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From: Antoine Riard <antoine.riard@gmail.com>
Date: Mon, 13 Nov 2023 02:18:16 +0000
Message-ID: <CALZpt+FEwjwQQWY6TBFuWeZbqC6Ywa7eSTcpqYuQPZ6+6QBzaw@mail.gmail.com>
To: Peter Todd <pete@petertodd.org>
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Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>,
 security@ariard.me, "lightning-dev\\\\@lists.linuxfoundation.org"
 <lightning-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] OP_Expire and Coinbase-Like Behavior: Making
 HTLCs Safer by Letting Transactions Expire Safely
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Your two latest mails.

> The problem that OP_Expire aims to solve is the fact that Carol could
prevent
> Bob from learning about the preimage in time, while still getting a
chance to
> use the preimage herself. OP_Expire thoroughly solves that problem by
ensuring
> that the preimage is either broadcast in the blockchain in a timely
fashion, or
> becomes useless.

I respectfully disagree - There is a more general underlying issue for
outdated states in multi-party off-chain constructions, where any "revoked"
or "updated" consensus-valid state can be used to jam the latest off-chain
agreed-on, through techniques like replacement cycling or pinning.

> My suggestion of pre-signing RBF replacements, without anchor outputs,
and with
> all outputs rendered unspendable with 1 CSV, is clearly superior: there
are
> zero degrees of freedom to the attacker, other than the possibility of
> increasing the fee paid or broadcasting a revoked commitment. The latter
of
> course risks the other party punishing the fraud.

Assuming the max RBF replacement is pre-signed at 200 sats / vb, with
commitment transaction of ~268 vbytes and at least one second-stage HTLC
transaction of ~175 vbytes including witness size, a channel counterparty
must keep at worst a fee-bumping reserve of 35 268 sats, whatever payment
value. As of today, any payment under $13 has to become trimmed HTLCs.
Trimmed HTLCs are coming with their own wormhole of issues, notably making
them a target to be stolen by low-hashrate capabilities attackers [0].

[0]
https://lists.linuxfoundation.org/pipermail/lightning-dev/2020-May/002714.h=
tml

> This does have the practical problem that a set of refund transactions
will
> also need to be signed for each fee variant. But, eg, signing 10x of each
isn't
> so burdensome. And in the future that problem could be avoided with
> SIGHASH_NOINPUT, or replacing the pre-signed refund transaction mechanism
with
> a covenant.

I think if you wish to be safe against fees griefing games between
counterparties, both counterparties have to maintain their own fee-bumping
reserves, which make channel usage less capital efficient, rather than
being drawn from a common reserve.

> Using RBF rather than CPFP with package relay also has the advantage of
being
> more efficient, as no blockspace needs to be consumed by the anchor
outputs or
> transactions spending them. Of course, there are special circumstances
where
> BIP125 rules can cause CPFP to be cheaper. But we can easily fix that, eg
by
> reducing the replacement relay fee, or by delta-encoding transaction
updates.

It is left as an exercise to the reader how to break the RBF approach for
LN channels as proposed.

> As SIGHASH_NOINPUT is desirable for LN-Symmetry, a softfork containing
both it
> and OP_Expire could make sense.

I think there is one obvious issue of pre-signing RBF replacements combined
with LN-symmetry, namely every state has to pre-commit to fee values
attached and such states might spend each other in chain. So now you would
need `max-rbf-replacement` *  `max-theoretical-number-of-states` of
fee-bumping reserves unless you can pipe fee value with some covenant
magic, I think.

> In existing anchor output transactions, this type of attack wouldn't work
as
> when broadcasting the transaction, Alice would be spending her anchor
output,
> which Bob can't double spend.

However Bob can double-spend Alice's commitment transaction with his own
commitment transaction and a CPFP, as long as it's a better ancestor
feerate and absolute fee package, then double-spend his own CPFP. Which is
exactly what my test is doing so I don't think your statement of saying
this type of advanced replacement cycling attack wouldn't work isn't
correct.

