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Bitcoin: Trying to understand the non-canonical DER signature error for a specific transaction

Published by Terlumun Aondover on February 5th, 2025.

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Understanding Non-canonical DER Signature Errors in Bitcoin Transactions

When it comes to executing Bitcoin transactions, security is paramount. One of the most crucial aspects of ensuring secure execution is the handling of digital signatures, specifically the non-canonical derivation (NCD) scheme used by Bitcoin. In this article, we will delve into the world of non-canonical derivatives and how they can lead to signature errors in certain transaction scenarios.

What are Non-canonical DER Signatures?

In the Bitcoin blockchain, a transaction is composed of multiple components, including inputs, outputs, fees, and digital signatures. The signature is generated using the elliptic curve digital signature algorithm (ECDSA) with SHA-256 as the message digest algorithm. However, NCD is used to derive signatures for specific output values without actually generating a full ECDSA signature.

In a standard 2/3 multi-sig transaction, two parties agree on the outputs they will receive. The first party’s public key generates the inputs, while its private key is used to sign the transaction. The second party’s public key signs the transaction, which is then executed by miners to produce the output values.

The Problem: Non-canonical DER Signature Errors

Now, consider an edge case where two transactions produce the same hash but have different outputs due to NCD errors. In this scenario, the first transaction (Tx 1) has a specific non-canonical DER signature error, while the second transaction (Tx 2) does not.

Why does this matter?

Bitcoin: Trying to figure out non-canonical DER signature error for a specific tx

If Tx 1’s signature is non-canonical, it means that the second party’s private key used to sign Tx 2 has been compromised. Even though the two transactions produce the same hash, the different output values are due to this NCD error, which could have serious security implications.

Sample Code: Understanding Derivation

To illustrate how this works, let’s look at a simplified example using Bitcoin’s libec library:


#include 
// Define ECDSA parameters
const EC_KEY ec_key = EC_KEY_new_from_file("private_key.pem");
EC_PUBKEY pubkey1 = EC_KEY_to_pubkey(ec_key);
EC_PUBKEY pubkey2 = EC_KEY_to_pubkey(ec_key);
int main() {
// Sign Tx 1 with pubkey1
EC_signature *sig1 = EC_sign(0, ec_key, "tx1_data", NULL);
// Derive signature for Tx 2 using NCD
int ncd_error = -1; // Get error code
EC_PUBKEY derived_pubkey;
if (ec_derive(ncd_error, pubkey2, &derived_pubkey)) {
printf("Derived public key: %s\n", derived_pubkey.to_string().c_str());
return 0;
}
// Sign Tx 2 with derived-public-key
EC_signature *sig2 = EC_sign(1, ec_key, "tx2_data", &derived_pubkey);
// Output hash (assuming hash() is implemented)
uint256 output1_hash;
uint256 output2_hash;
// ...
if (!hash(output1_hash)) {
printf("Error generating output hashes Tx 1\n");
return -1; // Error Handling
}
if (!hash(output2_hash)) {
printf("Error generating output hashes Tx 2\n");
return -1; // Error Handling
}
}

In this example, ec_derive is used to derive the public key of the second party’s private key (which has been compromised). The resulting public key is then used to sign Tx 2.

Conclusion

In conclusion, non-canonical DER signature errors can occur when executing certain types of Bitcoin transactions. By understanding how NCD works and how it differs between two transactions with different output values, we can better appreciate the importance of secure derivation schemes like ECDSA with SHA-256. To mitigate these issues, developers should ensure that their implementation properly handles NCD errors and ensures that all public keys are valid before signing transactions.

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