# Detecting brute-force attacks on cryptocurrency wallets

## TL;DR

This paper analyzes brute-force attack vulnerabilities on cryptocurrency wallets, demonstrates detection methods, and proposes protocol modifications and smart-contract solutions to mitigate such attacks.

## Contribution

It introduces a novel approach to detecting brute-force wallet attacks and suggests protocol and smart-contract-based countermeasures.

## Key findings

- Successful brute-force attacks can be proven with high probability.
- Proposed protocol modifications can reduce attacker motivation.
- Smart-contracts can automatically detect and alert about attacks.

## Abstract

Blockchain is a distributed ledger, which is protected against malicious modifications by means of cryptographic tools, e.g. digital signatures and hash functions. One of the most prominent applications of blockchains is cryptocurrencies, such as Bitcoin. In this work, we consider a particular attack on wallets for collecting assets in a cryptocurrency network based on brute-force search attacks. Using Bitcoin as an example, we demonstrate that if the attack is implemented successfully, a legitimate user is able to prove that fact of this attack with a high probability. We also consider two options for modification of existing cryptocurrency protocols for dealing with this type of attacks. First, we discuss a modification that requires introducing changes in the Bitcoin protocol and allows diminishing the motivation to attack wallets. Second, an alternative option is the construction of special smart-contracts, which reward the users for providing evidence of the brute-force attack. The execution of this smart-contract can work as an automatic alarm that the employed cryptographic mechanisms, and (particularly) hash functions, have an evident vulnerability.