Best,
Antoine

Le mer. 8 nov. 2023 =C3=A0 02:06, Peter Todd <pete@petertodd.org> a =C3=A9c=
rit :

> On Wed, Nov 08, 2023 at 12:51:31AM +0000, Peter Todd via bitcoin-dev wrot=
e:
> > > In a post-package relay world, I think this is possible. And that
> > > replacement cycling attacks are breaking future dynamic fee-bumping o=
f
> > > pre-signed transactions concerns me a lot.
> >
> > Well the answer here is pretty clear: v3 package relay with anchors is
> broken.
>
> BTW a subtlety of this that may not be obvious is that in v3 package rela=
y,
> with zero value outputs, the outputs must be spent in the same package.
> Thus
> _unlike_ existing anchor-using transactions, there would be only one anch=
or
> output on the commitment transaction.
>
> In existing anchor output transactions, this type of attack wouldn't work
> as
> when broadcasting the transaction, Alice would be spending her anchor
> output,
> which Bob can't double spend. But that doesn't work in v3, which intends =
to
> limit UTXO growth by requiring that anchors be spent in the same package.
> Thus
> unlike existing anchor outputs, an anchor would be truly a OP_1 output
> without
> a signature, and thus belong to either Alice nor Bob uniquely.
>
> --
> https://petertodd.org 'peter'[:-1]@petertodd.org
>

