Smart Contract Outcome Locking With Secret-Shared Validation

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Solution Overview

Problem

Existing blockchain technologies face challenges in executing smart contracts that require conditions to be met dynamically, especially when data is undetermined at the time of locking script creation, leading to security and validation issues.

Innovation Solution

A method utilizing dealer-free secret sharing and elliptic curve arithmetic to enforce security in smart-contract execution, involving a computer-implemented method for determining outcomes based on consensus among a group of members, using cryptographic keys and secret sharing protocols to validate transactions.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If traditional blockchain smart contract execution is used, then the system can process transactions, but security risks increase due to inability to handle undetermined data at locking script creation

Engineering Contradiction:

Improvesmart contract execution securityVSAvoidability to handle dynamic conditions

Core Design Contradiction:

ReliabilityVSAdaptability or versatility

Solution Approach 1:

The patent applies preliminary action by creating a locking script with a placeholder hash value before the actual data is determined. The locking script is prepared in advance with a commitment to a future value, allowing the smart contract to be locked and validated now while the actual outcome data is determined later. This resolves the contradiction by enabling security validation upfront without requiring the actual dynamic data to be known yet.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The patent uses a hash value as an intermediary between the locking script creation and the final outcome determination. The hash serves as a commitment mechanism that bridges the gap between undetermined data and required validation. The locking script contains a hash placeholder that later gets replaced with the actual outcome hash, allowing the system to maintain security while adapting to dynamic conditions.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Adaptability or versatility

If data is undetermined at locking script creation, then dynamic conditions can be handled, but validation issues and security risks increase

Engineering Contradiction:

Improvedynamic condition handlingVSAvoidtransaction validation reliability

Core Design Contradiction:

Adaptability or versatilityVSReliability

Solution Approach 1:

The system performs preliminary validation by creating a locking script with a hash placeholder that commits to a future value. This allows the transaction to be locked and included in the blockchain now, with validation deferred until the actual data is determined. The preliminary hash commitment ensures that when the actual data arrives, it can be verified against the original commitment, maintaining validation reliability despite undetermined data.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The hash value acts as an intermediary that enables validation without requiring the actual data. The locking script validates against the hash commitment rather than the raw data itself, allowing the system to maintain validation reliability while handling undetermined dynamic conditions. The hash serves as a verifiable placeholder that can be replaced with the actual outcome later.

Inventive Principle:

Principle #24Intermediary (Mediator)

3Measurement precision

If consensus among group members is implemented, then accurate outcome determination is achieved, but system complexity increases

Engineering Contradiction:

Improveoutcome determination accuracyVSAvoidconsensus mechanism complexity

Core Design Contradiction:

Measurement precisionVSDevice complexity

Solution Approach 1:

The patent uses hash values as intermediaries that simplify the consensus mechanism. Instead of requiring complex verification of actual outcome data from multiple sources, the system uses hash commitments that can be easily verified. The consensus process determines which hash value to commit to, and this hash then serves as the basis for the locking script validation, reducing the complexity of outcome determination while maintaining accuracy.

Inventive Principle:

Principle #24Intermediary (Mediator)

Solution Approach 2:

The system uses hash copies as representations of the actual outcome data. Rather than storing or transmitting the full outcome data for consensus verification, the system works with hash copies that are computationally efficient to verify. The actual outcome data is determined through consensus, but only its hash representation needs to be validated in the locking script, reducing complexity while preserving outcome determination accuracy.

Inventive Principle:

Principle #26Copying

Data Source

PatentUS12580760B2Smart contract execution using distributed coordination

Publication Date: 2026.03.17 NCHAIN LICENSING AG

AI summary

Computer-implemented methods for smart contract outcome determination are described. Assent to determine an outcome of a set of conditions is communicated to a set of counterparties, with the set of conditions having a first possible outcome and a second possible outcome. A first private key share corresponding to the first possible outcome and a second private key share corresponding to the second possible outcome are generated using a secret sharing protocol. An amount of a digital asset is transferred to an address associated with a first blockchain transaction. As a result of determining the outcome to be the first possible outcome, the first private key share is revealed within a particular time frame, with the first private key share usable, at least in part, by the set of counterparties to determine the outcome. The blockchain transaction is caused to be validated at a node in a blockchain network.