Recently there has been a lot of buzz about Bitcoin and blockchains. Bitcoin is a digital currency that has received considerable attention in the past decade. The design of Bitcoin offers the world the hope of a low-cost, decentralized, and anonymous currency. It allows two or more parties to carry out financial transactions directly without the need for financial intermediaries such as banks or payment processors. The transactions are verified by network nodes and entered in a publicly distributed ledger called the blockchain. This book joins other books in Artech House’s ’Information Security and Privacy” series. The authors have published many articles at prestigious conferences related to information security.

This book, which has ten chapters, begins with an introduction to Bitcoin and blockchains. A background for digital payments is then furnished. The architecture of payment systems, the notions of security and privacy in payments, and security in payment systems before Bitcoin are then described. The specifications of the Bitcoin protocol are also looked at. The data types, the architectural aspects of Bitcoins, and the mechanisms for incorporating scalability of Bitcoins are studied. The security of transactions in Bitcoin is examined. This brings in notions such as confirmed transactions, zero-confirmation transactions and their security, and Bitcoin forks, which are explained. The focus is then on privacy in Bitcoins. The privacy of Bitcoin users, the mechanisms for enhancing privacy in Bitcoin, and attacks such as network-layer attacks on Bitcoins are highlighted.

The sixth chapter analyzes the security and privacy of lightweight clients. The concept of simple payment verification is introduced along with provisions of privacy for lightweight clients. For this, tools such as Bloom filters are used. The Bitcoin ecosystem is then probed. Payment processors, exchanges for Bitcoins, wallets for Bitcoins, mining pools, betting platforms, and other constructs are realized. There is a discussion on the applications and extensions to Bitcoin. Litecoin, Dogecoin, Namecoin, and digital assets are ushered in as possible extensions of Bitcoin. Various applications of the Bitcoin blockchain are mentioned. These include robust decentralized storage, permacoins, mechanisms for decentralized identity management, time-dependent sources of randomness, and smart contracts. The blockchain far outside the scope of Bitcoin is also considered. Notions such as sidechains, Ethereum, open blockchains, and ripples are familiarized. A comparison is made between Bitcoins, Ethereum, open blockchains, and ripples. The last chapter contains the authors’ concluding remarks. This chapter is short, just like the introductory chapter.

This is one of the first books to delve into the security aspects of Bitcoin and blockchains. It tries to answer some questions about the security aspects related to this new digital asset and ledger. The rapid growth of Bitcoin has been received with much awe and skepticism by the financial sector and the research community. Today, many merchants are accepting Bitcoins as payment. However, many banks around the world have warned Bitcoin users that they may not get chargebacks or be covered by refund rights. Bitcoins can provide legitimate financial services. However, currently they are also being used for criminal activities such as the drug trade, black markets, buying child pornography, covert mining of Bitcoins by malware and botnets, Ponzi schemes, and money laundering.

The theft of Bitcoins from Mt. Gox Bitcoin exchange and its subsequent liquidation, and the recent theft in the year 2016 of about $70 million in Bitcoins by hackers from the Bitcoin exchange Bitfinex highlight security concerns. Bitcoin mining is highly energy intensive, so critics doubt if Bitcoins really lower transaction costs. Technical issues also abound; for example, if a user’s private key is lost, the Bitcoin network will not discern any other grounds of ownership, and the Bitcoins are rendered unusable and thus lost. Bitcoins presently suffer from high price volatility. Privacy advocacy groups have criticized the Bitcoin for lack of anonymity. The legality of Bitcoins varies among countries; for example, it is legal in some but illegal in many other countries. The Bitcoin has a long way to go with regard to performance. As of now, the existing blockchain technologies do not meet the performance or transactional volume of conventional payment methods. Financial markets are doubtful about its sustainability, chiefly due to the absence of regulations and legislation. Many governments and banks are just beginning to study the pros and cons of Bitcoin. Nevertheless, Bitcoin has received more adoption than any other digital currency proposed to date, although some researchers have criticized its security and privacy provisions. Many practitioners speculate that the blockchain technology may revolutionize a number of online applications.

This book evaluates many countermeasures for some of the reported vulnerabilities of Bitcoin. It compares the security and privacy provisions of other blockchain technologies with that of Bitcoin. The book is a must-read for information technology (IT) professionals and researchers working with Bitcoin frameworks even though it is primarily meant for computer scientists, engineers, and security experts. I recommend this book for its intended audience. It can also be used for teaching a course on digital currencies and their security. Other books on the topic could be consulted as well [1,2,3,4,5].