Publication detail

SmartOTPs: An Air-Gapped 2-Factor Authentication for Smart-Contract Wallets

BINDER, A. BREITENBACHER, D. HARTEL, P. SZALACHOWSKI, P. HOMOLIAK, I. HUJŇÁK, O.

Original Title

SmartOTPs: An Air-Gapped 2-Factor Authentication for Smart-Contract Wallets

Type

conference paper

Language

English

Original Abstract

With the recent rise of cryptocurrencies, the security and management of crypto-tokens have become critical. We have witnessed many attacks on users, their software, or providers, which have resulted in significant financial losses. To remedy these issues, many wallet solutions have been proposed. However, these solutions often lack essential security features, usability, or do not allow users to customize their spending rules. In this paper, we propose SmartOTPs, a smart-contract cryptocurrency wallet framework that gives a flexible, usable, and secure way of managing crypto-tokens in a self-sovereign (i.e., non-custodial) fashion. The proposed framework consists of four components (i.e., an authenticator, a client, a hardware wallet, and a smart contract), and it provides 2-factor authentication (2FA) performed in two stages of interaction with the blockchain. To the best of our knowledge, our framework is the first one that utilizes one-time passwords (OTPs) in the setting of the public blockchain. OTPs are aggregated by a Merkle tree and hash chains in such a way that for each authentication only a short OTP (e.g., 16B-long) is transferred from the authenticator to the client. Such a novel setting enables us to make a fully air-gapped authenticator utilizing small QR codes or a few mnemonic words, while additionally offering resilience against quantum cryptanalysis. We have made a proof-of-concept basing on the Ethereum platform. Our cost analysis shows that the average cost of a transfer operation is comparable to existing 2FA solutions using smart contracts with multi-signatures.

Keywords

cryptocurrency wallets, smart contracts, 2-factor authentication, Merkle tree, one-time passwords, post-quantum computing

Authors

BINDER, A.; BREITENBACHER, D.; HARTEL, P.; SZALACHOWSKI, P.; HOMOLIAK, I.; HUJŇÁK, O.

Released

21. 10. 2020

Publisher

Association for Computing Machinery

Location

New York City

ISBN

978-1-4503-8139-0

Book

Proceedings of the 2nd ACM Conference on Advances in Financial Technologies

Pages from

145

Pages to

162

Pages count

18

URL

https://dl.acm.org/doi/epdf/10.1145/3419614.3423257

BibTex

@inproceedings{BUT168117,
  author="BINDER, A. and BREITENBACHER, D. and HARTEL, P. and SZALACHOWSKI, P. and HOMOLIAK, I. and HUJŇÁK, O.",
  title="SmartOTPs: An Air-Gapped 2-Factor Authentication for Smart-Contract Wallets",
  booktitle="Proceedings of the 2nd ACM Conference on Advances in Financial Technologies",
  year="2020",
  pages="145--162",
  publisher="Association for Computing Machinery",
  address="New York City",
  doi="10.1145/3419614.3423257",
  isbn="978-1-4503-8139-0",
  url="https://dl.acm.org/doi/epdf/10.1145/3419614.3423257"
}