Assignment 2: Blockchain and Mining with Proof-of-work for Bitcoin 
CE235 Computer Security 
2024-2025 
University of Essex 
1. Introduction 
 
1.1 Bitcoin Mining 
Bitcoin is a cryptocurrency. In the Bitcoin system Bitcoins are mined through proof-of-work mechanism. 
Bitcoin miners are given technical puzzles to solve. There is only one puzzle at any time with a given difficulty 
level, which is set by the system administrator. New puzzles are created after the current one is solved. 
The first miner who solves the puzzle is awarded a specified number of bitcoins. The winner creates and sign a 
new block with digital signature technology and broadcast to other Bitcoin users. The signed block is linked to 
the previous signed blocks. These blocks form a chain of blocks (called blockchain) as shown in the following 
figure. The new signed blocks are verified by others and could become mature after being confirmed by a given 
number of miners, which is measured by length of blocks linked to the new blocks. 
 
 
1.2 Technical puzzle 
The puzzle set in the proof-of-work is to find a specific integer number (called nonce), which together with a 
few other numbers (such as hash value of the previous block, the transactions to be included to the new block) 
are hashed with SHA-256 algorithm and the hashed value satisfies a given condition. 
The puzzle can be formulated as follows: 
 
where preHash is the hash value of the previous block, Tx is transaction of bitcoins. levelHard is a given number, 
usually controlled by requiring a consecutive number of most significant bits (MSB) being zeros, for example 
the first 30 MSBs being zero. The more MSB zeros required on levelHard, the more difficult to solve the puzzle 
(finding the nonce satisfying the condition). Below gives a binary number with the 15 MSB being zeros and 5 
least significant bits (LSB). 
(MSB) 00000000000000011100000101111110011010101100000 (LSB) 
 
1.3 Signing and verifying a new block 
The first miner solving the puzzle will create a new block, which includes a block header (storing the digital 
signature of this new block, which will include the hash value of the block body) and a block body. The block 
body includes the hash value of the previous block, the found nonce and transactions included in this block. The 
digital signature is created by encrypting the hash value of this new block with private key. The block is linked 
to the last block of the existing blockchain and broadcast. The new block will then be verified by others using 
the winning miner’s public key and checking the hash values of this and previous blocks. 
 
2. Specification 
Block header (signature)
Prev Hash
Nonce
Tx1
Tx2
TxN
Block header (signature)
Prev Hash
Nonce
Tx1
Tx2
TxN
Block header (signature)
Prev Hash
Nonce
Tx1
Tx2
TxN
Block n-2 Block n-1 Block n
find nonce, subject to: hash(preHash, nonce, Tx) < levelHard This assignment takes 18% of the marks (18 marks) of this module. The aim of the assignment is to write a 
Python program, which will implement a simplified version of Bitcoin mining and digital signature schemes as 
shown in the following figure, with additional task of protecting the confidentiality of the signed message (from 
by encrypting/decrypting the signed message (such as with an extra RSA key pair for the validator). 
 
2.1 Task1: Create a RSA public/private key pair with 1024 bits key length [1 mark] 
o The RSA key pairs will be used in Task3 and Task4 of this assignment. 
o The created RSA public {n,e} and private keys {n,d} need to be displayed with the following 
format: 
 
2.2 Task2: Find a nonce with hash algorithm SHA-256, which is a hash value satisfying requirement 
of the 6 least significant bits (LSB) being zero [4 marks]. Produce a figure (or a table) which shows 
the computation time (denoted by T) used to find a valid nonce by your own computer against the 
number of required LSB being zero (denoted by N) changing from 1 to 8 [3 marks]. 
o Hint: you can extend Example 4 in the provided sample program to complete this task. Example 4 
generates only one nonce and check if the nonce is valid. 
o You should try many random integers as nonce (with a loop) until you successfully find a nonce 
that meets the requirement. The only output from this task is the nonce, which needs to be displayed 
with the following format (suppose the found nonce is 12345): 
 
 
o You can use your program to produce the figure/table automatically, or you can record the 
computation times and create the figure/table using other software, then present it to the teaching 
staff members during your demonstration. Not to submit the figure/table to Faser. 
 
