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

Ivan Homoliak, Dominik Breitenbacher, Ondrej Hujnak, Pieter Hartel, Alexander Binder, Pawel Szalachowski

Research output: Chapter in Book/Report/Conference proceedingConference contributionAcademicpeer-review

2 Citations (Scopus)
27 Downloads (Pure)

Abstract

With the recent rise of cryptocurrencies' popularity, the security and management of crypto-tokens have become critical. We have witnessed many attacks on users and providers, which have resulted in significant financial losses. To remedy these issues, several wallet solutions have been proposed. However, these solutions often lack either essential security features, usability, or do not allow users to customize their spending rules. In this paper, we propose SmartOTPs, a smart-contract wallet framework that gives a flexible, usable, and secure way of managing crypto-tokens in a self-sovereign 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. In SmartOTPs, the OTPs are aggregated by a Merkle tree and hash chains whereby 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 by utilizing small QR codes or a few mnemonic words, while additionally offering resilience against quantum cryptanalysis. We have made a proof-of-concept based 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.

Original languageEnglish
Title of host publicationAFT 2020 - Proceedings of the 2nd ACM Conference on Advances in Financial Technologies
PublisherAssociation for Computing Machinery (ACM)
Pages145-162
Number of pages18
ISBN (Electronic)9781450381390
DOIs
Publication statusPublished - 21 Oct 2020
Event2nd ACM Conference on Advances in Financial Technologies, AFT 2020 - Virtual, Online, United States
Duration: 21 Oct 202023 Oct 2020
Conference number: 2

Publication series

NameAFT 2020 - Proceedings of the 2nd ACM Conference on Advances in Financial Technologies

Conference

Conference2nd ACM Conference on Advances in Financial Technologies, AFT 2020
Abbreviated titleAFT 2020
Country/TerritoryUnited States
CityVirtual, Online
Period21/10/2023/10/20

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