Time warp is an exploit of Bitcoin’s difficulty adjustment algorithm that allows miners controlling a large amount of hashrate to prevent difficulty from increasing even as the rate of block production increases.

Ignoring some technical details, Bitcoin’s difficulty adjustment algorithm (DAA) attempts to keep an average of ten minutes between new blocks by adjusting the difficulty of the proof of work (PoW) that blocks must demonstrate in order to be valid. This depends on miners including the (approximate) current time in the block headers they create, so that the Bitcoin consensus protocol can calculate how much the recent inter-block average differs from the ideal of ten minutes.

Consensus rules prevent a single miner, or small number of miners, from claiming they created a block far in the past by requiring that any time in a block header must be greater than the median time of the previous 11 blocks, called the median time past (MTP) rule.

However, miners controlling a majority of hashrate (or a sub-majority of miners using an attack that gives them influence over other miners, such as selfish mining), can gain precise control over the header time of each block. For almost all blocks, they can set this to the minimum increase of one second greater than the median. But, for the last block in a difficulty adjustment period, they can set it to the current time. Using small numbers for illustrative purposes below, we can see a series of header times suddenly advance far in the apparent future and then return to the past, giving the attack its time warp name:

[0, 1, 2, 1795594, 3, 4, 5, ...]

Bitcoins DAA only adjusts difficulty once every 2016 blocks. Miners who begin a time warp attack cannot significantly affect difficulty for the first 2016-block epoch because both the first and last blocks in that epoch will need to have approximately accurate times. For the second epoch, miners can make it appear that the first block was mined two weeks in the past and the last block was mined at present, giving an average of about 20 minutes per block and causing the DAA to halve the difficulty. Miners will then by able to complete the next epoch twice as fast and yet make it seem like it took about 25 minutes per block, lowering difficulty further. They can repeat the attack indefinitely until they’re producing one block per second, the lower bound allowed by the MTP rule.

Consequences

The original reason to fear the attack was that miners could use it to quickly claim all remaining block subsidy. The attack takes about a month of publicly visible preparation before it really gets going, at which point it would only take miners about another month to claim all remaining subsidy, which was valued at approximately $91 billion USD at the time of this writing (April 2024).

Since the discovery of the attack, a significant amount of user funds (but believed to be far less than $91 billion) is now stored in contract protocols that use timelocks. Since the activation of BIP113, those contracts all depend on MTP rather than block header time. During a time warp attack, MTP increases significantly slower than normally, so funds could be made inaccessible to their users for much longer than they expected or could potentially lead to users losing money (depending on the contract).

The time warp attack would also result in much faster creation of new blocks than expected, making it easy to overwhelm the CPU or bandwidth of many nodes. With a reduced number of nodes on the network, many other attacks would be easier, including eclipse attacks and unwanted consensus changes. A high rate of block production (due to a low difficulty of creating each block) could also prevent miners from converging on a single best chain, forcing nodes to frequently reorganize and making transaction confirmation completely unreliable.

Proposed use as an upgrade mechanism

A 2018 proposal called forward blocks proposed changing the consensus rules to deliberately encourage miners to perform a timewarp to produce blocks more quickly. Those blocks would commit to essential transaction data, such as amounts and previous transaction, allowing non-upgraded full nodes to continue verifying consensus rules such as the 21 million bitcoin limit. Upgraded nodes would look for other transaction data, such as signatures, in extension blocks that would not be seen by older nodes. This could increase the maximum number of confirmed transactions on the network using only a backwards-compatible soft fork.

We’re unaware of any continued research or development of this idea for Bitcoin.

Solutions

Because the setup for the attack is public, takes about a month, and requires cooperation from miners controlling a large portion of total network hashrate, there has been an apparent lack of urgency to fixing the attack.

A request for solutions was made in 2018 and an elegant solution was proposed as part of the consensus cleanup soft fork proposal: require the first block in a new difficulty period have a time no earlier than ten minutes before the last block in the previous period. This means miners can only set an artificially-low timestamp for the first block in a retarget period if they also set an artificially-low timestamp for the last block in the previous period—but putting a low timestamp in the previous period would’ve raised difficulty then by as much as they’ll be able to lower it at the end of the current period, making any such attempt worse than useless.

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