Building a decentralized cryptocurrency exchange using zero-knowledge proofs
7/12/2017: The protocol is flawed and contains a black mail risk. The other side cannot claim a refund without knowledge of the secret so even if the TXIDs can be validated with ZK-proofs the scheme still doesn’t work. I guess its back to the drawing board with this idea.
Edit 5/9/2016: I’ve updated the scheme. I’ll update it again if I get time to think of a way to avoid using timelock encryption for the refunds since that will make it more secure. Although I want to add that timelock encryption depends on the security assumptions of hash functions so its also not like this is particularly crazy (as new and scary as things may sound.)
Quite recently its become possible for those outside the field of cryptography to construct zero-knowledge proofs. One such proof is a proof for SHA256 hashes that basically allows anyone to state that “yes, I know some value that produces some known
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