Bitcoin as Time-based source of randomness

by Albert Szmigielski

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Bitcoin mining involves finding a suitable nonce so that the resulting hash meets a certain criteria. The hash is not predictable and can only be found by exhaustive search. Therefore the hash cannot be trivially guessed in advance. This allows the creation of a random seed that is time depended. Clearly the hash of some block in the future cannot be guessed without expending considerable effort and computing resources, and as a result the hash together with the Merkle tree root of a future block can be used as a random seed. According to researchers Bitcoin produces 68 bits of min-entropy every 10 minutes, of which 32 near-uniform bits can be extracted [1].

The biggest benefit of using Bitcoin as a time based source of randomness is the guarantee that it can not be tampered with, without undue expending of resources. Furthermore, it relies on no trusted third parties, and as such it is decentralized. It is highly available as long as the Bitcoin network is in existence.

 

[1] Bonneau, Joseph, Jeremy Clark, and Steven Goldfeder. “On Bitcoin as a public randomness source.”

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