{"id":11285,"date":"2022-02-14T14:33:01","date_gmt":"2022-02-14T14:33:01","guid":{"rendered":"http:\/\/ci0299d2308000263c"},"modified":"2025-10-01T13:15:23","modified_gmt":"2025-10-01T18:15:23","slug":"pros-cons-and-possibilities-for-bitcoin-discreet-log-contracts","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/technical\/pros-cons-and-possibilities-for-bitcoin-discreet-log-contracts","title":{"rendered":"The Pros, Cons And Possibilities For Bitcoin&#8217;s Discreet Log Contracts"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><p><strong>Listen To This Episode:<\/strong><\/p>\n<ul>\n<li><a href=\"https:\/\/podcasts.apple.com\/de\/podcast\/discreet-log-contracts-episode-53\/id1532957243?i=1000550799305\" target=\"_blank\" rel=\"noopener\">Apple<\/a><\/li>\n<li><a href=\"https:\/\/open.spotify.com\/episode\/6cncYO3plUREs7Y8dGBjYp?si=d7ca14907e4e43c1\" target=\"_blank\" rel=\"noopener\">Spotify<\/a><\/li>\n<li><a href=\"https:\/\/podcasts.google.com\/feed\/aHR0cHM6Ly9uYWRvYnRjLmxpYnN5bi5jb20vcnNz\/episode\/YTc0ZGY5MzEtMDE3Yy00ZTQ2LTkzNjgtZTQ2N2JmZDQxYWQz?sa=X&amp;ved=0CAUQkfYCahcKEwig1Mf9-vn1AhUAAAAAHQAAAAAQKw\" target=\"_blank\" rel=\"noopener\">Google<\/a><\/li>\n<li>Libsyn<\/li>\n<li><a href=\"https:\/\/overcast.fm\/+jXsTE9g0k\" target=\"_blank\" rel=\"noopener\">Overcast<\/a><\/li>\n<\/ul>\n<p>In this episode of &#8220;Bitcoin, Explained,&#8221; hosts Aaron van Wirdum and Sjors Provoost were joined by resident sidechain and Layer 2 expert Ruben Somsen, once again, this time to discuss Discreet Log Contracts (DLCs).&nbsp;<\/p>\n<p>DLCs are a type of smart contracts for Bitcoin, first proposed by Lightning Network white paper co-author Tadge Dryja. In essence, DLCs are a way to perform bets \u2014 but this means that they can ultimately be leveraged for all sorts of financial instruments, including futures markets, insurances and stablecoins.&nbsp;<\/p>\n<p>At the start of the episode, van Wirdum, Provoost and Somsen discussed what can be considered a type of proto-DLC, namely a multi-signature setup for sports betting where two participants add a neutral third party (an \u201coracle\u201d) that can resolve the bet one way or the other if needed. The trio explained that how this solution comes with a number of downsides, like the difficulty of scaling it.&nbsp;<\/p>\n<p>From there, van Wirdum, Provoost and Somsen went on to explain how DLCs solved these problems using a setup that resembles payment channels as used on the Lightning Network. When structured like this, they explained, oracles merely need to publish a cryptographically-signed message about the outcome of an event, which can be used by the winning participant of the bet to create a withdrawal transaction from the payment channel.&nbsp;<\/p>\n<p>Finally, Somsen explained how the original DLC concept could be streamlined by using adaptor signatures, a sort of \u201cincomplete signatures\u201d that can be made complete using the signed message from the oracle. With adaptor signatures, DLCs no longer require a separate withdrawal transaction, as the winner can claim funds from the payment channel directly.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Discussing Discreet Log Contracts, a type of smart contract that can be leveraged for many financial instruments on Bitcoin.<\/p>\n","protected":false},"author":2520,"featured_media":11286,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35],"tags":[1237,1806,379,1283,1216,1739,1279],"class_list":["post-11285","post","type-post","status-publish","format-standard","has-post-thumbnail","category-technical","tag-bitcoin-explained","tag-discreet-log-contracts-1","tag-dlcs","tag-oracles","tag-podcast","tag-podcasts","tag-smart-contracts"],"author_data":{"id":2520,"name":"Bitcoin Magazine","nicename":"bitcoin-magazine","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2025\/01\/bitcoin-magazine-logo.jpeg"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/explaining-dlcs-on-bitcoin.png","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/11285","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2520"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=11285"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/11285\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/11286"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=11285"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=11285"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=11285"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}