The transaction malleability problem is a vulnerability in

blockchain The blockchain is a distributed ledger with growing lists of Record (computer science), records (''blocks'') that are securely linked together via Cryptographic hash function, cryptographic hashes. Each block contains a cryptographic hash of th ...

which can be exploited by altering a

cryptographic hash A cryptographic hash function (CHF) is a hash algorithm (a map of an arbitrary binary string to a binary string with a fixed size of n bits) that has special properties desirable for a cryptographic application: * the probability of a particu ...

, such as the digital signature used to identify a cryptocurrency transaction. Transaction malleability is considered to be one of the largest ongoing threats to blockchain technology, as it can compromise financial transactions such as

Bitcoin Bitcoin (abbreviation: BTC; Currency symbol, sign: ₿) is the first Decentralized application, decentralized cryptocurrency. Based on a free-market ideology, bitcoin was invented in 2008 when an unknown entity published a white paper under ...

and other cryptocurrency transactions, and cause other issues in the network.

Discovery

The transaction malleability problem became known to the Bitcoin community in 2011. In February 2014, Japanese Bitcoin exchange Mt. Gox revealed that they had been targeted by an exploit in Bitcoin protocol called "Transaction Malleability". At the time, Mt. Gox was the world's largest bitcoin exchange, handling approximately 70% of all bitcoin transactions. The company reportedly lost hundreds of millions of dollars worth of Bitcoin due to this bug. After failing to attract enough investors to offset its losses, Mt. Gox suspended withdrawals, and closed its website. The company soon filed for bankruptcy with CEO Mark Karpelès resigning. Shortly after Mt. Gox's announcement, it was revealed that Silk Road 2.0 had lost $2.7 million worth of Bitcoin due to an unknown hacker who exploited transaction malleability. A 2014 study published by Christian Decker and Roger Wattenhofer found that no major transaction malleability exploitations had occurred prior to the MT. Gox attack.

Applications and threats

Transaction malleability can be used to alter the unique ID of a monetary transaction before it is confirmed. For example, it is possible for a hacker to fool computer systems into erroneously sending multiple transactions by manipulating the TX ID of a bitcoin transaction.

References

{{Reflist Blockchains