AFC has been subjected to a formal third-party security review. For security announcements, audit results and other general security information, see https://AFC/support/security.html
There are known bugs which make proving keys generated on 64-bit systems unusable on 32-bit and big-endian systems. It's unclear if a warning will be issued in this case, or if the proving system will be silently compromised.
Wallet encryption is disabled, for several reasons:
You should use full-disk encryption (or encryption of your home directory) to protect your wallet at rest, and should assume (even unprivileged) users who are runnng on your OS can read your wallet.dat file.
This implementation of AFC is not resistant to side-channel attacks. You should assume (even unprivileged) users who are running on the hardware, or who are physically near the hardware, that your AFC process is running on will be able to:
Determine the values of your secret spending keys, as well as which notes you are spending, by observing cache side-channels as you perform a JoinSplit operation. This is due to probable side-channel leakage in the libsnark proving machinery.
Determine which notes you own by observing cache side-channel information leakage from the incremental witnesses as they are updated with new notes.
Determine which notes you own by observing the trial decryption process of each note ciphertext on the blockchain.
You should ensure no other users have the ability to execute code (even unprivileged) on the hardware your AFC process runs on until these vulnerabilities are fully analyzed and fixed.
The REST interface is a feature inherited from upstream Bitcoin. By default, it is disabled. We do not recommend you enable it until it has undergone a security review.
Users should choose a strong RPC password. If no RPC username and password are set, AFC will not start and will print an error message with a suggestion for a strong random password. If the client knows the RPC password, they have at least full access to the node. In addition, certain RPC commands can be misused to overwrite files and/or take over the account that is running AFC. (In the future we may restrict these commands, but full node access – including the ability to spend from and export keys held by the wallet – would still be possible unless wallet methods are disabled.)
Users should also refrain from changing the default setting that only allows RPC connections from localhost. Allowing connections from remote hosts would enable a MITM to execute arbitrary RPC commands, which could lead to compromise of the account running AFC and loss of funds. For multi-user services that use one or more AFC instances on the backend, the parameters passed in by users should be controlled to prevent confused-deputy attacks which could spend from any keys held by that AFC.
Users should be aware of new behavior in AFC that differs significantly from Bitcoin: in the case of a block chain reorganization, Bitcoin's coinbase maturity rule helps to ensure that any reorganization shorter than the maturity interval will not invalidate any of the rolled-back transactions. AFC keeps Bitcoin's 100-block maturity interval for generation transactions, but because JoinSplits must be anchored within a block, this provides more limited protection against transactions becoming invalidated. In the case of a block chain reorganization for AFC, all JoinSplits which were anchored within the reorganization interval and any transactions that depend on them will become invalid, rolling back transactions and reverting funds to the original owner. The transaction rebroadcast mechanism inherited from Bitcoin will not successfully rebroadcast transactions depending on invalidated JoinSplits if the anchor needs to change. The creator of an invalidated JoinSplit, as well as the creators of all transactions dependent on it, must rebroadcast the transactions themselves.
Receivers of funds from a JoinSplit can mitigate the risk of relying on funds received from transactions that may be rolled back by using a higher minconf (minimum number of confirmations).
The option -debug=zrpc covers logging of the AFC_* calls. This will reveal information about private notes which you might prefer not to disclose. For example, when calling z_sendmany to create a shielded transaction, input notes are consumed and new output notes are created.
The option -debug=zrpcunsafe covers logging of sensitive information in AFC_* calls which you would only need for debugging and audit purposes. For example, if you want to examine the memo field of a note being spent.
Private spending keys for z addresses are never logged.
Potentially-Missing Required Modifications
In addition to potential mistakes in code we added to Bitcoin Core, and potential mistakes in our modifications to Bitcoin Core, it is also possible that there were potential changes we were supposed to make to Bitcoin Core but didn't, either because we didn't even consider making those changes, or we ran out of time. We have brainstormed and documented a variety of such possibilities in issue #826, and believe that we have changed or done everything that was necessary for the 1.0.0 launch. Users may want to review this list themselves.