E-commerce is the more reputed way to do transactions nowadays and all the online
transaction use multicurrency. At present, e-commerce and online trade is the most
popular way to buy or sell anything and this domain has become a very broad and wide
area. These e-commerce and online trading applications are using a different level of
security mechanism and those mechanisms provide some certain level of security. These
security mechanisms basically depend on third-party authentications using symmetric or
asymmetric key cryptography approaches.When using any third party or middle
hand to authenticate any transaction still there can be a lot of vulnerabilities since security
control and sensitive data been shared with an external party. As a solution to this
situation block-chain concept was introduced and using this concept, third-party
dependencies of an application can be eliminated.
Most of the existing online trading application and payment systems have been integrated
with the actual bank and all these bank transactions are always use bank profiles to do
any transaction. But using cryptocurrency like bitcoin no need to have a bank profile and
it is very fast compared to others. Currently, all the other fiat-currencies has a tendency to
inflate and it can be very time dependent but it’s very important to find out
noninflationary currency that will be helpful for the stability of the economy. This
solution mainly based on the bitcoin which is well-organized crypto-currency and peer-
to-peer payment method and it has more value-added features than existing wallet
services and peer-to-peer payment applications. This application basically focuses on the
high-security wallet mechanism, wallet restore functionality in any crash or vulnerability
situation and also user-friendly application to the user with seamless transaction delay
time. And also this application is open source user creation and any user can create a
wallet with basic validations and can use for any bitcoin transfer functionalities. Using
this application user can always check his balances and transaction history at any time
and also this APIs can be integrated with any front-end client since back-end service have
been implemented as micro-services endpoints. As an end product, this will be an open
source high secure bitcoin wallet application with integration capability with any third
party services like a bank, card applications.
Table of Contents
CHAPTER 1
1.1 INTRODUCTION
1.1.1 Blockchain Basics
1.1.2 Hash Function
1.1.3 Cryptographic Hash Function
1.1.4 Hash Chain
1.1.5 Linked List and Block Chain Structure
1.1.6 Public Key Cryptography
1.1.7 Public Cryptography in Bitcoin
1.1.8 How to Secure Hash Chain with Public Key Cryptography
1.1.9 What is Block-Chain
1.2.1 Introduction to Bitcoin
1.2.2 Current Use Case of Bitcoin
1.2.3 How Bitcoin works
1.2.4 How Block Chain use in Bitcoin
1.3.1 Bitcoin Mining
1.3.2 Proof of Work – (PoW)
1.3.3 Proof of Stake – (PoS)
1.4.1 Bitcoin Address
1.4.2 Bitcoin Address Creating Process
CHAPTER 2
3.1 BACKGROUND – LITERATURE REVIEW
3.1.1 Theoretical background on Blockchain ecosystem and Secure Wallet
3.1.2 Summary of existing Bitcoin wallet security and application features
CHAPTER 3
2.1 PROBLEMS DEFINITION (Existing application and wallet security mechanism gaps)
2.2 Aim and objectives
2.3 Limitations
2.4 Assumptions
CHAPTER 4
4.1 METHODOLOGY
4.2 Secure Wallet Implementation
4.2.1 Single-Sign Transaction
4.2.2 Multi-Sign Transaction
4.2.3 Simplified Payment Verification (.spv)
4.2.4 Wallet Encryption
4.2.5 Wallet Backup
4.2.6 Restore Wallet
4.3.1 Deployment and Hosting
4.3 Technology Stack
CHAPTER 5
5.1 Evaluation & Results
5.1.1 Evaluation Plan
5.1.2 User Experience Test Scenarios
5.1.3 Bitcoin Transfer Testing
5.1.4 Software Wallet File Location Security
5.1.5 Double Spending Attack
5.1.6 Transaction Confirmation Time
5.1.7 Hypothetical Testing on Multi-Sign Transactions
CHAPTER 6
6.1 Discussion
6.2 Challenges
6.3 Future Work
Objectives and Core Topics
The primary objective of this thesis is to develop a highly secure, web-based peer-to-peer payment system utilizing Bitcoin, which addresses critical security vulnerabilities in existing solutions through innovative wallet management and transactional improvements.
- Implementation of a multi-signature transaction mechanism to enhance security beyond single-key authentication.
- Development of a secure wallet system featuring encryption, automated backup, and restoration capabilities using mnemonic seed codes.
- Integration of a Bitcoin auction feature to facilitate direct buy and sell requests among users.
