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International Conference on Financial Cryptography and Data Security

FC 2017: Financial Cryptography and Data Security pp 321–339Cite as

Escrow Protocols for Cryptocurrencies: How to Buy Physical Goods Using Bitcoin

Part of the Lecture Notes in Computer Science book series (LNSC,volume 10322)

Abstract

We consider the problem of buying physical goods with cryptocurrencies. There is an inherent circular dependency: should be the buyer trust the seller and pay before receiving the goods or should the seller trust the buyer and ship the goods before receiving payment? This dilemma is addressed in practice using a third party escrow service. However, we show that naive escrow protocols introduce both privacy and security issues. We formalize the escrow problem and present a suite of schemes with improved security and privacy properties. Our schemes are compatible with Bitcoin and similar blockchain-based cryptocurrencies.

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Notes

  1. 1.

    There may be other desirable features that can be categorized as security properties that are out of the scope of this work.

  2. 2.

    See for example https://escrowmybits.com/.

  3. 3.

    The zero knowledge proof proves that a ciphertext encrypts the discrete log of a known value for a known base. For details of how to construct this proof see Camenisch et al. [21]. Gennaro et al. demonstrates that these proofs work with ECDSA and Bitcoin keys [26].

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Acknowledgements

We would like to thank Andrew Miler and Washington Sanchez for useful discussions and feedback.

Steven Goldfeder is supported by the NSF Graduate Research Fellowship under grant number DGE 1148900. Rosario Gennaro is supported by NSF Grant 1545759. Arvind Narayanan is supported by NSF Grant CNS-1421689.

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Authors and Affiliations

  1. Princeton University, Princeton, USA

    Steven Goldfeder & Arvind Narayanan

  2. Stanford University, Stanford, USA

    Joseph Bonneau

  3. EFF, San Francisco, USA

    Joseph Bonneau

  4. City College, City University of New York, New York, USA

    Rosario Gennaro

Authors
  1. Steven Goldfeder
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  2. Joseph Bonneau
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  3. Rosario Gennaro
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  4. Arvind Narayanan
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Corresponding author

Correspondence to Steven Goldfeder .

Editor information

Editors and Affiliations

  1. University of Edinburgh, Edinburgh, United Kingdom

    Aggelos Kiayias

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© 2017 International Financial Cryptography Association

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Goldfeder, S., Bonneau, J., Gennaro, R., Narayanan, A. (2017). Escrow Protocols for Cryptocurrencies: How to Buy Physical Goods Using Bitcoin. In: Kiayias, A. (eds) Financial Cryptography and Data Security. FC 2017. Lecture Notes in Computer Science(), vol 10322. Springer, Cham. https://doi.org/10.1007/978-3-319-70972-7_18

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