Practical oracle-based Bitcoin payments

Abstract

Discreet Log Contracts (DLCs) enable conditional Bitcoin payments using external oracles, but their efficiency depends on cryptography, system design, and oracle interac- tion. This thesis introduces a lightweight, modular Rust framework for prototyping and benchmarking DLC components, with parsing, computation, storage, and oracle inter- faces separated. We implement optimizations for anticipation point computation, parallel processing, and Schnorr adaptor signatures, while outlining theoretical improvements. In collaboration with the community, we integrate a performant Schnorr adaptor and pro- vide, to our knowledge, the first direct comparison of Schnorr- and ECDSA-based adaptor signatures. Benchmarks show Schnorr pre-signing up to five times faster than ECDSA, with further gains from parallelism and basis optimization, demonstrating how careful design improves the practicality of DLCs for advanced Bitcoin contracts.