• Sat. Oct 31st, 2020

Dimancherouge

Technology

First Discreet Log Contract Goes Live On Bitcoin Mainnet

By Landon Manning

Discreet Log Contracts (DLCs), a wide-reaching application of blockchain technology, has seen its first incorporation onto the main Bitcoin blockchain, opening the gateway for Bitcoin users to access this technology without relying on any other chains or third-party applications.

Since Bitcoin was the first major blockchain-based cryptocurrency to appear and have an organic, decentralized community work to grow and maintain it, there are some applications of blockchain technology that are more cumbersome and impractical to use with Bitcoin’s own underlying infrastructure. Other, newer and more nimble blockchains, such as Ethereum, were designed from the beginning to facilitate smart contracts more easily than Bitcoin. However, various developers have been working on DLCs for several years, seeking a way for these types of transactions to occur organically on the Bitcoin blockchain with no other chains required.

The key to understanding this whole field of DLCs is that most of it stems from the use of smart contracts: a way to securely have multiple parties enter into an agreement with a neutral third party, known as an oracle, then facilitating the settlement. DLCs, then, are the main theorized avenue for how to weld this type of smart contract flexibility onto the existing body of Bitcoin. After several years of experimentation, one developer has executed a groundbreaking new test.

On September 8, 2020, Nicolas Dorier of BTCPay Server announced that he had successfully used a DLC to execute a simple smart contract bet with fellow Bitcoin engineer Chris Stewart, specifically to stake 1 BTC on the outcome of the 2020 U.S. Presidential Election. Stewart, the founder of Suredbits, has also been working with his company to make DLCs a reality. 

DLCs have a number of advantages specifically tailored to the Bitcoin community: for one, this technology is very scalable, an important criteria considering the widespread usage of Bitcoin and the great number of latency issues that can manifest themselves. 

Additionally, it continues Bitcoin’s legacy of being pseudonymous, as the oracle used to determine the conditions of activating a smart contract can function without the users making any concrete identification of themselves. This will allow a great range of possible uses, from small groups or even pairs of individuals executing smart contracts in secret, to massive operations that involve input from and output to huge numbers of anonymous users. 

This particular test pilot is an extremely simple proof of concept, but if it works it could allow the whole galaxy of smart contract applications to operate on Bitcoin alone, cutting out much of the draw not only of competing crypto assets but a number of applications designed to work in tandem with Bitcoin.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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