Bitcoin Beacon
Iddo Bentov, Ariel Gabizon, David Zuckerman

TL;DR
This paper presents a Bitcoin-based protocol for generating unpredictable, publicly verifiable randomness, analyzes its security under various adversarial budgets, and introduces a hybrid protocol combining trusted parties with Bitcoin.
Contribution
It demonstrates how to instantiate a secure randomness beacon using Bitcoin and explores its security limits with different adversary budgets.
Findings
Bitcoin can be used to instantiate a secure randomness beacon under certain assumptions.
An impossibility result is shown for adversaries with infinite budgets.
A hybrid protocol combining trusted parties and Bitcoin is proposed.
Abstract
We examine a protocol that outputs unpredictable and publicly verifiable randomness, meaning that the output is unknown at the time that starts, yet everyone can verify that the output is close to uniform after terminates. We show that can be instantiated via Bitcoin under sensible assumptions; in particular we consider an adversary with an arbitrarily large initial budget who may not operate at a loss indefinitely. In case the adversary has an infinite budget, we provide an impossibility result that stems from the similarity between the Bitcoin model and Santha-Vazirani sources. We also give a hybrid protocol that combines trusted parties and a Bitcoin-based beacon.
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Taxonomy
TopicsBlockchain Technology Applications and Security · Cryptography and Data Security · Distributed systems and fault tolerance