- Optimization of Bitcoin transaction confirmation times to improve the efficiency of small-value (Nano) transfers.
- Deployment of the application as a cloud-based micro-services architecture to ensure platform independence and high scalability.
Excerpt from the Book
4.2.2 Multi-Sign Transaction
The standards transaction in bitcoin using single-sign transaction but bitcoin network is supporting the multi-sign transaction as well. In the multi-sign transaction will need multiple private keys from more than one person and this mechanism will be more complex. This mechanism will more secure since it will require multiple users private keys and involvement in order to continue with the transaction. These N keys can be arbitrary and any M of which required for any transaction to perform. This is like example safety deposit box in the real world. For safety box banker has one key and also customer also has a key. In order to open the safety both key need to be present at same time. There are few security advantages of this multi-sig transaction technology. Using multi-sig transaction we can eliminate a single point of frailer because one key can be generated in one location and other key in another location and in order to continue the transaction both location keys need to be available. So in backend could not steal any coins without both keys.
Summary of Chapters
CHAPTER 1: Provides a foundational introduction to blockchain technology, Bitcoin operations, mining processes (PoW/PoS), and the mechanisms of public key cryptography used for secure transactions.
CHAPTER 2: Reviews existing literature on blockchain ecosystems and Bitcoin wallet security, identifying common industry drawbacks such as platform dependency and lack of advanced authentication.
CHAPTER 3: Defines the problem scope, specifically focusing on single-signing threats, double spending, 51% attacks, and the lack of robust wallet recovery mechanisms in current applications.
CHAPTER 4: Details the methodology for the proposed system, covering the architectural design, micro-services implementation, database structure, and the secure wallet lifecycle including encryption and multi-signature support.
CHAPTER 5: Presents the evaluation plan and results, using TestNet3 for simulated environment testing, validating security features, restoration functionality, and transaction speed improvements.
CHAPTER 6: Discusses the implementation outcomes, addresses the technical challenges encountered during development, and suggests future improvements such as bixcoin integration and expanded auction capabilities.
Keywords
Blockchain, Peer-to-peer, Bitcoin, Crypto-currency, Wallet, Private Key, Public Key, Hash chain, Double Spending, 51% Attack, Multi-Sign, Distributed Ledger Technology, Smart Contract, Simplified Payment Verification, Wallet Encryption
Frequently Asked Questions
What is the core focus of this thesis?
The thesis focuses on improving the security and usability of peer-to-peer Bitcoin payment systems by addressing deficiencies in current wallet management and transactional security protocols.
What are the primary themes discussed?
The work covers blockchain fundamentals, Bitcoin network architecture, cryptographic security, multi-signature transaction implementation, and the development of a micro-services-based web application.
What is the main goal of the proposed system?
The primary goal is to implement a secure, cloud-based Bitcoin payment system that includes advanced features like multi-signature authentication and reliable wallet restoration.
Which scientific method is applied?
The author uses a constructive, implementation-oriented research method, developing a software solution as a prototype and testing it within the TestNet3 staging environment.
What is covered in the main section of the document?
The main section details the methodology, including the component design, API endpoints for the micro-services architecture, and specific source code implementations for wallet encryption and restoration.
Which keywords characterize this research?
Key terms include Blockchain, Peer-to-peer, Bitcoin, Multi-Sign, Distributed Ledger Technology, Smart Contract, and Wallet Encryption.
How does the multi-signature feature improve security?
By requiring M of N keys to authorize a transaction, it eliminates the single point of failure inherent in single-sign wallets, ensuring that no single compromised key can result in the loss of funds.
Why is a wallet restoration mechanism significant?
Existing solutions often lack recovery tools; the proposed system uses mnemonic seed codes stored in an encrypted database to allow users to recover their wallet file and transaction history in the event of hardware or software failure.
How is the issue of transaction delay addressed?
The system introduces a mechanism to dynamically adjust transaction fees based on block size, incentivizing miners to prioritize specific transactions and thereby reducing confirmation delays for Nano transactions.
What challenges did the author face during implementation?
The author highlights the scarcity of understandable technical resources, the difficulty of setting up a local blockchain test environment, and the impossibility of conducting real-world testing on the main Bitcoin network due to high transaction costs.
- Citar trabajo
- Eranda Gunasena (Autor), 2018, Peer-to-peer payment system and crypto-currency using blockchain technology with a secure wallet and multi-signature transactions, Múnich, GRIN Verlag, https://www.grin.com/document/491201
