In a report to be featured at the 38th IEEE Symposium on Security and Privacy in May, Aviv Zohar of The Hebrew University present findings on how an attack to the Bitcoin Blockchain can occur via the Internet’s routing infrastructure. In this paper, Zohar and his collaborators Maria Apostolaki and Laurent Vanbever, show off two ways a Border Gateway Protocol (BGP) can attack Bitcoin through either a partition attack, or a delayed attack.
In the partition attack, if an Internet Service Provider ISP is the sole route within a significant part of the Bitcoin network, a black hole could stop the two sides (the blockchain and the internet routing infrastructure) from communicating with each other. While these two “islands” will continue to process transactions and mine new bitcoin, when the intruder brings the two elements together again, there is no other option than to discard the mined bitcoins, transactions, and mining revenue.
The delayed attack, however, is thought to be worst, in some respects, because unlike the partitioning attack, researchers say it is undetectable. This attack creates a scenario where merchants become vulnerable to double-spending; valuable processing power is wasted by miners, and ordinary nodes cannot spread the latest version of the blockchain.
These sort of attacks are problematic for Bitcoin’s developers because they do not control the attack vector, the respected (BGP) protocol that defines how packets are routed through the Internet.
BGP problems are well-known as they are a product of a simpler era, and are setup to trust the information received. A careless or malicious error on the part of a carrier or ISP network can essentially poison BGP route information to the Internet, black-holing major chunks of net traffic.
Both of these types of attacks do require an insider given that they happen at the ISP