Firstly, we show that the Bitcoin system provides an attractive way to construct a version of timed commitments" where the committer has to reveal his secret within a certain time frame, or to pay a fine. This, in turn, can be used to obtain fairness in some multiparty protocols. Secondly, we introduce a concept of multiparty protocols that work "directly on Bitcoin". Recall that the standard definition of the MPCs guarantees only that the protocol "emulates the trusted third party". Hence ensuring that the inputs are correct, and the outcome is respected is beyond the scope of the definition. Our observation is that the Bitcoin system can be used to go beyond the standard "emulation-based" definition, by constructing protocols that link their inputs and the outputs with the real Bitcoin transactions.
As an instantiation of this idea we construct protocols for secure multiparty lotteries using the Bitcoin currency, without relying on a trusted authority (one of these protocols uses the Bitcoin-based timed commitments mentioned above). Our protocols guarantee fairness for the honest parties no matter how the loser behaves. For example: if one party interrupts the protocol then her money is transferred to the honest participants. Our protocols are practical (to demonstrate it we performed their transactions in the actual Bitcoin system), and can be used in real life as a replacement for the online gambling sites. We think that this paradigm can have also other applications. We discuss some of them.Category / Keywords: bitcoin, multiparty, lottery Date: received 24 Nov 2013, last revised 18 Mar 2014 Contact author: l mazurek at mimuw edu pl Available format(s): PDF | BibTeX Citation Note: Typo in abstract Version: 20140318:191838 (All versions of this report) Short URL: ia.cr/2013/784 Discussion forum: Show discussion | Start new discussion