORPG-du-jour and like to buy and sell game items using BitCoins. I could easily watch for incoming connections on TCP port 8333 and terminate them at my workstation rather than passing those particular connections on to his workstation. A bit convoluted, yes, but it illustrates the point. This type of attack could be performed at any hop along the route between the two transacting parties. If I were an evil admin at Big ISP USA, well, you get the idea.
I would recommend not allowing the use of network addresses as the address of an intended recipient. I would think it would be a bit more secure to always require a BitCoin address and do transactions that way. If I understand how that is done correctly, you just compute the transaction into the block chain and let the intended recipient ‘discover’ it, correct? An alternative could be to allow the network nodes to provide a resolution service, where they ask around for the network address of a BitCoin address, and if that node is online, once a consensus is agreed upon by the network for that address the sending BitCoin application connects directly there. Because the BitCoin addresses are tied to the keys of the node, I would think that some method could be devised to prove ownership of that BitCoin address by the sending node and not to proceed with the transaction if so. At the very least I would recommend, if you intend to retain the recipient addressing by IP method is to allow for matching a hash of a shared secret between the parties or something that an intermediary would not know, but since you have the crypto in place, keys generated, etc. anyhow, using that would be a much stronger solution.
Or am I over-thinking this and the network connection is just to send immediate notification of the transaction and context information such as the comment? The BitCoin application mentioned getting the recipient’s public key and a few other things, and there seems to be a lot more going on in the network traffic than what would be required for a simple notification.
Talk to you soon,
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Dustin D. Trammell
dtrammell@dustintrammell.com
http://www.dustintrammell.com