Bitcontracts: Supporting Smart Contracts In Legacy Blockchains

In this paper we propose Bitcontracts, a novel solution that enables secure and efficient execution of generic smart contracts on top of unmodified legacy cryptocurrencies like Bitcoin that do not support contracts natively. The starting point of our solution is an off-chain execution model, where the contract's issuers appoints a set of service providers to execute the contract's code. The contract's execution results are accepted if a quorum of service providers reports the same result and clients are free to choose which such contracts they trust and use. The main technical contribution of this paper is how to realize such a trust model securely and efficiently without modifying the underlying blockchain. We also identify a set of generic properties that a blockchain system must support so that expressive smart contracts can be added safely, and analyze popular existing blockchains based on these criteria.