Using Timelock in Bitcoin is a mode that is used to make transactions. The use of it, could bring risks according to the analysis of a developer whose pseudonym is 0xb10c.
According to this person, the increased use of this block could allow theft among miners. This is because the transactions made with Timelock do not have all the security of the network, according to the report.
This is a network error, which at the moment is almost imperceptible, but it will still be there. As the use of the network becomes more widespread, it will become more common for those who use Timelock to become victims of fee-sniping robberies.
What is it and what does it mean to use Timelock in Bitcoin?
A Timelock is a kind of primitive intelligent contract. With its use, you can determine at what height or time in a block, a transaction can be collected and sent to the ledger by the miners.
This is one of the most practical options of this cryptomonkey, which allows you to restrict expenses. Until the parameters with which it was programmed are fulfilled, no miner will be able to take it and include it in a block, remaining the same, pending.
There are two programmable ways to do this. The first one is according to the height of the block. The other is by placing a time parameter. When the limit is reached, the miners can do their job and the transaction is marked as completed.
It’s worth noting that Bitcoin’s Timelocks were included by Satoshi Nakamoto in the creation of his project. In addition, there are four modes of Timelock with double functionality: transactions themselves (nLocktime and nSequence) and the scripts (CheckLockTimeVerify and CheckSequenceVerify).
In practice: You want to send 1 Bitcoin to another person and have that transaction reach you in a non-automatic time. In this case, Timelock is applied so that you can define what will take to arrive according to your interest. It can be programmed in time frames (for example, in one day) or in sequence (for example, within 20 blocks).
Is Bitcoin security vulnerable?
What is the risk of Timelock detected by 0xb10c?
As noted above, this is a network error that allows some vulnerability. In a study, based on transactions operated between September 2019 and March 2020, the mentioned developer shows its results.
„About 10.9 million (19%) of the 57.49 global transactions were made with Timelock. From those, 1.6 million were vulnerable. This represents 2% of the total and 10% of those made with Timelock.
It concluded in its study that 10% of Bitcoin’s transactions with Timelock are vulnerable to fee-sniping. As for the transactions in general, only 2%. In both cases, the vulnerability becomes almost invisible today.
The number of users who make Bitcoin transactions today does not represent a massive amount. For this reason, a 10% or 2% error rate affects a very small number of people compared to the errors of traditional banking.
However, the development of Bitcoin, its massive adoption, and the increase in its price, could change this and make using Timelock in Bitcoin a threat to transactions.