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<div dir=3D"ltr">Your two latest mails.<div><br></div><div>&gt; The problem=
 that OP_Expire aims to solve is the fact that Carol could prevent<br>&gt; =
Bob from learning about the preimage in time, while still getting a chance =
to<br>&gt; use the preimage herself. OP_Expire thoroughly solves that probl=
em by ensuring<br>&gt; that the preimage is either broadcast in the blockch=
ain in a timely fashion, or<br>&gt; becomes useless.<br></div><div><br></di=
v><div>I respectfully disagree - There is a more general underlying issue f=
or outdated states in multi-party off-chain constructions, where any &quot;=
revoked&quot; or &quot;updated&quot; consensus-valid state can be used to j=
am the latest off-chain agreed-on, through techniques like replacement cycl=
ing or pinning.</div><div><br></div><div>&gt; My suggestion of pre-signing =
RBF replacements, without anchor outputs, and with<br>&gt; all outputs rend=
ered unspendable with 1 CSV, is clearly superior: there are<br>&gt; zero de=
grees of freedom to the attacker, other than the possibility of<br>&gt; inc=
reasing the fee paid or broadcasting a revoked commitment. The latter of<br=
>&gt; course risks the other party punishing the fraud.<br></div><div><br><=
/div><div>Assuming the max RBF replacement is pre-signed at 200 sats / vb, =
with commitment transaction of ~268 vbytes and at least one second-stage HT=
LC transaction of ~175 vbytes including witness size, a channel counterpart=
y must keep at worst a fee-bumping reserve of 35 268 sats, whatever payment=
 value. As of today, any payment under $13 has to become trimmed HTLCs. Tri=
mmed HTLCs are coming with their own wormhole of issues, notably making the=
m a target to be stolen by low-hashrate capabilities attackers [0].</div><d=
iv><br></div><div>[0] <a href=3D"https://lists.linuxfoundation.org/pipermai=
l/lightning-dev/2020-May/002714.html">https://lists.linuxfoundation.org/pip=
ermail/lightning-dev/2020-May/002714.html</a></div><div><br></div><div>&gt;=
 This does have the practical problem that a set of refund transactions wil=
l</div>&gt; also need to be signed for each fee variant. But, eg, signing 1=
0x of each isn&#39;t<br>&gt; so burdensome. And in the future that problem =
could be avoided with<br>&gt; SIGHASH_NOINPUT, or replacing the pre-signed =
refund transaction mechanism with<br>&gt; a covenant.<div><br></div><div>I =
think if you wish to be safe against fees griefing games between counterpar=
ties, both counterparties have to maintain their own fee-bumping reserves, =
which make channel usage less capital efficient, rather than being drawn fr=
om a common reserve.</div><div><br></div><div>&gt; Using RBF rather than CP=
FP with package relay also has the advantage of being<br>&gt; more efficien=
t, as no blockspace needs to be consumed by the anchor outputs or<br>&gt; t=
ransactions spending them. Of course, there are special circumstances where=
<br>&gt; BIP125 rules can cause CPFP to be cheaper. But we can easily fix t=
hat, eg by<br>&gt; reducing the replacement relay fee, or by delta-encoding=
 transaction updates.<br></div><div><br></div><div>It is left as an exercis=
e to the reader how to break the RBF approach for LN channels as proposed.<=
/div><div><br></div><div>&gt; As SIGHASH_NOINPUT is desirable for LN-Symmet=
ry, a softfork containing both it<br>&gt; and OP_Expire could make sense.<b=
r></div><div><br></div><div>I think there is one obvious issue of pre-signi=
ng RBF replacements combined with LN-symmetry, namely every state has to pr=
e-commit to fee values attached and such states might spend each other in c=
hain. So now you would need `max-rbf-replacement` * =C2=A0`max-theoretical-=
number-of-states` of fee-bumping reserves unless you can pipe fee value wit=
h some covenant magic, I think.</div><div><br></div><div>&gt; In existing a=
nchor output transactions, this type of attack wouldn&#39;t work as<br>&gt;=
 when broadcasting the transaction, Alice would be spending her anchor outp=
ut,<br>&gt; which Bob can&#39;t double spend.<br></div><div><br></div><div>=
However Bob can double-spend Alice&#39;s commitment transaction with his ow=
n commitment transaction and a CPFP, as long as it&#39;s a better ancestor =
feerate and absolute fee package, then double-spend his own CPFP. Which is =
exactly what my test is doing so I don&#39;t think your statement of saying=
 this type of advanced replacement cycling attack wouldn&#39;t work isn&#39=
;t correct.</div><div><br></div><div>Best,</div><div>Antoine</div></div><br=
><div class=3D"gmail_quote"><div dir=3D"ltr" class=3D"gmail_attr">Le=C2=A0m=
er. 8 nov. 2023 =C3=A0=C2=A002:06, Peter Todd &lt;<a href=3D"mailto:pete@pe=
tertodd.org">pete@petertodd.org</a>&gt; a =C3=A9crit=C2=A0:<br></div><block=
quote class=3D"gmail_quote" style=3D"margin:0px 0px 0px 0.8ex;border-left-w=
idth:1px;border-left-style:solid;border-left-color:rgb(204,204,204);padding=
-left:1ex">On Wed, Nov 08, 2023 at 12:51:31AM +0000, Peter Todd via bitcoin=
-dev wrote:<br>
&gt; &gt; In a post-package relay world, I think this is possible. And that=
<br>
&gt; &gt; replacement cycling attacks are breaking future dynamic fee-bumpi=
ng of<br>
&gt; &gt; pre-signed transactions concerns me a lot.<br>
&gt; <br>
&gt; Well the answer here is pretty clear: v3 package relay with anchors is=
 broken.<br>
<br>
BTW a subtlety of this that may not be obvious is that in v3 package relay,=
<br>
with zero value outputs, the outputs must be spent in the same package. Thu=
s<br>
_unlike_ existing anchor-using transactions, there would be only one anchor=
<br>
output on the commitment transaction.<br>
<br>
In existing anchor output transactions, this type of attack wouldn&#39;t wo=
rk as<br>
when broadcasting the transaction, Alice would be spending her anchor outpu=
t,<br>
which Bob can&#39;t double spend. But that doesn&#39;t work in v3, which in=
tends to<br>
limit UTXO growth by requiring that anchors be spent in the same package. T=
hus<br>
unlike existing anchor outputs, an anchor would be truly a OP_1 output with=
out<br>
a signature, and thus belong to either Alice nor Bob uniquely.<br>
<br>
-- <br>
<a href=3D"https://petertodd.org" rel=3D"noreferrer" target=3D"_blank">http=
s://petertodd.org</a> &#39;peter&#39;[:-1]@<a href=3D"http://petertodd.org"=
 rel=3D"noreferrer" target=3D"_blank">petertodd.org</a><br>
</blockquote></div>

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