UPDATE (16th August 19:11 BST): Updated to include an emailed statement from cryptocurrency startup Enigma.

Yet another dire security flaw was unveiled Tuesday with potential ripple effects across the tech world, including for cryptocurrency projects seeking to leverage certain hardware devices.

Following a pair of bugs unveiled earlier this year, the Foreshadow vulnerability impacts all Intel’s Software Guard Extensions (SGX) enclaves, a special, supposedly extra-secure region of chip often used for storing sensitive data.

In short, while the enclave is supposed to be tamper-proof, a group of researchers found a way for an attacker to steal the information it stores.

For many, Meltdown and Spectre were spooky enough. The bugs impacted every single Intel chip, the hardware powering most of the world’s computers. But, since it wasn’t so easy to execute, there weren’t many real-world attacks.

Foreshadow might not sound as bad because it impacts a more specific type of Intel hardware: SGX. However, since many cryptocurrency projects plan to use this technology, Foreshadow could have even worse ramifications for the cryptocurrency world.

Perhaps most notably, Signal creator Moxie Marlinspike is in the process of advising a new, allegedly greener coin called MobileCoin that puts SGX at the center, even raising $30 million to do so.

As a result, these projects will have to do some restructuring before launching for real.

“The findings released today absolutely have a broad impact on cryptocurrency projects,” Cornell University security researcher Phil Daian told CoinDesk.

The good news, though, is that the researchers followed the security world’s “responsible disclosure process” for revealing bugs, alerting Intel before showing it off so the tech giant could come up with a fix (which deployed a few months ago).

But the security world is making a lot of noise because that still might not be enough.

“It is likely that, because many of these systems are slow to upgrade and because many of these fixes require either involved or hardware upgrades, infrastructure will remain vulnerable to this class of attack for a long time,” Daian said, adding:

“It would be surprising if at some point this flavor of attack is not used to steal cryptocurrency.”

The good and the bad

But there’s both good and bad news.

For one, it appears as though none of the high-profile SGX projects in cryptocurrency are yet being used to secure real money. “To my knowledge, there is no SGX system in production or widespread use in the space today,” Daian said.

The bad news is there are a plenty of projects that want to use SGX, and maybe even have plans to do so soon. And the ideas are pretty cool.

MobileCoin is perhaps the most ambitious since the project’s developers want to replace miners, a crucial part of securing any cryptocurrency, with these enclaves to build a more energy-efficient cryptocurrency.

But there are plenty of others that want to use SGX for its security and privacy gains.

Enigma is using it in a unique bid to boost privacy in smart contracts, while wallet hardware company Ledger went as far as to partner with the tech giant Intel to explore using SGX as a new avenue for storing private keys. And the list goes on and on.

Enigma argued, however, that the impact of the bug has been overblown.

“Like any software or hardware, the discovery and resolution of potential vulnerabilities is a normal and expected part of the development process. In this case, the vulnerability has already been addressed by Intel and does not in any way diminish the potential for SGX technology,” Enigma CEO and co-founder Guy Zyskind said in a statement.

Zyskind added that Enigma’s “proud” to be working with Intel and believe their work with SGX is crucial to cryptocurrency’s future, as they’re creating “robust privacy solutions that will finally allow decentralized applications to work and be adopted at scale.”

These huge benefits are still not stopping some researchers from worrying about its impact, though.

“The SGX attack is devastating,” Kings College London assistant professor Patrick McCorry told CoinDesk, adding that research groups have long been discussing how it can be deployed to add extra security to data.

“It can potentially undermine the integrity – and privacy – for any application that is reliant upon trusted hardware. A lot of companies in the cryptocurrency space rely on SGX to support multi-party protocols, but this attack allows any participant to cheat,” he added.

“In my opinion, good SGX research and systems should assume hardware can always be broken at some cost, and should, as always, design defensively and include layered security,” Daian said.

He went on to give some advice to companies that plan to launch soon.

“Projects planning to launch soon that rely on SGX should evaluate the vulnerabilities and any updates from Intel with caution for implications to the security of their systems, and should publish such investigations along with their code,” he said.

The other bad news, though, is it’s possible for hackers to find a new variant of the bug, similarly impacting all SGX chips.

“But as Foreshadow demonstrates, attacks only get better,” McCorry remarked.

Sweet vindication

Meanwhile, the bug is leaving some developers feeling vindicated.

Because Intel has a backdoor into all SGX devices, it’s long been a controversial tech avenue for cryptocurrency projects, with enthusiasts often arguing that using the technology puts too much power or trust in one company’s hands.

Simply put, in their minds, the Foreshadow vulnerability is a good example of why not to put SGX at the cornerstone of a cryptocurrency project.

“Good thing we didn’t adopt a certain professor’s SGX-based bitcoin scaling solution!” tweeted pseudonymous bitcoin enthusiast Grubles.

“Though even *if* it had been somehow perfect, it was never a good idea to root the security of bitcoin in a chip vendor’s secret sauce technology,” Bitcoin Core maintainer Wladimir van der Laan responded.

But again, most projects using SGX haven’t actually launched in production.

Some researchers went as far as to argue most cryptocurrency projects exploring SGX haven’t actually used them on real money because Intel has such a bad reputation. The industry has been experimenting with the technology – but is too cautious to actually launch go through with it.

Some security researchers advise to continue on this trend – to not use SGX.

But other researchers are more optimistic that SGX, or something like it, could one day play a big role in cryptocurrency, seeing Foreshadow as a positive sign trusted hardware is being battle-tested.

“SGX will need to be repeatedly tested and broken by adversarial researchers until it can claim a strong degree of security, which will take years,” Daian said, going on to add that he believes trusted hardware along the lines of SGX may one day play a big (and positive) role in cryptocurrency.

In short, it might just take some time, he argued, adding:

“Realizing such a technology certainly holds great promise for trust minimization and scalable privacy protection in cryptocurrency and beyond.”

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