Computationally sound Bitcoin tokens
This addresses the need for secure and efficient token systems on Bitcoin, which is incremental as it builds on existing script language capabilities.
The authors tackled the problem of implementing secure fungible tokens on Bitcoin by extending the Bitcoin script language to allow spending conditions to depend on neighbor transactions, resulting in a computationally sound implementation where adversaries can only cause token divergence with negligible probability.
We propose a secure and efficient implementation of fungible tokens on Bitcoin. Our technique is based on a small extension of the Bitcoin script language, which allows the spending conditions in a transaction to depend on the neighbour transactions. We show that our implementation is computationally sound: that is, adversaries can make tokens diverge from their ideal functionality only with negligible probability.