Fresh warnings over Bitcoin Cash......is it really safe?

This morning I came across an article that raised concerns over the Bitcoin Cash fork and the possibility of 'Replay Attacks' and the potential to lose money.

To recap, on August 1, a group of users and mining pools who didn't agree with bitcoin's technical direction split off to create a new cryptocurrency, bitcoin cash, in the hopes of winning over users. And because of the way it "forked" from bitcoin, most users of bitcoin at the time are now left with an equal amount of bitcoin cash, and those funds are tied to their existing wallets. 

What is a Replay Attack?

 An attacker, or anybody in general, could pick up your broadcasted transaction on one chain, and relay it to a node on another chain. Since the transaction is valid on both chains, both nodes would accept it. Even though you didn’t mean to spend your other coins, a malicious attacker or even the receiver trying to sneak himself extra coins could make you spend them. However, that can happen only if you decide to spend your coins in the first place. If you never send a transaction nobody can magically remove coins from your wallet. This attack works both ways too, you could spend BTU coins, and if a BTC node picks up the transaction those coins could be gone as well. 

How to protect against it?

 Protecting against this type of “replay attack” will be quite a challenge, to say the least. Both individual blockchains would have to ensure funds cannot be moved twice, although that is much easier said than done. One way that the replay attack could be avoided is if each respective fork added a “salt” to their transaction, making a transaction on one chain only valid on that specific chain. This would prevent attackers from broadcasting transactions on alternate chains, as they would be deemed invalid. 

What is Bitcoin Cash doing about it?

The main method is a redefined sighashing algorithm which is basically the same as the one specified by BIP 143. This sighash algorithm is only used when the sighash flag has bit 6 set. These transactions would be invalid on the non-UAHF chain as the different sighashing algorithm will result in invalid transactions. This means that in order to use this, you will need to transact on the UAHF chain first and then on the non-UAHF chain second. 

 They Bitcoin Cash specification now requires that all transaction use the redefined sighashing algorithm as explained for the first method. This means that there is now two way transaction replay protection; transactions made on the Bitcoin ABC chain will be invalid on the non-ABC chain and vice versa. 

You can read more about it here: 

https://www.coindesk.com/lightnings-tadge-dryja-working-bitcoin-cash-splitter/

Do you have Bitcoin cash and do you have any concerns about it? Let me know in the comments.

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