How to use bitcoin to design fair protocols

Result by Iddo Bentov, Ranjit Kumaresan
Blog by Samuel Ranellucci

Fairness is the idea that if one player gets the result then all players
get the result.
A classical result from Cleve in 1986, showed that fairness without an honest majority
was impossible for certain functionalities.

To deal with this, we have that instead of guaranteeing such fairness,
we insure that if this occurs the honest players received payment
in lieu of fairness while at the same time the cheaters lose money.
This is achieved via the use of bitcoin.

Bitcoin is often used for lottery, gambling, auctions.
We also want that honest parties never lose coins.

The formal framework used in this work is the Formal framework of
the real-ideal world paradigm and they have straight line simulation.

First they design and implement the Claim or refund functionality.
It is a 2-party computation where the sender deposits coins with an associated
time bound and a circuit. The receiver can claim deposit if he reveals
a satisfying assignment for the circuit, within time t.

To realize general protocols, it works as follows:
First compute a value for the function and secret share the result.
Each player then deposit coins.
The idea is that if a player reveals his shares, he gets the coin back.
If he doesn’t, he must pay a penalty to all other players.

In future works, it would be interesting to reduce the penalty
for secure lottery.

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