Probabilistic Smart Contracts: Secure Randomness on the Blockchain

Abstract

In today's programmable blockchains, smart contracts are limited to being deterministic and non-probabilistic. This lack of randomness is a consequential limitation, given that a wide variety of real-world financial contracts, such as casino games and lotteries, depend entirely on randomness. As a result, several ad-hoc random number generation approaches have been developed to be used in smart contracts. These include ideas such as using an oracle or relying on the block hash. However, these approaches are manipulatable, i.e. their output can be tampered with by parties who might not be neutral, such as the owner of the oracle or the miners.We propose a novel game-theoretic approach for generating provably unmanipulatable pseudorandom numbers on the blockchain. Our approach allows smart contracts to access a trustworthy source of randomness that does not rely on potentially compromised miners or oracles, hence enabling the creation of a new generation of smart contracts that are not limited to being non-probabilistic and can be drawn from the much more general class of probabilistic programs.

Recent Advances in Smart Contracts: A Technical Overview and State of the Art

“…As an improvement to PRGNs based on contribution schemes, Chatterjee et al propose a game theory approach to improve the incentive for participants to be honest [4]. For a random bit request with ID r id , n participants each select a random bit b i (where i = {1, ..., n}), a nonce n i , and an amount m i .…”

“…Kumar et al proposed an encryption scheme that uses such an approach to revoke delegated keys [73]. • Random Number Generation: Chatterjee et al proposed a PRNG for smart contracts based on a contribution scheme [4]. However, a request results in the return of one bit.…”

Cyber-Physical Trust Systems Driven by Blockchain

“…Due to the lack of randomness in blockchain technology [35], providing nonces is a challenge. With a blockchain system, a nonce's first goal can be replaced by a counter that is sent and increased with each message ensuring a unique and ordered number only used once is contained in the message.…”

“…Unpredictability is difficult because for blockchains to have consensus, all involved parties and nodes must agree on the outcome of every element that creates the next block in the blockchain. Thus, every blockchain function must be deterministic making generating random numbers a major issue for blockchain technologies [35]. For an example function, generateRandomNo(), every node must produce the same result deterministically, thus, making it not a random number.…”

BlockHouse: Blockchain-Based Distributed Storehouse System

“…In the blockchain, the too obvious way would be to use the block hash as a seed for a pseudo-random number generator. However, a party can control the hash of a block to predict the future block hash [7] and then control the future challenges. Number of auditor nodes n Proba of dishonest majority p = 2/3 p = 5/7 p = 4/5 Fig.…”