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NETWORK-LAYER ATTACKS

In this section, we show how an adversary can leverage information from the Bitcoin P2P network in order to profile Bitcoin users. We start with a brief refresher on information exchange in the Bitcoin network.

Refresher on Bitcoin P2P Network Setup

Initially, Bitcoin peers communicated with the rest of the network peers through unencrypted and unauthenticated TCP connections.

Since there was no authentication offered by the connection layer, peers maintain a list of IP addresses associated with their connections (neighbors). To avoid denial-of-service attacks, peers evaluate the behavior of their neighbors in the P2P network by implementing a reputation-based protocol. In particular, whenever a malformed message is received by a node, the peer decreases the reputation value (or increases the penalty score) of the associated connection categorized using its IP. As soon as the penalty score of a connection reaches a threshold value (currently 100), the peer rejects connection requests coming from that IP for 24 hours (see Chapter 3 for more detail on this process).

As mentioned in Chapter 3, Bitcoin peers maintain by default eight outgoing connections, also known as entry nodes.

 
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