Brief Summary of Discreet Log Contract
I recently listened to an interesting Podcast with Pierre Rochard and Ben Carman about smart contracts on the Bitcoin network. They are called Discreet Log Contracts (DLC). A DLC enables a bet to be made on an outcome with trust-minimised execution using Bitcoin.
In simple terms, a DLC is an anonymous peer to peer smart contract. Neither the blockchain observers nor oracles know the contract terms and the oracle does not know the transaction amounts. On chain a DLC looks like a normal multi-signature spend, such that no external observer can learn of the contract’s existence or details from the public ledger. And a DLC can be run on any blockchain; all that is needed is multi-signature contracts and timeouts.
DLCs use payment channels, similar to the Lightning Network. However, instead of generic payments, DLCs are used to process payments conditional on some external data.
The first Discreet Log Contract on Bitcoin’s mainnet took place on September 8th, 2021. It was a bet between BTCPay server creator Nicolas Dorier and Suredbits founder Chris Stewart on the outcome of the US Presidential election.
My Thoughts on DLCs for Future Reflection
I think DLCs will exist in the future, but used mostly by the Bitcoin Maximalist community. They will never reach wide scale adoption. It's an exciting technological break through (developed by Tadge Dryja of MIT in 2018) but will never overthrow smart contracts on other blockchains, such at Ethereum.
I believe Bitcoin "maximalism" will be a key roadblock to the growth of DLCs. There is little mind share developing the technology and I suspect the UI will be clunky like the Lightning Network.
Time will tell.