04

Research

Blockchain and Smart Contract Group

Stefan Dziembowski

Leader of Research Group

Polish IT specialist, professor of exact and natural sciences. He specializes in cryptography. Professor at the Institute of Computer Science at the Faculty of Mathematics, Informatics and Mechanics at the University of Warsaw

Blockchain technology was introduced in 2008. What is typically understood by this name are cryptographic protocols for achieving large-scale consensus in distributed networks. They can work in the so-called permissionless settings, where the set of participants is not determined a priori, or in permissioned settings, where the consensus is maintained by predefined groups of servers. The initial applications of these technologies were within the financial sector, mostly in the creation of new virtual cryptocurrencies (such as Bitcoin). However, currently, this technology is believed to have many more applications, in particular, in schemes for managing digital identity, mortgages, land title recording, supply chain monitoring, insurance, clinical trials, copyright management, running decentralized organizations, energy trading, and in the Internet-of-Things. Some of these applications involve the so-called smart contracts, which are self-executable agreements resembling legal contracts, written in a programming language. 

Probably the best-known example of a blockchain platform that permits the deployment of such contracts is Ethereum Of course, several of the aforementioned blockchain applications may be slightly too far-fetched and may lose the competition with centralized solutions. Yet, we are confident that some of them will be successful, and that this technology has substantial potential in the new digital economy. Within this area, we plan to focus on the following tasks.

Decentralized Finance

One of the main problems of cryptocurrencies is their highly fluctuating exchange rates with standard currencies. The term Decentralized Finance (often abbreviated as DeFi) refers to blockchain solutions that address this problem. The most notable examples are the stable coins, where the internal currencies of a given blockchain are exchangeable with the fiat money at a fixed rate. There are several interesting proposals on how to construct such coins, most of them coming from blockchain startups and lacking full formal security analysis. We will work on improving these protocols and understanding their security properties. DeFi protocols can also be used as a replacement for financial institutions such as the stock market. One of the problems with this approach are the so-called front-running attacks where the miners (or other powerful users) constantly monitor the messages sent to the blockchain and choose their transactions depending on the transactions of the other users. Unfortunately, most blockchain solutions allow such powerful participants to publish their transactions on the blockchain before the original transactions appear there. This can lead to considerable financial losses for such honest participants. We will work on addressing this problem in real life using tools from cryptography.

Proofs-of-Space in practice

The most popular blockchain platforms (including the Bitcoin one) use consensus based on the so-called Proofs-of-Work, where the participants are incentivized to constantly solve a large amount of computational “puzzles” (this process is also called mining). This leads to massive electricity consumption, and it is currently estimated that the Bitcoin blockchain alone wastes more electricity than a mid-sized country.  Several alternatives to Bitcoin mining have been proposed in the past.  Stefan Dziembowski (who leads this research at IDEAS) is one of the authors of another approach to this problem, called the Proofs of Space. In this solution, the computational puzzles are replaced with proofs that a given party contributed some disk space to the system. The only intensive computation happens in the setup phase, during which the user fills in her disk with pseudorandom data. Once this is over, the user performs only occasional lightweight computations. Several ongoing blockchain projects are based on these ideas. Recently, one of these projects (www.chia.net) went live, and it is very instructive to observe its performance and the problems that appear during its operation.  We will be monitoring the situation in this field and identify opportunities for improvements to the existing protocols.

Real-life side-channel security of blockchain wallets

Another important weakness in the vision of decentralizing internet services is that interacting with blockchains is more complicated than in the case of centralized solutions. Moreover, the decentralization makes it harder to revert the transactions that were posted by mistake or as a result of an attack. In several blockchains, reverting transactions is not possible at all (this is the case, e.g., in Bitcoin or Ethereum). Due to this problem, users are often discouraged to interact with blockchains using insecure devices such as PCs or smartphones. Instead, they can rely on the help of trusted servers, which is a solution that invalidates most of the benefits of the decentralization, and had disastrous effects in the past. A much more secure solution is to use the so-called hardware wallets, which are dedicated devices, protected against cyber-attacks. Several such commercial solutions are available on the market. We will work on analyzing the security of the existing hardware wallets. In particular, we will be interested in their side-channel security, i.e., security against attacks based on information such as power consumption or electromagnetic radiation. In IDEAS we will be more focused on the practical aspects of this problem. In particular, we plan to hire practitioners who are experts in side-channel analysis to work on this topic. We hope that the expertise gained in this way can potentially lead to the construction of new, more secure wallets.

Practice-oriented verification of blockchain protocols

One of the main problems in the blockchain area is that decentralized solutions are typically more complex and error-prone than centralized ones. In particular, errors in smart contracts can lead to considerable financial losses. Furthermore, some blockchain algorithms in the past had serious errors that could be used to steal large amounts of money. We will address these problems using tools from formal methods, in particular, proof assistants and provers such as Coq, Easycrypt, Why3, and others. Theoretical aspects of this work are one of the topics of the ongoing ERC grant of Stefan Dziembowski. In IDEAS, we will work on more technical aspects, especially on making this approach usable in real life by blockchain developers.

Stefan Dziembowski

Leader of Research Group

Professional experience

Stefan Dziembowski is a professor at the University of Warsaw. He is interested in theoretical and applied cryptography. Dziembowski received an MSc degree in computer science in 1996 from the University of Warsaw, and a PhD degree in computer science in 2001 from the University of Aarhus, Denmark. He was a post-doc at the ETH Zurich, CNR Pisa and the University of Rome “La Sapienza”, where he joined the faculty in 2008. In 2010 he moved to the University of Warsaw where he leads the Cryptography and Blockchain Lab.

Awards and achievements

His papers appeared at leading computer science conferences (FOCS, STOC, CRYPTO, EUROCRYPT, ASIACRYPT, IEEE S&P, ACM CCS, TCC, CT-RSA, and LICS), and journals (Journal of Cryptology and IEEE Transactions on Information Theory, Journal of the ACM, Communications of the ACM). He also served as a PC member of several international conferences, including CRYPTO, EUROCRYPT, ASIACRYPT, Theory of Cryptography Conference (TCC), and the International Colloquium on Automata, Languages and Programming (ICALP). He served as the general chair of the Twelfth Theory of Cryptography Conference (TCC’15), and as a PC co-chair of TCC’18. He will serve as a PC co-hair of Eurocrypt 2022. He was also a keynote speaker at the Conference on Cryptographic Hardware and Embedded Systems (CHES) 2020. He is a co-author of two papers that won the Best Paper Awards (at Eurocrypt 2014 and at IEEE S&P 2014).

Grants

He is a recipient of an ERC Advanced Grant, ERC Starting Independent Researcher Grant, an FNP Welcome grant, an FNP Team grant, two NCN “Opus” grants, and a Marie-Curie Intra-European Fellowship (2006-2007).   He is also a winner of the Polish-German “Copernicus” Award (in 2020, together with prof. Sebastian Faust) and the Kazimierz Bartel award (in 2016). He will serve as a member of the Council of the Polish National Science Centre in the 2021-24 term.

RESEARCH

Algorithms, especially the ones used in machine learning, promise to aid people in making decisions.

Blockchain technology was introduced in 2008.

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