Efficient Zero-Knowledge Contingent Payments in Cryptocurrencies Without Scripts

One of the most promising innovations offered by the cryptographic currencies (like Bitcoin) are the so-called smart contracts, which can be viewed as financial agreements between mutually distrusting participants. Their execution is enforced by the mechanics of the currency, and typically has monetary consequences for the parties. The rules of these contracts are written in the form of so-called “scripts”, which are pieces of code in some “scripting language”. Although smart contracts are believed to have a huge potential, for the moment they are not widely used in practice. In particular, most of Bitcoin miners allow only to post standard transactions (i.e.: those without the non-trivial scripts) on the blockchain. As a result, it is currently very hard to create non-trivial smart contracts in Bitcoin.

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