Over half the internet could have been compromised by a two-year-old security flaw that also could affect a number of online bitcoin services, it was revealed today.

The vulnerability, named ‘Heartbleed’, affects versions of OpenSSL, an open-source implementation of the SSL and TLS internet security protocols that encrypt and secure internet traffic, including: passwords, messages, e-commerce and banking, and other sensitive data including Virtual Private Networks (VPNs). OpenSSL is the most popular software library used for this purpose.

Two years old

The Heartbleed flaw has reportedly been known to researchers since 2011, and even ‘black hat’ hackers since 2012, meaning critical data on a large portion of the internet has been openly available for years. There have been no confirmed reports of exploits, though attacks leave no trace.

Security admins around the world are now hurriedly applying a fix, and changing certificates and secret keys on the off-chance they could have been compromised.

Since it weakens any site using the ‘secure’ https protocol, the threat isn’t specifically to bitcoin services like wallets and exchanges. But given authorities’ tendency to ignore bitcoin thefts or inability to investigate them effectively, it could leave bitcoin services more vulnerable than ‘traditional’ online financial or other critical ones.

Test your services’ sites

Italian security expert Filippo Valsorda built a web-based test that allows anyone to enter a server’s hostname to see if it is affected or not. He also posted open-source code for the test on GitHub.

At the time of writing, entering major bitcoin services addresses on Valsorda’s site showed that Blockchain, Coinbase and BitPay were safe, but that the world’s most popular exchange, Bitstamp, remained vulnerable.

Valsorda too was more concerned about online bitcoin services than anything inherent in other implementations, saying it was “simple to exploit and not that quick to patch”.

“It’s fundamental to tell everyone to check all their servers and update ASAP […] I can’t obviously be positive about it, but bitcoin-specific software (local wallets, etc.) should not be affected even if they use OpenSSL, since the bug is only triggerable in live TLS connections.”

“However almost everything public facing in the Bitcoin ecosystem is (rightly) secured with TLS (think all web wallets, exchanges but also APIs and Mail servers) and potentially (probably) affected.”

Rushing to patch software, rotate certs

It’s estimated over 50% of internet servers use some form of OpenSSL (and probably a lot more). The thought that over half the internet’s sensitive data could have been exposed for two years has left security departments sweating.

Exploiting Heartbleed, an attacker could access the RAM of affected systems, allowing them to see up to 64 kilobytes of data at a time – enough to build up enough knowledge to access a system’s secret keys. Those keys are used to encrypt and decrypt sensitive traffic and identify service providers.

Once secret keys are gained, attackers could read any traffic to and from a server openly or impersonate services and users.

Attacks on a vulnerable system do not require man-in-the-middle techniques and leave no trace, leaving sysadmins with no sure way to know if their systems have been compromised.

The extent of the potential damage left some reeling:

Heartbleed is a rare bug: a failure in a crypto library that leaks data beyond what it’s protecting. So worse than no crypto at all.

– matt blaze (@mattblaze) 8th April 2014

Mike Hearn, developer and chair of the Bitcoin Foundation’s Law and Policy Committee, said he hoped the impact on bitcoin services would be limited, but noted that bitcoin services didn’t always employ best practices for security:

“I’m hoping the impact will be limited. Major sites will have to rotate their SSL keys after upgrading […] Most sites should have the private keys for their wallets in a different server process where the data cannot be extracted this way. However it will not surprise me if a few sites are not working this way for whatever reason and might suffer thefts.”

Companies react

Following the news, many bitcoin and altcoin exchanges took to twitter to issue official responses and update users on their progress tackling the flaw.

#Bitstamp turns off its accregistration, login & all virtual currency withdrawal functions as a precaution following recent OpenSSL news. — Bitstamp (@Bitstamp) April 8, 2014

In an interview with CoinDesk, Bitstamp CEO Nejc Kodrič revealed that although the company had patched its servers successfully, its DDoS mitigation provider, Incapsula, must do the same to ensure full security.

Hence, the exchange has chosen to remain “on the safe side” and temporarily deactivate account registrations, account logins and all virtual currency withdrawal functions.

Other exchanges have since issued similar statements via the platform, including Bitfinex – a recent addition to CoinDesk’s BPI.

Heartbleed bug fixed on Bitfinex, withdrawals are disabled for now until we make sure everyone is safe — Bitfinex.com (@bitfinex) April 8, 2014

Meanwhile, platforms like localbitcoins.com and Bitcurex have reported greater success:

We are up again, heartbleed bug fixed. http://t.co/OwP9Ft1dE7 — LocalBitcoins.com (@LocalBitcoins) April 8, 2014

Blockchain.info also released a statement via its website stating that it upgraded services a week ago. The company also emphasised that wallet passwords are never sent to its server.

It added: “We’ll be continuing to investigate as needed and provide you with any necessary updates.”

Public information release

News of Heartbleed’s existence was released by Finnish IT security consultancy Codenomicon, who published the description after trying the exploit for itself. A Google Security engineer, Neel Mehta, reported it to the OpenSSL team while Adam Langley and Bodo Moeller prepared a fix.

The name comes from the bug’s existence in OpenSSL’s ‘heartbeat’ extension, and does not represent any flaw in the SSL/TLS protocol itself.

Codenomicon said exploitation was ‘easy’ and that it had successfully attacked its own services, gaining access to secret keys for X.509 certificates, user names and passwords, and other ‘business critical’ communications.

OpenSSL’s security advisory said Heartbleed affected 1.0.1 and 1.0.2-beta releases of the software library, including 1.0.1f and 1.0.2-beta1.

“A missing bounds check in the handling of the TLS heartbeat extension can be used to reveal up to 64k of memory to a connected client or server,” it read, advising users to either upgrade immediately or remove heartbeats from their version of OpenSSL by recompiling it with -DOPENSSL_NO_HEARTBEATS.”

This story was co-authored by Grace Caffyn.

Heart image via Shutterstock