Eve does a BitCoin Sting

Eve does a BitCoin Sting

Let’s have a bit of fun with Eve pulling off a Bitcoin Sting.

And so, after reading about the $81 million scam at the Bangladesh Central Bank , Eve settles down after her magic tricks, and flicks through the TV channels. She eventually ends up on the movie channel, and which is showing The Sting:

Before her eyes she sees Paul Newman and Robert Redford setting a fake bookmaker and then in creating delays in the transmission of the results from a horse race in order to pull off a scam (“The Sting”).

Eve’s mind, which is continually thinking about new ways of tricking people, goes into overtime. Could she do this with a Bitcoin scam?

Her target is going to be a local coffee shop, as she knows that they accept bitcoins straight away and hand her the coffee. If she was lucky she could walk out of the shop with some free coffee.

Eve sets up The Coffee Sting

In the film the scammers setup a fake bookmaker. So how could she do this?

So Eve’s first scam on the coffee shop is sneak round the back and switch the network connection of a coffee shop to her own one. For this she sets up a proxy, so the coffee shop will not be able to know there has been a switch. She then sets up a completely fake Bitcoin network which spoofs all the network transactions, including building block chains. So, once setup, she walks into the coffee shop pays for coffee and they will accept the payment, and she walks out with a free cup of coffee.

Next, in her second scam, she thinks of the plot of delaying the transmission of the horse race. Could she setup a transaction race, where she could send out a transaction with a conflicting purchase at exactly the same time, and where there would a race to see which one way accepted? Both transactions focused on certain bitcoins which Eve owns.

One would be a transaction to an account which she owns, and the other is one, for the same bit coins, to the coffee shop. So she walks into the coffee shop, and pays for her coffee, and, at the same time, she sends some money to herself. There will be a transactions race with them, and the miner will decide which is the correct one. For Eve, sometimes it will work, other times not. It’s a bit like tossing a coin for Eve. By the time that the coffee shops finds out that about the scam, Eve will have drunk the coffee, and be long gone.

With all that free coffee, and inspired by The Sting, Eve sets herself up as a Bitcoin miner for her third scam. For this she pre-computes a block chain which includes a transfer to Bitcoins A to another address which she owns. She then invests heavily in some nice new miner equipment. It then takes her a while, but she will eventually finds a block chain for the transfer to the transfer to herself, but she keeps it secret.

Next she walks into the shop and purchases her coffee, with the same bitcoins (Bitcoins A) and walks out. She now has a race against the miners, so she triggers the block chain from her miner to be broadcast into the network. This transaction is the one which uses the bitcoins that she used to purchase the coffee, to be sent to her own address. If she is quick, this will be accepted by the network and over-ride the purchase she has just made for her coffee.

Her risk here is that another miner may pick up the transaction and compute the new block chain, and she’ll have to pay for the coffee for herself. Eve thus knows she has just a few minutes to trigger her miner to broadcast … and as she walks out of the coffee shop … sweat bristles over her face … and it’s a race against time. She presses the trigger button, and she now has a free cup of coffee!

Now, for her final scam, she wants to guarantee that she’ll get a free cup of coffee, so over months she buys and rents every piece of bit coin mining equipment that she can get. She then becomes a “major miner” (!), and she calculates that she now has the power to control the network, and other miners will be swayed by her decisions.

So she goes into the shop and buys her coffee, and walks out. Now she presses the button again, and her miners create a fork for the transaction to herself, while others will pick up the coffee shop transfers and fork that for their ledgers. There is then a battle for the transaction that will win. A strong mining infrastructure is likely to win, as it will add more transactions, and there will be more miners supporting the fork.

Conclusions

All a bit of fun, or is it?