2.3 Task3: Digitally sign the nonce and your student number with the RSA private key [3 marks] 
o The message to be signed is a string consisting of the nonce (found with 6 LSB being zero) and 
your student number, which are separated by a space. For example, if the found nonce is 12345 and 
your student number is 54**1, then the message to be signed needs to be a string “12345 54**1” 
o You need to sign the message with RSA key pair generated in Task 1. 
o The outputs of this Task3 include the hashed value of the message and the signature, which need to 
be displayed with the following format. 
 
 
Find a valid 
nonce
Sign message
(nonce, student #)
Verify the digital 
signature
Generate RSA 
keys
Measure 
computation time
Required # of 
LSB zeros
Valid 
nonce
Encrypted message 
& signature
Validation 
outcome
Table or figure Keys
Keys
Public key: 
(n=0x995361030caa5bf308e272fe07f3466c0727b5ac0c41107142fd97dd75ec4a197250c038
8b8711b210b2beb300980**1913e9eb21b22f72c3fe8b62adda13491c6efbf3f4e6c6c60**8da
c7**af2ca0b8067f4550fae82c8ea85d3fc0667f1de7a193f23a1d30e8e7f2894f07ce26b5d94
85df5a29fc265fc217dbbb91065b35, e=0x10001) 
Private key: 
(n=0x995361030caa5bf308e272fe07f3466c0727b5ac0c41107142fd97dd75ec4a197250c038
8b8711b210b2beb300980**1913e9eb21b22f72c3fe8b62adda13491c6efbf3f4e6c6c60**8da
c7**af2ca0b8067f4550fae82c8ea85d3fc0667f1de7a193f23a1d30e8e7f2894f07ce26b5d94
85df5a29fc265fc217dbbb91065b35, 
d=0x24cf1913a7d74042dce7ac6ea30efae19568299bb7c76**09ff20ca2ec9c010011eb23f28
f40aa7562bfdebb4f91aef2c091557cf1b9d7b82651a2663115f1ee0c416b1fec516a83657558
068f1eebffae9f11b2801830acf2b0af4367fcd26ffe4672c5c5165afaeb5eeb81e6497a04192
133**6e124b4ce2a869a16fc998e1) 
 
Valid Nonce: 12345  
 
2.4 Task4: Verify the signature [3 marks] 
o The signature verification is to be achieved by decrypting the digital signature with public key 
{n,e} generated in Task 1 to get the hash value from the signature and compare it to the one 
obtained from hashing the signed message. 
o The process of signature verification needs to output yes or no depending on the verification 
outcome. 
 
2.5 Task5: Protect the confidentiality of the signed message from Task 3 by encrypting/decrypting 
the signed message [4 marks] 
o You should generate another RSA key pair for the validator. 
o The signed message should be encrypted with a key of the validator by the user who signs the 
message. 
o The encrypted signed message should be decrypted with another key of the validator before the 
signature validation by the validator. 
 
3. Sample Program 
We provide a sample python program miningBitcoin_sample.py, which includes most of the needed 
RSA encryption and digital signature functions to complete the above tasks. It can be run from integrated 
development environments (IDLE). It can also be run from the command line like this: 
python mingingBitcoin_sample.py 
 
You should modify the sample python program to complete the tasks. Your own program should have a name 
like cs_bitcoin_registrationnumber.py (replace registrationnumber by your own registration number). For 
example, if your registration number is 1234567, your filename will be: 
cs_bitcoin_1234567.py 
 Your program must run from the command line like this: 
python cs_bitcoin_1234567.py 
The outputs of your program are required to be displayed, following the specified format for marking purposes. 
 
4. How to submit 
Submit your python .py file to Faser by the submission deadline Friday, 13/12/2024. 
 
5. Marking Scheme 
You will be asked by the Professor He or teaching assistants at NWU to demonstrate your work and answer questions 
to ensure it is your own work. Your marks for this assignment will be dependent on the complement and output 
results of your program, and your answers to the questions asked by the teachers. If you are asked to but you don’t 
demonstrate your work, no mark will be given to your assignment work. 
Apart from demonstration of your work to the teaching staff members, it is mandatory for you to submit your program 
file to Faser on time. Otherwise, you may not get any mark for your work on the assignment. 
Your submitted program may be checked and tested by Professor He. If problems such as plagiarism are found from 
the testing, your marks will be reduced. 
 
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