Bitcoin: Did Segwit (BIP141) eliminate all txid malleability issues listed in BIP62?
The Impact of Segwit (BIP141) on Bitcoin’s Modifiability Issues: Separating Fact from Fiction
When Bitcoin Improvement Proposal 2×11 (BIP62) was released in October 2018, it introduced several key changes to the Bitcoin protocol, including Segregated Witness (Segwit). While BIP141 was intended to address some of the most prominent modifiability issues listed in BIP62, closer inspection reveals that not all of the issues were effectively addressed. In this article, we take a detailed look at how Segwit addresses these issues and examine why it left some vulnerabilities untouched.
The Original Modifiability Issues (BIP62)
Prior to BIP141, the Bitcoin network was vulnerable to modifiability attacks, which allowed hackers to modify and manipulate transaction data without detection. The original list of formulability issues included:
- Transaction ID (txid) manipulation
- Block size reduction
- Signature verification bypass
- Broadcast attack
- Zero-knowledge proof
Segregated Witness (Segwit)
BIP141 introduced Segregated Witness, a new consensus mechanism that was intended to reduce the number of transactions broadcast and verified by the network. Segwit achieves this through two main changes:
- Closing: Segwit allows for unblocked blocks with a single transaction per block. This reduces the overall size of each block and minimizes the amount of data transferred.
- Splitting
: Segwit also allows transactions to be split across multiple unblocked blocks, further reducing the network’s bandwidth requirements.
Addressing malleability issues (BIP141)
Segwit addresses several malleability issues listed in BIP62:
- txid manipulation: By limiting the size of each block and using unsealing, Segwit reduces the likelihood of transaction ID manipulation.
- Zero-knowledge proof: Segwit’s split mechanism makes it difficult for attackers to use zero-knowledge proofs to manipulate transactions.
Why it failed to address all malleability issues
While Segwit addresses some malleability issues, it may not have effectively addressed others for the following reasons:
- Lack of block size modification: The original BIP62 list included a block size limit of 4 MB, which was reduced to 1 MB in BIP141. However, this change does not address the root cause of the malleability issues (i.e., reducing the number of transactions to be mediated and verified).
- No change to signature verification: Signature verification bypass is still possible with the current implementation of Segwit.
- Split attack vulnerabilities remain: While splitting transactions across multiple unsealed blocks reduces the network bandwidth requirements, it may not be sufficient to prevent zero-knowledge attacks.
Lightning Network Considerations
Besides Bitcoin, Lightning Network (LN) is another cryptocurrency that uses Segwit and BIP141. However, LN’s architecture and use case are significantly different from Bitcoin’s:
- Higher transaction throughput: LN has a more efficient transaction processing mechanism than Bitcoin, making it less susceptible to malleability attacks.
- Reduced Block Size Limit: LN uses a different consensus algorithm that allows for larger block sizes.
Conclusion
While Segwit (BIP141) has addressed the most prominent malleability issues listed in BIP62, it may not have effectively addressed all of the issues due to block size changes and signature verification. The Lightning Network architecture also presents unique challenges that reduce its vulnerability to malleability attacks.
In conclusion, while Segwit is a significant improvement over Bitcoin’s original protocol, it cannot eliminate all transaction identifier malleability issues.
