Publication Details

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

BINDER Alexander, BREITENBACHER Dominik, HARTEL Pieter H., SZALACHOWSKI Pawel, HOMOLIAK Ivan and HUJŇÁK Ondřej. SmartOTPs: An Air-Gapped 2-Factor Authentication for Smart-Contract Wallets. In: Proceedings of the 2nd ACM Conference on Advances in Financial Technologies. New York City: Association for Computing Machinery, 2020, pp. 145-162. ISBN 978-1-4503-8139-0. Available from: https://dl.acm.org/doi/epdf/10.1145/3419614.3423257
Czech title
SmartOTPs: Dvoufaktorová autentizace pro Smart-Contract peněženky
Type
conference paper
Language
english
Authors
Binder Alexander (SUTD)
Breitenbacher Dominik, Ing. (SUTD)
Hartel Pieter H. (UTWENTE)
Szalachowski Pawel, Dr. (SUTD)
Homoliak Ivan, Ing., Ph.D. (DITS FIT BUT)
Hujňák Ondřej, Ing. (DITS FIT BUT)
URL
Keywords

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

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.

Published
2020
Pages
145-162
Proceedings
Proceedings of the 2nd ACM Conference on Advances in Financial Technologies
Conference
ACM Advances in Financial Technologies, New York City, US
ISBN
978-1-4503-8139-0
Publisher
Association for Computing Machinery
Place
New York City, US
DOI
10.1145/3419614.3423257
EID Scopus
2-s2.0-85097043057
BibTeX 
@INPROCEEDINGS{FITPUB12127,
   author = "Alexander Binder and Dominik Breitenbacher and H. Pieter Hartel and Pawel Szalachowski and Ivan Homoliak and Ond\v{r}ej Huj\v{n}\'{a}k",
   title = "SmartOTPs: An Air-Gapped 2-Factor Authentication for Smart-Contract Wallets",
   pages = "145--162",
   booktitle = "Proceedings of the 2nd ACM Conference on Advances in Financial Technologies",
   year = 2020,
   location = "New York City, US",
   publisher = "Association for Computing Machinery",
   ISBN = "978-1-4503-8139-0",
   doi = "10.1145/3419614.3423257",
   language = "english",
   url = "https://www.fit.vut.cz/research/publication/12127"
}
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