Secure Multiparty Computations on Bitcoin

Abstract

Bitcoin is a decentralized digital currency, introduced in 2008, that has recently gained noticeable popularity. Its main features are: (a) it lacks a central authority that controls the transactions, (b) the list of transactions is publicly available, and (c) its syntax allows more advanced transactions than simply transferring the money. The goal of this paper is to show how these properties of Bitcoin can be used in the area of secure multiparty computation protocols (MPCs).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.

Fair Two-Party Computations via Bitcoin Deposits

“…Of course, one example of a such a functionality is the lottery protocol. We would like to stress, however, that our result does not imply the result of [2], since the protocols of [2] work on the current version of Bitcoin protocol (without any modification).…”

“…In our recent paper [2] we put forward a new concept dubbed "secure multiparty computations (MPCs) on Bitcoin". On a high level the idea of this concept is as follows.…”

“…Bitcoin, due to its fully distributed nature, and the fact that the list of transactions is publicly known, gives an attractive opportunity to go beyond this barrier. In [2] we discuss this idea, and provide some examples of how it can be used. The main technical contribution of that paper is a protocol for a multiparty lottery with a very strong security property: each honest party can be sure that, once the game starts, it will be fair, and she will be paid the money in case she wins.…”

“…Although the main application of this commitment scheme is the lottery protocol, it can actually also be used to obtain fairness in protocols where the inputs and outputs do not concern Bitcoin. One of the questions left open in [2] is to construct protocols for more general functionalities than the commitment scheme or the lottery.…”

“…1 On a technical level, our protocols are based on a new variant of a Bitcoin-based timed commitment scheme that we call the "simultaneous commitment" and denote SCS. It can be viewed as an extension of the Bitcoin-based commitment scheme from [2] described above. The main difference is that it forces both users to simultaneously commit to their secrets.…”