The First DLC Contract Launched on the Bitcoin Network
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The first discreet log contract (DLC) was launched on the main Bitcoin network, that is, a contract invisible to an outside observer in the transaction logs.
Podcast author Marty Bent spoke about this, calling current events “a very important moment in the history of bitcoin.”
The contract was signed between the developer of BTCPay Server Nicolas Dorier and the founder of the company Suredbits, which prepared the functional implementation of the DLC for Bitcoin, Christopher Stewart. It is used to place a bet on the winner of the upcoming US presidential election.
I just entered in a bet via a DLC (with adaptor sig) with @Chris_Stewart_5 on the US elections.
He used https://t.co/mkXCUrNHLH
— Nicolas Dorier (@NicolasDorier) September 8, 2020
Benefits of DLC contract
The advantages of DLC contracts over other types of smart contracts are scalability, increased privacy, and reduced need to trust third-party oracles when receiving data from external sources. They allow the participants to agree on an event in the future. For example, the price of Bitcoin at a certain moment, the result of a sports match, or the temperature of the air.
In this case, Dorier and Stewart have formed several transactions that will be used to transfer bitcoins to one of them, depending on the outcome of the dispute. The transfer of funds is carried out using the signature of the oracle, confirming the result. At the same time, the oracle will not know who is using his signatures to perform the DLC, unless the participants announce it publicly.
“When the elections are over, the observer will hand over a signature that I or Nicolas can use to receive the prize. If Trump wins, Nicolas will receive 1 BTC. If Biden wins, I will receive 1 BTC, ” – Stewart explained.
Also, there is the possibility of a refund of bets if an unaccounted candidate becomes the winner. If for some reason, the oracle disappears, transactions will be executed in March 2021, which will also allow the return of the provided assets to the parties to the dispute.
According to Bent, a wallet will soon be available that will allow anyone to generate DLC contracts.
“I don’t think Bitcoin users need to cede this territory to Ethereum,” Stewart added. “Bitcoin has many powerful building blocks that enable advanced applications to be built on it.”
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