2016/12/16 by Johnny Dilley, Andrew Poelstra, Dilley, Johnny +9 · 1 voice · 4 citations
Computer Science · #Blockchain Technology Applications and Security #Caching and Content Delivery #Distributed systems and fault tolerance #cs.CR #cs.CY
paper · pdf · doi:10.48550/arxiv.1612.05491
openalex publication_date 2016/12/16 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
Bitcoin, the first peer-to-peer electronic cash system, opened the door to permissionless, private, and trustless transactions. Attempts to repurpose Bitcoin's underlying blockchain technology have run up against fundamental limitations to privacy, faithful execution, and transaction finality. We introduce Strong Federations: publicly verifiable, Byzantine-robust transaction networks that facilitate movement of any asset between disparate markets, without requiring third-party trust. Strong Federations enable commercial privacy, with support for transactions where asset types and amounts are opaque, while remaining publicly verifiable. As in Bitcoin, execution fidelity is cryptographically enforced; however, Strong Federations significantly lower capital requirements for market participants by reducing transaction latency and improving interoperability. To show how this innovative solution can be applied today, we describe \liquid: the first implementation of Strong Federations deployed in a Financial Market.