The Ring of Gyges: Using Smart Contracts for Crime

Thanks to their anonymity (pseudonymity) and lack of trusted intermediaries, cryptocurrencies such as Bitcoin have created or stimulated growth in many businesses and communities. Unfortunately, some are criminal, e.g., money laundering, marketplaces for illicit goods, and ransomware. Next-generation cryptocurrencies such as Ethereum will include rich scripting languages in support of smart contracts, programs that autonomously intermediate transactions. We illuminate the extent to which these new cryptocurrencies, by enabling criminal activities to be conducted anonymously and with minimal trust assumptions, may fuel new criminal ecosystems. Specifically, we show how what we call criminal smart contracts (CSCs) can facilitate leakage of confidential information, theft of cryptographic keys, and various realworld crimes (murder, arson, terrorism). We show significantly that CSCs for leakage of secrets are efficiently realizable in existing scripting languages such as that in Ethereum. We show that CSCs for key theft can be achieved using cryptographic primitives, such as Succinct Non-interactive ARguments of Knowledge (SNARKs), that are already expressible in these languages and for which efficient supporting language extensions are anticipated. We demonstrate similarly that authenticated data feeds, another anticipated feature of smart contract systems, can facilitate CSCs for real-world crimes. Our results illuminate the scope of possible abuses in nextgeneration cryptocurrencies. They highlight the urgency of creating policy and technical safeguards and thereby realizing the great promise of smart contracts for beneficial goals.