Can confidential computing stop the next crypto heist?

November 7, 2022 TH Author

The theft of billions of dollars in cryptocurrency over recent months could have been prevented, and confidential computing is a key to the security fix.

Confidential computing aims to isolate sensitive data without exposing it to the rest of the system, where it would be more vulnerable to intruders. It does this by processing encrypted data in memory using hardware-based secure enclaves.

“The number of incidents in this space — just a few months ago the attack of the Ronin Bridge for example,” says Fireblocks co-founder and CTO Idan Ofrat, referencing the $600 million blockchain bridge heist in which an attacker used hacked private keys to forge withdrawals and steal funds.

Ofrat’s company focuses on digital asset infrastructure for banks, cryptocurrency exchanges, NFT marketplaces and other organizations that want to build blockchain-based products.

The Ronin hack “was the largest ever attack on cryptocurrencies, and to exploit it, the attacker was able to control one wallet and sign two transactions,” Ofrat continues. “If they had used confidential computing, they probably wouldn’t have gotten to that stage.”

“When you think about digital asset security, the first thing that you need to protect is the private key of the wallet,” Ofrat tells The Register.

This is where confidential computing comes into play. There are alternate technologies, like cryptographic hardware security modules (HSMs) and other key management systems, but in the digital asset space these aren’t secure enough, Ofrat opines.

Private key security

For example: miscreants can compromise wallet software and instruct the HSM to sign malicious transactions, he explains. “This is where confidential computing is much more powerful because it allows you to protect the entire flow including the generation of the transaction, the policies that you want to apply to this transaction and who approves it, and then also protect the private key itself.”

Fireblocks uses confidential computing for multi-party computation for private key security. The specific implementation is based on the concept of threshold signatures, which distributes the generation of key shares across multiple parties and requires a “threshold” of these shares (for example, five of the eight total shares) to sign the blockchain transaction.

“Off-the-shelf key management products like HSMs don’t support the algorithm that you need for multi-party computation,” Ofrat adds. “So in order for us to both protect the key but also use multi-party computation to break the key into multiple shards, the only way to do it is confidential computing.”

All of the major cloud providers have their own flavor of confidential computing, and at their respective conferences last month both Microsoft and Google added services to their confidential computing portfolios.

Pick your flavor

Google, which first introduced its Confidential Virtual Machines in 2020, announced Confidential Space, which allows organizations multi-party computation, last month. This, according to Google Cloud Security VP and GM Sunil Potti, will let organizations collaborate without exposing sensitive data to their partners or the cloud provider.

For example, banks can work together to identify fraud or money laundering activity without exposing private customer information — and breaking data privacy laws in the process. Similarly, healthcare organizations can share MRI images or collaborate on diagnosis without revealing patient information, Potti said at the event.

Meanwhile, Microsoft also announced the general availability of its confidential virtual machine nodes in Azure Kubernetes Service in October. Redmond first demonstrated confidential computing at its 2017 Ignite conference, and Azure is widely considered the most mature provider of the still-nascent technology.

Amazon calls its confidential computing product AWS Nitro Enclaves — but as all cloud customers with data spread across multiple environments quickly discover, providers’ services don’t always play nice with each other. This holds true for confidential computing technologies, which has created a market for companies like Anjuna Security.

Or use cloud-agnostic software

Anjuna developed confidential computing software that allows companies to run their workloads on any hardware and in any cloud providers’ secure enclaves without having to rewrite or otherwise modify the application. This makes securing sensitive data really easy, Anjuna CEO and co-founder Ayal Yogev tells The Register.

He likens his company’s software to HTTPS: “It’s simple, so why wouldn’t you use it instead of HTTP? With confidential computing, it’s essentially the same thing,” Yogev says. “We make it super simple to use.”

Anjuna’s customers include the Israeli Ministry of Defense, banks and other financial services firms, and digital asset managers.

While Fireblocks started using Azure Confidential Computing when the service was available in preview, and its core is built on Intel SGX for secure enclaves, “we want to give out customers options, like AWS Nitro or GCP,” Ofrat says. “Customers can choose whatever cloud partner they want, and Anjuna supports all of them.”

Will it go mainstream?

A recent Cloud Security Alliance survey [PDF], commissioned by Anjuna, found 27 percent of respondents currently use confidential computing and 55 percent plan to do so in the next two years.

Ofrat says he expects confidential computing to become more mainstream across cloud environments over the next three of five years.

“This will support Web3 use cases, but also government and healthcare use cases around privacy,” he adds.

Benefits of confidential computing even extend to protecting against ransomware and IP theft, Ofrat tell us, noting the rumored Disney movie theft in which crooks reportedly threatened to release film clips unless the studio paid a ransom.

“They could take this simple technology and encrypt movies before they’re out,” he says. “The technology can be really beneficial.”

And keeping stolen cryptocurrency out of crooks’ hands wouldn’t be such a bad thing, either. ®