Cryptocurrency Smart Contracts for Distributed Consensus of Public Randomness

TL;DR

This paper proposes a blockchain-based system using smart contracts to generate trustworthy, publicly verifiable random numbers in a distributed setting, preventing manipulation by malicious providers.

Contribution

It introduces a novel method leveraging cryptocurrency smart contracts to ensure secure, tamper-proof public randomness from potentially malicious sources.

Findings

Successfully prevents providers from controlling random outputs

Ensures transparency and immutability of the random number history

Mitigates collusion risks between providers and miners

Abstract

Most modern electronic devices can produce a random number. However, it is difficult to see how a group of mutually distrusting entities can have confidence in any such hardware-produced stream of random numbers, since the producer could control the output to their gain. In this work, we use public and immutable cryptocurrency smart contracts, along with a set of potentially malicious randomness providers, to produce a trustworthy stream of timestamped public random numbers. Our contract eliminates the ability of a producer to predict or control the generated random numbers, including the stored history of random numbers. We consider and mitigate the threat of collusion between the randomness providers and miners in a second, more complex contract.